FCC WEIGHS RULING AGAINST GEMSTAR IN CABLE MUST-CARRY FIGHT

Sources said 4 FCC commissioners are considering decision that would deny cable must-carry status to electronic program guide (EPG) transmitted over vertical blanking interval (VBI) of local broadcast stations. Prospective ruling in Gemstar case, which pits Gemstar-TV Guide International, broadcasters and CE manufacturers against Time Warner Cable and other cable operators, would follow recent Cable Bureau recommendation that broadcasters’ must-carry rights shouldn’t extend to 3rd party EPGs. Instead of gaining mandatory carriage on cable systems, Gemstar would have to negotiate its way onto systems, just like cable networks and other nonbroadcast services.

FCC and cable officials declined comment on proceeding. But sources confirmed that draft order rejecting Gemstar’s must-carry petition, prepared by Cable Bureau, began circulating on Commission’s 8th floor for approval last week. “It is percolating along,” one source said. “It’s on the radar screen.” At our deadline, it wasn’t clear whether Chmn. Powell or any of other commissioners had voted on item.

Sources said they expected full Commission to back Cable Bureau recommendation because staff decisions usually aren’t reversed. They also see FCC ruling against Gemstar in analog must-carry case because of EPG stance that agency took in its recent DTV must-carry order tentatively rejecting dual cable carriage of analog and digital broadcast signals. In section buried deep within that order last month, Commission concluded that “program guide data that are not specifically linked to the video content of the digital signal being shown cannot be considered program-related, and, therefore, are not subject to a carriage requirement.” As one source put it: “They foreshadowed that in their must-carry order.”

Gemstar brought case to FCC last March, filing petition for special relief after Time Warner Cable stripped Gemstar’s EPG from local broadcaster VBI signals in at least 9 markets. Gemstar, which has signed VBI deals with local broadcasters in each Time Warner market, argued that must-carry rules applied because programming guides were closely related to video programming presented by broadcast stations. But Time Warner, which claims right to charge for cable bandwidth use, contended must-carry rules didn’t apply to such ancillary services as programming guides.