A decision Friday by the Federal Communications Commission to grant must-carry status for broadcast stations that exist on home shopping fare drew bitter dissent from the cable TV industry and a promise by Rep. John Dingell (D-Mich.) to investigate.
At issue is the agency’s 2-1 decision that local home shopping stations operate in the public interest, and therefore qualify for must-carry protection.
Wall Street saw the decision as a sizable boost to the $ 2 billion TV shopping industry. Home Shopping Network Inc., one of the largest programmers, saw its shares jump 1 1/4, or 10.7%, to $ 12.875, on a volume of 1.9 million shares.
Specifically, the ruling affects some 70 stations nationwide, 41 of which are HSN affiliates. The action, which had been expected, sets up an obvious appeal by disgruntled parties and some extended debate on whether 24 hours of blurbs actually serve the public.
One member of the commission believes they do not. “I will think of the public interest standard as a once-handsome thoroughbred so abused and neglected that it has finally broken down in the middle of the track,” said Commissioner Ervin Duggan in dissent.
The cable TV industry was predictably caustic in its reaction. “To give these home shopping stations preferred status over cable networks such as C-SPAN, CNN and Nickelodeon demonstrates how totally bankrupt these must-carry rules are,” said a representative for the National Cable Television Assn. “This underscores why we’re asking the Supreme Court to overturn the whole regime.”
Coincidentally, an appeal of the new cable TV law’s must-carry language was also filed Friday before the U.S. Supreme Court. Prompted by an earlier federal court decision, NCTA joined Daniels Cablevision, Turner, Time-Warner and the Discovery Channel in a petition. A separate FCC petition for reconsideration was also expected.
Reaction was swift from Dingell, chairman of the House Energy & Commerce Committee. “The decision is a mistake,” he said. “The commission missed an opportunity to address the issue of whether TV licensees should be permitted to broadcast commercials in whatever form virtually 24 hours a day.”
He promised to inquire into what stations and services would be displaced by the decision and to press for “meaningful limits on commercialization.” A new definition of the public-interest responsibilities of licensees will also be discussed, he said.
The stations affected, although they primarily transmit commercial programming, serve the public interest, the panel said.
It said they have “significant viewership” and they play an “important role” in providing competition to home shopping services on cable. What’s more, the existing renewal system adequately takes into account competing demands for the spectrum now used by home shopping stations.
In an accompanying statement, Commissioner Andrew Barrett cited a public-interest value in home shopping stations because of their role in generating financing for small stations.