US court strikes down ‘30% market-cap’ rule; gives Comcast greater expansion rights

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Comcast Corp

In what Wall Street analyst Craig Moffett described as a "moral" victory for cable biggie Comcast Corp., a federal appeals court in Washington struck down a rule that limited Comcast's business at 30 percent of the pay-TV market - this being the second time the '30 percent market-cap' regulation has been overturned; the first time being the 2001 court decision!

Comcast had contended that the market-cap rule, passed under Kevin Martin, the former Chairman of the Federal Communications Commission (FCC) was politically motivated, and had said that it would not trounce a court challenge.

About the recent court ruling, the present FCC Chairman Julius Genachowski said that while setting a new 'cap' in future, the FCC will give due consideration to the court's decision on the 30 percent level.

Hailing the court decision that allows greater expansion rights, the Philadelphia-based Comcast, which currently controls nearly 25 percent of the pay-TV market with almost 24 million cable-TV subscribers, said that it could now carry forth its acquisition plans, particularly as it has, of late, been steadily losing cable-TV customers.

Commenting on the 21-page court decision, Comcast spokeswoman Sena Fitzmaurice remarked: "We are pleased the court has vindicated our position. This important decision affirms that rules must reflect the changing realities of the dynamic video marketplace where today consumers have more choice in video providers and channels than ever before."


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