In an action that could revolutionize the structure of the television industry, the Federal Communications Commission last week called for dramatic deregulation of cable television.
If the rules are adopted, cable television will likely expand its operations sharply in urban areas, and continue with steady growth in more rural regions. Urban systems would become much more viable since a number of restrictions on what they can show would be eliminated.
The commission voted proposals to end limits on the number of "distant" television stations that can be brought, via satellite, to cable customers. It also proposed an end to regulations that allow local broadcast outlets to prevent cable operators from bringing in programs that also appear on the local station.
Under existing rules designed to protect local broadcasters, cable systems can rarely bring more than two outside television stations into their markets.
The FCC actions were heartily endorsed by the staff, which had presented the results of its two-year economic study of the cable industry and its potential impact on the broadcasting industry.
The study reported that there would be no significant financial harm to local television stations if cable operators were given new freedoms.
"Our studies showed that the actual impact was miniscule," said FCC Chairman Charles Ferris in an interview following the votes. "They showed that we could provide all of try. We had, until now, always presumed there would be some harm."
Ferris said the staff reports, which the commission adopted, provided the basis for the commission's actions, which he said were "designed to give the viewing audience many more options" on what to watch.
The new rules are subject to public comment for 120 days, after which the commission will decide whether to make them law.
"If these rules are ultimately adopted." Ferris said, "viewers around the country will have much more programming to choose from, and we will essentially be removing significant impediments to the development of future networks."
He also predicted growth in the number of so-called "superstations" if the rules are enacted. Superstations, such as WTCG-TV in Atlanta and WGN-TV in Chicago, are independents (not network affiliated) which specialize in being picked up by many cable systems around the country and alter their programming accordingly. Both stations offer, for example, considerable sports programming.
Ferris predicted that some of the superstations could develop, into virtual "alternative networks," and added that "the marketplace will sort itself out to deal with the economics."
For example, Ferris said, "a producer who went to a superstation to sell his show would extract higher revenues from that station based on the larger audience it would be reaching because of the cable retransmission."
At the same time, Ferris added, the station would be able to charge higher advertising rates because of its increased audience.
The National Cable Television Association said the FCC actions were the first major moves to deregulate its industry, and hailed the day they were voted as a "red-letter day."
"The conclusion of the inquiry (by the FCC staff) holds out the prospect of allowing cable television to compete freely with broadcast television for the first time," the NCTA said in a statement.
The cable TV industry say it serves 14 million homes across the country, or about 20 percent of all homes served by television. But in urban markets, the industry has grown only 12 percent since 1972.
There are still unresolved questions about copyright provisions for artists whose work is retransmitted on cable outlets. White House communications advisor Henry Geller has already called upon the FCC to recognize the need to reimburse those whose shows are sent over cable wires. Cable operators predict such a provision would sharply curtail their operations.
Under existing rules, cable systems pay a small amount of their gross receipts into a pot which in turn redistributes that money to artists. But many arists claim the system is woefully inadequate.