FCC cable order overturned

TW not allowed to recover costs, higher rates allowed

WASHINGTON (AP) — A federal court Friday overturned a Federal Communications Commission order that prevented cable TV companies from charging higher rates to recover some business costs.

The case, brought by Time Warner, dates to 1992 and involves a roughly 11- to 17-month period during which cable companies were not permitted to recover increases in business costs including programming, taxes and fees to broadcasters.

Eventually, the FCC issued an order allowing companies to raise rates to account for such business cost increases in the future, but it did not permit them to recover past expenses.

The U.S. Court of Appeals for the District of Columbia said the FCC did not explain this distinction.

“The commission had an opportunity to pass on the question of whether operators should be allowed to recover their revenue deficiencies, but chose to duck — its failure to address the point was not an accidental mistake,” the court said.

The same court had previously told the agency to rethink its rule that had prevented cable companies from recouping business costs during the 11- to 17-month period.

Time Warner’s attorney, Seth Davidson, said cable TV customers won’t see any immediate impact from the decision because cable companies will have to wait for the FCC to change its rules.

And, that may not happen before cable rates are deregulated. The FCC’s rate-making authority over cable is set to expire on March 31.

Time Warner had told the court that the agency’s order meant the company was not allowed to recover more than $14 million.

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