By Staff -- Broadcasting & Cable, 5/8/2005 8:00:00 PM
Court Strikes Broadcast Flag
Federal judges Friday struck down FCC rules aimed at preventing broadcast-TV programming from being illegally duplicated over the Internet and other computer networks.
The U.S. Court of Appeals in Washington ruled that the FCC overstepped its authority when it required manufacturers of digital TVs to include “broadcast-flag” technology to protect programming content from piracy.
Broadcasters and Hollywood, who must now plead their case in Congress, say a strong safeguard against illegal copying must be in place if TV stations are going to be allowed to air digital versions of the latest movies and other valuable programming.
The court agreed with petitions from the American Library Association, Public Knowledge and others that the flag rules are not authorized by the FCC's right to regulate interstate radio communications.
The FCC has the right to govern how TV signals are received but not what is done with them after reception of the signal is complete.
The flag is a code embedded in broadcast programming that signals the receiver to block the illegal retransmission of the broadcast over computer networks and other devices. Broadcasters argue that, without that protection, the switch to digital is fraught with dangers from digital pirates.
The court said there is “no statutory foundation for the broadcast-flag rules.” Saying the commission acted outside its scope of authority, the court found that “Congress never conferred authority on the FCC to regulate consumers' use of television-received apparatus after the completion of broadcast transmissions.”
Fox News Wants To Double Fees
Cable operators are already bracing for tough negotiations to renew Fox News Channel, but News Corp. is signaling just how tough.
The network is looking to at least double the license fee it charges DBS and cable systems to carry the network. Currently, Fox News' fee averages around 25¢ per month per subscriber.
On News Corp.'s earnings conference call May 3, President Peter Chernin said he is looking at another 25¢ per month, at least. “Trust me, we think we're worth a hell of a lot more than that,” he said.
Since Fox News reaches more than 80 million subscribers, that increase “its worth $250 million to the bottom line.”
Fox News launched in 1996, so its 10-year carriage deals start expiring next September.
The network's average license fee is 37% less than the 40¢ that rival CNN has managed to secure for its two networks (CNN and Headline News), growing the price gradually over 25 years.
But Fox has eclipsed CNN in the Nielsen ratings and wants to leapfrog the network's license fees as well. “We invested a lot of money and worked really hard to achieve this over the 10 years,” Chernin says, “and we believe we should get an appropriate payback.”
He has a tough road ahead. Cable and DBS operators are already fiercely fighting increases in programming costs. Moreover, a major reason Fox News' fees are even as high as 25¢ is the massive upfront payments the network offered operators to launch the channel. They exceeded $300 million, including payments of about $12 per subscriber to then-top operator, Tele-Communications Inc.—J.M.H.
Sony, Tribune Team On First-Run
Tribune Co.'s 26 TV stations, its syndication arm Tribune Entertainment, and Sony Pictures Television (SPT) have agreed to develop and produce a first-run syndicated program, with the joint venture working on a daytime program for the Tribune group starting in fall 2006.
The announcement failed to mention specific projects. It appears likely that a talk show with Howard Stern sidekick Robin Quivers, which failed to gain traction for this September, will be among those that Sony and Tribune consider for fall 2006.—J.B.
Apollo Panel To Launch
Arbitron and Nielsen parent VNU are creating a panel of 6,000-plus households to test Project Apollo, a new service to integrate viewership with product-purchasing information.
The service, which is based on Arbitron's portable people meters, is intended to give advertisers a better gauge of the effectiveness of their ads by relating exposures across multiple platforms to shopping behaviors. Each person will get a portable people meter, which records exposure to various media sources, broadcast and cable.—J.E.
Peacock Keeps Old Kentucky Home
NBC has finalized a deal to keep TV rights for two of the three jewels in horse racing's Triple Crown, the Kentucky Derby and Preakness, for another five years. The deal thwarts an attempt by ESPN to snag Preakness rights away and pair the race with ABC's carriage of the Belmont Stakes. NBC will carry the Derby and Preakness through 2010.—J.M.H.
'Grey's Anatomy' Healthy
ABC has officially picked up its new hit midseason medical drama, Grey's Anatomy, for next season with an order for 13 episodes.
The Touchstone series has been a surprise hit in its 10 p.m. Sunday time period after Desperate Housewives, retaining more of its powerhouse lead-in than Boston Legal , which it displaced.
Boston Legal is also coming back next season with a full, 22-episode season order (plus the five episodes left from this season).—J.B.
House Defeats VNR Disclosure Bill
The House last week voted down an amendment to a Vocational Ed bill that would have prevented use of funds for paid commentators or video news releases (VNRs) unless both clearly disclosed that they were provided by the government.
Rep. George Miller (D-Calif.), ranking Democrat on the education and workforce subcommittee and a leading congressional opponent of unsourced VNRs, had proposed the amendment, saying, “The Bush administration has refused to end the deceptive, wasteful and illegal practice of producing fake news.” After its defeat, he said the House had “failed to adopt a commonsense measure to do something about it.”
