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Fast Track - Broadcasting & Cable

Fast Track

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Pepper Goes With Cisco

Robert Pepper, the FCC policy chief whose 1995 letter to Congress estimating the value of DTV channels led to broadcasters being criticized as recipients of a “$70 billion giveaway,” is leaving the government to join Cisco Systems.

Pepper, 57, will join the Washington office of the giant broadband and computer-equipment company as senior managing director, global advanced technology policy. Pepper will draft public-policy suggestions for Washington and other governments to consider but won’t lobby the FCC or Capitol Hill.

The 19-year FCC veteran, best known for running the agency’s think tank, wanted to set the record straight: $70 billion was the high end of his estimate. He predicted that the value of the DTV channels broadcasters received could also be as low as $20 billion but would probably land somewhere in the middle. Broadcasters dismissed Pepper’s estimates. Today, however, Pepper’s numbers look right on target. Congress is moving to reclaim and auction half the channels broadcasters are now using by 2007, and Capitol Hill economists predict the government’s take will be $30 billion-$40 billion. Cisco plans to help wireless operators build networks over broadcasters’ auctioned spectrum. But the company also sells equipment that will help broadcasters themselves offer wireless services over their digital channels.—B.M.

TNT Renews 'The Closer’

TNT has renewed its blockbuster summer drama, The Closer, for a second season of 15 episodes.

The original crime series, starring Kyra Sedgwick, has notched sky-high ratings for TurnerBroadcasting’s TNT since its June 13 premiere. The debut turned in the highest-rated showing ever for a basic-cable original scripted series, with a 4.8 household rating.

With 7.03 million total viewers, the premiere was the No. 2 most-viewed basic-cable program in the second quarter, with subsequent episodes averaging 5.46 million total viewers. Ten of this season’s 13 episodes have yet to air.—A.B.

ABC Pulls 'Welcome To the Neighborhood’

ABC has taken Welcome to the Neighborhood off the schedule after criticism of the selection process for the winners of a new home.

The National Fair Housing Coalition put out an alert slamming the show, saying, “The premise of the show is that the white neighbors living in this 'picture perfect’ community will have the right to select their new neighbors. The families competing for their approval ... [include] groups protected by federal or state fair housing laws. ABC is sponsoring a program that contradicts these families’ legal rights under federal and state fair housing acts.”

ABC responded June 29 by announcing it would not air the six-episode reality series.

The summer series was to have debuted July 10 at 9 p.m. ET (the Desperate Housewives slot), leading into reruns of Housewives at 10. Now, Housewives will stay at 9 and Grey’s Anatomy will repeat at 10, its normal time slot.

ABC left open the option to show the series at some point with the “at this time” qualifier in its statement.

ABC’s summer reality series rollouts have been hit (Dancing With the Stars) and miss (The Scholar).—J.E.

No Quick Ownership Fix

Media General, Tribune and other TV groups with newspaper holdings that conflict with FCC anti-consolidation rules face a wait of one year or more before they will learn whether they must sell some of their properties.

FCC Commissioner Kathleen Abernathy told reporters June 30 that license renewals for those companies and others with ownership conflicts will remain stalled until the FCC’s larger rewrite of its overall ownership rules is completed, a process that could take over a year.

License renewals are required for every broadcast station and give the FCC an opportunity to judge whether stations are complying with agency regulations and serving the public interest.—B.M.

Comcast Sees Starz Over Free VOD

Comcast will increase by sixfold the number of free video-on-demand movies it offers digital-cable subscribers under a new deal with Starz Encore Group.

Starz will give Comcast access to 1,500 titles per year to fuel its massive VOD giveaway.

Under the deal, which could extend Starz Encore’s relationship with Comcast for another decade, all Comcast digital customers will receive 250 free Encore movies each month. That’s in addition to the 50 free VOD movies from the Sony library and around 200 movies tied to premium movie networks like HBO.

The increased offerings are a tactical move to lure new digital subs and give existing ones reason to stay on board and not to defect to satellite providers.

Comcast said that MTV Networks veteran Diane Robina is joining the company to head the new cable networks co-owned by the cable giant and Sony. Robina will lead the development of new channels and oversee the startup operations. Comcast and Sony have not yet decided what types of channels they will launch.—A.B. and A.R.

