Cable Blasts Dual Must-Carry at FCC
Programmers and Operators Pan FCC Chief's Plan
By Ted Hearn -- Multichannel News, 7/22/2007 8:00:00 PM
Washington — Cable operators and programmers strongly oppose, on legal and policy grounds, proposed federal rules that could furnish certain local TV stations with greater carriage rights on cable systems than they currently possess.
For decades, cable has fought any attempt by government to force the carriage of local TV stations, with mixed results. In the Cable Act of 1992, Congress adopted the first must-carry law; in subsequent years, cable persuaded the Federal Communications Commission not to expand those carriage rights.
But FCC chairman Kevin Martin wants to shake up the status quo. He has proposed rules that would result either in forcing the carriage of more TV-station programming on cable or in forcing millions of consumers to acquire new digital TV sets if they don't want to lease digital-to-analog converter boxes from the local cable provider.
BIG-NAME CRITICS
Some of cable's biggest players — including Comcast, Time Warner Inc., Discovery Communications, the National Cable & Telecommunications Association and the American Cable Association — have condemned the proposals, rejecting Martin's conclusion that new rules would ensure a smooth national switchover to digital broadcasting in February 2009.
Martin's plan “proposes an unlawful command-and-control approach over the cable operator's property, using the broadcast digital transition as [a] cloak to disguise a perpetual violation of the Constitution,” the NCTA said last Monday in comments filed at the FCC, marking the first phase in a battle that could eventually involve the courts and perhaps Congress.
The NCTA said the FCC's proposals, if adopted, would raise serious Fifth Amendment issues involving the uncompensated taking of private property. Martin's key industry ally — the National Association of Broadcasters — said the new carriage mandates would conform with current law and would “not raise any constitutional concerns.”
The FCC is many months away from issuing a ruling. A year ago, Martin had to back down when he failed to muster three votes in favor of multicast must-carry, or forced cable carriage of multiple programming services that TV stations can transmit with their digital bandwidth.
With the congressionally mandated cutoff of analog TV due Feb. 17, 2009, Martin is concerned that broadcasters' new digital signals won't be seen in millions of cable homes that rely solely on analog reception devices.
His solution: forcing cable to carry TV stations that exercise their mandatory cable-carriage rights in both analog and digital — a policy known as dual must-carry and something the NAB has been advocating on and off for nearly a decade without success. Cable systems that have gone all-digital — presumably meaning every TV in every cable home can display digital signals — would be exempt from the dual-carriage mandate, taking effect immediately after Feb. 17, 2009
Under current law, every full-power TV stations may insist on cable carriage without charge, called must-carry; or they may negotiate carriage, which the vast majority of commercial stations do in a process called retransmission consent. The country's 380 public TV stations have must-carry but no retransmission-consent rights.
Because so few cable operators, in terms of subscribers served, are expected to be all-digital in early 2009, the industry considers dual must-carry as the FCC's regulatory intent now, even though the agency in 2001 and again in 2005 considered dual must-carry a violation of cable's First Amendment rights.
A key legal issue is the requirement that must-carry TV signals need to be “viewable via cable on all television receivers” in a cable subscriber's home.
From Martin's perspective, “viewable” means that the cable operator has the burden of ensuring that no analog TV sets goes dark. Time Warner, by contrast, said “viewable” is an obligation to transmit the digital must carry signal to the home, provided the cable operator makes converter boxes available for sale or lease to requesting customers.
“Must-carry signals plainly are 'viewable' (i.e., 'capable of being viewed') when they can be received with the help of a set-top box — even if the consumer declines to accept that box,” Time Warner's comments said.
In addition to its legal concerns, the cable industry also stressed looking at the practical consequences of a de facto dual-carriage regime with an indefinite sunset.
Discovery, for example, explained that dual must-carry could make it rethink pending HD investments if FCC policies were to overallocate cable bandwidth to TV stations.
“The only certain result of forcing cable operators to carry duplicative broadcast channels is to ensure that innovative nonbroadcast programming will be crowded out,” Discovery told the agency.
$50 TIMES 126 MILLION
The NCTA said that the price to escape dual carriage would be excessive. It said that in early 2009, about 126 million analog-television sets will remain in use in cable homes. Supplying a $50 box for each one would cost $6.3 billion.
Comcast — probably in a warning aimed more at broadcasters than the FCC — said because the pay TV market had changed so much in the past 15 years, with satellite providers claiming 30 million customers, the FCC was taking on big risks by adding to cable's must-carry burdens.
“Were the [FCC] to proceed with its dual must-carry proposal, it would invite the courts to re-examine the entire must-carry regime,” Comcast said, referring to the 1992 law that allows any full-power TV station to demand cable carriage free-of-charge.
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