RULING LIMITS TCI'S SATELLITE SERVICE LINK.

Byline: Mark Landler The New York Times

If Tele-Communications Inc. is still determined to be a full-fledged player in the high-power satellite television business, it may no longer have a choice but to strike a deal with Rupert Murdoch and MCI.

The federal government reaffirmed on Tuesday a decision that bars Tele-Communications from transmitting a direct-broadcast satellite service to American homes from a Canadian-owned satellite.

The Federal Communications Commission originally rejected the request by TCI, the giant cable company, on July 15, on the grounds that Canada had not authorized U.S. companies to use the satellite. But TCI and its partner, Telquest Ventures, appealed the ruling.

Now, with this final ruling, the FCC has closed the last obvious avenue for Tele-Communications to upgrade its medium-power satellite service, Prime Star, without the help of Murdoch's News Corp. and MCI Communications Corp. These companies jointly control the only available U.S. orbital slot for a high-power satellite service.

Tele-Communications, which serves portions of the San Fernando Valley, held extensive negotiations last year with both companies about combining Prime Star with a direct-broadcast satellite service they were starting. The talks went nowhere, however, and TCI switched its sights to transmitting Prime Star from the Canadian satellite.

``The FCC's decision certainly increases the likelihood that a deal will get struck between TCI and News Corporation,'' said Rick Westerman, an analyst at UBS Securities. ``One of the reasons that a deal makes sense is that the two sides have such complementary assets.''

News Corp. and MCI plan to start a direct-broadcast satellite service - called American Sky Broadcasting, or A Sky B. But they must wait at least a year to take delivery of four high-power satellites, which will transmit the service. TCI, on the other hand, already owns a satellite but lacks an orbital slot in which to put it.

``It just happens to be the only uncommitted DBS satellite on the Earth,'' said Robert Thomson, TCI's senior vice president for policy planning, ``We suspect it will be a marketable asset.''

Thomson and executives at MCI and News Corp. said Tuesday that their companies had not revived any talks. While TCI may now have fresh motivation for coming back to the table, several analysts said the negotiations could receive a jolt of momentum from the other side as well.That is because MCI is increasingly concerned about the cost of A Sky B, executives familiar with MCI's thinking said; analysts estimate those costs at between $1.5 billion and $2 billion. MCI chairman Bert Roberts indicated Monday that the company would be willing to cut its equity stake in A Sky B to attract a new partner.