Policy

NCTA: Multicasting Could Cost $116B

9/07/2005 9:40 AM Eastern

Expansion of local-TV-carriage requirements on cable could cost the federal government up to $116 billion to settle claims by cable operators forced to set aside channels for programming services that they don’t voluntarily want to distribute.

The eye-popping price tag was the worst-case scenario outlined in a multicasting-cost analysis performed by Kane Reece Associates Inc. for the National Cable & Telecommunications Association, which promptly fed copies of the report to every office on Capitol Hill.

On the low end, Kane Reece found that taxpayers could be on the hook for $4.2 billion in cable claims.

Although the cost range was significant, none of the dollar amounts potentially involved was “small potatoes,” NCTA president Kyle McSlarrow told reporters Wednesday.

The National Association of Broadcasters -- which is urging Congress to expand cable-carriage rules -- dismissed the report as wildly exaggerated.

"Only in the Orwellian world of giant cable cartels does more competition equate with higher cost to consumers. We're optimistic that Congress will reject the call of the cable monopolist and embrace more choice for local television viewers,” NAB spokesman Dennis Wharton said.

The NCTA asked Kane Reece to estimate the value of cable bandwidth that broadcasters would use under a potential law that mandated multicast must-carry -- namely, the obligation to carry the five or six programming streams that a digital-TV station could cram into a 6-megahertz channel. Cable currently has to carry just one service per must-carry station.

The NCTA argued that multicast must-carry would violate the Fifth Amendment ban on taking private property without just compensation. If cable is right, the industry could go to court to collect funds from the U.S. Treasury.

In the weeks ahead, the NCTA will be fighting the NAB on multicasting, which is tied to legislation on ending analog-TV transmission in a few years.

“They are throwing everything they have at this issue,” McSlarrow said.

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