Must-Carry, But Through the Back Door

The National Association of Broadcasters and the Association for Maximum Service Television have cooked up a complicated plan that would give a station the power to force a local cable system to carry either the old analog signal or the new digital one but not both.

That's the theory, anyway.

Under current rules, stations can invoke must-carry for only the analog signal. But under the new plan, stations choosing the digital option would have so much leverage over carriage terms that most cable operators would probably be resigned to carrying two versions of a broadcaster's signal.

The plan would require operators to make sure all their digital-tier customers received the broadcaster's digital signal. Sure, operators could take the expensive route of outfitting all their customers with digital converter boxes at once. But the more viable option initially would be to provide customers who have digital converter boxes the digital version and downconvert the channels for analog customers at no extra charge. Also, cable systems not equipped to downconvert when the next round of retransmission-consent talks begins Jan. 1, 2006, would be saddled with dual must-carry.

The broadcaster organizations offered the new plan as a kind of acknowledgement that federal regulators will never order cable operators to carry both the analog and digital channels during the switch to DTV.

But the National Cable & Telecommunications Association immediately dismissed the broadcasters' plan as "nothing more than a back-door attempt to obtain dual must-carry."

This either/or option would be in place until 85% of TV homes have digital sets, the penetration level that would trigger a government takeback of the old analog spectrum.

The new plan would also give stations the right to negotiate a retransmission deal for the remaining signal.

The NAB/MSTV alternative is a carefully worded response to the FCC's longstanding reservation about the constitutionality of granting dual–must-carry rights. Many commissioners have sympathized with broadcasters' argument that dual must-carry is the only way stations can profitably bring new channels online and persuade viewers to replace their old analog sets with new digital TVs. But, since the first DTV-service rules were issued in 1997, commissioners fretted that expanding must-carry requirements wouldn't withstand the cable industry's inevitable court challenge.

"The FCC has been reluctant to impose dual carriage," said NAB General Counsel Jack Goodman, "but there also is a view that some plan resulting in digital cable carriage between now and the end of the transition is really important and that relying only on voluntary carriage is going to be difficult.'

In 2001, the FCC tentatively rejected broadcasters' dual-carriage request and is expected to confirm that decision when it issues permanent digital-carriage rules early next year. That rulemaking is viewed as the last real opportunity to win transitional carriage rights.

Cable has always argued that all must-carry mandates violate operators' First Amendment right to decide what programming is carried over their systems. The less onerous analog rules survived Supreme Court review by only one vote, leading many operators and the FCC to deduce that an expanded dual mandate would be struck down.

It's true that cable operators won't have to accept both signals from the broadcasters, but, if the digital option is invoked, most would have little alternative to carrying two versions.

Goodman said it "may very well be true" that cable systems will feel they have no choice but to carry two signals but choosing between that option and an upgrade for all customers is a business decision that has no bearing on the plan's constitutionality. "There's no government mandate for dual carriage and therefore no First Amendment injury."