Clintons Problems Are Cables Gain

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Washington -- With world stock markets churning, the
economy of nuclear-tipped Russia imploding and President Clinton's grip on power
loosening, no one in Congress is tapping a foot about cable rates these days.

According to House Speaker Newt Gingrich (R-Ga.),
it'll be business as usual on Capitol Hill until the end of this Congress in early
October. That is, he said, except for the House Judiciary Committee -- the panel charged
with sifting through independent counsel Kenneth Starr's report on presidential sex
and alleged perjury.

But people who make their living by shielding cable from
Washington-induced trauma said Gingrich's view was mistaken. They said an autumn
crammed with crises will surely deflect attention away from cable-rate bashers and
program-access agitators.

"We're not expecting anything," one industry
source said.

"I think that the likelihood of any meaningful
legislation going through this year is exceedingly slim because of time, because of
jurisdictional conflicts and because the relevant committees involved have a big-agenda
item other than this," one broadcasting source said.

So for the next four or five months, the cable industry can
relax: There won't be a rate-freeze bill, a program-access-overhaul bill, or a bill
forcing ESPN onto the a la carte menu to spoil the holidays.

"I think that nothing's teed up," one cable
lawyer said. "You'd have to objectively look at where all of the various bills
are and conclude that there is not a very substantial chance that anything will be
enacted."

The House Judiciary Committee is headed by Rep. Henry Hyde
(R-Ill.), sponsor of a bill (H.R. 3559) that relies on antitrust law to ban exclusive
contracts between cable programmers and incumbent cable operators. Busy supervising the
review of Starr's report, Hyde and his committee will not have time to consider that
bill or related measures this year.

"Their dance card is filled for the foreseeable
future," said Ken Johnson, spokesman for Rep. Billy Tauzin (R-La.).

Next year, however, the cable industry will face an early
test: Can it stop a bill (H.R. 2757) that would continue federal price controls after
March 31, 1999? If Republicans maintain or tighten their grip on the House and Senate, as
expected, passage of a cable-rate bill seems unlikely, bordering on impossible.

The next question is: Will Clinton still be in office next
spring, or will Vice President Al Gore have seized the reins by then? It might not make a
difference: Because cable lobbyists have cozied up to former Gore personnel and
confidants, it doesn't seem likely that Gore would try to make people forget the sins
of his predecessor by lashing out at a corporate target like cable.

Congressional aides who were interviewed said the
legislative window is essentially closed until next year.

Capitol Hill sources mentioned that the passage of a bill
overhauling the Satellite Home Viewer Act to allow provision of local-TV signals under
some kind of must-carry scheme was now highly unlikely -- not only because Starr's
report landed last week, but also because lawmakers are planning to go home Oct. 9 to
campaign.

"Just as a practical necessity, [SHVA legislation] is
going to slip to next year," one Senate source said. "I think that it's
looking increasingly like that."

"I think that the delivery of the Starr's report
on Capitol Hill has effectively killed any chance of local-into-local and white area being
resolved," Johnson said. (The white-area issue refers to dish owners who are legally
eligible to buy distant-network signals.)

Johnson did not rule out the possibility that satellite
provisions could be added to a spending bill, but he said such a step would require
Gingrich's intervention.

"If the leadership decided that it was critically
important to solve one of these issues, it could be done through an appropriations
rider," Johnson said.

A broadcasting source denied that the National Association
of Broadcasters offered a deal to the satellite industry last week involving carriage of
distant-network signals. The deal reportedly would have called for a March 15 cutoff date
of illegal subscribers to distant-network signals and a phase-in of must-carry obligations
for direct-broadcast satellite companies that transmitted local-TV signals into local
markets.

The report surfaced following a meeting between NAB
personnel and Senate Commerce Committee chairman John McCain (R-Ariz.), who has been
trying to broker a compromise and cobble together a bill with Senate Judiciary Committee
chairman Orrin Hatch (R-Utah).

"There was a flurry of activity over the last day or
so on the possibility of a local-into-local bill," one cable lawyer said late last
week. "There was the view that broadcasters might be willing to compromise on a
phase-in of must-carry, but that was a trial balloon that got punctured yesterday
afternoon."

The cable industry is opposed to a phase-in, favoring full
must-carry obligations in each market where a DBS provider has elected to offer local-TV
signals.

A Senate source gave one bill an outside shot at passing --
a measure that has passed the Senate and two House panels in different forms, which would
roll back copyright fees paid by satellite carriers to beam superstations and
distant-network signals to dish-owners.

One broadcasting source agreed, saying, "That probably
has some legs."

Johnson said Tauzin has tossed in the towel on his bill
(H.R. 4352), which would allow local governments to deny deregulation to cable operators
that failed to provide several programming packages; would require cable operators to
provide a broadcast-basic tier with no satellite channels included; and would extend
program-access laws to all cable programmers.

"It was always intended to be a starting point -- a
shot across the bow -- to send a message to the cable industry to be more responsible when
it comes to future rates," Johnson said.

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