It will be interesting to see whether Cablevision ever discloses how much it spent on legal bills since 2009 to prevent customers of Verizon’s FiOS and AT&T’s U-verse from seeing HD feeds of MSG and MSG+. The regional sports channels are owned by Madison Square Garden, a company that’s controled by the Dolan family which also controls Cablevision. Whatever the cost, it seems to have been for naught: Cablevision today threw in the towel in one of the industry’s longest and most baffling battles after the U.S. Court of Appeals for the Second Circuit denied the company’s appeal of an FCC order in September requiring MSG to provide the HD feeds to two of its toughest competitors. FiOS customers in the New York area began to receive the sports channels in HD today; U-verse should have them soon.

It could be a big deal in the markets. Sports fans love HD — and the channels carry games for the New York Knicks, New York Rangers, New York Islanders, the Buffalo Sabres and the New Jersey Devils. Verizon and AT&T said that Cablevision was trying to hobble them by taking advantage of a loophole in a federal law that requires cable operators to offer channels that they own to competitors. The law just referred to services distributed via satellite. Cablevision said the rule didn’t apply to MSG because it’s distributed on landlines. The company also said that cable companies would have less incentive to invest in quality programming if they have to also provide it to the competition. The FCC’s Media Bureau still said that the decision to withhold HD transmissions was “unfair” and violated the program access rules.

While the story seems to be over, Cablevision says that it’s still “exploring (its) options.” It adds: ”In a highly competitive market like New York, consumers are best served when video providers are allowed to compete, not just on price, but on product differentiation.”

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