Multicast Must-Carry Could Cost Billions, Says NCTA


The National Cable & Telecommunications Association sent a letter to members of Congress Tuesday arguing that any law requiring them to carry all of a broadcaster's digital signals would be doubly unconstitutional.

NCTA President Kyle McSlarrow cited a legal analysis from former Assistant Attorney General Charles Cooper that argued such a law would violate the First and Fifth Amendments, calling it speech regulation that does not advance a compelling government interest and a "taking" of cable property.

That "taking" could make the government liable for compensating the cable industry billions of dollars, said McSlarrow, arguing that the $100 billion the industry has spent to upgrade its plant would be substantially devalued if they had to give over a large block of channels to broadcasters.
Moreover, he said "[that] liability would offset – and could far outweigh – the $10 billion the Government is counting on from the recapture and sale of the broadcasters' analog spectrum. "

McSlarrow told reporters that the low end of the value of the spectrum that would be taken was $4 billion-$5 billion, when figured on the same basis as leased access value, and over $100 billion on an opportunity cost basis, which factors in the advanced services it could use that bandwidth for.

The must-carry battle has been heating up as the House and Senate prepare bill to set a hard date for the return of analog spectrum and the switch to all-digital broadcasting. The bills are also expected to establish some kind of subsidy for analog-to-digital converter boxes to help in the transition, and broadcasters hope a multi-cast  must-carry requirement as well.
The FCC ruled that digital must-carry applied to a single duplication of the primary analog channel, but said Congress was free to change that if the FCC had not correctly interpreted the law.

"Such a multicast carriage requirement does nothing to aid the digital transition," said McSlarrow. "Indeed, it is more likely that it will impede the move to the digital age by removing any incentive to produce the kind of compelling digital content that would be necessary to succeed in the marketplace."

McSlarrow said NCTA was not threatening to sue for the money if Congress grants multicast must-carry, but was instead pointing out the other shoe that could drop.