Cable Systems

At first glance it appears cable television firms got the best of the broadcast industry in round two of the Great Cable Reformation. But in the cable business, things are not as simple as they seem.It will take months to sort out what happened to subscribers' fees under the new law aimed at rolling them back. It may take a flock of MBAs months to figure out who got what in this week's showdown between broadcasters and cable operators.Cable operators no longer have the right to pluck broadcast signals from the air and retransmit them to customers.

Remember retransmission consent and all the talk about how cable TV subscribers might not be able to see their favorite network shows if an Oct. 6 deadline was not met?Remember, then, how just before midnight on D-Day all sorts of deals were made and extensions granted so that cable subscribers never missed an episode of "Roseanne" or "60 Minutes"?Well, another big deadline came and went unmet yesterday -- the deadline set by the 60-day extensions that were granted back in October. And guess what happened?

WASHINGTON -- Deciding that it would be smarter to run and fight again some other day, the House Energy and Commerce Committee voted 31-12 yesterday in favor of a bill that would impose tough new rate regulations on most cable television systems.But it is a much weaker bill than a measure passed by the Senate in January.The thrust-and-parry strategy marked an attempt by the panel's chairman, Rep. John D. Dingell, D-Mich., to sidestep the deadlocks and jurisdictional squabbles that have stalled House action on the bill for months.

Millions of cable customers nationwide, including many in the Baltimore region, are waiting to see if popular Fox shows such as American Idol remain on their cable systems as Sinclair Broadcast Group Inc. and Comcast Corp. approach tomorrow's deadline to reach a deal on programming costs. Comcast said yesterday that discussions between the two parties remain "productive" and that they are working to reach a "fair agreement that would avoid any interruption in service for our customers."

NEW YORK -- Time Warner Inc. said yesterday that it had agreed to acquire Cablevision Industries Inc. in a stock deal valued at $2.2 billion, a transaction that would let the company vie with Tele-Communications Inc. for the title of the nation's largest operator of cable systems.The move is the latest in an aggressive cable strategy by Time Warner, which two weeks ago bought the cable properties of Houston Industries in a deal estimated at $2.3 billion.In a meeting with analysts yesterday, Time Warner Chairman Gerald Levin indicated that the deal signaled that the company had completed its strategy of "clustering" its cable systems in particular areas, a strategy that permits it to offer telephone services as well as cable.

The Federal Communications Commission has adopted new regulations that would give local cities and towns greater authority in controlling cable TV rates, but most cable systems in major metropolitan areas would not be affected.Skyrocketing monthly fees and a flood of complaints about poor service have spurred both the FCC and Congress to take another look at four year-old legislation that freed the cable industry from local rate regulation.Now, 97 percent of the nation's 9,600 cable TV systems are exempt from any kind of price controls.

Discovery Communications Inc. will invest $500 million or more in a long-term partnership with the British Broadcasting Corp. to develop programming and new cable TV channels in the U.S. and abroad, the Bethesda company said yesterday.The deal is expected to lead to a BBC cable channel in the United States that would be owned by the British government-controlled broadcaster, yet distributed through Discovery's relationships with local cable systems.It also will give Discovery the right of first refusal to show nearly all of the BBC's nonfiction programming in the U.S., and the right to work with the BBC to develop programs for Discovery's present and future cable channels, including the Discovery Channel, the Learning Channel, and the Animal Planet Channel.

Stephen A. Burch was named yesterday president of Comcast Corp.'s Mid-Atlantic Division, overseeing operations in Maryland, Delaware, Virginia and Washington. Headquartered in Philadelphia, Comcast has about 1.5 million customers in the region. Burch expects that number to reach nearly 2 million as Comcast continues to acquire other local cable systems. Burch, 50, was formerly the regional senior vice president for Comcast. But the company's growth in the area prompted Comcast to form the Mid-Atlantic Division in May. Birch's responsibilities will remain the mostly same.

The battle now reaching a climax in Congress over re-regulating the cable television industry is a classic example of a bill intended to aid consumers that has almost been submerged by interest groups fighting each other for competitive advantages.The bill started as a consumer protection measure. Congress lifted controls on cable TV operations in 1984. Charges promptly skyrocketed in many areas. Often service quality dipped almost as quickly. The cable TV operators gained a reputation for concentrating on expansion and amalgamation but neglecting their captive audiences.

Two of the biggest U.S. cable television companies signed a $2.3 billion merger agreement yesterday, creating the No. 3 cable company in the country after Tele-Communications Inc. and Time Warner, and hastening a trend toward regional consolidation.Cox Enterprises Inc., an Atlanta-based newspaper and television company, agreed to buy the cable systems owned by Times Mirror Corp., publisher of the Los Angeles Times, New York Newsday, The Sun, and The Evening Sun. Cox operates 21 cable systems, publishes 18 daily newspapers and owns or operates 20 radio and television stations.