The Bush administration yesterday reaffirmed its opposition to congressional efforts to re-regulate the cable television industry, but announced for the first time that it would back provisions to allow the nation's phone companies to get into the cable business.
The administration staked out its position in a letter to Rep. Edward Markey (D-Mass.). It came on the eve of a House subcommittee's consideration of a bill that would reimpose some restraints on cable TV subscription rates and would force the cable industry to make its programming available to competitors, such as direct-broadcast satellite operators. The cable industry was largely deregulated under the Cable Act of 1984.
The administration had registered its opposition to cable re-regulation earlier during Senate committee consideration of a similar cable bill. Despite those objections, the Senate committee overwhelmingly passed the measure, which contains all of the major provisions that will be taken up by Markey's subcommittee today.
Yesterday's letter -- which was signed by Commerce Secretary Robert Mosbacher and James F. Rill, who heads the Justice Department's antitrust division -- said the administration prefers that the marketplace, not government, put checks on cable rates through vigorous competition.
"For instance," the letter said, "the administration believes Congress should consider removing the current legislative prohibitions on telephone company entry found in the 1984 Cable Act."
The telephone companies have been spoiling to get into the cable business for years and have been vigorously opposed not only by the cable industry, but also by the nation's newspaper publishers, who fear the phone companies will begin to attract some of their advertising revenue.
Both the House and Senate bills contains no specific proposals to permit telephone companies to deliver video programs. But Sen. Conrad Burns (R-Mont.) is expected to introduce a bill in the Senate today that would permit phone companies other than the seven former Bell operating companies to enter the business on a limited basis.
On a a related matter, Mosbacher and Rill said they also opposed a requirement in the draft House bill that would force programmers such as CNN or Home Box Office to offer their shows both to cable systems and to their competitors.
The intent of the "program exclusivity" provision is to spur competition to cable television from alternative sources, such as the satellite system announced recently by Rupert Murdoch and NBC. That measure, like the phone company provision, has been opposed by the cable industry. The administration believes the provision is not necessary because current antitrust law protects competitors against potential cable industry abuses.