So what does this mean for the sector?
This news suggests that the current administration sees the combination of more cable subscribers as anti-competitive, even if they have different geographic footprints as the two companies tried to argue. Therefore, it's likely that we'll see a similarly chilly reception for the currently proposed DirecTV (DTV) and AT&T (T - Get Report) merger.
Interestingly, both of those companies' stocks are up this morning.
These mega-cable operators may have reached their peak size in terms of subscribers, yet they're still churning out gobs of cash. They have to find ways to spend it, and one interesting question is: where will they put this money to work?
One obvious option would be trying to buy more content. I would be watching players like Scripps Networks (SNI), Lions Gate (LGF) and Starz (STRZA). Even a company like CBS (CBS - Get Report) or Viacom (VIAB - Get Report) could be attractive for a bigger player.
This ruling is also great news for Netflix (NFLX - Get Report), which seems to be receiving favorable protection from the government against possible bigger competitors controlling more of the pipes to people that CEO Reed Hastings has to run his service over.
It is a win, too, for unbundling and for over-the-top streaming services, which will be encouraged to flourish even more.
Will that potentially hurt the profitability of juggernauts like ESPN, owned by Disney (DIS - Get Report)? It's too soon to say. Right now, players like Disney and Time Warner are trying to embrace the trend of over-the-top streaming and use it to their advantage, with their premium content as a key lever to do so.
At least for the next couple of years, the big dogs of cable can't just merge with each other. They will have to pick off other strategic, cash-flow-producing content assets.
This story was originally published on RealMoney.com on April 23 at 10:28 a.m.