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Cable TV Could Get Its Mouth Washed Out

When Corporate America, the left-leaning American Civil Liberties Union, and the right-tilting Progress & Freedom Foundation all team up to lobby Capitol Hill, chances are good that they will prevail. But normal rules don't apply in America's culture wars -- especially when the issue is protecting children from the sometimes racy fare on cable TV. Democrats, eager to show that they, too, care about "family values," are joining the cause championed by the powerful new chairman of the Senate Commerce Committee, Ted Stevens (R-Alaska). "This is legislative crack," frets Andrew Jay Schwartzman, chief executive of the Media Access Project, a Washington public interest group that defends First Amendment rights.

Despite the protests of Schwartzman and other free-speech advocates who argue that the cable biz should enjoy greater First Amendment safeguards than broadcasters that use public airwaves, cable -- and even satellite TV and radio -- could become subject to the government's indecency rules. "It absolutely will happen; it's only a question of when," says Adam D. Thierer, a senior fellow at the Progress & Freedom Foundation. Decency advocates say the Supreme Court may look at cable protections differently now that 85% of households have cable or satellite, vs. 15% nearly 25 years ago when the court said that the rules did not apply to cable.

Cable faces a formidable coalition that includes the conservative Parents Television Council and liberal Consumers Union -- along with religious broadcasters and even Walt Disney Co (DIS)., which is bucking other media companies. "We don't wake up in the morning looking for indecency rules for any of our businesses," says Disney lobbyist Preston Padden. But if there are rules, "they should be the same for broadcast and expanded basic cable programming."

The indecency battle itself will not be so cut-and-dried. The cable biz has cannily fended off a first attack by the PTC and Consumers Union -- the push for so-called à la carte programming -- by hiring Christian Right operative Ralph Reed, BusinessWeek has learned, and encouraging religious broadcasters to voice their opposition. A spokesperson for Reed, who is running for lieutenant governor of Georgia, declined to comment.

A Deep-Sixed Plan

A la carte is a backdoor attempt to influence content by forcing cable operators to let consumers pick the channels that they want to buy. If parents could choose their channels instead of having to select one of the packages offered by the cable companies, the argument goes, then they could get the kid-friendly Disney Channel, for example, without also signing up for the more risqué MTV.

But such disparate parties as Disney, religious broadcasters Pat Robertson and Jerry Falwell, and groups including the Leadership Conference on Civil Rights helped the cable industry deep-six that proposal. Without cable's broad programming packages, they argued, networks like Black Entertainment Television and the Christian Broadcasting Network would have never survived. One idea that is favored by Senator Stevens and Kevin J. Martin, the new chairman of the FCC, would require cable operators to offer a package of family-friendly channels.

As cable and satellite executives await Stevens' next move -- a bill is expected this spring -- they're on high alert. For them, the culture wars have only just begun.

Congress and President Bush talk about controlling the $400 billion deficit, but they continue to boost spending and cut taxes as if it did not exist.

At Bush's urging, Congress will soon approve $80 billion to fund the war in Iraq for 2005. It is abandoning efforts to trim farm subsidies. The House voted to repeal the estate tax at a cost of nearly $1 trillion over 10 years. Medicare seems off the table, any Social Security overhaul is likely to jack up the deficit, and lawmakers have so far failed to agree on a budget for fiscal 2006, in part because the Senate is reluctant to trim planned spending for Medicaid. Besides, any budget savings will be more than offset by at least $70 billion in tax cuts -- mostly by extending the 15% rate on capital gains and dividends through 2010. Add it up, and the GOP budget is likely to boost deficits by at least $150 billion through 2010 -- even if the estate tax remains on the books.

Deficit hawks such as Senate Budget Committee Chairman Judd Gregg (R-N.H.) were willing to combine spending reductions with a freeze on new tax cuts. But the White House would not go along, even though Republican strategists concede that deficit reduction will go nowhere unless tax hikes are in the mix. Bottom line: look for long-term deficits to continue to rise.

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