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Judge Upholds TV Stations on Cable Charges : Communications: The decision paves the way for new channels planned by networks and local broadcasters.

September 17, 1993|JOHN LIPPMAN | TIMES STAFF WRITER

The cable TV industry, which sought to have major portions of the new cable TV law declared unconstitutional, suffered another defeat Thursday when a federal judge upheld a ruling that local TV stations can charge cable operators to carry their programming.

The decision paves the way for a whole raft of new cable TV channels planned by the networks and local broadcasters in light of the controversial cable law enacted last year.

U.S. District Judge Thomas Penfield Jackson in Washington rejected cable industry arguments that the so-called retransmission-consent clause of the 1992 cable act violates the industry's First Amendment rights to free speech.

Jackson, however, did strike down three minor provisions in the new law, including limits on the number of subscribers that cable operators would be allowed to serve. The Federal Communications Commission was expected to outline those limits next week.

As part of the new cable law adopted by Congress last year, local TV broadcasters were granted the right to seek payment for the use of their broadcast signal by cable operators. The cable industry, which has maintained that it won't negotiate for programming that other viewers get for free, has refused to pay broadcasters for carrying their signal.

Instead, broadcasters and cable operators have entered into a series of face-saving deals that would grant cable operators the right to carry broadcast signals in exchange for clearing channel space on their systems to launch new cable networks owned by ABC, NBC, CBS and Fox.

Among the new networks to be launched are a second ESPN channel owned by ABC, a new all-talk channel owned by NBC, a new public affairs and news channel owned by CBS and a new entertainment and interactive channel owned by Fox.

Given the current channel capacity limitations on most cable systems, however, it could be years before those channels became widely available.

Jackson's decision was a defeat for Time Warner, Daniels Cablevision and the Discovery Channel, which all challenged the constitutionality of the new cable law. "We respectfully disagree with those parts of the ruling that went against us and we will appeal," said Michael Luftman, a spokesman for Time Warner.

In upholding the major portions of the new cable law, Jackson said the new rules do not violate free speech and therefore could not be struck down on First Amendment grounds.

The cable industry has also challenged the constitutionality of the so-called must-carry provisions in the new law. Those provisions require cable operators to carry local TV signals without charge if demanded by the broadcaster.

Earlier this year, the challenge of the provisions was separated and considered by a special three-judge panel, which upheld the constitutionality of the law on a 2-1 vote. The industry has appealed the decision to the U.S. Supreme Court.

* STUDIO PRIZE: Cable titan John Malone must resolve whether he and ally Barry Diller will launch a hostile bid for Paramount. D5.

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