Hollywood stands to win big in newest cable war.

Congress eyes bills on Baby Bell, cable firm competition

Legislation wending its way through Congress to redraw the fine line separating cable television companies and phone companies may prove to be a boon for Hollywood. Producers expect the emerging information superhighway to open new avenues for them to peddle their films and shows as phone and cable firms vie for customers.

Already, the U.S. House of Representatives has approved a plan that would scrap prohibitions against regional phone companies -- or Baby Bells -- transmitting cable television programs and other "incidental services" across their local lines. Once free to enter the cable market, the Baby Bells could compete head-to-head with traditional cable companies.

"The Baby Bells already have the infrastructure and systems in place to begin transmitting anytime they want with comparatively little restructuring," said media specialist Sherrie Mazingo, chairwoman of the University of Southern California's journalism school broadcast department.

What's more, Mazingo said, with the Bells having all of these systems in place, including billing operations, many observers believe they can deliver cable TV for less than the cable companies do now.

Meanwhile, Hollywood producers and others in the entertainment industry see a whole new world of programming opportunities opening up.

"The consensus I hear when people talk about the information superhighway is that it will create more need for our product," said Gini Barrett, spokeswoman for the Public Affairs Coalition of the Alliance of Motion Picture and Television Producers.

This means more money for Hollywood, Barrett said, "but it will be small-screen programming that is more cost-sensitive than major motion picture production."

Rich D'Amato, senior director of public affairs for the National Cable Television Association, agreed that Hollywood stands to benefit under deregulation.

"The more entrants you have, the more channels you create, the more carriers you have out there, the more programming there will be," he said.

However, D'Amato said producers and others in the entertainment industry have been faring well on the growth of the traditional cable industry, which he said added about 130 new channels and networks last year.

"Whether or not the Bells provide (cable) service, there's going to be a need for more programs," D'Amato said. "There is simply an increasing need for programming."

But several important hurdles confront visions of the brave new world of telecommunications.

On June 28, the House overwhelmingly approved a two-bill package allowing regional phone companies to carry cable TV programming, cable television operators to carry phone service and Bells to carry long-distance phone service within a given state's boundaries.

The Senate, on the other hand, is considering a bill similar to the House package but with one big difference; it would allow the Baby Bells to branch out only after they face competition on their own home turf -- the local telephone exchange -- by giving up their local service monopolies.

The Baby Bells, which oppose the stricter guidelines that the Senate is considering, have already played their next card. Four regional telephone carriers have filed suit in federal court to overturn the 1982 court decree that barred them from offering long-distance service and required them to seek court approval to enter other markets -- including the cable TV business -- when the Bell System was originally broken up.

And most recently, the Federal Communications Commission granted one Baby Bell -- New Jersey Bell -- the right to carry televised programming to 38,000 people in Dover Township, N.J. The company said it will offer 384 channels at 20 percent below the area's basic cable rate.

If the Baby Bells have their way and are eventually allowed in the cable TV market, the competition would be fierce, USC's Mazingo said. While the cost of providing service will be an important determining factor as to how well a venture can complete, just what programs are being offered will also be highly important.

Mazingo predicted many companies may even vie for exclusivity in programming to get the winning edge.

If they enter the entertainment business, "the Baby Bells have got to fill air time," Mazingo said. "They've got to distribute. And they're going to have to find programming sources that are going to be different from what the subscribers can get on their cable service."