Kennard Aide: FCC Near Must-Carry Decision

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New Orleans -- The cable industry's bruising battle with
broadcasters over mandatory carriage of digital TV signals is coming to head, a senior
official at the Federal Communications Commission said last week.

"In terms of timing, I thinking we will see something
in the next month or so. The chairman will be asking his colleagues to vote on
something," said Tom Power, mass-media adviser to FCC chairman William Kennard.

Broadcasters want mandatory carriage of their analog and
digital signals until the migration to digital is complete. The cable industry says it is
required to carry one signal, not both. Whichever side loses will likely turn to the
courts for relief.

The ALTV panel came a day before the opening of the
National Association of Television Program Executives convention here.

Digital must-carry could become an issue on Capitol Hill
this year, said Rep. Billy Tauzin (R-La.), who favors an FCC rule requiring cable carriage
of the digital TV signals during the transition.

"If we don't get good digital must-carry agreements
and rules, Congress may need to step in and declare it," Tauzin said at another NATPE
event. "The FCC is going to have to make some decisions there, or Congress
will."

Power said Kennard's posture hasn't changed: TV stations
must make a good case for government intervention.

"I think the chairman has been pretty clear that he
thinks the burden is on broadcasters to come forward and show why must-carry is necessary,
and why the broadcasters' digital product can't stand on its own the way a lot of cable
programmers are getting to digital," said Power.

The FCC is studying the channel-capacity issue to determine
whether cable operators have the space to accommodate the potential forced carriage of
hundreds of new TV signals, said Power.

That's a question with major policy and constitutional
implications, he said.

Panel moderator Shaun Sheehan, Washington vice president
for Tribune Co., said cable's capacity concerns were not material to the FCC's
deliberations. The commission should mandate carriage to reward TV stations for investing
in digital, as the federal government has urged, he said.

"This is truly a government-industry policy,"
said Sheehan. "We were told to get a digital service and get it out there."

Congressional aides on the panel said video streaming -- a
practice that's the center of a copyright suit against a Canada-based Web site
transmitting local TV stations over the Internet -- is likely to become a political battle
on Capitol Hill in the months ahead.

"I don't know what, if anything, Congress will do this
year, but I think it will get some attention in the Commerce Committee this year,"
said Justin Lilley, a top telecom aide to House Commerce Committee chairman Rep. Tom
Bliley (R-Va.)

Two weeks ago, several Hollywood studios, CBS Corp., ABC
Inc., and Fox Broadcasting Co. -- plus the National Football League and the National
Basketball Association -- sued the owners of iCraveTV.com in federal court.

The Web site is retransmitting local TV signals from
Buffalo, N.Y. -- including movies and sporting events -- over the Internet on a global
basis, without compensating the copyright owners.

Andy Levin, a top policy adviser to Rep. John Dingell
(D-Mich.), ranking Democrat on the Commerce Committee, said Internet video streaming is
likely to become a big hit with consumers. He said it could force lawmakers to ensure that
Internet users are not denied access to local TV based on the geographic restrictions
contained in distribution agreements.

"I think the boundaries are going to probably
disappear and [TV stations will] be competing against other local stations all over the
country. iCraveTV is out there, broadband is going and [consumers] want freedom to watch
what they want," Levin said. "I think what they are doing now is clearly
illegal, but I think it's a sign of things to come. I don't think it's going to be able to
be contained."

During the year, the House Commerce Committee may hold a
hearing on whether Internet-service providers should be allowed to stream local TV signals
over the Internet under a copyright license held by cable operators and satellite
carriers.

The licenses allow the distribution of local-TV signals
over cable and via satellite without permission from the copyright owner and without
paying copyright royalties.

Policymakers are concerned that the global scale of the
Internet is inconsistent with the aims of the cable and satellite licenses.

"If they can prove technologically that they can
comply with all the terms and conditions of the licenses, why shouldn't they get
one?" Lilley said. "That's not to say that Congress should give them one right
off the bat, but at a minimum we should have that debate and there should be a discussion
as to why they can or cannot comply with the terms and conditions of these licenses."

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