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D.C. Federal Judge Overturns Ban On Telcos Into Video

Hundreds of small and mid-sized telephone companies nationwide won the right to become cable TV providers Jan. 27 when a federal judge here overturned Congress’ ban on telco entry into the video delivery business.

Claiming the law violates the telcos’ First Amendment right to free speech, Judge Gladys Kessler of the U.S. District Court for D.C. Circuit took the unusual step of issuing her decision from the bench. The ruling came after she heard arguments presented by lawyers from the U.S. Telephone Assn. and the government.

The decision applies to members of USTA, a D.C.-based lobbying group whose membership includes nearly all of the 1,133 local phone service providers nationwide. Most of the giant regional Bell operating companies have won court fights seeking to have the telco/cable cross-ownership ban overturned.

Kessler’s decision means that on a national basis, only three local phone services providers – SBC (formerly Southwestern Bell), Southern New England Telephone Co. and GTE Corp. – continue to face restrictions against cable entry. Those three firms also have lawsuits pending against the congressional ban.

The Kessler ruling is especially bad news for the cable TV industry, which has been fighting to block telco entry into their business. National Cable Television Assn. spokesman Rich D’Amato said the decision “only points up the need for major telecommunications legislation to be enacted by Congress quickly.”

Congress is tackling information highway legislation that would allow telcos to enter the cable business, and vice versa. But given the onslaught of legal victories that have been won by the telcos, it’s unclear whether the phone companies need to accommodate cablers and long-distance phone providers in the infopike bill.

USTA prez Roy Neel called the Kessler decision a “tremendous victory for not only USTA’s member companies, but also for their customers who will now be able to enjoy the benefits of competition.”

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