A spokesman for Miller says he will take every opportunity to reintroduce the measure on subsequent spending bills. Senate Commerce Committee Chairman Ted Stevens (R-Alaska) has scheduled a May 12 hearing on a bill mandating disclosure of government VNRs.
The hearing had originally been scheduled for April 28 but was postponed when the bill had not been introduced at least 48 hours before the scheduled hearing.—J.E.
Comedy Central Halts 'Chappelle's Show' Production
In a terse, three-line statement, Comedy Central said it is "optimistic" that production will resume "in the near future" on the third season of Chappelle's Show, which was scheduled to premiere May 31.
No word on the reason for the abrupt move only one day after the channel buoyantly pitched its shows to advertisers.
Dave Chappelle re-upped for two more seasons (a total of four) last August, with a lucrative deal that has been pegged at $30 million-$50 million and was based on projections of DVD and other backend sales through the end of the fourth season.
In 2004, when season two aired, the show averaged 3.1 million total viewers (2.2 million in 18-49s), which made it one of the channel's top-rated shows.
Season one DVD sales were 2.8 million units. In its most recent financial statement, Viacom pointed to a 30% increase in ancillary revenue, singling out Chappelle's Show for special mention.—A.B.
CBS' Summer Reality Check
CBS will air three new reality series this summer. Fire Me, Please, airing Tuesdays at 9 starting June 7, is a seeming spoof on The Apprentice. It gives two contestants until 3 p.m. to get fired from a new job. First one out wins. On The Cut, beginning Thursday, June 9, designers vie to launch their own label for Tommy Hilfiger. The winner in Rock Star: INXS becomes the new lead singer in the group. Another hook: The contestants live together. It debuts July 11, with three airings a week. Survivor executive producer Mark Burnett cooked this one up, too. (See page 9.)
Murphy Leaves 'Nightline'
George Murphy is out at ABC News' Nightline, although it is not clear if he was fired or will be allowed to resign.
The Nightline senior director has not been at work for several weeks since ABC learned that he was endorsing the Sony Vegas editing system, including during a planned appearance at the NAB convention in Las Vegas last month.
ABC had just signed a big deal for Avid editing equipment, which was announced at the convention. The network also has a written policy against product endorsements of any kind.
ABC had no comment.—J.E.
AT&T, Comcast Settle @Home
On the eve of trial, AT&T has agreed to settle several claims tied to its control of failed high-speed online service Excite@Home.
The telephone company says the settlement is a $340 million payment to Excite@Home bondholders and a company pursuing a patent-infringement claim. Comcast says it will cover half the settlement because it bought AT&T's cable division two years ago. However, the settlement does not resolve all the claims directly against Comcast or against Excite@Home's other major shareholder, Cox Communications.
Excite@Home was formed to create a national data backbone and other services for most of the major cable operators in the late 1990s as the industry was beginning to offer high-speed Internet services.
Like many dotcoms of the era, Excite@Home got swamped in losses and shut down. Comcast and Cox managed to sell out to AT&T at a huge price $3 billion before the fall.—J.M.H.
Armstrong To Head Johns Hopkins Medicine
Michael Armstrong, the former chairman of AT&T and Comcast Corp., has been elected chairman of the board for Baltimore-based Johns Hopkins Medicine, effective July 1. Armstrong, 66, will head a board that oversees a $3 billion clinical and medical research enterprise that includes the university's medical school and health system. —J.E.
Brockman Promoted, Binford Out at ABC
Kevin Brockman, a seven-year veteran at ABC, has been named senior VP, communications, for the Disney-ABC Television Group; he had been senior VP of entertainment communications. The network also announced that Sue Binford resigned her position as senior VP, corporate communications.—P.J.B.
Bad 'Idol', Big Ratings
A new American Idol controversy hit the right note with viewers last week on two networks. Fox's reality powerhouse soared in the ratings last week despite a steamy exposé by ABC newsmagazine Primetime Live about an alleged affair between a former contestant and a judge and claims of preferential treatment.
The May 3 and 4 installments of American Idol collected 49.8 million viewers combined, and the show's Nielsen marks are up over last season. ABC's Idol-themed special, which came on an hour after the Fox show, nabbed 13.7 million viewers and a 6.1 rating/16 share among adults 18-49, more than double the newsmagazine's season average. In a rare ratings coup for ABC, the network beat out workhorse dramas CSI: NY and Law & Order in viewers and adults 18-49.
On the ABC special, former Idol wannabe Corey Clark alleges he and judge Paula Abdul carried on a secret affair two seasons ago and she aided him in the competition.
Abdul has denied the charges, and Fox says it will investigate any legitimate complaints of favoritism. Fox and Idol producers said the special was filled with "rumor, speculation and assertions from a disqualified contestant who admitted during the special to telling lies." Clark was removed from the show for not revealing charges he assaulted his sister and resisted arrest.—A.R.
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