
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, June 27, 1995                   TAG: 9506270041
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-2   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Short

JUSTICES TO RULE ON CABLE TV VIA PHONE

The Supreme Court on Monday agreed to decide whether local telephone companies may enter the cable television business in their service areas and sell programming directly to their customers.

But the high court's ruling on the federal ban on telephone companies offering such cable services is not expected until sometime next year, and by then, Congress may have stolen the court's thunder.

The Senate earlier this month approved a bill that, among other things, would let local telephone companies enter the cable business. The House is expected to consider a similar bill next month.

A federal appeals court last year struck down the ban as a violation of phone companies' free-speech rights.

The cross-ownership ban dates back to a 1984 federal law, similar to one that prohibits local television stations from owning cable systems in their service areas. Government lawyers say the ban is intended to prevent anti-competitive practices in the cable industry.

Because local phone companies generally are subject to regulation under cost-of-service principles, they have an incentive to transfer an affiliated cable system's costs to captive consumer-ratepayers, Justice Department lawyers told the court.

That cost-shifting, they said, would result in telephone customers paying higher rates and cable TV competitors being subjected to unfair competition.

by CNB