Daily Variety, November 25, 2003, Tuesday

Washington — With the battle over media consolidation in full swing, major TV broadcasters are pushing forward on a new effort that, critics argue, could see them attain even more power over competitors.

In a matter of weeks, the Federal Communications Commission will decide whether cable operators will be forced to carry the multiple programming streams that broadcasters will have available after the transition to digital is complete.

Commissioners have indicated they would like to reach a conclusion about it once and for all by the end of the year. Originally, some industry observers believed that the agency could rule on the issue at its Dec. 17 meeting. According to FCC sources, though, a ruling could easily be delayed until January.

The full impact of the rule won't be felt until broadcasters finish transferring their signals from analog to digital, which is not expected for at least a couple of years. But the decision is crucial for broadcasters' business plans, and lobbying on the rule — known in FCC parlance as "multicasting must-carry" — has reached a fever pitch.

Media watchdogs argue granting broadcasters such a financial boon without including a public interest requirement would further undermine the quality of television. If the new looser restrictions on media ownership stick, they argue, it's just one more government giveaway to media giants.

Cable operators are particularly leery of the government giving broadcasters more power, and the National Cable and Telecommunications Assn. as well as cabler Comcast are desperately trying to convince the FCC to rule against the big nets and major broadcast interests.

Comcast lawyers filed several letters with the FCC recently, arguing that multicasting "could compound problems that have repeatedly arisen in retransmission consent negotiations ... by giving broadcasters additional leverage to use in seeking carriage of and payment for their affiliated cable programming networks."

Some cable programming outlets are also fighting the multicasting rule. Execs at Discovery Communications, Hallmark and several public broadcasters are worried about how a government mandate to carry several of the free-over-the-air broadcasters' channels could affect cable nets.

"It will cause Discovery programming to be dropped because broadcasting programmers will have a government-sponsored advantage in competing for the limited amount of space that cable companies can make available to the kinds of targeted channels (e.g., Discovery Kids) that Discovery produces," company lawyers wrote the FCC last week.

The National Assn. of Broadcasters and networks such as NBC brush aside such concerns. They claim cablers have an almost unlimited ability to carry as many channels as they wish and that more channels automatically will translate into more public interest coverage of news and public affairs.

"I can assure you there will be more coverage of public interest local programming if this is passed," said NAB spokesman Dennis Wharton. "I would hazard a guess there would be more coverage of political debates and more local C-SPAN-like channels will crop up to cover city council meetings and a whole variety of local news."

NBC told the FCC that if multicasting is approved, the net plans to create four digital programming streams next year, with the first devoted to network and affiliate programming, the second to local news during the day and high-definition network programming in primetime and late night. The net would devote a third stream to weather and local programming and a fourth to local events and sports.