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These Babies Can Do Without Cable



Now that the Baby Bells are edging toward more freedom to create and sell information services such as on-line computer data bases (page 92), they are casting an eye toward undoing other limitations. Among the most important is the 1984 law that bars phone companies from owning cable television properties in areas where they offer telephone service. While the Bells argue strenuously that they should be let into cable, their case is flawed.

Allowing the Bells to own cable TV operators wouldn't necessarily bring about competition that would hold down cable rates. In fact, phone companies might simply buy the existing franchises, thus combining two big monopolies into one huge one.

The Bells argue that they need to be in cable TV to justify the expense of wiring America with fiber-optic cables. But that doesn't hold water, either. If phone companies want to install fiber, they're free to do so now and try to recoup the cost later by charging independent cable companies for carrying TV signals over it. Owning the content doesn't change the cost-benefit equation of installing fiber.

Independent telephone companies such as GTE Corp. are already allowed to own and operate cable TV systems outside their local service areas, and the Bells ought to be given that right, subject to safeguards against cross-subsidization. But letting phone companies extend their monopoly in their home service area to another monopoly doesn't make competitive sense.

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