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Cablevision Finds 'Loophole' Fight Appealing

4:00 PM -- New Federal Communications Commission (FCC) rules aim to tighten the so-called "terrestrial loophole," but Cablevision Systems Corp. (NYSE: CVC) isn't going to abide by them without first putting up a fight.

The MSO confirmed that it appealed the decision by filing a petition with the US Court of Appeals for the D.C. Circuit on March 15. The FCC approved the order in January, tightening an exemption that let cable operators prevent competitors from carrying MSO-owned networks that are distributed over terrestrial lines (that exemption has never covered satellite-delivered networks). The loophole has historically applied most often to MSO-owned regional sports networks. (See FCC Tightens 'Terrestrial Loophole' and VZ Tunes In Comcast's Philly Network.)

FCC commissioner Robert McDowell, the only one to vote against the decision, all but predicted Cablevision's challenge at the time, noting that the order could be open to an appeal.

Cablevision, using the card Comcast Corp. (Nasdaq: CMCSA, CMCSK) played in its appeal of an FCC order targeting that MSO's Internet traffic policies, argued that the Commission exceeded its authority on the matter. (See Net Neutrality Ruling: FCC Loses, Comcast Wins.)

Among other arguments, the MSO also claims that the FCC order violated the Communications Act of 1934 and the Administrative Procedure Act, according to Multichannel News.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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