Multicast Aligns Cable, Consumer Groups

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Washington— In the early 1990s, consumer groups urged Congress to force cable systems to carry every TV station in the country. Despite a White House veto, “must-carry” became the law of land.

Consumer lobbyist Gene Kimmelman worked hand in glove with the National Association of Broadcasters to pass the Cable Act of 1992. But in NAB's latest must-carry fight, Kimmelman is supporting cable, refusing to let nostalgia fog his quest for tactical advantage on Capitol Hill.

Kimmelman, policy director for Consumers Union, thinks cable has the better side of the argument. Sharing his view are Jeff Chester, executive director of the Center for Digital Democracy, and Mark Cooper, research director of the Consumer Federation of America.

RHETORICAL ENEMIES

In recent years, few in the public-policy arena have heaped more rhetorical refuse on cable than Kimmelman, Chester and Cooper. If they aren't complaining about rising cable rates, they're either fighting the latest cable merger or issuing ominous warnings about how cable lusts to make the Internet its private toll road.

Not surprisingly, their decision to back pay TV over free TV has the NAB puzzled.

“It's baffling to us why Gene Kimmelman and Jeff Chester are siding with the giant cable cartels and against more local program choice for their constituents,” NAB spokesman Dennis Wharton said.

Far from being inconsistent, Kimmelman said he looks at each issue individually and decides what's best for consumers, forming alliances that can produce results instead of frustration.

“I'm not out to stun the world. I follow what I hope is a very consistent logic that doesn't necessarily fit with the conventional wisdoms of where the consumer people automatically are. At least, I feel I'm being consistent,” Kimmelman said in a recent interview.

At issue is NAB's attempt to broaden the must-carry law.

Because digital-TV stations can cram five or six programming services into the space of a single analog channel, the NAB insists cable should carry all five or six.

Happy with the status quo, cable wants must-carry to mean carriage of just one programming service.

DTV LEGISLATION PEG

Congress is expected to intervene this fall in connection with legislation ending broadcasters' transition to DTV. Because key lawmakers are as divided as the NAB and the National Cable & Telecommunications Association on multicast must-carry, it wouldn't be a shock to learn that the buck had been passed to the Federal Communications Commission. FCC chairman Kevin Martin supports multicast must-carry.

Like cable, consumer groups think multicast must-carry is bad policy — but not for the same reasons. The NCTA has stressed constitutional concerns and the effect on cable networks threatened by a surfeit of local-TV signals choking cable systems.

The consumer groups oppose multicast must-carry because they see it driving up rates for basic cable, the tier all subscribers must buy and where local TV signals must reside. Must-buy and multicast must-carry are not a recipe for stable cable rates, the consumer groups argue.

“It's a policy we are going to try to kill. It's only going to mean hiking cable rates,” CDD's Chester said.

The groups also noted that even if TV stations elect retransmission consent over must-carry, simply having the right to force cable to carry five or six programming services would give broadcasters increased bargaining power over cable, again causing rates to rise for the most popular programming tiers.

“Giving [broadcasters] six times the bargaining power will only make the problem worse without producing any benefits. Multicast must-carry does not make sense for the consumer, given the structure of the pay TV market,” the CFA's Cooper said.

BUNDLING COMPLAINT

If cable companies sold programming on an a la carte basis, Cooper said he would have a different outlook on multicast must-carry.

“The bundle is eating us alive,” Cooper said. “Consumers are forced to swallow these huge bundles.”

The NAB claims that without multicast must-carry, local stations won't experiment with new digital services because the 15% of TV households that do not subscribe to cable or satellite is too small of an economic base for financing new and innovative programming.

Without multicast must-carry, all viewers would lose the opportunity to access more news, sports and weather reports in addition to community affairs and Spanish programming, according to NAB.

The public-service programming that TV stations are promising with multicasting, Kimmelman said, should already be airing on their primary analog service today — which, he said, explains why he could justify supporting must-carry in 1992 but not multicast must-carry in 2005.

“At that point in time, it was a fight over a very different animal. Must-carry was over an individual channel that had some, we thought, unique attributes. It was part of a much larger [regulatory] package, too. This really is something very different, even though it carries the same name,” Kimmelman said.

NIL NEWS IMPACT

Kimmelman said he doubts that multicast must-carry would change local market economics to the point where local TV stations that don't produce news today would consider it financially viable in the future. About 50% of commercial TV stations do not present local news, he said.

“If they don't do it now, why would they be better off against the big boys in a multicast environment?” Kimmelman said.

The fight over multicast must-carry, Kimmelman said, can't be divorced from media ownership. Within a year or two, the FCC is expected to revive rules that would allow media companies to own two or more TV stations in a market.

“We know that [FCC] chairman Martin is going to relax those rules,” Kimmelman said.

Under liberalized FCC ownership rules, TV station owners armed with multicast must-carry rights would have too much influence in a market, Kimmelman said.

“I'm worried about the dominance of a few companies in local markets,” he said. “It is a few owners determining what that local content is and what the slant of it is.”

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