FCC halts GTE's cable experiment Company operates system in Calif.

November 11, 1993|By Los Angeles Times

WASHINGTON -- In a decision that further thickens the cloud of controversy over telephone and cable cross-ownership, federal regulators have ordered GTE to end its federally sanctioned experiment to offer state-of-the-art video services in Cerritos, Calif., with Apollo Cablevision.

After granting to GTE in 1989 a five-year waiver from federal rules barring a single company from providing cable and phone service in the same community, the Federal Communications Commission rescinded its decision this week.

The FCC cited a 1990 federal court's determination that the agency had not adequately justified why it was necessary to let GTE contract with a construction company affiliated with Apollo to design and build the interactive system. The court at that time sent the case back to the FCC for further consideration.

The rules governing cable TV and telephone cross-ownership have become engulfed in a legal quagmire as disparate technologies in the burgeoning $300 million telecommunications industry meld into electronic networks capable of handling voice, video, computer and data communications from under one roof.

The Cerritos ruling comes only months after U.S. District Judge T.W. Ellis III opened the door for Chesapeake & Potomac Telephone Co. of Virginia, a Bell Atlantic subsidiary, to provide several hundred channels of video programming in its Virginia RTC telephone service area.

Bell Atlantic followed up its court victory, which is on appeal, by announcing that it plans to merge with cable giant Tele-Communications Inc. and offer video and telephone service in various locales throughout the United States.

Under federal statutes and FCC rules, telephone companies are barred from providing video programming directly to households through an affiliate in their service area. However, the FCC has the authority to waive the cross-ownership restrictions for "good cause."

"Although this decision took a long time, it does put people on notice that waivers will need to be for good cause," said Jerry Yanowitz, vice president of federal affairs for the California Cable Television Association.

But Richard Welch, an attorney in the FCC general counsel's office, suggested the impact of the decision was not that far-reaching. He noted that GTE's was the only "good cause" waiver of cross-ownership rules issued by the FCC.

The FCC decision could be the final straw for GTE's ill-fated experiment in Cerritos, although what will happen to the project is unclear. A GTE spokeswoman said the company was "disappointed" by the FCC ruling, which becomes effective March 9, and was mulling its legal options.

In Cerritos, GTE operated what was perhaps the most sophisticated cable system in the United States, allowing many subscribers to use their TV sets interactively for such things as shopping, educational instruction and video games. But the system has attracted relatively little interest, and the waiver authorizing the service was set to expire in July.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.