In a major step toward their entry into the television business, regional phone giants Pacific Telesis and Bell Atlantic Corp. on Friday won a court order that should eventually enable them to beam television programming across the nation.
Although the phone companies need to clear several more regulatory hurdles, they hailed the waiver issued by U.S. District Judge Harold Greene as a crucial victory.
"What we are trying to do is compete with cable television on an even playing field," said Craig Watt, a spokesman for San Francisco-based Pacific Telesis, parent of Pacific Bell, which already has plans to offer television programs in Southern California. "We are very pleased."
In trying to use their phone lines to transmit television signals, regional telephone companies have said they were at a serious disadvantage to cable television operators, which are allowed to use efficient and money-saving satellite signals to pick up video programming.
The waiver granted Friday lets the phone companies use satellite broadcasting signals too. Without the waiver, the phone companies would have had to pay other companies to do this or set up an expensive system of transmitters around the country.
Greene, who oversees the 1984 decree that broke up the AT&T; telephone monopoly, was granting a waiver from conditions established as part of the AT&T; breakup that placed numerous competitive restrictions on the newly created regional phone companies.
"We now have the competitive freedom we need to deliver the same and even better kinds of video programming services on the same virtually unrestricted basis as cable companies can with no artificial boundaries," said James Young, Bell Atlantic's vice president and general counsel.
Bell Atlantic was the first Bell company in the country to win federal court permission to provide cable television service within its five-state region, which includes the District of Columbia.
That landmark 1993 case prompted other phone companies to successfully challenge a 1984 Cable Act provision barring telephone companies from owning and programming cable systems inside their telephone service areas.
Bell Atlantic is building a cable facility in Dover, N.J., to serve 38,000 people. It plans to build video networks in major cities throughout its telephone territory. But those plans, contested by the cable industry, have yet to be approved by the Federal Communications Commission.
PacTel began construction of a multibillion-dollar communications network last May that will be capable of offering telephone, television and other electronic services to 1.5 million homes in the San Fernando Valley, Orange County, San Diego and San Jose.
PacTel has also teamed up with two other regional phone companies--Bell Atlantic and Nynex--to develop programming for interactive services.
PacTel's Watt said the firm still must win a waiver from the Federal Communications Commission to begin building the video portion of its network. The FCC is expected to act on the company's request in about a month, he said.
The company is also awaiting the outcome of a lawsuit in which it seeks to overturn government rules that prohibit regional phone companies from developing television programming for broadcast over their own networks, Watt said.