Cable television, widely considered to be among the most glamorous and significant industries in the communications field, is facing regulatory problems that cloud its future at a time when cable has the potential to become more than a simple entertainment medium.
Despite the bravado implicit in the theme of this year's recent National Cable Television Association convention, "Cable: The Future of Communications," there is little doubt the industry is in a state of transition with regulatory issues compounding a degree of economic uncertainty and the problems of growth at a time of high interest rates.
Speeches and interviews with industry officials and observers during the convention, held in Los Angeles with more than 15,000 participants two weeks ago, indicate that despite a wealth of technological, marketing and programming developments, the industry is in many ways in search of an identity.
"There are thousands of people here trying to figure out what the business is," said one cable executive when asked about the tenor of the meeting.
The industry's leadership recognizes the uncertainty. "In addition to the community antenna services business and the premium entertainment services business, we are becoming the key to an emerging information and distribution service business whose ultimate dimensions can only be imagined," said Thomas Wheeler, president of the NCTA.
"The challenge for any entrepreneur is to know what business he is in soon enough to fully take advantage of it. In other words, our industry must be seen for what it is: not so much a business as a sequence of businesses which has evolved over the years into a complete communications continuum," Wheeler said.
There is deep division within the industry about Wheeler's message, with even some of the association's leadership divided over whether cable will be simply a means to bring additional television signals to homes or whether it will be a part of the telecommunications revolution linking businesses through data and other high-speed services.
Adding more snow to the cable-business picture is a confusing jumble of governmental issues, ranging from the current legislative debate about American Telephone & Telegraph Co.'s role as an information provider to the increasingly complex state of the local franchising process to the thorny congressional debate about copyright, the fee system used to pay noncable programming sources.
Perhaps no single public policy issue domidnated the public and private meetings of the NCTA parlay than the AT&T question. Although acrimony between cable and telephone industries is nothing new, the industry now has been caught in the middle of a fierce debate between AT&T and the nation's newspaper publishers over AT&T's fervent desire to be granted the ability to distribute various kinds of information and advertising to the home. The newspaper industry, through its primary trade group, the American Newspaper Publishers Association, is aggressively fighting that effort in congressional and court forums.
"The threat to diversity by entry of telephone companies into the information market is further aggravated by the threat of encroaching government control over these services," K. Prescott Low, chairman of ANPA's government affairs committee warned the convention. "The participation of a regulated utility company in the provision of a competitive information service invites increased government intrusion into content-related judgments -- a result which newspapers and cable operators equally abhor."
Clearly, there is a growing tension within the industry's leadership about these issues. The possibility of statutory restrictions on AT&T's ability to market services to the home inevitably raises questions about whether similar restrictions on the cable industry might follow.
There is little the cable industry fears more than a so-called separations policy which, if adopted, would create a bridge between the owners of the cable into the home and those who send signals or programming and data over that some wire.
"We are getting that kind of a message, it's one telephone company lobbyists are pushing," claimed Gustave Hauser, president of Warner Amex cable. "But it's nonsense because it would put the industry, as we know it, outof business. We can't spend $100 million building a franchise without knowing the benefits." Hauser will testify on the subject before a Senate committee this week.
The issue also is linked to an ongoing Senate Commerce Committee study of first amendment and fairness issues related in large part to new video technologies. For the cable industry, which was grown dramatically from 9.8 million to 18.6 million subscribing homes over the past six years, largely as a result of loosening federal regulation, is faced with trying to maintain that unregulated status. In fact, the industry is trying to develop a regulatory status, under the first amendment, not unlike the news industry.
In a letter to Sen. Robert Packwood (R-Ore.), NCTA Government Affairs Vice President Robert Ross concluded recently that cable should be "accorded the same editorial discretion and journalistic freedom given newspapers under the First Amendment."
On the local level, the cable industry is facing the prospects of franchise reauthorization in many cities and towns, renewals that will test the industry's ability to convince municipal governments that local cable companies have fulfilled initial franchise agreements.
Even more important are the possibilities that some cities awarding franchises for the first time are looking seriously at municipal ownership and possibly operation of cable systems. Cities, pressed agressively, even at times scandalously by cable concerns seeking franchises, increasingly see cable as a way to enlarge municipal budgets.
For example, the city council of St. Paul, Minn., recently moved to make St. Paul the first major city to propose such a venture, rejecting applicants from major cable companies. A recent prepared for the District of Columbia city government also proposed a similar program.
Predictably, the industry vigorously opposes the idea, seeing municipal ownership of cable as a threat to the basic viability of cable television. And the industry won support for its view of municipal ownership from one powerful source at the convention -- Rep. Timothy Wirth (D-Colo.), chairman of the House subcommittee with communications responsibilities.
"We should ask if we want city councils to manage the entertainment, public affairs and culture networks of a city, thus leaving the door open for municipal control of programming," Wirth said at the convention. "A local legislative body could limit access to the system, bow to pressure and prohibit certain programming, or even take over all the service for itself. The potential for harm is enormous. But it is avoidable."