DirecTV Must Add Pax Stations

Paxson Communications Corp. is entitled to require DirecTV Inc. to carry 36 of its stations in 31 markets, under a Federal Communications Commission decision released last Tuesday.

The FCC — which arbitrates carriage disputes between TV stations and direct-broadcast satellite providers — gave DirecTV 60 days to add the stations unless it can point to other agency rules that would disqualify Paxson-owned stations from mandatory carriage.

On Jan. 1, EchoStar Communications Corp. and DirecTV were required to carry any local TV station that requested carriage in markets in which they had opted to retransmit one or more over-the-air signals. Broadcasters were required to elect must-carry status by July 1, 2001.

In an eight-page decision, the FCC examined draft carriage agreements between Paxson and DirecTV. Although DirecTV alleged that Paxson had elected to negotiate carriage and waive its mandatory rights, the FCC disagreed. It ordered DirecTV to add Paxson's stations to its lineup.

Under a prior agreement, DirecTV distributes a national feed of Paxson's over-the-air Pax TV network. As a result of the FCC's decision, DirecTV must now carry both the national feed and Pax TV's owned-and-operated stations in the 31 affected markets.

Cable Services Bureau deputy chief William Johnson handed down the FCC's decision. DirecTV can appeal the decision to the four FCC commissioners, but the commission seldom overturns a bureau order.

"We believe the decision of the FCC's Cable Services Bureau is wrong. We will vigorously defend our rights in this matter and are considering our options with regard to seeking review of the decision," said DirecTV spokesman Bob Marsocci.

For DirecTV, the FCC's decision is effectively a dual-carriage mandate that would needlessly consume satellite capacity, Marsocci said.

"The ruling would force DirecTV to use its limited bandwidth to offer local Pax TV programming that is already available via the national feed, where it can be viewed by more customers than if it was offered through local affiliates," he said.

Paxson executive vice president and general counsel Tony Morrison said his company hopes to negotiate a deal with DirecTV that may avoid duplicative carriage in local markets.

"Anything is possible," Morrison said. "They're a partner here. It should be a win-win for everybody."

Several years ago, Paxson and EchoStar reached a deal in which EchoStar agreed to carry Pax TV's national feed and Paxson agreed to waive its right to seek mandatory carriage for its owned-and-operated stations.