Capital Watch - Broadcasting & Cable

Capital Watch

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Cable Fights for Haggling Rights

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.

Internet TV on the Way, Powell Says

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.

For Crowd Shots

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.

Kerry Opponents Fail FEC's Media Smell Test

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.

D.C. Lobby Veteran Joins Belo

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.

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