The Federal Communications Commission will consider rules at its Oct. 20 meeting allowing local telephone companies to provide video services, the commission announced.
The pending video dial-tone rules have generated more than 30,000 pages of pleadings by local phone companies, cable operators and other interested
parties.All seven regional Bell operating companies, Sprint, GTE and Contel have plans to offer video services. The FCC has approved special applications for five trials and one commercial video dial-tone offering. At least 24 applications are pending, waiting for the FCC to establish ground rules.
The FCC regulates broadcasters and cable operators and has moved to exercise its authority over phone companies that wish to offer the same
services. The phone companies have also fought for their right to offer video services in the courts, winning three court decisions on First Amendment
grounds. "We've been looking forward to this for some time," said Edward Young III, vice president and associate general counsel for Bell Atlantic. Young said the commission should not be swayed "by those who want to delay implementation of video dial tone for the sole purpose of protecting their monopoly markets."
Bell Atlantic has FCC approval to build a video network in Dover Township,
N.J. Opposition to video dial tone centers on three issues: cost allocation, programming and fairness.
Cable operators argue that the phone companies will find a way to use revenues derived from their guaranteed profits to build their cable systems. Such cross-subsidization could be easily hidden because the improved networks being built for cable can also be used for telephone service.
The FCC has proposed cost-allocation and cross-ownership rules to prevent the phone companies from charging phone customers for investments or operating costs for video networks, technology and programming.
The FCC has prohibited the phone companies from providing their own video programming. In the past, phone companies have been treated as "common carriers" that must carry any content that anyone wants to deliver at the regulated tariff. As common carriers, phone companies would not be required to obtain and pay for municipal franchises as cable operators do.
The phone companies argued successfully in federal court that restrictions on programming are unconstitutional. The heavily regulated cable operators say the phone companies will be able to give their own programming better terms.
The cable operators complain that they are banned from offering phone service in most states and argue that the phone companies shouldn't be allowed into video before telephony competition is realized.
The communications bills that died in Congress last month were written to mediate the dispute over timing. Telephone companies would have had to wait before being allowed to provide video services if the bills had been signed into law.
Sen. Ernest Hollings, D-S.C., blamed lobbying by the phone companies for his bill's demise.