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Policy

Powell Seems Ready to Nix Multicasting

1/23/2005 7:00 PM Eastern

Washington— Cable operators would not have to carry multiple digital services provided by local TV stations under a plan favored by Federal Communications Commission chairman Michael Powell, an agency source confirmed last Thursday.

Many TV stations want cable to carry all the free services they transmit, but Powell is sticking to his 2001 vote that cable should be required to carry just one programming service, the source said.

In a related move, Powell will also propose that cable operators do not need to carry a TV station’s analog and digital channels during the transition to digital-only transmission.

FEB. 10 VOTE

Four years ago, the FCC tentatively concluded that “dual must-carry” violated the First Amendment rights of cable operators and programmers.

An FCC source confirmed that Powell intends for the five-member agency to vote on multicasting and dual carriage at its Feb. 10 meeting.

The issue of so-called multicast must-carry refers to the small percentage of commercial TV stations that elect mandatory cable carriage. Public TV stations are required to elect must carry, and thus would be hurt the most from Powell’s proposal.

Powell’s approach would not deny stations that negotiate carriage with cable operators the right to demand distribution of multiple services.

Powell’s decision to advance the multicast issue comes as a federal court considers a request by Paxson Communications Corp., a large TV-station owner, to force the FCC to issue final cable carriage rules for DTV stations within 30 days.

The FCC told the court that Paxson’s request should be denied because final rules were issued in January 2001, at least with respect to the multicasting rights of DTV stations.

Paxson and other TV stations asked the FCC to reconsider. Because the FCC failed to take action on the reconsideration request, Paxson went to court to force the agency’s hand.

An FCC source said Paxson’s court move prompted Powell to push for a vote on multicasting.

SEPARATE PLANS

The source said Powell has decided to deal with the multicasting and dual-carriage issue separately from a broader plan to end TV stations’ transition to all-digital broadcasting by Dec. 31, 2008. Under that plan developed by FCC staff, DTV stations would possess multicast must-carry rights.

Two weeks ago, FCC Media Bureau chief Kenneth Ferree indicated that a vote on multicasting did not have to occur within the context of the DTV transition plan.

In recent years, Powell has signaled his willingness to move the multicast issue, but divisions among the FCC members sidetracked a vote.

Republican FCC member Kevin Martin supports broadcasters, while GOP colleague Kathleen Abernathy has been less clear about how she would vote.

Democrats Michael Copps and Jonathan Adelstein are expected to back broadcasters, but not before the FCC has adopted a range of public-interest obligations for DTV stations.

The losing side in the carriage votes at the FCC can file an appeal in federal court and claim the agency’s ruling was unreasonable, unconstitutional or both.

'AMPLE REASON’

“The extensive record in this proceeding gives the [FCC] ample reason to reaffirm its previous rulings,” National Cable & Telecommunications Association spokesman Brian Dietz said in a statement last Thursday.

Many broadcasters argue that multicast carriage rights are critical to the industry’s ability to compete in a world of hundreds of channels on pay-TV platforms.

But the cable industry counters that handing TV stations many additional slots on their systems would, in addition to raising serious First Amendment issues, tempt stations to air infomercials and other low-value content aimed a reaping quick profits.

Cable also argues that TV stations should not be able to claim channel space by default when cable networks (which don’t have FCC licenses) need to bargain for carriage.

In 1997, the Supreme Court ruled 5-4 that a law requiring cable operators to allocate one-third of their channels for TV stations demanding carriage was consistent with the First Amendment. Multicast must-carry was not directly addressed in that case.

DTV CARRIAGE ON RISE

A few years ago, broadcasters started to de-emphasize dual carriage during the transition and pressed the FCC to impose multicast mandates on cable after the transition.

On their own, cable operators have steadily increased carriage of DTV stations, especially stations that transmit HDTV programming. NCTA said last week that 450 DTV stations are carried by cable.

In addition, Comcast Corp. has announced plans to offer subscribers a simulcast service, which involves the transmission of all analog channels (both broadcasting and cable) in digital.

Under Comcast’s voluntary approach, some stations would actually enjoy triple carriage: once in analog, once in standard-definition digital, and once in HDTV.

September