Regulators were poised to open up the U.S. cable market to more competitors by closing a cable loophole blocking access to some sports programs to competitors, a source familiar with the issue said on Tuesday.

The R Federal Communications Commission will start considering the order on Wednesday, but it would not come up for a vote by the five-member panel until next year, the source said.

If approved by the FCC panel, the order would represent a big win for Verizon Communications Inc and AT&T Inc and satellite providers DirecTV and DISH Network Corp that have been left out of some lucrative markets by incumbent cable companies.

The move is seen by some experts as the FCC acting consistently with its push for nondiscriminatory requirements for access to the Internet, as the agency is about to study the proposed joint venture between Comcast Corp and General Electric Co's NBC Universal.

Verizon and AT&T want to carry games by the New York Knicks basketball team and the New York Rangers, New York Islanders and New Jersey Devils ice hockey teams played at Madison Square Garden (MSG).

In August, AT&T filed a complaint with the FCC alleging anti-competitive practices against Cablevision Systems Corp, which owns the Knicks and the Rangers.

AT&T and Verizon said FCC rules prohibit cable operators such as Cablevision from engaging in conduct that prevents other video providers from offering a competing service to consumers.

AT&T provides its customers in Connecticut with standard MSG programing, but was not able to access high definition programing. AT&T also complained that Cox was blocking access to carry San Diego Padres baseball games.

New York is the most competitive telecommunications market in the country, said Cablevisions spokeswoman Kim Kerns. The idea that the nation's two largest phone companies, AT&T and Verizon, need a regulatory bailout is absurd.

Verizon supports the move.

Consumers shouldn't be forced to stick with their incumbent cable provider in order to have access to their local teams' games, or to watch those games in high definition, Verizon spokesman David Fish said.

The FCC's Media Bureau plans on Wednesday to circulate the order -- which could apply to Comcasts' regional sports network in Philadelphia -- for approval from the FCC panel, the source said.

Free Press, a public interest group, lauded the FCC order and urged the agency to apply open access to all competitors in the Internet video market when it considers the Comcast-NBC deal.

For years, cable operators have exploited a loophole in the law that lets them restrict access to popular programing for themselves and hurt their competitors, said Marvin Ammori, a Free Press senior adviser.

The FCC is closing the loophole and requiring nondiscriminatory access for all competitive cable operators. The same basic principle should apply to Internet video distribution.

(Reporting by John Poirier; editing by Andre Grenon)

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