Cable Gains Friends on Must-Carry

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Washington -- The cable industry won't go at it alone
in fending off government attempts to force carriage of digital-TV signals.

Last week, a children's-advocacy group, a civil-rights
organization, a public-interest law firm and others decided to throw their collective
weight behind the cable industry's opposition to digital must-carry.

"The broadcasters don't deserve a double digital
giveaway. They already got [analog] must-carry from 1992 and the free spectrum," said
Jeff Chester, executive director of the Center for Media Education, a group that backed
FCC rules requiring TV stations to air three hours per week of children's educational
television.

Chester indicated, however, that the CME might back off if
broadcasters provided free airtime to local-, state- and federal-office seekers and
increased the amount of children's educational and community-affairs programming.

"The broadcasters have to show that they are going to
serve the public interest in new and innovative ways before we will ever support a digital
must-carry regime," Chester said.

The CME was joined in a coalition by the Benton Foundation,
the Office of Communications of the United Church of Christ, the Media Access Project and
the Civil Rights Forum.

Support from the CME coalition wasn't the only anomaly
to surface last week, as digital must-carry comments streamed into the Federal
Communications Commission, where a rulemaking is pending to decide what obligations, if
any, cable operators must shoulder to ensure the success of local broadcasters'
migration to digital.

Another odd development -- while not as widely
unanticipated as the public-interest groups' filing -- was that the four major TV
networks declined to file in support of digital must-carry.

Depending on the source, the networks' no-show was
either a nonevent or a glaring example of the traumatic divisions within the broadcast
industry that split the networks from their affiliates, as well as the established
networks from the newer networks and independent stations.

"We look to the [National Association of Broadcasters]
to represent the television industry. The NAB's comments support digital
must-carry," one broadcast-network source said, in explaining why the network
didn't file on digital must-carry.

Another broadcast-industry source said that although the
networks are entitled to rely on retransmission consent to attain digital carriage, they
should have joined the rest of the industry in support of digital must-carry to present
the FCC a united front.

"The major networks are going to get carried. The
others are going to have to get down on bended knee and kiss the John Malone ring.
That's the reality of the broadcast business these days," the source said,
referring to the chairman and CEO of Tele-Communications Inc.

A broadcast-affiliate source said the networks'
absence was an observation worth noting, but they had been signaling their position since
the NAB's Las Vegas convention in April.

"I would say that I am not surprised that they
didn't file," the broadcast-affiliate source said. "It doesn't tell
you anything that you didn't know back in April."

Gail McKinnon, vice president of federal policy for CBS
Inc., said her company has stated on prior occasions that it preferred to pursue
digital-carriage issues privately with cable operators.

"We continue to negotiate with the cable industry on
digital-signal-carriage issues, and we didn't think that it would be necessary to
comment at this juncture," she said. "We always have the option of weighing in
down the line."

Jill Luckette, the National Cable Television
Association's vice president of program-network policy, said the TV networks could be
sitting on the sidelines because they fear that digital must-carry might result in
carriage loss for their cable networks.

"I think that their cable networks' side of their
business has a particular interest that may not correspond with what a pure broadcaster
might have," Luckett said. "I think, sure, they have mixed businesses within the
corporation, and both of those sides of the business are impacting the final
decision."

In its filing, the NCTA gave prominence to a new legal
argument, in addition to traditional First Amendment concerns, in opposing digital
must-carry.

At a press conference here Oct. 14, NCTA officials asserted
that forced carriage of digital and analog signals would violate the Fifth Amendment
prohibition on the taking of private property without just compensation.

Dan Brenner, the NCTA's vice president of law and
regulatory policy, said broadcasters that elect must-carry over retransmission consent are
prohibited from paying for carriage, and no authority exists for the FCC to compensate
cable operators.

Although cable raised the Fifth Amendment issue in the
analog must-carry litigation, it decided to place it at the forefront in the context of
digital must-carry. The NCTA said the addition of digital-TV signals would impose a far
larger incremental burden on cable systems than did analog must-carry.

The NCTA rolled out the new legal strategy at the same time
that it announced that it had retained Harvard Law School professor Laurence H. Tribe to
help in fashioning constitutional arguments against digital must-carry.

In additional to constitutional claims, the NCTA said the
FCC had no statutory authority to require carriage of both digital and analog signals
during the transition -- which is supposed to expire Dec. 31, 2006, although deadline
waivers are possible.

The NAB, in its comments, said the provision of the 1992
Cable Act that authorized analog must-carry is the FCC's same authority to require
digital must-carry. The NAB said the language requiring carriage of "the signals of
local commercial-television stations" made no distinction between analog and digital.

"Put simply, a qualifying signal is a qualifying
signal, unless Congress plainly directs otherwise," the NAB said.

NCTA president Decker Anstrom said the NAB's position
was legally inaccurate, and it would cause channel-locked cable systems -- which serve
two-thirds of all cable subscribers -- to drop widely viewed cable networks.

"As we look at this, there is no reason why every
broadcast station should be regarded as more important than any cable network,"
Anstrom said. "We don't believe that there is any rationale for a
broadcaster-first policy."

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