Is Legal Static Distorting Cable Picture? : Media: Consumer groups and lawmakers worry that reform act is being jeopardized by resourceful industry lawyers.

Consumer groups rejoiced in April after federal regulators took the first major step toward implementing a tough new cable law by ordering a $1-billion rollback in cable TV rates.

But today, some consumer groups--and some lawmakers--worry that the law’s promise of lower monthly cable fees, better service and more video competition is being jeopardized by resourceful cable industry lawyers who have managed to get the law tied up in nearly half a dozen courtrooms from New York to California.

“The cable industry has spared no expense and taken a ‘leave no prisoners’ philosophy in their litigation,” said Andrew Jay Schwartzman, executive director of Media Access Project, a Washington-based consumer group that is itself opposing the cable industry in court.

The industry acknowledges the litigation, but insists that it is hardly gratuitous.

Instead, industry executives say, lawsuits are an inevitable outgrowth of the sweeping changes wrought by the new law, which imposes onerous burdens on some cable operators.

“The whole ballgame has been changed,” said John P. Cole Jr., a lawyer for Daniels Cablevision Inc., a cable operator trying to overturn a provision of the new law. “And when you change the ballgame, you invite litigation. It’s fair to say some cable operators are fighting for their survival.”

Schwartzman said the U.S. Supreme Court must share the blame for the explosion of cable litigation because it has “ducked the core issues of how cable is to be treated under the First Amendment. The mere absence of precedents generates litigation.”

The latest legal skirmish over the Cable Television Consumer Protection and Competition Act of 1992 is set to unfold over the next few days in a courtroom in New York. Public interest groups will join the Hughes Communications subsidiary DirecTV and several telephone companies in formally challenging a massive antitrust agreement that 40 state attorneys general reached last month with some of the nation’s biggest cable companies.

The challengers contend that the antitrust agreement--which was aimed at ensuring that satellite broadcasters and others have access to cable programming--could have the opposite effect.

They contend that if the pact is approved by U.S. District Judge John Sprizzo, the seven cable companies could lock up exclusive contracts for programming, shutting out satellite broadcasters and other competitors, some of whom are only beginning to emerge.

Thus, the challengers say, the cable companies could evade a key provision of the cable act.

The outcome of the dispute could have a major impact on monthly cable fees and how much programming is available to alternative video providers such as DirecTV, a new service that plans to broadcast directly to small, home-based satellite dishes.

Such companies have long complained that the cable industry has balked at selling them marquee cable programming such as MTV, CNN, ESPN and HBO.

“I am concerned with the effect these consent decrees may have on the development of full competition to the cable industry, particularly . . . on the direct-broadcast satellite industry, potentially the most viable competitor to cable,” Rep. Billy Tauzin (D-La.) told Sprizzo in a letter last month. He added that the consent decrees “undermine both the letter and spirit of the 1992 cable act.”

The decrees stem from a multistate examination of a partnership between a unit of General Electric Co. and seven cable companies that serve nearly half the nation’s 57 million cable subscribers.

Called Primestar Partners Ltd., the suburban Philadelphia firm launched a direct-broadcast satellite TV service three years ago that it said was designed to offer expanded TV service in rural areas where cable is unavailable. But state law enforcement authorities have alleged that Primestar was created by the cable industry to stifle competition.

The Primestar dispute over program access comes in the wake of recent warnings by the Federal Communications Commission that it will have to delay implementation of the new cable law until Oct. 1 because the FCC does not have enough money to administer it. The dispute also follows at least four other major lawsuits involving various aspects of the cable law.

* In Washington, U.S. District Judge Thomas P. Jackson is presiding over a suit by cable giant Time Warner challenging the rate regulation and program access provisions of the cable law.

* At the U.S. Supreme Court, Time Warner has joined cable operators Turner Broadcasting System and Daniels Cablevision in challenging “must carry” cable rules that allow local broadcasters to demand that their programs be carried on cable systems.

* In Los Angeles, a three-judge panel in U.S. District Court is hearing a lawsuit brought by a unit of Times Mirror Corp., parent of the Los Angeles Times, challenging the “must carry” rules.

* In San Francisco, Viacom International--after initially winning a court ruling barring the FCC from enforcing “must carry” rules for 30 days on Viacom’s cable system in the Bay Area--saw the ruling vacated a few weeks later.

The Cable Act

Some key provisions of the 1992 federal cable law:

* Rates: Congress ordered the Federal Communications Commission to establish procedures for cutting rates the FCC finds “unreasonable.”

* “Must carry”: A cable operator with more than 12 usable activated channels must set aside at least four to carry the signals of local commercial TV stations that demand to be carried over the cable system.

* Service: Cable installation must occur within seven days of a customer’s request, and service calls must be answered within 30 seconds. Callers should receive busy signals no more than 3% of the time. If there is an interruption in service, repairs must begin within 24 hours of the malfunction becoming known.

* Program access: Cable operators, satellite programming vendors and other marketers of cable programming must sell it on a non-discriminatory basis to cable or other carriers in order to promote competition and diversity.

Source: Cable Television Consumer Protection and Competition Act of 1992