Cable Bill Likely to Face Legal Challenges

IN its first override of a veto by President Bush, Congress pushed through legislation Oct. 5 to regulate some cable television rates and increase competition in the industry.

It may take a few years before this law's full impact on consumers becomes clear, says Stuart Brotman, a senior fellow at the Annenberg Washington Program in Communications Policy Studies. The details of the legislation must be clarified by the Federal Communications Commission, and the strength of FCC enforcement will depend on who wins the November election, notes Mr. Brotman, a professor at Tufts University in Medford, Mass.

Several provisions may face legal challenges, he adds. Those include a measure allowing broadcasters to seek fees from cable operators for the right to retransmit programming. Cable companies may also challenge a requirement that they be willing to sell self-produced programming to competing systems such as direct-broadcasting satellite and microwave.

The law will regulate a basic tier of cable programming and allow consumers to challenge rates on a second tier. Consumer advocates expect this will reduce rates, since most markets are now virtual monopolies.

The law does not regulate rates in pay-per-view or other premium services. Here Congress hopes that fresh competition will give consumers fair prices. "The real, ultimate competitors [to cable] will be the telephone companies," which have recently won the right to deliver a "video dialtone" to homes, Brotman says.

On Oct. 5, New York Telephone announced it would be the first phone company to enter this field, beginning a trial in January with 2,000 Manhattan customers.