For cable TV companies in the U.S., August 28 was a day to celebrate. Ending several years of regulatory battles, a ruling by the U.S. Court of Appeals for the District of Columbia Circuit came down in favor of Philadelphia-based Comcast, which sought to overturn the Federal Communications Commission’s contentious 30% market share limit on cable TV operators. “Arbitrary and capricious” is how the appeals court described the FCC’s limit. Not everyone is happy about the ruling, however, with some media watchdogs warning about the dangers of cable monopolies. In contrast, Peter S. Fader, professor of marketing and co-director of the Wharton Interactive Media Initiative, sees this as a “golden age” for the industry and consumers alike. Fader spoke with Knowledge at Wharton about why the recent ruling is likely to make the landscape more, not less, competitive.

An edited transcript of the conversation follows.

Knowledge at Wharton: Comcast is the biggest cable carrier in the U.S. right now and the one most often discussed in the debate about the possibility of a cable company exceeding the FCC’s 30% market share cap on carriers. Should people be worried that Comcast will try to exceed that 30% and perhaps control too much?

Peter S. Fader: More power to them. People should not look at the historical trajectory that brought them to this point. Comcast used to be very small; it grew a lot. That’s great. But it’s not as if they are threatening to take over broadcasting, telecommunications or anything like that. In the big scheme, they are a fairly small player. There are a lot of different players with different degrees of strength. And it’s a beautiful market right now, with lots of different technologies and different business models. [Comcast makes] it interesting, but by no means are they winning the race.

Knowledge at Wharton: There’s been a lot of talk lately about vanishing “gatekeepers.” Because Comcast has a pipeline feeding both video entertainment and broadband content to about one out of every five American homes, they are quite a gatekeeper. Their decisions about programming can be very influential, correct?

Fader: It is still a very competitive market, though. Just as there might be vanishing gatekeepers, there are also genuine economies of scale and scope. [Comcast has] the capability to offer different kinds of programming, whether it is sports or other kinds of entertainment, that they couldn’t offer if they were just one of a zillion little players. Consumers are better off today with the choices they have than they had years ago, and it’s getting better all the time. This is from someone who recently dropped Comcast to move to Verizon FiOS, and it wasn’t so much dissatisfaction with Comcast as much as, “Here’s something cool. Let’s give it a try.”

Knowledge at Wharton: Comcast, Time Warner Cable and Verizon FiOS, for example, all may have the same threat on the horizon, which is that a lot of people — more and more everyday — are getting video entertainment from the Internet. Comcast and Time Warner have partnered to make cable subscriptions portable so that consumers can see the programming online. Have they been doing enough to advance their interactive business on the web?

Fader: The initiative that you mentioned — the TV Everywhere project — is still relatively new. We don’t know exactly how it’s going to look. But it’s a great idea. It will be a boon to consumers, and at the same time it will light a fire under competitors — even Hulu and YouTube — to up the ante a little bit. Again, we’re in no danger that anyone is going to be cornering the market with one kind of content or restricting the choices that consumers have. TV Everywhere is a fantastic idea, and [the winner of the battle] between it and some of its competitors [will be the one] who offers the best service, the best selection, quality, convenience, at a good price, as opposed to any kind of legal restrictions. This is a great example of where lawyers and regulators can just stay out of it and let the market prosper.

Knowledge at Wharton: Another changing part of that market is wireless delivery of interactive services. I don’t believe that Comcast has played on that front and I’m not sure if other cable carriers are very big on it either. Is that something they should be paying more attention to?

Fader: They are certainly dipping their toes in those waters. All these companies [like Comcast] have wireless divisions. It’s more on the communications side than on the entertainment side. There are probably conversations taking place that I’m not aware of. But, again, it’s yet another technology and [allows them to say], “Let’s throw satellite into the mix as well.” People can get information from so many different sources. It’s at the point where the consumer doesn’t know — doesn’t really care — what kind of pipe is bringing the information in as long as it is good stuff. This really is a golden age for the delivery and creation of different kinds of entertainment.

Knowledge at Wharton: It’s not just the delivery of entertainment; it’s the ability to interact with that information, [give] feedback, tell the information provider exactly what you want and communicate with others on the network. Doesn’t that give a big advantage to the cable firms and the Verizons over their satellite competitors?

Fader: It’s not necessarily the case that more data is better. A lot of it has to do with your capabilities of really extracting insight from it. Comcast as well as some of the other large cable providers recently created a joint venture called Project Canoe, which is going to be centered around exactly this issue — the idea of letting them create common standards so that they have one data format across the country, which would allow for targetable advertising and so on. Again, it’s a great idea, but so far it has been a failure. They were hoping to have some services out there by the summer of 2009, which is just about gone, and there’s still nothing to show for it. I’m not picking on Comcast in particular, but just because these are big cable companies doesn’t mean that they can get their arms around all this data better than small companies that are built around analytics.

Knowledge at Wharton: Going back to the limits on cable ownership: Clearly, Congress wanted the FCC to impose some sort of limit. That’s why the FCC came up with the 30% limit. Is there an upper limit somewhere, or is the growing diversity of technologies making that irrelevant?

Fader: I’m more of a grassroots, bottom-up kind of guy. I don’t like just looking at a market and making up numbers — like a 30% or anything like that. The acid test is: Are consumers better off with the landscape as it is or as it appears to be changing? The answer is yes [to the latter]. I don’t see any risks on the horizon. Things are going to continue to get better as other technologies come into the forefront and as other companies start jumping into the mix. It would be wrong to look at previous markets and say, “Here’s a number that worked for them.” It’s fair to say that this is a case where it’s really different and there’s not a lot of precedence for what’s happening.

Knowledge at Wharton: Disney’s deal the other day to pick up Marvel was the first big media deal we’ve had in awhile. Could this lead to … a deal by a Comcast, Time Warner or [another player] to acquire more cable systems?

Fader: I’m not sure that the Disney deal by itself is an indicator of anything. Too often people look for patterns in M&A activity of this sort. If something were to happen with Comcast and, let’s say, Time Warner or some other big cable provider, it might be because the government has stepped out of the mix. But I’m not going to predict that there’s going to be a flood of mergers and acquisitions taking place. I’ll leave that to my finance colleagues.