Fued over must-carry issue holds up digital transition

LAS VEGAS — In a surprise score for broadcasters, a rookie regulator with close ties to the Bush administration told NATPE attendees Tuesday that the Federal Communications Commission may need to level the playing field between financially strapped stations and the more robust cablers.

Specifically, FCC commish Kevin Martin suggested the FCC may come down on the side of broadcasters on the volatile issue of must-carry in the digital age, which has sparked all-out war between broadcasters and cable operators.

Broadcasters say cablers should be ordered by Washington to carry their full signal once the transition to digital is complete. Cablers have argued that it’s not fair, since the digital signal includes multiple stations. The feud is one of several key issues holding up the overall digital transition.

Martin, who was nominated to the FCC by the White House after serving as telecom adviser during Bush’s transition into office, suggested broadcasters aren’t out of bounds when talking about must-carry and that the FCC mustn’t be afraid to draw up new regulations.

“The biggest threat is inaction on our part,” Martin said. “Yes, we need a level playing field.”

Martin was the only government rep headlining back-to-back panels on deregulation, an anxiety-ridden topic at NATPE. He said deregulation must take place when the lay of the land changes, but that every act of deregulation may require a new rule — re-regulation, if you will — such as must-carry.

Rubbing elbows with Martin were NBC TV Stations prexy Jay Ireland, new Fox TV Networks prexy Anthony Vinciquerra, Radio & Television News Directors Assn. prexy Barbara Cochran, Bear Stearns managing director and media analyst Victor Miller, Young Broadcasting exec veep Deb McDermott, Katz Television prexy Jim Beloyianis and Dispatch Broadcast prexy-CEO Michael Fiorile, among others.

Station execs said many broadcasters are facing a perilous future, thanks to the economic downturn of the last 18 months and to massive media consolidation, which has given rise to gargantuan gatekeepers, such as AOL Time Warner, Disney and Viacom. Things will only get more bleak, they said, if two proposed mergers on the table — EchoStar/DirecTV and Comcast/AT&T Broadband — go through.

“You’re talking about all the little broadcasters fighting the Huns,” said CobbCorp prexy Brian Cobb, whose company handles media mergers and acquisitions.

Vinciquerra said ownership regs constraining broadcasters from further growth aren’t fair, considering the near-monopolistic reach of cablers. For instance, a Comcast/AT&T combo will lock up 90% of the audience in major markets including Los Angeles, he said.

The new Fox net prexy pitched the idea of broadcasters banding together and securing an antitrust exemption from the U.S. Dept. of Justice, allowing stations in a particular market to negotiate joint retransmission agreements with a cabler.

Along those lines, panelists said it’s time for the FCC to ease duopoly regs and allow stations to merge with others in their markets.

Miller, meanwhile, urged networks and affiliates to stop their infighting, saying it only depletes much-needed energy. The latest war between nets and their affils involves a crucial FCC ownership rule blocking a big broadcaster from reaching more than 35% of the national audience.

A federal appeals court in Washington is expected to rule on the cap any day, with Viacom and NBC predicting victory.

Repping TV newsies, Cochran warned her colleagues on the panel to protect the future of news departments, which have been hit hard by financial cutbacks. She said news departments are the lifeblood of local stations, yet are the first to suffer.

Station group toppers McDermott and Ireland, however, said there won’t be any news at all if stations don’t boost the bottom line, and that new business models are needed, such as the creation of station group “hubs,” which share resources.

Today, wed the deregulation debate will continue at the confab, with FCC chair Michael Powell skedded to address the NATPE crowd during a Q&A with ABC correspondent Cokie Roberts.

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