Cable Not Backing Paxson's Proposal

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The cable industry Tuesday declined to endorse Paxson Communications Corp.'s
recent statements to federal regulators that cable operators are warming to the
company's mandated digital-TV-carriage proposals.

In recent letters to the Federal Communications Commission, chairman Lowell
'Bud' Paxson said broadcasters and cable operators were beginning to unite
behind his regulatory changes.

'I am pleased to report,' Paxson said in a Sept. 21 letter to FCC chairman
Michael Powell, 'that based upon meetings involving numerous members of both the
broadcast and cable industries, momentum is building around a consensus on the
digital must-carry issue and that support is growing for the Pax TV digital
must-carry proposal.'

Marc Osgoode Smith, a spokesman for the National Cable &
Telecommunications Association, said his organization supported private carriage
deals with local TV stations instead of FCC mandates.

'We aren't aware of [Paxson's talks with cable operators], but if he is
having private negotiations with cable operators, it buttresses our point that
private negotiations are more favorable than government regulation. We are
hopeful that's where his focus is,' Smith said.

Paxson Communications is the third-largest TV-station owner in the United
States, with 69 stations reaching 67 percent of TV households, according to
Broadcasting & Cable magazine, a sister publication to
Multichannel News. The company is 32.5 percent owned by NBC.

Paxson's proposal has many parts, calling for FCC carriage mandates when TV
stations offer a single high-definition-TV channel or when they offer multiple
digital-TV signals in addition to their traditional analog services.

When broadcasting in HDTV, a TV station would be entitled to analog carriage
and the HDTV signal would be carried on the digital tier, occupying no more than
3 megahertz of spectrum. Because analog channels occupy 6 MHz, 3 MHz for HDTV
would allow MSOs to husband bandwidth, Paxson said.

When broadcasting multiple digital-TV signals, a TV station could demand
carriage of its primary digital signal in downconverted analog format for all
subscribers to view, and it could demand carriage of its remaining four or five
digital-TV signals on the MSO's digital tier.

Although the MSO could drop the traditional analog signal, the analog signal
would remain available to off-air-only TV households.

Under both options, cable operators would be allowed to place all broadcast
digital-TV programming on the digital tier when set-top penetration reached 95
percent of the subscriber base. At that point, no TV station would occupy more
than 3 MHz on a cable system, compared with today, when each TV station consumes
6 MHz, Paxson said.

'It is time for all of us to get this finished and behind us so that the
broadcast and cable industries can move forward aggressively with the
digital-television transition and service to the viewing public,' he
added.

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