Cable-Net Execs Descend on FCC

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Washington -- A group of cable-programming chieftains
paraded into the Federal Communications Commission last week in a show of strength
designed to blunt broadcasters' bid to gain government-mandated cable access for
digital-TV signals.

Arriving in a coach bus at the FCC's riverfront
headquarters, the cable group posed for photographers before fanning out to meet with
Cable Services Bureau personnel, FCC chairman William Kennard and the other commissioners.

Among the 25 programming executives who made the Nov. 3
rounds at the FCC were Debra Lee, president and chief operating officer of BET Holdings
Inc.; Rich Cronin, president and CEO of Fox Family Channel; and Decker Anstrom, president
and CEO of The Weather Channel.

But the visit was likely a mission of shooting the wounded,
because agency sources are making it increasingly clear that Kennard remains unconvinced
that broadcasters have made a strong case, both legally and commercially, for FCC action.

One sign that the issue is slipping away from the National
Association of Broadcasters deals with timing.

For months, FCC officials have promised to issue digital
must-carry rules by the end of the year. Now, according to commission sources, those
promises have been altered to mean that the CSB will forward its recommendations to the
five commissioners by the end of the year.

How long the commissioners will take to act is
anyone's guess, especially if the current round of retransmission-consent talks
results in the signing of digital-carriage deals.

Nevertheless, a television-industry source said
broadcasters expect the FCC to act this year. "They have said publicly that they will
deal with this in the fourth quarter. We will take them at their word," the source
said.

Cable sources said the programming executives emphasized
that digital must-carry was the first issue that caused such a large and competitive group
to lobby jointly and express their fears about the future of their own business plans.

"Nobody held back speaking with enthusiasm and passion
about the investment that cable is making," said a cable source, adding that A&E
Television Networks CEO Nickolas Davatzes played master of ceremonies of sorts for the
cable entourage.

The FCC is considering rules that would require cable
operators to carry local TV stations' analog and digital signals until the
broadcasters are forced to surrender the analog signals -- a period of time that could
consume a decade or more.

Cable operators with limited channel capacity warned that
some established cable networks would get bumped, and that others looking for carriage
would have to stand in line behind the broadcasters.

"Our position is that letting the marketplace work is
the middle ground," a cable source said.

With word of the visit spreading two weeks ago, the NAB
tried to get a jump on the event by sending a letter Nov. 1 to Kennard claiming that
cable's arguments against digital must-carry were bogus.

The NAB letter -- signed by the association's top
lawyer, Henry L. (Jeff) Baumann -- said cable was wrong to assert that the law does not
require digital carriage and wrong that carriage of digital-TV signals would bump cable
networks off systems.

The NAB said the cable industry was making the same
channel-shortage arguments in the context of digital must-carry that it made in the
context of analog must-carry. The association added that no channel-capacity problem
existed in analog and none exists in digital because of advancements in
channel-compression technology.

"Cable programmers are making the same tired arguments
they raised when the [1992] Cable Act was passed -- arguments that proved to have no
foundation," Baumann said.

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