Despite Lobbying Efforts, Not All Broadcasters are United on Multicast Must-Carry

Not all broadcasters say they need multicast must-carry rules to develop business models for programming their digital streams. Backers of multicast must-carry say they can’t afford to invest in new programming without being assured access to cable TV’s wide distribution (CD June 13 p2).

Carriage negotiations should be based on programming quality, whether on a broadcasters’ primary or a multicast stream, Nexstar Bcstg. COO Duane Lammers said: “If you're offering a product that people want, then they're going to pay for it.” Nexstar hasn’t commented on the issue at the FCC because it’s not interested, he said. It uses multicasts only in limited ways, such as to increase distribution of some stations in large areas, Lammers said: “I wouldn’t say it’s on our radar because we're not proponents of must carry. We believe in retransmission consent. It’s just in conflict with our strategy.”

Nexstar is exploring other uses for its spectrum, such as gaming and broadband, but hasn’t settled on anything, Lammers said: “There’s going to be all kinds of different uses. We don’t necessarily see it as a programming [vehicle].”

Broadcasters could rue multicast must-carry if public interest duties pushed by FCC Comrs. Adelstein and Copps are imposed on the industry, said a lobbyist. Chmn. Martin’s must-carry order didn’t include such rules in a version circulated recently on the 8th floor. The Democrats might support must-carry rules if Martin agrees to issue a notice of proposed rulemaking seeking public comment on DTV obligations, said the lobbyist. The question is how onerous such rules may be, said sources.

Despite Nexstar’s comments, broadcasters will benefit from multicast must-carry rules, said industry lawyers. They said FCC approval of the mandates would give TV stations a leg up in carriage negotiations with cable operators. In 1992, broadcasters got a lift from similar rules passed by Congress for analog stations. Networks new at the time, especially Fox, got the biggest boost, sources said. This time things will be similar, with upstarts CW and MyNetworkTV seen as major beneficiaries, they said.

TV stations would have a hard time getting carriage of digital broadcasts aside from their primary ones without must-carry obligations, said industry sources. Broadcasters also would face an uphill road to funding for such content due to concerns about small audiences, they said. That could limit many DTV channels to airing high school sports, political debates and other local programming that’s cheap to produce, said sources. With must-carry, “you could have 24 hour C-SPAN-like channels in some communities,” an NAB spokesman said: “It will benefit [consumers] tremendously when you have an opportunity to put 3 or 4 types of programming on the air.”

Some national TV networks may benefit from the change in carriage rules. America Channel, unable to reach deals with major cable operators, wrote Martin backing multicast must- carry. “It’s another opportunity, almost like having another platform on the ground, for independent channels to penetrate local markets,” Pres. Doron Gorshein told us.

Most station group business plans are surprisingly underdeveloped, broadcast attorney Erwin Krasnow of Garvey Shubert Barer said: “Even though broadcasters have had a long, long lead time to obsess about this issue, I see precious little out there in terms of broadcasters thinking through and implementing a [business] plan.” Must-carry rules would help broadcasters negotiate with cable operators, but some in industry use their absence to justify plans’ vagueness or absence, he said.

Big station groups might be able to afford original programming but smaller groups likelier to buy it, regardless of must-carry rules, Krasnow said: “A lot of clients I represent just don’t have the resources to do that.”

Broadcasters need must-carry rules to get financing for digitally streamed programming, Ion Media CEO Brandon Burgess told us. “You're going to see a whole landslide [of new programming] once people can raise money against guaranteed carriage,” he said: “Once you set the right metrics and incentives, the financing is going to be there. It’s a very inexpensive way for the government to induce the generation of a lot of free family-friendly content.”

Nexstar’s view that cable companies should pay for carriage in all cases is a “shallow analysis” of the situation, Burgess said. Stations in large markets and stations affiliated with major networks might be able to withhold a network feed and extract cash from a cable operator, but independent stations can’t, he said. Without major network content, stations have no leverage and the networks “can terminate an affiliation whenever they want,” Burgess said.