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U.S. appeals court sides with Comcast in Tennis Channel dispute

WASHINGTON (Reuters) - A federal appeals court ruled on Tuesday that Comcast Corp. did not discriminate against the Tennis Channel by placing it in a different cable television subscription tier than its own sports networks.

The unanimous ruling from the U.S. Court of Appeals for the District of Columbia Circuit reverses a 2012 decision from the Federal Communications Commission that Comcast unfairly placed the sports channel in a more expensive and thus less-watched viewing tier than its own Golf Channel and NBC Sports Network.

Tennis channel on Tuesday said it planned to seek further review of the case.

The FCC had voted 3-2 along party lines to require Comcast to put Tennis Channel on par with its own sports network, marking the first time a cable network prevailed over a cable operator under the FCC's 1993 federal anti-discrimination program carriage rules.

Comcast, however, argued that the FCC's requirement infringed upon its freedom of editorial judgment and speech and that its placement of the Tennis Channel was based on the financial analysis, not discrimination against a rival.

Siding with Comcast in his opinion, Judge Stephen Williams said the latter argument was enough because the FCC did not present evidence to establish how Comcast would financially benefit from distributing the Tennis Channel more broadly.

"Without showing any benefit for Comcast from incurring the additional fees for assigning Tennis a more advantageous tier, the Commission has not provided evidence that Comcast discriminated against Tennis on the basis of affiliation," he wrote.

Williams had raised those concerns at oral arguments earlier this year, when he said the financial implications of requiring Comcast to move Tennis Channel were unclear.

The FCC and the sports network said that Comcast weighed the costs of having Tennis Channel in a higher viewing tier but did not adequately analyze the benefits. Comcast argued that it did, and found none.

Tennis Channel said in a statement that Comcast's "clear pattern of discrimination ... warrants further review of the panel's decision and we intend to seek that review."

The FCC had no comment on its plans to advance the case.

"Tennis Channel received exactly the carriage it bargained for and agreed to. Comcast's decision to carry Tennis Channel was the product of legitimate business considerations, not affiliation," Comcast said in welcoming Tuesday's ruling.

The case is Comcast Cable Communications, LLC v. Federal Communications Commission, U.S. Court of Appeals for the D.C. Circuit, No. 12-1337.

(Reporting by Alina Selyukh and David Ingram; Editing by Gerald E. McCormick, Dan Grebler and David Gregorio)

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