BBC Sells Off BBC Broadcast

The BBC surprised the broadcast technology sector last week when it agreed to sell off the BBC Broadcast division to Creative Broadcast Services Ltd. for approximately $297 million. The BBC wasn’t expected to complete the sale of the division until September, but Creative Broadcast Services, owned by Australian investment firm Macquarie Capital Alliance Group and Macquarie Bank Ltd., came through with an offer that overwhelmed those made by other bidders. BBC Broadcast handles transmission of all the BBC networks and other networks like ESPN ClassicSport and UK’s Channel Four as well as interactive TV services and mobile device services.—K.K.

Martin Floats “Either/Or” Must-Carry

To encourage greater viewership of digital-TV channels, FCC Chairman Kevin Martin wants to give TV stations the right to choose whether local cable systems carry their old analog channels or their new digital ones. Martin wants his fellow commissioners to impose the rule at the commission’s July 14 meeting.

Currently, stations are permitted to demand carriage only for their analog channels. Martin argues that the TV business needs to begin migrating from the old channels in order to accelerate consumer adoption of digital programming.

To speed the switch, the current policy of applying cable must-carry rights only to analog channels must be changed, the chairman is telling his fellow commissioners.

Martin’s proposal, dubbed “either/or,” is supported by broadcasters, who have been fighting for expanded digital-carriage rights since 1997.

The cable industry is opposed, arguing that the idea is a back-door way to mandate dual-carriage obligations on the pay-TV industry.—B.M.

C-SET Is Shuttered

After only ten months on-air, Carolinas Sports Entertainment Television (C-SET), the 24-hour regional sports and entertainment network owned by BET founder Robert Johnson, ceased operations June 30.

Launched on October 16, 2004, C-SET was available to approximately 600,000 Time Warner digital-cable subscribers throughout North and South Carolina. The network provided telecasts of 60 Charlotte Bobcats (NBA) and Charlotte Sting (WNBA) home games, plus original programming and Carolina-based college sports.

Experts estimated losses at $15 million and at least 20 staffers. The Bobcats expressed intent to air at least 15 games on the UPN affiliate in Charlotte.—M.M.C.

Justice O’Connor Steps Down

The resignation of Supreme Court Justice Sandra Day O’Connor on Friday gave the White House a chance to replace her with a more conservative justice.

That could be good news for media companies seeking further ownership deregulation if a pending FCC revision eventually ends up before the justices. They didn’t take up the issue in its most recent decisions. A more conservative court could mean the cable industry will face a court battle over adult programming. Broadcasters may also face a fight ahead on indecency, if planned appeals reach the high court.

O’Connor, appointed by President Ronald Reagan in July 1981, was the first woman on the court and considered a moderate swing vote.

She wrote the dissent in the must-carry case, voting with those who would have denied must-carry status to broadcasters. She was in the minority in the Playboy case, voting to uphold mandatory scrambling of adult programming.

In two recent media-related cases (see page 10), O’Connor voted with the majority in decisions upholding cable companies’ right to keep ISP competitors off their broadband networks and holding peer-to-peer network operators liable for copyright violations if they promote illegal downloading of movies, TV shows and music.

If Chief Justice William Rehnquist, a strong conservative, resigns soon as expected, President Bush could have two appointments to make.—B.M.

Cablevision Kills Two Local Channels

Cablevision systems shuttered two of its three New York area cable channels, Metro TV and Metro Stories, June 24. In May, Cablevision began notifying customers about the change with scroll messages. Cablevision is continuing production on a third local channel, Metro Traffic & Weather.

Cablevision launched its first Metro channel in 1998 and later added two more.—A.B.

Al Jazeera Int’l Coming to U.S.

Al Jazeera International says it is on schedule to launch in first-quarter 2006 as the first 24-hour English-language international news network headquartered in the Middle East. But it remains to be seen how successful it will be in gaining carriage in this country.

Funded by the Emir of Qatar, who launched the Arab-language Al Jazeera in 1996, the network’s avowed aim is to provide an objective and impartial worldwide perspective without political bias from any government agency.

The original Arabic-language Al Jazeera is available in the U.S. via EchoStar’s Dish Network.

Al Jazeera International will have a separate staff and editorial autonomy from its Arab counterpart, says Commercial Director Lindsey Oliver, a former director of CNBC Europe. It may take more than that to convince some skeptics that there is no political agenda, a challenge Oliver recognizes. “There’s a frustration that people have the misconception that [Al Jazeera] has an agenda or supports terrorists,” she said. “If we could start a new channel with editorial values of integrity, honesty and fearless reporting without prejudice, that’s what we’re hoping to bring here.”

