The Federal Communications Commission, saying that more competition is needed in the cable television industry, says it will consider allowing local telephone companies to own cable systems.
The FCC said it may ask Congress to drop the 17-year-old rules barring local telephone companies from owning cable companies in their service areas.New technologies such as fiber optic transmission, which telephone companies are developing, could in the future provide video, telephone and data services to homes if the cab-le/telephone cross-ownership rules were abolished, the FCC staff said in its recommendation to the commission.
The commission recently voted 3-0 to seek public comment before making a final decision on a recommendation to Congress, which will have the final word.
"I would like to see the public benefit from competition in the delivery of video products by wire," FCC Chairman Dennis Patrick said at the FCC meeting.
But Commissioner Patricia Diaz Dennis said she was not yet convinced that phone companies should be allowed to control the content of programs.
The proposal is likely to run into stiff opposition from the cable industry.
"Federal law clearly prohibits telephone companies from operating cable systems within their local service areas," said James Mooney, president of the National Cable Television Assocation.
The cable industry has fought hard to keep the phone companies out of their business, arguing that the huge firms would stamp out industry competition.
"There is concern about the sheer economic clout of the telephone industry," said Jerome Kern, a cable industry lawyer at the firm Shea and Gould in New York.
Congress incorporated the FCC rules into law in 1984, thereby insuring that any change would have to receive congressional approval. Congress has in the past disagreed with the deregulation proposals of the FCC.
The cross-ownership rules in general prohibit phone companies from owning cable television firms in their telephone service areas. A phone company can own cable firms in locations where it is not the local provider of phone service.
The rule was adopted in 1971 to prevent anti-competitive abuses by phone companies, such as restricting cable companies' access to poles or subsidizing cable operations with revenues from phone customers.