Paxson Tired of Waiting for the FCC

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Enough, already.

Paxson Communications Corp. chairman and CEO Lowell Paxson is fed up with the regulatory foot-tapping at the Federal Communications Commission over cable carriage of his digital-TV stations.

To drive home his point, Paxson has asked a federal court to force the FCC to make a decision, up or down, so that aggrieved parties can challenge the outcome in court.

Paxson already has one digital must-carry appeal pending before the U.S. Court of Appeals for the D.C. Circuit, but the court has refused to process it before the FCC adops final rules.

FILED A WRIT

The inability to get action from the FCC or the courts has prompted Paxson, one of the largest-TV station owners in the country, to try a new legal maneuver.

On Aug. 27, his company filed a writ of mandamus with D.C. Circuit court, claiming the FCC had allowed the issue to fester since 1998, constituting an unreasonable delay. Paxson asked the court to give the FCC just 30 days to adopt rules.

“The proceeding is simply at a standstill, apparently having been thrown into the 'giant regulatory wastebasket’ by the FCC,” Paxson told the court.

Paxson has been badgering the agency for years to endorse its position that cable has to carry digital-TV signals today, not after the termination of analog service, as the agency ruled in January 2001.

Based in West Palm Beach, Fla., Paxson owns 60 stations, which largely rely on mandatory carriage rights to reach cable and satellite viewers.

Its Pax TV service, featuring family friendly programming, is available to 89% of U.S. households.

Cable operators are voluntarily carrying about 400 digital TV stations, mostly network affiliates that are beaming HDTV signals. MSOs have said they would be carrying more if stations didn’t demand cash compensation.

In the mandamus request, Paxson complained that cable operators were refusing to carry DTV signals to block competition from digital stations that are now technically capable of transmitting dozens of channels, instead of one, to viewers in a particular market.

“Not surprisingly, cable operators today are carrying virtually none of the digital programming being offered by broadcasters. They have no economic incentive to do,” Paxson told the court.

Writs of mandamus are extraordinary requests and not routinely granted by the courts, an FCC source said last Tuesday.

The National Cable & Telecommunications Association — which has opposed DTV carriage mandates before analog TV service has shut down — condemned Paxson’s latest legal move to barge its way onto cable systems.

“Paxson offers a prime example of why broadcasters should not be given expanded digital must-carry rights. With its analog channel, Paxson already rents out part of its broadcast day for paid programming. More infomercial channels will not speed the DTV transition,” NCTA spokesman Brian Dietz said.

At some point, the FCC and the NCTA are permitted to file oppositions to Paxson’s mandamus petition.

In January 2001, the FCC rejected broadcast-sponsored proposals that cable operators carry a TV station’s analog and digital signal during the transition to all-digital broadcasting.

Although the agency tentatively concluded that “dual must-carry” would likely violate the First Amendment rights of cable operators, it asked for additional comment on cable channel capacity to handle a double dose of broadcast fare.

The FCC also said a TV station could not exercise its digital must-carry rights until it had surrendered its analog license. But digital-only stations could demand analog cable carriage of that signal, the agency added.

Few stations are interested in shutting down analog service now, because off-air only viewers without digital receivers would lose access to programming.

The FCC also dismissed a broadcaster demand that after the transition, cable operators carry every programming service that a TV station can cram into its digital bandwidth. Today, that’s about five or six channels.

The FCC said a TV station was entitled to carriage of just one channel of programming.

Paxson’s proposal is that cable should immediately carry the digital signal. and if the signal contained more than one programming service, one of them must be downconverted to analog while the others could be carried in digital. Cable operators argued that Paxson’s plan was tantamount to dual must-carry.

In August 2001, the FCC rejected Paxson’s proposal after the company filed a complaint demanding that Chicago cable operators carry one digital service in analog and five in digital.

DELAYS AT FCC

Policy disputes among FCC chairman Michael Powell and the agency’s four other commissioners have contributed to the delay.

The commissioners have been reviewing an ambitious DTV transition plan that is far broader than matters related to cable carriage.

Among other things, the FCC’s Media Bureau plan calls for ending the DTV transition on Dec. 31, 2008, meaning the termination of analog broadcasting. The next day, cable would be required to carry all DTV programming streams, overturning the January 2001 ruling that only one service had to be carried.

Powell is hoping to adopt the plan before the end of the year. But the FCC is unlikely to go forward without a clear signal from Capitol Hill that something would be done to ensure millions TV sets not connected to cable would be capable of displaying DTV signals.

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