The Department of Justice yesterday urged the Federal Communications Commission to deny a request by CBS Inc. that would permit the television network to own small cable television systems.
CBS has asked the FCC to waive 10-year-old rules that prohibit television networks from owning local cable systems.
In making its request five weeks ago, however, CBS told the FCC that the systems it proposed to own -- operations not to exceed one-half percent of the total nationwide cable subscribers, or 90,000 subscribers -- would allow the network to experiment with new programs and technologies. CBS already is experimenting with a teletext, or print information, system at two of the television stations it owns.
But the Justice Department said any changes in the rule would have to be carried out during a formal commission rulemaking procedure.
"We believe that CBS' entry into cable system ownership, even on a limited scale, would undercut the cross-ownership rule's goal of promoting economic competition and diversification of control of the channels of mass communication," the Justice Department's Antitrust Division said.
The department also warned that CBS could use the systems to "maximize viewers of its broadcast affiliate" and "could use the exclusionary power of its cable systems to deny access to programmers whose product would compete for the same audience."
Further, the CBS petition was filed at an important period in an historic tussle between the broadcasting and cable industries. The networks for many years have fought the emergency of cable television, saying that the growing medium threatened to reduce the networks' audience.
But within the last three months, both CBS and American Broadcasting Cos. have said they plan to produce cultural and arts programming services for cable television, an acknowledgement of the inevitable growth and potential profitability of the cable industry. There is no restriction on networks engaging in such ventures.
The cable industry itself also apparently is moving to a more concilliatory position in its disputes with the cable business. The National Cable Television Association, in also filing comments with the FCC, said it would not oppose a lifting of the rule in this case but noted that its position in no way indicates that cable operators would support a true lifting of the cross-ownership rule.