Rivals Have Net Access: NCTA

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Washington -- The cable industry is calling on federal
regulators to ignore claims by phone companies that they need stronger program-access
rules in order to compete for video subscribers.

In a Sept. 1 filing, the National Cable Television
Association said the cable-programming market is functioning properly, claiming that
competitors like direct-broadcast satellite carriers and telephone companies are gaining
larger and larger chunks of the market almost monthly.

In a Federal Communications Commission filing last month,
the NCTA reported that cable incumbents' market share had dropped over the past 12
months from 85 percent to 82 percent, calling it a trend that showed no signs of
diminishing or reversing course.

Two weeks ago, the NCTA said cable competitors have access
to "virtually all of the programming that has significant viewership," and it
urged the FCC to report to Congress that no changes were needed in the program-access
regime.

"The NCTA urges the [FCC] to recommend … that the
marketplace, and not the government, should dictate the terms of video competition,"
the 13-page filing said.

Under FCC rules, satellite-delivered networks that are
owned by cable operators cannot be withheld from various cable competitors.

The rules, which grew out of the 1992 Cable Act, are
largely responsible for the rapid success of the DBS industry, which now claims 11.9
million subscribers, compared with about 66 million for cable.

In a separate FCC filing, a coalition headed by Ameritech
New Media and BellSouth Corp.'s BellSouth Entertainment said its members have access
to many networks, but they should have access to all of them.

And the group alleged that it is paying more than cable
incumbents pay for programming, making it harder for new entrants to compete on price.

"Programming is the essence of the video-distribution
market," the telcos said. "If nascent competitors cannot acquire programming
that it attractive and offer it to their target subscribers, no other aspect of
competitive entry is important."

BellSouth and ANM are the marquee names of the Competitive
Cable Coalition, which also includes RCN Corp., little-known McLeodUSA, McLeodUSA's
Dakota Telecommunications Group unit and Hiawatha Broadband Communications Inc.

The coalition is an informal group, with no leader or
office. "It's an ad hoc, conference-call group at the moment," BellSouth
spokesman Bill McCloskey said.

The CCC called on the FCC to ensure access and fair prices.
"To the extent the [FCC] believes it lacks adequate statutory authority, it should
formally request additional authority from Congress to address these issues," the
coalition said.

The NCTA responded to the price-discrimination allegation
by asserting that the most efficient distributors are entitled to the best rates.

"There is certainly no reason why programmers should
be forced to give every buyer the same price as the most efficient buyer," the
association said.

The NCTA added that even if competitors are paying more per
subscriber for programming, "there is no evidence that alleged price differentials
are inhibiting the ability of alternative [distributors] to compete."

One way cable can avert the program-access rules is to pull
programming off the satellite and distribute it terrestrially.

Although little programming has migrated off satellite, the
CCC said, the geographic clustering of cable properties -- interconnected by AT&T
Corp.'s national fiber network -- could result in an increase in the distribution of
video programming via landline facilities.

"The pendency of the AT&T acquisition of MediaOne
[Group Inc.] exacerbates these problems both nationally and locally," the CCC said.

In a final request, the CCC asked the FCC to overhaul its
rules governing access to wiring in apartment buildings, hotels and hospitals. The group
said recent efforts by the FCC to expand access to the wiring have failed.

The NCTA said further expansion of inside-wiring rules was
unnecessary.

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