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Class-A Squabble

2/08/2008 7:00 PM Eastern

In a new battle with cable, Federal Communications Commission chairman Kevin Martin wants to force the industry to begin carrying hundreds of low-power local TV stations that up to now have not had such access, except in the most rural parts of the country.

According to two FCC sources, Martin, a Republican, circulated his proposal last Tuesday to the other four commission members. Under Martin’s plan, the process would begin with adoption of a notice of proposed rulemaking at the FCC’s public meeting Feb. 26.

Martin’s proposal is a response to concerns raised by Class A station owners that only three out of nearly three dozen federally certified digital-to-analog converter boxes are capable of receiving or passing through analog TV signals. That’s a problem because Class A stations are not required to convert to digital on Feb. 17, 2009, along with the country’s 1,756 full power TV stations, which have the right to demand cable carriage.

Martin’s idea is that if Class A Stations are designated full-power stations, they get must-carry rights and the value of their stations go up, allowing them to secure the financing to go digital quickly. Once they go digital, the Class A stations don’t have to worry about whether converter boxes can pass through analog signals.

“The item is designed to give an incentive to some low-power stations to go digital, since they don’t have a hard date, by enabling them to apply to become full power,” a Martin aide said. “That would avoid the current concern with converter boxes that don’t pass through analog signals. This is a DTV item and not anti-cable.”

A low-power TV station owner who contacted Multichannel News last Friday said Martin’s plan wouldn’t actually require the stations to ramp up their power levels to be designated full-power. The owner said that if Martin’s plan failed, Martin wanted to use the so-called 70-70 test in federal cable law to impose Class A must-carry on cable operators. Generally, the FCC gets new authority to regulate cable when subscriber penetration exceeds 70% of homes passed.

Adoption of the Martin-backed plan could be a windfall for the owners of Class A TV stations, as the regulations would provide those broadcast outlets with instant access to about 60% of TV homes in a typical market.

It could also mean more competition among local TV stations. It’s possible that TV stations that already have must-carry rights might not want to see their numbers expand.

Class A owners could be in the catbird seat financially for another reason: The FCC has not granted any new Class A licenses since the late 1990s, putting a premium on the existing inventory.

According to the FCC, there are 567 Class A stations, which are required to air three-hours of local programming per week and remain on the air 18 hours per day.

Unlike full-power TV stations, Class A stations don’t have comprehensive mandatory cable carriage rights at present. Federal law and FCC rules limit Class A must carry to the most rural parts of the country, where there might not even be a cable company. A broadcast attorney estimated that 10% today have mandatory access to cable.

National Cable & Telecommunications Association vice president of communications Brian Dietz said Martin’s proposal would violate cable’s constitutional rights and disrupt the public-private effort to transition TV stations to an all-digital format on Feb. 17, 2009.

“It would be especially unfortunate to inject needless uncertainty and litigation, which would only serve to undermine the goal of a smooth digital transition,” Dietz said.

September