Time Warner Wins a Cable Battle

A federal court 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. Time Warner’s attorney 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. The FCC’s rate-making authority over cable is set to expire on March 31, 1999.