Pax Pushes FCC on Digital Must-Carry

Washington-It appears that at least one big TV-station owner-Paxson Communications Corp.-wants some quick answers on digital must-carry.

Frustrated by inaction by federal regulators and hostility from the cable industry, Paxson has filed the first digital must-carry complaint against a group of operators.

The filing could lead to a decision by the Federal Communications Commission in early January.

Paxson, owner of 60 stations that beam programming to 66 million U.S. homes, filed the complaint Sept. 11 at the FCC, after AT & T Broadband and some smaller cable operators refused to carry Paxson's owned-and-operated digital TV-station in Chicago.

After receiving such a complaint, the FCC typically places it on public notice and seeks public comments. The agency has 120 days from the publication of that notice to render a decision.

The FCC's Cable Services Bureau gets first dibs on the complaint. If Paxson dislikes the outcome, it can seek bureau reconsideration or review by the five FCC commissioners. But the agency is under no time constraints when considering a petition for reconsideration or a petition for review, an FCC source said.

According to the complaint, Paxson is seeking cable carriage of its digital signal. But its demands included some interesting twists.

In Chicago, Paxson operates an analog TV station on channel 38, which is widely carried by area cable operators. The station offers such family-friendly fare asTouched By An Angel,BonanzaandMysterious Ways.

In June, Paxson launched its digital service on channel 43, offering a digital simulcast of its analog station as its primary feed. It also decided to use its digital spectrum to multicast five other services: East and West Coast feeds of Pax TV, the Worship Network, Praise TV Network and the Total Living Network.

In the complaint and in a June 5 letter to AT & T, Paxson said it had the right to force cable operators to carry its primary digital signal-Pax TV-as a downconverted service that would occupy analog channel 38.

Under that proposal, cable operators would not have to carry both analog and digital versions of the same programming. The cable industry has complained repeatedly that it should not have to absorb a double dose of must-carry.

Paxson did not indicate how long Chicago cable operators would have to carry its primary digital feed in analog.

"We are open to their needs," said Paxson spokeswoman Nancy Udell.

While relenting on dual carriage, Paxson insisted AT & T and the other operators had to carry its digital multicast services on their digital tiers to the extent that digital TV is offered to Chicago-area cable subscribers.

In previous comments to the FCC, the National Cable Television Association has said it would consider carrying a primary digital signal in analog to help expedite the return of TV spectrum from channels 60 through 69.

The FCC wants to auction that spectrum next March to wireless carriers, and the auction could trigger a bidding war worth billions of dollars to the U.S. Treasury.

Worried about interference, winning bidders may have to pay millions of dollars to convince the owners of the 100 analog TV stations in the 60-to-69 band to cease broadcasting prior to 2006, when the transition to digital is supposed to be complete. Paxson has told the FCC it would not agree to shut down its analog TV stations in that band unless cable operators agree to carry all of its multicast signals.

The NCTA's concession on the 60-to-69 issue won't help Paxson in Chicago, because its analog and digital stations in that city are located outside the band.

As a result, the Paxson complaint is a non-starter with the cable industry, which has generally said it won't carry any digital signals until broadcasters have returned their analog spectrum to the FCC.

"There's nothing in the law that would support [Paxson's] position," said NCTA spokesman David Beckwith.

In comments filed at the FCC on Sept. 15 on the 60-to-69 auction, the NCTA said cable carriage of a digital signal in analog should be voluntary. Mandatory cable carriage of multicast DTV signals, as Paxson proposed, is barred by law, which refers to cable carriage of the primary digital signal only, the NCTA said.

Paxson's complaint appears to be designed to force the FCC to finally articulate digital must-carry policies.

FCC chairman William Kennard launched a digital must-carry proceeding more than two years ago but has steadfastly refused to adopt any rules.

Kennard has said he's in no rush because the FCC needs to have a better understanding of broadcasters' plans for their digital spectrum, which was obtained for free on condition that the broadcasters return their analog spectrum when the transition to digital is finished.

"This [complaint] brings to light that we would like them to make a move on the two-year-old rulemaking on must-carry," Paxson's Udell said.

Paxson's demand for cable carriage of its primary digital feed in analog would solve a major headache associated with the transition; namely, audience loss.

If Paxson had proposed carriage of only its digital services-with the cable operator not obligated to carry its analog feed-then only subscribers with digital boxes would be able to see Pax TV programming.

In view of the fact that about 10 percent of 68 million cable subscribers have digital boxes, Paxson had to make a pitch to stay on the analog tier. Otherwise, the company would lose access to 90 percent of Chicago cable subscribers.

Paxson's complaint is different from a must-carry request filed June 21 by Guenter Marksteiner, owner of WHDT in Stuart, Fla.

Marksteiner wants the FCC to rule that his station, which plans to broadcast exclusively in digital, has the right of analog-tier carriage on local cable systems. Unlike Paxson, WHDT is not seeking mandatory cable carriage of data or multicast programming services.

NCTA told the FCC it opposed Marksteiner's request, asserting that scarce analog shelf space should not automatically be reserved for a digital-TV station that has never had any off-air viewers.