Cable firms Chorus and NTL may take legal action against telecoms regulator Ms Etain Doyle if she allows Eircom to offer television services over its telephone network.
Ms Doyle is currently deciding how and whether telecoms operators should be allowed to offer licensed television programmes via Asymmetric Digital Subscriber Line (ADSL) technology.
ADSL technology installed over telephone networks enables telecoms firms to provide broadband digital services including television and high speed Internet.
Both were granted exclusive rights until 2004 to provide licensed television services over "equivalent systems" by Ms Doyle in a decision notice made in December 1998.
This clause has created uncertainty over whether telecoms operators can legally offer television services over their own telecoms networks.
But Eircom is lobbying hard to provide a similar service down telephone lines.
A submission it made to the regulator contends the exclusion of popular TV packages from an ADSL package would "cast doubt" on the viability of its investment in broadband services.
"Ultimately this will have negative consequences for new economy growth by restricting and distorting investment," continues the submission.
However, NTL and Chorus believe they have secured exclusive rights to offer broadcast television services until 2004 and intend to delay competition from ADSL technology.
Giving cable firms exclusivity was considered a necessary incentive to encourage the firms to invest hundreds of millions of pounds in network upgrades to provide digital TV, telephony and high speed Internet services.
A consultation paper on ADSL, delivered by Ms Doyle shortly before Christmas, failed to address the crucial issue of whether telecoms networks can be considered "equivalent systems" to cable.
Submissions from Chorus and NTL show they are prepared to defend what they interpret as exclusive rights to provide television services.
"It would be the intention of this company to protect our legal interest in this regard," says Chorus's submission to Ms Doyle.
Chorus is suing the State for damages of £100 million (€127 million) following its failure to prevent illegal deflectors operating for much of the 1990s.
NTL also argues that altering the current regulatory regime would have serious implications for cable and MMDS operators.
A decision to remove the exclusivity provisions would undermine NTL's business plan, says the submission "and would consequently render it increasingly difficult for NTL to justify to investors the large sums that are being spent in rolling out our new network".
Industry sources believe Ms Doyle may try to circumvent the legal difficulties on this issue by invoking strict roll-out criteria contained in cable operators licences.
These stipulate that the two firms have to attain digital rollout targets of 200,000 homes together by March 31st to retain their exclusive rights.
If Chorus and NTL failed to meet this deadline, the regulator may be able to rule that Eircom could provide television services over ADSL before the company's launch date for ADSL, which is proposed sometime between April and September.
