State Laws/Franchising

Google's Page Questions Cable Must-Carry Law

5/22/2008 10:06 AM Eastern

Washington—Google co-founder and president Larry Page said Thursday the ability of television stations to demand carriage on cable systems probably deters policymakers from ever considering plans to take back TV spectrum for use by mobile broadband access providers.

"I don't know how you fix that," Page said. "I think that's a difficult political problem."

Page's point was that TV stations don't want to give up the economic value tied to must carry, no matter how small their over-the-air audience. Congress awarded must-carry rights in 1992.

"I think the issue, as I understand it from the broadcasters, [is that] the must carry provisions are what they're really after," Page said. "We have this kind of weird economic situation where if you broadcast, then you are required to carry on the cable systems and that has a lot of economic value for the broadcasters."

Page's comments came in a 90-minute discussion with Michael Calabrese, director of the New American Foundation's wireless future program. Google CEO Eric Schmidt, Page's successor in that job, is about to become the NAF's new board chairman.

Page arrived here to discuss the company's ambitions in the wireless communications arena after lobbying successfully at the Federal Communications Commission to impose open access conditions on a major parcel of spectrum recently auctioned by the FCC and won by Verizon. The wireless industry's main trade association is suing the FCC to overturn the access condition.

Just last week, Google agreed to invest $500 million in the Clearwire Wi-Max venture that includes Sprint, Clearwire, Intel, Comcast, Time Warner and Bright House Networks. According to published reports, Google's payment is to insure that it is the default Internet search engine on the network.

"I think it's going to be an open network, and I think it's going to stay that way," Page said.

On broadcasting, the context for Page's comments was related to the need for TV stations to hold on to valuable spectrum when the vast majority of viewers watch those channels over cable and satellite platforms.

"If you were being practical about it, you'd clearly say, ‘Well, there [are] wires passing all the houses,'" Page said. "We actually have satellite television in which there's no incremental cost to adding a user basically at all. You just need to buy the dish."

Regarding the estimated 11 million to 19 million homes that are broadcast-only, Page said: "It wouldn't cost you very much to buy them out."

As a practical matter, Page said he didn't believe TV stations had much to worry about.

"I mean, I just assume that's a pretty difficult political fight," he said.

Page said a TV station in Philadelphia, which he didn't name, tried to stop broadcasting in analog because its electricity costs were higher than its advertising revenue. The station, he said, wanted to beam just a digital signal to protect its cable must carry rights.

"As I understand it, the FCC didn't let them [cut off the analog signal]," Page said.

The FCC, in fact, has let several TV stations discontinue analog service mainly because the stations demonstrated that they did not have a measurable supply of over-the-air viewers—the very people whose access to free TV the must carry law was designed to protect.

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