Silicon Valley Channel Spat Heads to Court

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A federal judge has sent a channel positioning squabble
between two California cities and AT&T Broadband & Internet Services back to state
court for resolution.

The Silicon Valley cities of Los Gatos and Saratoga are
challenging AT&T Broadband's decision to bump their public-access channel from
the channel 6 slot for a broadcaster, independent UHF station KICU. The move was part of
the MSO's plan to unify its regional channel lineup.

Other cities in the area also lost their plum access spot,
but Los Gatos and Saratoga both believe there is language in their franchise agreement
that sets channel 6 aside for local programming.

Los Gatos' KCAT and Saratoga's KSAR have both occupied the
channel 6 allocation for more than 10 years. In court documents, producers at the two
channels said that because AT&T Broadband is no longer required to directly fund their
operations, the low channel-position is vital to their survival.

Most of the two outlets' viewership is generated by
"surfers" moving between the adjacent CBS and ABC affiliates, the producers
said.

AT&T Broadband sought the move to federal court, where
the issue could have been argued on first amendment grounds. However, the case was
remanded to the cities' preferred venue, Santa Clara County Superior Court.

The two cities are seeking a preliminary injunction that
would move their stations from channel 15, where AT&T Broadband placed them on Sept.
22, back to channel 6.

The cable operator has told the cities it needed to clear
channel 6 to satisfy its must-carry provisions with respect to KICU. The broadcaster was
located on channel 15, although its UHF frequency is channel 36.

According to court documents, that channel is now part of a
trapped expanded-basic tier. As a result, KICU was required to negotiate for a lower
channel position.

Attorneys for the cities argue that AT&T made the
channel slot unavailable, so the broadcaster can't use must-carry rules to obtain the
best spot it can get through a business deal with the operator.

The cities want KICU moved to channel 8, but AT&T said
it needs that slot for another must carry station, KFWU in Fort Bragg. City attorneys
argue that KFWU doesn't qualify for must-carry status because 95 percent of its
programming consists of fare retransmitted from another local station that is already in
the lineup.

This case could be a precursor for similar battles around
the country. Operators are moving to consolidate their holdings within individual markets,
with an eye toward consolidating regional operations. MSOs also find it more effective to
market cable networks by directing subscribers to a specific channel in a given area.

The hearing on the preliminary injunction is scheduled for
Dec. 14.

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