Digital Must-Carry: Where To?

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The long road to establishing permanent rules for cable carriage of broadcasters' digital signals may be near the end. FCC chairman Michael Powell has put digital must-carry rules at the top of his media priority lists and is currently working with the agency Media Bureau to craft a proposal to present to fellow commissioners "in the near term," a spokesman said.

If reports are true, the cable industry isn't going to like it and broadcasters, despite important gains, are likely to characterize the outcome as a split decision.

FCC Media Bureau chief Ken Ferree told reporters in July that he would resubmit a plan for digital-carriage rights for commissioners' review with "no major changes" from one that failed to win a three-vote majority in August 2002.

That proposal, industry sources said, would likely make cable companies carry the multiple streams made possible by broadcasters' greater digital capacity. Powell's office won't confirm the details, but sources following the proceeding said the plan called for the FCC to tentatively conclude that broadcasters are entitled to carriage of all the programming they can cram into the 6 MHz of spectrum allotted for each channel, as long as the programming is offered free to over-the-air viewers but asked for another round of public comment before going forward. Others suggest that the FCC will be more aggressive and impose the mandate now, even though few broadcasters are in position to take advantage.

The prospect of a multi-carriage mandate is very worrisome to cable, which argues that more than quadrupling the systems' must-carry obligations will doom many popular cable nets. "The imposition of additional channels could force other viable channels off operators' lineups," said Brian Dietz, spokesman for the National Cable & Telecommunications Association.

At the group's convention in Chicago a few months ago, NCTA president Robert Sachs warned that mandated multiple carriage could cause the number of broadcast channels forced onto pay-TV distributors there to rise from 17 to 102.

Winning that right to multicast carriage would be a victory for broadcasters because it would ensure that the 70% of U.S. homes that rely on cable for TV would have access to nearly all their new DTV programming, a key motivation for stations to develop digital channels necessary to whet consumer interest and spur the transition. The downside for broadcasters is that their longstanding demand for carriage of both analog and digital signals during the DTV transition would be denied.

Ferree's plan bogged down last summer because it could not win the necessary three votes for approval, in part because there was an empty seat on the five-member panel. Now that commissioner Jonathan Adelstein has filled that vacancy, chances for a three-vote majority are thought to have improved. In summer of 2002, Republican commissioner Kevin Martin was said to have opposed a plan proposed by Powell and Republican commissioner Kathleen Abernathy to tentatively conclude that multiple-carriage rights was the way to go but seek comment on the constitutionality of that approach. Instead, Martin wanted to declare broadcasters' rights immediately.

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