In a decision that could help prod telephone companies into the cable TV business, the Federal Communications Commission has ruled that Bell Atlantic has a right to carry sports programming owned by a competitor. The victory is important for would-be cable operators itching to get their claws into the profitable eyeballs of TV viewers everywhere. And it could mean that the prospects of as-yet elusive cable TV competition just got at least a bit brighter.
At issue are program-access rules that stem from the 1996 Telecommunications Act. They say that cable operators must make industry-owned channels available to new competitors. Cable operators have tried everything to find loopholes that would allow them to retain exclusivity over at least some of their most popular fare.
Enter Cablevision Systems, whose majority-owned Rainbow Media Holdings Inc. programming subsidiary oversees some of the most popular regional sports channels in the New York-New Jersey-Connecticut area. Bell Atlantic, which has set up a new video system in the affluent New York City suburb of Dover Township, New Jersey, has been trying to negotiate with Rainbow for months to get SportsChannel New York.
To no avail, Bell Atlantic claims. Its efforts have hit a wall of canceled meetings and unreturned phone calls. Nonsense, Cablevision has rejoined. The real issue, the company says, is that Bell Atlantic is improperly holding on to a US$346,500 deposit Cablevision made to get space on Bell Atlantic's video system.
The FCC last week dismissed Cablevision's argument about the deposit, saying that should be considered as a separate issue. In the meantime, the commission ordered Rainbow to get serious about negotiating with Bell Atlantic about SportsChannel New York.
The order has unsettled cable-industry lawyers.
"It looks like the FCC went out of its way to trivialize Rainbow's argument," said John Seiver, a cable-law specialist with the Washington, DC, firm of Cole, Raywid, and Braverman.
Seiver said the order tells the likes of Bell Atlantic that they can ride into town and get their hands on any cable channels they want in the name of competition.
Indeed, a Bell Atlantic spokesman called the decision a "big victory" and said it will make it easier for the company to compete in Dover and perhaps anywhere else it may choose to go (although it hasn't announced any other immediate video entry plans in its region).
