Cable industry can't duck regulators

MULTIMEDIA & COMMUNICATIONS

May 11, 1994|By Michael Dresser | Michael Dresser,Sun Staff Writer

If you look like a duck and walk like a duck and quack like a duck, look out. You're going to end up being regulated by the State Duck Commission.

That was the gist of a decision handed down Thursday by the Public Service Commission of Maryland, dismaying cable television operators.

The PSC told the state's cable television operators that if they decide to waddle into Bell Atlantic's duck pond, they're going to have to play by the same rules -- and that means answering to the regulators.

With the age of local telephone monopolies fading into history, cable television companies have been eagerly contemplating the prospect of using their miles of coaxial cable to bring telephone and interactive multimedia services into U.S. homes.

The prospect they haven't been relishing is that of answering to 50 state regulatory authorities that have no cozy ties to the cable industry. After all, the cable industry has just come back under the regulatory thumb of the Federal Communications Commission, which recently ordered a series of painful rate rollbacks.

The Maryland decision arose out of a broader case filed by John Glynn when he was state people's counsel, a position he has since left (and which Gov. William Donald Schaefer has left conspicuously unfilled since appointing the independent-minded Mr. Glynn to a judgeship).

The filing called on the PSC to redefine its jurisdiction in light of the convergence of regulated and nonregulated industries.

The cable operators took the position that they should not be regulated because they aren't telephone companies. The Office of People's Counsel, along with the PSC staff and Bell Atlantic Corp., argued that if a company offers telephone-style services, it is a telephone company regardless of whether that is its main business.

The PSC, not surprisingly, ruled that the PSC has a lot of power. The commission agreed that under state law it does not have the authority to regulate traditional one-way cable television service, but it asserted its jurisdiction over "other telecommunications services such as voice-grade telephone service, teleconferencing, data transmission, text transmission and interactive multimedia services."

For Bell Atlantic, the decision provides the "level playing field" it wanted. "It's fine by us," said spokesman Dave Pacholczyk.

J. Edward Davis, the lawyer for the Cable Television Association of Maryland, Delaware and the District of Columbia, said the cable operators were evaluating the order and would meet soon to determine whether to challenge the PSC in court.

While the cable industry will no doubt continue to lament the PSC's action, the lure of telephone revenue will likely overcome any reluctance to submit to regulation.

"I do not think that this order will be a deterrent at all," said Wayne O'Dell, president of the cable association.

Having left the cable industry bruised, the commission did offer it a rhetorical ice pack.

"The commission prefers to employ light-handed regulation with respect to nondominant carriers who offer services which are subject to competition," the commissioners wrote. "Thus today's decision . . . does not necessarily mean that cable television companies will be burdened with intrusive regulation by this commission."

Necessarily?

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