Powell’s Goodbye Kiss-Off

Jan 31, 2005  •  Post A Comment

Hoping to give broadcasters a goodbye they won’t soon forget, outgoing Federal Communications Commission Chairman Michael Powell has slated a vote Feb. 10 to try to ax a National Association of Broadcasters proposal that would require cable operators to carry all of a broadcaster’s multicast digital signals.

The NAB has been arguing long and hard that carriage of all of the free programming streams multicast on DTV channels is critical to the broadcast industry’s survival. But the cable industry has been fighting the NAB initiative largely on First Amendment grounds, preferring the agency’s existing rule that limits the carriage obligation to the one primary DTV programming stream.

Mr. Powell has long made clear his support for cable on the issue: Like the cable industry, he would prefer to limit the carriage obligation to the one primary DTV programming stream, no matter how many streams are broadcast.

In a dire development for broadcasters last week, industry lobbyists said it appears that Mr. Powell has lined up the three-vote majority needed to get his way, with GOP Commissioner Kathleen Abernathy and Democratic Commissioner Jonathan Adelstein tipping the balance in his favor.

“This is Michael Powell giving the finger to the NAB,” said Jeff Chester, executive director of the Center for Digital Democracy.

FCC sources said Ms. Abernathy has made no secret of her concern that NAB’s multicast carriage proposal raises serious constitutional problems. Sources said Mr. Adelstein signaled his opposition to the NAB plan last week, largely on grounds that broadcasters had fought the concept of paying for multicast carriage by accepting new public-interest obligations.

Mr. Adelstein is obligated to cable because the National Cable & Telecommunications Association lobbied for his reappointment to the FCC late last year, key industry sources said.

“Broadcasters played a game of chicken, and they lost,” Mr. Chester said. “The NAB board killed off multicast must-carry.”

Despite the appearance to the contrary, sources said negotiations over multicast carriage were still ongoing last week and that neither Ms. Abernathy’s nor Mr. Adelstein’s vote was locked in. But the prospects for an NAB win were so grim that Robert Decherd, Belo chairman and CEO, announced he is urging key lawmakers to force the agency to postpone a vote until after Mr. Powell leaves the agency in March.

“I believe that taking agency action prior to a new FCC chair being seated and that person having the opportunity to consider this matter is very ill-advised,” Mr. Decherd said in a Jan. 26 letter to lawmakers. “Everyone acknowledges the need to reach closure on this issue, but Chairman Powell’s approach is the wrong way to go.”

In addition, an ABC executive said uncertainty about cable carriage obligations for digital multicast channels was a factor in the network’s decision to pull the plug Jan. 29 on ABC News Now-or at least the version of the 24/7 news service the network has been offering to its affiliates for their digital multicast channels. The programming will continue to be available to broadband and wireless subscribers under commercial agreements.

Even if the broadcasters lose Feb. 10, it’s possible they could get the decision overturned after Mr. Powell’s successor assumes the FCC chairmanship.

The NAB remained optimistic. “A favorable FCC DTV multicasting rule will result in an explosion of free programming options, including news and public affairs programming, that will clearly benefit millions of consumers,” NAB spokesman Dennis Wharton said. “We’re hopeful that the FCC sides with consumers in this decision rather than with the gatekeeper cable operators.”

After Mr. Powell’s departure there will be a new set of commissioners at the FCC, with GOP Commissioner Kevin Martin-who has been supportive of NAB on the carriage issue-widely expected to be promoted to the chairmanship and Earl Comstock, a former staffer for Sen. Ted Stevens, R-Alaska, expected to be appointed as a new GOP commissioner.

Some broadcast industry sources also believe they can still win the case for multicast must-carry in the courts, no matter what the FCC does.

“We think we have a great case,” a broadcast industry source said.