Cable Ops Ask for End to Station Ban

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Washington -- Time Warner Cable wants to see the repeal of
a rule that bars cable systems from owning local TV stations.

The operator argued that the ban is illegal and that it
rests on faulty assumptions about the market power of cable systems.

But the National Association of Broadcasters wants the rule
retained, asserting that "such a regulatory change now would provide even greater
opportunity for cable operators to abuse their gatekeeper role."

The Federal Communications Commission adopted the
cross-ownership rule in 1970, concerned that cable operators that owned TV stations would
discriminate against unaffiliated broadcasters and potentially reduce the number of
independent media voices in a community.

Two years ago, Congress removed the ban from the
communications statutes, while preserving the FCC's authority to retain the ban as a
rule. Congress, however, instructed the FCC to review the need for the rule every two
years.

Time Warner, filing comments last week in the FCC's
first biennial review, said a blanket prohibition violates cable operators' First
Amendment rights to speak as FCC-licensed broadcasters unless there is clear evidence that
competition would be harmed and that the number of speakers would be reduced.

Time Warner added that the record is devoid of such
evidence.

For example, the MSO said, cable's market share has
dipped below 85 percent as a result of competition from direct-broadcast satellite
operators, which had 7.2 million subscribers as of June 30, and from smaller competitors
such as wireless and private-cable operators.

Because all TV stations currently have mandatory access to
cable systems, operators would not be able to favor TV stations that they own over
stations that they don't own, Time Warner said.

"The FCC's must-carry and channel-positioning
rules prevent cable-system operators from abusing their carriage status in an attempt to
minimize local broadcast competition and, thus, they nullify any concerns about carriage
that may have at one time justified a cable-television cross-ownership restriction,"
Time Warner said.

Time Warner's comments have more than routine
significance for the company because the MSO is awaiting a final ruling by the FCC on
whether it can retain ownership of a 68,000-subscriber cable system and WTBS (known
nationally as TBS Superstation) in the Atlanta market.

In its opposition to repeal, the NAB told the FCC that
cable operators should be prevented from buying local stations at least until after the
FCC has issued digital must-carry rules -- an action that could take months to produce and
years to take full effect.

In its own comments, the National Cable Television
Association said the NAB's position was an ironic one: The NCTA said the NAB was
advocating the retention of the cable-TV station cross-ownership ban, while endorsing the
repeal of the 1975 rule that prohibits the common ownership of a TV station and a
newspaper in the same market and that contains other local-ownership restrictions on TV
stations.

The NCTA also said the NAB's decision to link the
repeal of the cable-system/TV-station ownership rule to the outcome of digital must-carry
was without merit. The cable group argued that stations -- particularly powerful network
affiliates, which will be the first to migrate to digital -- have retransmission consent
to secure cable carriage of their digital signals.

"Their leverage in dealing with local cable systems is
undeniable," the NCTA said.

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