Capital Watch


Holding On

Media General wants a permanent waiver that will allow it to own both
WBTW Florence, S.C., and the town's daily newspaper, the
Morning News. Right now, FCC rules ban a
company from owning a TV station and a daily newspaper in the same market.
Until a court struck down the FCC's plans to loosen the restriction, Media
General hoped it would have little trouble keeping the combo together. Media
General's request is contained in WBTW's license renewal application, the first
of many that major media companies are expected to file in the next few years.
Media General, Tribune and Gannett operate both TV stations and newspapers in
eight markets where waivers will be needed to prevent FCC-ordered divestitures.
The companies were able to set up the combos in the first place because of a
loophole that allows TV owners to buy hometown papers and operate them until
the local station's license is up for renewal. If the FCC isn't willing to
grant a permanent waiver, Media General's fallback request is for permission to
keep both properties until WBTW's license comes up for renewal again in 2012.
Media General says a waiver is justified because owning both properties
provided the station with resources to offer better news coverage. It also says
the market, which includes Myrtle Beach, has robust competition between media

Super Bowl Countdown

Viacom's indecency showdown with the FCC will get under way within the
next two weeks. That's when the commission finally proposes its expected
$550,000 fine for Janet Jackson's Super Bowl "wardrobe malfunction." In July,
Viacom Co-President Les Moonves vowed to fight the FCC in court if the agency
orders Viacom's CBS O&Os to pay up for violating indecency restrictions. An
FCC source says the proposed fine, which the agency's Enforcement

Bureau recommended to commissioners in July, will be formally unveiled
this week or next. Moonves told TV critics that any fine would be "patently
ridiculous." Many First Amendment lawyers are hoping Moonves keeps his pledge
to fight in court because they believe the case could lead to a Supreme Court
review of all FCC indecency restrictions.

Oh, Canada

U.S. satellite TV companies are turning to Canada's under-used
satellite spectrum as a way to deliver local channels to more American markets.
After DirecTV won permission from the FCC to move one of its satellites into a
Canadian slot, EchoStar officials said they are looking at the same idea.
"We're considering that option now that the FCC has opened this up." DirecTV
will be able to offer local channels in 24 additional markets and 7 million
more homes by using frequencies controlled by Telesat Canada. After moving its
DirecTV5 satellite into position, the company will offer to add the local
broadcast channels beginning late September through early October. In all,
DirecTV will offer local channels in 130 markets, accounting for 92% of U.S. TV
households. DirecTV's agreement with Telesat allows it to be the only U.S. user
of the Canadian channels through the end of 2008. By then, Telesat plans to
launch a new satellite that will dedicate up to 50% of its capacity to "foreign
broadcast needs," including other U.S. DBS providers. As part of its deal with
Telesat, DirecTV is providing a second satellite that Canadian DBS provider
ExpressView will use to increase the number of channels offered to subscribers


MDS America will roll out a new wireless broadband service in
Jacksonville, Fla., and two other markets in the next three months, says CEO
Kirk Kirkpatrick. MDS's rollout will be the first from several companies that
won new FCC licenses for a microwave-delivered broadband/TV service auctioned
by the government in January. MDS also makes equipment other winners plan to
use. One possibility is Cablevision subsidiary DTV Norwich, which plans to
supplement its new DBS service VOOM with microwave-delivered channels.