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Cablers: Must-carry will cost taxpayers

McSlarrow sez 'high end' could hit $115 bil

WASHINGTON — The fight over a digital multicast must-carry mandate escalated Wednesday as cablers warned Congress that such a requirement could end up costing U.S. taxpayers more than $115 billion.

Responding to lawmakers’ request for a valuation of costs to cablers should they be forced to make room on their networks for broadcasters’ multicast streams, National Cable and Telecommunications Assn. prexy-CEO Kyle McSlarrow said in a letter Wednesday to Capitol Hill that the “high end” could reach as much as $115.6 billion. Lowest sum was put at $4.2 billion.

“Neither is a small number,” McSlarrow told reporters at a luncheon briefing.

The figures came from Kane Reece Associates, a market valuation firm NCTA retained after Congress asked for an estimate. Under the Tucker Act, private citizens and businesses are entitled to “just compensation” from the U.S. Treasury if a federal order or mandate takes or expropriates their property.

Broadcasters hope to get a multicast must-carry provision included in digital television transition legislation that Congress will probably take up within the next month. Under current regulations, cablers are required to carry only one broadcast analog channel. But digital technology would allow broadcasters to transmit as many as six channels.

Cablers oppose carrying more than one because, among other reasons cited, carrying all would be unfair to independent programmers and producers who must compete for carriage.

The wide range between the high and low figures resulted from different approaches to calculating the costs. McSlarrow said Kane Reece used four methods in calculating to offer a broad analysis of possibilities. The most conservative approach produced the low of $4.2 billion, while an “opportunity cost approach” produced the high number.

McSlarrow stressed that NCTA has no plans to pursue compensation, saying he hoped that Congress would reject broadcasters’ requests to impose a mandate and thus make compensation unnecessary. He also refused to say whether NCTA would definitely pursue it should Congress decide to impose the mandate.

Still, McSlarrow’s warning to Congress — the second in two days –underscores cablers’ efforts to stop a multicast must-carry mandate. On Tuesday, McSlarrow cautioned Congress that the mandate would be unconstitutional (Daily Variety, Sept. 7).

Meanwhile, the National Assn. of Broadcasters has organized a fly-in of members to lobby lawmakers for the mandate. McSlarrow said NCTA members are calling and sometimes visiting lawmakers to lobby against it.

NAB spokesman Dennis Wharton rejected the claim that a multicast mandate would cost taxpayers $115 billion.

“Only in the Orwellian world of giant cable cartels does more competition equate with higher cost to consumers. We’re optimistic that Congress will reject the call of the cable monopolist and embrace more choice for local television viewers,” Wharton said.

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