Cable Firms Ready to Fight Video Competition : Television: Their targets are a program-access law and the fledgling direct broadcast satellite industry.

As the Federal Communications Commission begins to draft rules under the new law re-regulating the cable business, cable companies are bracing to battle fledgling direct broadcast satellite operators over provisions aimed at promoting more video competition.

A little-known “program-access” provision in the law bars video programmers from “establishing different prices, terms and conditions” for the sale of cable fare to satellite broadcasters than they offer cable operators.

In December, the FCC will begin seeking public comment about the program-access rule and is expected to draft regulations to implement it by April.

Direct broadcast satellite operators--such as Hughes Aircraft Co.’s DirectTV Inc. of El Segundo--have long complained that providers of video programming have thwarted the growth of their industry.

The cable providers are accused of refusing to sell satellite broadcasters cable fare, such as MTV and CNN, or charging fees that are as much as 30% higher than what cable operators pay.

Unlike cable, which uses miles of wires to transmit video into the nation’s 55 million cable households, direct broadcast satellite relies on new technology that enables operators to beam dozens of channels of programming to viewers who have a special receiver hooked to a small satellite dish about the size of a bicycle wheel.

Because the DBS dish is cheaper, more compact and easier to install than the ones now in use, direct broadcast satellite is expected to capture a major share of video program distribution.

The impact will be greatest in rural areas where it is often not cost-effective to wire homes that are far apart.

Late next year, Hughes and Hubbard Broadcasting Inc. of St. Paul, Minn., hope to become the first major distributors to furnish DBS service. Government officials and industry analysts say the new technology offers the promise of lower costs and greater variety in programming.

“While rate regulation may bring down cable fees in the short term, over the long haul I think these (program-access) provisions may have a far bigger impact on consumers,” said Gene Kimmelman, legislative director of the Consumer Federation of America. “Program access will greatly increase competition. Even though it has never really been talked about much, it is the one provision the cable companies hate.”

The issue, however, was largely ignored during the debate over the Cable Television Consumer Protection and Competition Act of 1993--which Congress passed Oct. 5 over President Bush’s veto.

Public discussion of the measure largely centered on provisions that would cap skyrocketing cable rates by requiring that the federal government set maximum “reasonable” charges for basic cable service and those that would set minimum standards for cable service.

But as the battleground over the cable law shifts from Congress to the FCC, cable operators and programmers have begun to loudly attack the program-access requirement. Several hint that they may launch legal challenges against the measure.

In a speech to broadcast and cable industry officials in Washington last week, Viacom President Frank J. Biondi Jr. said that Congress “became spellbound by the siren call of program access” to the detriment of the cable industry. “We can expect (the cable law) . . . to wind up in the courts.”

Peggy Binzel, director of government affairs for Atlanta-based Turner Broadcasting System Inc., operator of Turner Network Television and Cable News Network, said Turner will challenge program access at the FCC.

Representatives of direct broadcast satellite operators are taking cable’s tough talk seriously and say they will oppose any attempt to weaken the new law.

“There is always some room for weakening the law through the regulatory process at the FCC,” said Lawrence Sidman, a Washington lawyer who represents Hughes. “But any substantial weakening by the FCC would be utterly inconsistent . . . and we would oppose it.”

Stanley S. Hubbard, president of his own direct broadcast satellite company in St. Paul Minn., noted that it was the cable industry some years ago that went to Congress so it would not have to pay high fees for retransmitting local broadcast stations over cable.

“Now when Congress comes along and says there should be access for DBS (direct broadcast satellite) operators, the cable companies say that’s not fair,” Hubbard said.