FCC ‘TENTATIVELY CONCLUDES’ AGAINST DTV MUST-CARRY

In long-awaited DTV order and accompanying further notice of proposed rulemaking (FNPRM), FCC also delved into thorny issue of what digital station’s must-carry rights covered. Commission said station’s “primary video” channel entitled to mandatory carriage includes “a single programming stream and other program-related content,” rather than full multiplex of separate programs carried on single DTV channel. Agency said digital stations could choose which one of their unrelated multiplexed signals would be carried. But it left open question of “the proper scope of the program- related carriage requirement,” seeking further comment on issue.

FCC decided cable systems didn’t necessarily have to carry higher data rate, which determines overall quality, for digital broadcast channels than they did for any nonbroadcast cable channels. That implied that cable systems carrying HBO’s HDTV feed, which uses 24 frames per sec., could reduce full-quality broadcast HDTV to about half its usual data rate. Commission stressed, however, that cable operators could not carry DTV signals in lesser format or lower resolution than that afforded to any nonbroadcast digital channels that they also carried. It also ruled that DTV-only stations could demand that their signals be carried in analog format, giving them same rights as ordinary analog stations.

Among other DTV matters, FCC said: (1) Cable operators could remodulate digital broadcast signals from 8 VSB to 64 or 256 QAM. (2) Cable operators didn’t have to carry “ancillary or supplementary services” transmitted on digital signal. (3) Cable operators didn’t have to carry “Internet and e-commerce services” provided by DTV station if services were not related to primary video signal. (4) Mandatory carriage of electronic program guides was “subject to a fact-based program-related analysis.” (5) Cable operators must carry such potentially program-related material as closed-captioning, V-chip data, Nielsen ratings data and channel mapping and tuning protocols. (6) Cable operators didn’t have to provide subscribers with set-top boxes capable of processing DTV signals for display on analog sets. (7) There was no need to set DTV channel lineup requirements like those that exist for analog signals. (8) Cable systems must make DTV signals available to subscribers on their basic service tiers.

But Commission left other DTV questions open to more debate. Agency sought further comment on: (1) Proposals that would allow cable operators to boost their basic service tier rates for each 6 MHz of capacity devoted to DTV carriage. (2) Application of digital cable carriage rules to DBS providers that offered local- into-local service. (3) Whether “educational” program streams broadcast by noncommercial stations should count as “program related” because of statutory language that applied specifically to such stations.

Former FCC Chmn. William Kennard, new Chmn. Powell and Comrs. Ness and Furchtgott-Roth voted in favor of order and NPRFM, although Ness dissented in part and Powell raised questions about NPRFM. Comr. Tristani firmly opposed action, arguing that Commission ignored “public interest” and harmed “every American” by deciding primary video question narrowly. She also blasted majority for ruling against must-carry status for public broadcasters that used their digital signals for multicasting several programming channels. In addition, she criticized Commission for deciding on definition of “primary video” without deciding on definition of “program-related” content and for “rushing the order out the door at the end of this [Clinton] Administration.”

In long statement, Ness said that while she supported “the majority of decisions in this order” and NPRFM, she disagreed with drawing tentative conclusion on dual must-carry. Calling such conclusion “gratuitous,” “unnecessary,” “premature” and “ill- timed,” she said “the record is insufficient to accurately discern the impact on cable operators’ speech posed” by such requirement. Ness also argued that conclusion “addresses only one aspect” of U.S. Supreme Court’s “intermediate scrutiny test” for First Amendment burdens. She also cited concern for public broadcasters affected by primary video ruling, saying that several “have developed innovative digital strategies that rely heavily on multicasting.”

Powell said he believed order “provides the clarity that the cable and broadcast sectors have been anxiously awaiting” from Commission and “eliminated some uncertainties in our posture.” But, while “compelled” to support it, he also expressed concern about impact of primary video ruling on public broadcasters seeking to do multicasting. “Regrettably, this may make it more difficult for digital broadcasters to obtain cable carriage, though I sincerely hope cable operators will negotiate fairly in an effort to accommodate creative broadcast offerings, particularly the good works of public broadcasters who have a unique public mission, and to help facilitate the transition to digital television,” he said. He suggested that broadcasters go to Congress for redress if Commission’s “interpretation of this statute should negatively impact the development of digital television.” He also urged “continued flexibility on the part of broadcasters and cable operators” to work out remaining DTV issues.

Broadcast and cable industries reacted predictably. NAB Pres. Edward Fritts said his group was “disappointed” with FCC’s order but “this fight is far from over.” He stressed that broadcasters “welcome the opportunity to make our case before a new FCC and a new Congress.” NCTA Pres. Robert Sachs said cable was “pleased” by FCC decision. He said “the winners here are consumers, who will enjoy greater program diversity on cable instead of duplication of the same broadcast channels."