In a blow to Gemstar-TV Guide International, the Federal Communications Commission last week ruled that cable companies are not required to carry the company’s electronic program guide service under the agency’s must-carry rules.
Gemstar says it has cut deals with hundreds of broadcasters to piggyback the signals for its interactive program guide service on the broadcasters’ vertical blanking intervals-tiny slivers of their channels. The service, which includes programming information and advertising, is then available to consumers who own TV sets and video recorders specially equipped to receive them in the broadcaster’s service area.
Gemstar has argued that cable systems should be required to carry the VBI signals under the same FCC must-carry rules that require operators to carry a broadcaster’s main signal.
But AOL Time Warner and other representatives of the cable industry have challenged Gemstar’s assertion.
Last week the FCC unanimously agreed with cable, contending that the agency’s must-carry rules only require cable operators to carry VBI material related to the broadcaster’s main programming.
“Very little of Gemstar’s VBI material is uniquely related to the main program of the broadcast station carrying it,” the FCC said.
In a recent filing at the FCC, Gemstar said such a ruling by the FCC would “bring significant harm to millions of innocent consumers immediately.”
But in the wake of the FCC’s decision, Jonathan Blake, an attorney for Gemstar, said the company believes that AOL Time Warner is contractually barred from stripping the signals.
“In theory, if cable were not under contractual restrictions, they could strip out this service,” said Mr. Blake, adding that Gemstar is considering an appeal.
Mike Luftman, a spokesman for Time Warner Cable, said the giant cable company had no plans to strip Gemstar from the VBI’s of local broadcasters.
“We’re pleased with the FCC’s ruling, and we look forward to productive discussions with Gemstar on a range of issues,” Mr. Luftman said.
Added David Beckwith, a spokesman for the National Cable & Telecommunications Association, “The negotiating table is the right place to resolve this matter.”
In a recent filing at the FCC, Gemstar said that more than 5 million consumers have already paid for analog TV sets and videocassette recorders equipped to receive Gemstar’s interactive program guide. “A substantial portion of these consumers would face the loss of service on the EPG [electronic program guide] they chose in the market and invested in if AOL Time Warner were to strip the Gemstar EPG information,” Gemstar said.
“Those who are in AOL Time Warner cable homes would be stranded with only one possible EPG supplier-AOL Time Warner,” Gemstar continued. “And if delivery of EPG service over the broadcast signal is sabotaged in cable, no EPG service will remain available in noncable homes.”