Must-Carry Fans Knock Cable Claims

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Washington -- Advocates of digital must-carry said last
Wednesday that the cable industry is exaggerating the potential harm of such a rule and
ignoring cable's central role in the transition to digital television.

Gary Shapiro, president of the Consumer Electronics
Manufacturers Association, called cable's fears, as expressed by Tele-Communications
Inc. chairman and CEO John Malone, "The big scare, the big lie," to convince the
Federal Communications Commission that digital must-carry would cause incumbent cable
networks to get bumped.

Shapiro was speaking at a panel here sponsored by The Media
Institute.

"The reality is that we're talking about going to
digital. When you go to digital, you get a lot more channel space," said Shapiro, who
represents TV-set makers.

Jeff Baumann, executive vice president and general counsel
for legal and regulatory affairs for the National Association of Broadcasters, said that
although the loss of cable networks would be "unfortunate," it would be a result
that cable would have to live with.

"We don't think that the disruption is going to
be as great as alleged by the cable industry," Baumann said, adding that cable was
key to the transition. "If it does result in a cable-programming channel being
displaced, I think that's part of the must-carry rule."

The FCC is close to launching a digital must-carry
rulemaking. Shapiro and Baumann outlined their concerns in a panel debate with cable
attorney Robert Corn-Revere and National Cable Television Association vice president of
law and regulatory policy Daniel Brenner.

Brenner said digital must-carry would hurt the cable
industry in two ways.

First, established cable networks would be dropped from
channel-locked systems to make room for digital-TV signals. Second, cable subscribers who
lacked $10,000 digital-TV sets or $500 digital converters would lose the cable network,
but not gain the digital-TV signal.

"When you added an analog must-carry signal, no matter
how thinly viewed it was, at least everybody could see it," Brenner said.

Corn-Revere said digital must-carry raised several First
Amendment issues and practical difficulties for the FCC. He added that a digital
must-carry rule would have to be phased in to provide time for programmers and operators
to acquire digital equipment.

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