Capital Watch

As customers flee to DBS, cable operators are demanding more freedom from the FCC to strike deals with subscribers who threaten to bolt. The cable industry is asking the FCC to finally rule on a 2-year-old request that would eliminate most operators' obligation to offer uniform prices through a franchise area. According to the National Cable & Telecommunications Association, in most major markets, competition from satellite is strong enough to warrant lifting rules prohibiting cable operators from negotiating one-on-one deals with subscribers. Current rules allow cable operators to free themselves from uniform-pricing restraints, but only when they prove to the commission that DBS or other competitors have captured at least 15% of a market. Because DBS now controls more than 15% of the national market, NCTA says cable franchises should no longer be required to prove they are eligible in local markets. Instead, cable operators should be presumed to face "effective competition" in every market unless residents prove that DBS penetration in their area is below the 15% threshold. The NCTA says the FCC could also make it easier for operators by preventing DBS companies from charging for data needed to prove when a market is eligible.

TV over the Internet is going to be the next new thing, predicts FCC Chairman Michael Powell. Companies all over Silicon Valley are making Internet television their "number-one effort," he says. For example, TiVo has partnered with Netflix for delivery of movies to subscribers, almost every major phone company has an initiative under way, and Microsoft and Intel are big players in the effort. One or more of these companies will develop the "killer app" needed to generate demand for Internet connections fast enough to handle video. Powell says the potential for Internet TV and other services makes him optimistic that Americans will rapidly adopt the high-speed service, despite other policymakers' worries that the U.S. is falling behind.

Live pictures from the Goodyear Blimp could be shot down by government plans to make room on the airwaves for cellphone and satellite users. Goodyear, along with the big broadcast networks and ESPN, are heavy users of special channels now used to beam sports coverage and other news footage back to network studios. Now the government wants them to share their "backhaul" channels. Broadcasters counter that they will have a hard time finding an open channel for sending live footage. To solve the problem, the Society of Broadcast Engineers wants the FCC to shrink and divide the channels, much as it did for another set of backhaul channels that local stations use for remote news feeds.

Conservative lobby Citizens United can't buy local broadcast and cable time for a documentary attacking Democratic presidential candidate John Kerry. The Federal Election Commission says the group doesn't qualify for an exemption allowing the press and non-profits to run ads mentioning federal candidates 60 days before a general election. To qualify, the documentary and ads promoting it would have to be part of a "news story, commentary or editorial" and would have to come from a group "acting as a media entity." Citizens United didn't qualify as a media entity. FEC pointed out that the restriction applies only to TV and radio, not direct mail, print advertising, videos, DVDs, the Internet and theaters.

Former Viacom lobbyist DeDe Lea has signed on to head Belo Corp.'s government relations office. Based in Dallas, she'll handle the TV and newspaper group's legislative and regulatory matters in Washington and in states where the company owns properties. She has been a vice president of government affairs at Viacom since 1997. Before that, she held a variety of posts in the National Association of Broadcasters government relations office.