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Multichannel News — MarCh 28. 1988
<br />Mooney Says Cable OPS Should `Tread Softly'
<br />By Larry Jotfoll,
<br />WASHINGWN — Facing
<br />heightened scrutiny, cable op-
<br />erators should work hard ' to
<br />explain and justify their busi-
<br />ness actions to local govern-
<br />ments and lural media, and
<br />should take other actions to
<br />ensure the industry's future,
<br />according to James Moxney,
<br />president of the National
<br />Cable Television Association
<br />lie- made his remarks in a
<br />wide-ranging interview at
<br />NCTA's offices here last
<br />week
<br />As it prepares for the. House
<br />teleconnmunications subcorn-
<br />mittee's hearing on March 30,
<br />Mr Mooney said, the cable
<br />industry should "tread softly
<br />by being careful to not annoy
<br />any more people than you have
<br />to annoy
<br />"We're kidding ourselves if
<br />we think there isn't some
<br />pressure building up, and un-
<br />less vve handle ,ourselves very
<br />carefully ;`sere could be some
<br />serious moves in the next Con-
<br />gress that can set us back a
<br />bit,** 11U Mooney said
<br />Operators should especially
<br />&to% clear of making "gratu-
<br />itous and bellicose statements
<br />in the financ►vl press," T>t
<br />:v:,00ney said b;ut most of all,
<br />operators should tread softly
<br />•'bv providing satisfaction and
<br />a sense of value to, your cur-
<br />lu►nrro
<br />Air �%10 ones also said that
<br />on the .+hole, the cable indus-
<br />try is "quite happy to I••ave the
<br />Cable Act alone " He ac-
<br />►nowledged that factions
<br />within the industry ar•gur th
<br />e
<br />Cable critics fail to realize
<br />that the industry's vertical in-
<br />tegration, an oft -raised ►ssne
<br />that promises to come up at the
<br />Ilouw hearings, has produced
<br />alternative programting for
<br />audiences previously neglected
<br />by broadcasters, Mr. Mooney
<br />said, citing The Discovery
<br />Channel, Black Entertainment
<br />'television, Nickelodeon, C-
<br />SPAN, and Arts S Entertain-
<br />ment as examples.
<br />"All of these developments
<br />took place in the context and
<br />environment of Hollywood
<br />being flatly uninterested in
<br />prolucing for us. And the
<br />broadcasters at one point even
<br />had the FCC lersuadel to pre-
<br />vent us front buying front Ilul-
<br />lywool We were dri.-eo ,,
<br />,create our own programming,"
<br />he said
<br />When cable critics think ver-
<br />tical integration, they think
<br />home shopping and florne Box
<br />Office, 111r Mooney said. But
<br />Time Inc.'s development of
<br />national distribu-ion of a
<br />premium movie service (111101
<br />resulted in a technological ad-
<br />vance that gave birth to a new
<br />industry, he noted
<br />Cable's critics complotining
<br />about vertical intogration fall
<br />into three categories, Nlr
<br />Mooney said: II television
<br />competition (broadcasters); 121
<br />suppliers of programming to
<br />broadcasters (Ilollywoentl; and
<br />31 othe• distribution
<br />technologies, such as MDS,
<br />that would like to get get ('Able
<br />programming
<br />Regarding the. (:able Act,
<br />franchising authorities "knew
<br />what they were getting," Mr
<br />Moxoney said, adding that
<br />"everyone understeaod'• that
<br />among the elements of the deal
<br />"basic rates woodd ralst• soon+e"
<br />because they were kept
<br />artificially low by local regu-
<br />lulors
<br />Mr. Mooney said he does
<br />not hear from municipalities or
<br />the nulional associations that
<br />represent them le . g . , National
<br />League of Cities) interested in
<br />reopening those provisions of
<br />the Cable Act. lie added that
<br />reports of the cities wanting to
<br />change the act have been "ex-
<br />aggerated."
<br />The N(:TA president said
<br />he does hear cities saying that
<br />they would like relief from the
<br />federal Civil Bights Act if they
<br />are faced with the prospects of
<br />granting it second franchise,
<br />and litigation arising from
<br />Moo I► lilt ni li,ao
<br />The franchising process
<br />evolved "under conditions es-
<br />tablished by a regulatory re-
<br />gime, which effectively made
<br />cable cornpan" to build inef-
<br />ficient system-•' to handle ca-
<br />pacity for access channels, and
<br />provide all kinds of data tranr-
<br />mission and other functions for
<br />which there is no apparent
<br />market," NIr Mooney said
<br />He added that cable com-
<br />panies did not want to huild
<br />the systems that way, but they
<br />reluctantly agreed to those
<br />terms because it was the only
<br />we% they could receive a
<br />franchise
<br />The overbuild issue is im-
<br />lx,rtant, Fie luointed out, be-
<br />cause of the unfairness to the
<br />incumbent companies if sec-
<br />ond franchisees are able to
<br />cherry -pick only the most af-
<br />fluent areas "Fur the rules of
<br />the game to be changed now 1
<br />think would tie inequitable to
<br />people whose investment had
<br />to be made under that re-
<br />gime," Mr Mowteey said
<br />He pointed nut that cherry -
<br />picking can alai be argued
<br />against as a public-podic-, mat-
<br />ter, in terms of fairr►ess to the
<br />public. Should some neigh
<br />bowh4owl% he able to get sornr-
<br />thing that tothers can't" i
<br />
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