She says there will be no racial or ethnic bias in staffing the new network, pointing to herself—a Caucasian woman—as an example. “We have a fresh, unique position, but we’re not something to be feared,” she says. “We’re not anti-anything or anyone.”

The ad-supported digital network will have four broadcast centers—Washington, London, Kuala Lumpur, and its headquarters in Doha, Qatar—contributing to one global feed, each broadcasting its own live chunk of time, with support from 40 international bureaus.

The network will launch on schedule regardless of its subscriber count, she says, characterizing early talks with operators as “very interesting and extremely encouraging.” Under an initial schedule, the first half of each hour will cover hard news and the second will be talk shows, debate programs, documentaries and current affairs discussions. Post summer, the network plans a consumer marketing and ad campaign.

At launch, the network will have a staff of “hundreds,” Oliver says. Managing Director Nigel Parsons is a 30-year media veteran who joined the network from Associated Press Television News. Yemen-born CNN vet Riz Khan will host a live international interview show.—A.B.

Nielsen Will Wait for Audits

Nielsen Media Research says it will wait until Ernst & Young audits its new local people meter (LPM) ratings system and submits them to the Media Ratings Council (MRC) before rolling out the system in new markets.

The announcement marks a shift in Nielsen policy. Previously, the ratings giant has converted markets, including New York and Chicago, to LPMs months before the MRC, the independent overseer of its ratings systems, can study the results.

The new policy will not affect Washington, D.C., and Philadelphia, which were scheduled to convert to LPMs on June 30. It will begin with Dallas and Detroit next year and apply to any future LPM markets.—A.R.

VNR Ruling Handed Down

Government-produced video news releases (VNRs) will be required to disclose their origins under a measure approved by the House Thursday.

The House voted to prohibit the White House, federal agencies or their subcontractors from producing packaged VNRs intended for broadcast or distribution in the U.S. unless the package includes a “clear notification” that the prepackaged story was prepared or funded by the government.

The measure was approved by the House as part of a larger spending bill. That bill must still be reconciled with a Senate budget bill, but the VRN amendment is expected to remain.

The House measure does not require broadcasters to air the disclosures, though FCC rules already do if the VNR deals with a political or controversial subject.

The Senate passed a similar VNR restriction. That measure expires Sept. 30, but Commerce Committee Chairman Ted Stevens (R-Alaska) wants to make it permanent.

A much more restrictive measure has been introduced in the Senate requiring 1) government agencies to include disclaimers visible during the entire pre-packaged story and 2) broadcasters to air those disclosures even if only small bits of the package are used. Stevens said that bill infringes on broadcasters’ speech.

The practice of using VNRs became controversial last year when Democrats complained the White House used VNRs to promote a new prescription-drug plan. The FCC is now reviewing comments from a separate inquiry it is conducting on VNR disclosures.—B.M.

CMT Snags Miss America

There she is, Miss America … on CMT.

The Viacom-owned country music cable channel will be the new home of The Miss America Pageant, thanks to a multi-year deal with The Miss America Organization. CMT will carry the pageant in January 2006 and 2007, with options through 2011.

The network, one of several cable nets that were eying the ratings-challenged pageant, says it will launch a multimillion-dollar promotional campaign to drum up interest in Miss America, including pageant-themed programming on fellow MTV Network, VH1, promos on CMT Radio and CMT.com, and a grassroots marketing campaign.

Miss America comes to CMT after it struggled in recent years on broadcast TV. ABC, which most recently broadcast the pageant, chose not to renew its contract for Miss America after the Sept. 18, 2004, broadcast pulled in a record low of 9.8 million viewers.

In an effort to retool the pageant, the Miss America Organization has been pitching the show with some sort of reality component attached. CMT is considering various strategies, including a separate reality show on the contestants.—A.B.

Corrections

The photo credit for the technology story on page 12 of this week’s B&C is missing. The inset photo should be credited to the Beverly Hilton...

WHO Des Moines, Iowa, and WTHR Indianapolis and KATV Little Rock, Ark., all won two Edward R. Murrow Awards from the Radio-Television News Directors Association, announced last month. A story on page 32 of the June 20 edition correctly noted those awards but incorrectly said KATV was the “only” station to win two Murrows.

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