Lobbying on DTV Viewability Rules Continues as June 17 Sunset Date Approaches

Allowing the rules to expire would hurt Spanish-speaking viewers, said Liberman Broadcasting, owners of Estrella TV and several TV stations, in a letter filed with the agency last week (http://xrl.us/bm5a8m). “Hispanic viewers typically opt for the broadcast basic level of service,” it said. “As a result, our ratings and ability to generate advertising revenue would suffer, thwarting our ability to compete against larger, more established Spanish-language programmers” that are carried under retransmission consent agreements and therefore would not be affected by the proposed rule change, Liberman said. “Must carry signals must continue to be provided to and viewable by all TV sets and subscribers to a cable system,” it said.

Recent arguments from broadcasters that the rule could threaten some stations’ profitability (CD April 25 p17) are flawed, the NCTA said. “NAB’s analysis assumes, without any explanation, that a station’s revenues will decline in direct proportion to any reduction in potential audience,” the NCTA said in a letter to the commission (http://xrl.us/bm5drw). Although the number of potential viewers can be an important factor in ad revenue, other variables are present, it said, pointing out that station revenues are projected to increase this year despite no corresponding increase in the number of TV households. “Other factors must be at work here, but these other factors and their applicability to must-carry stations are not acknowledged or taken into account,” the NCTA said. The NAB analysis fails to account for the likelihood that if some must-carry viewers lose access to analog must-carry programming, they might install digital equipment so they could keep watching, the letter said. “NAB’s speculative claims of harm provide no basis for the continuation of a rule meant only to help consumers ease the transition to digital television.”

Time Warner Cable attorneys met with an aide to FCC Chairman Julius Genachowski to argue against extending the requirements, an ex parte notice shows (http://xrl.us/bm5dr6). Extending the carriage requirement would risk violating cable operators’ First Amendment rights, they said. “Indeed, given the emergence of the Internet as a distribution platform and the robust competition among multichannel video programming distributors, we explained it likely would be impossible for the Commission to justify a new compelled-speech mandate,” the letter said. Extending the rule would raise procedural concerns as well, the letter said.

Religious broadcasters asked for the requirements to be extended and said they could be done without violating the First Amendment (http://xrl.us/bm5dsc). “The Supreme Court has affirmed the constitutionality of must carry regulations ... against the protestations of the cable industry,” said a letter from Craig Parshall, senior vice president and general counsel with the National Religious Broadcasters.

Lawyers for the NAB met with Media Bureau officials last week to make their case for extending the rule, an ex parte notice shows (http://xrl.us/bm5dsr). Cable customers shouldn’t be forced to buy extra equipment to keep viewing must-carry stations, the NAB said in an outline of the points it made during the meetings. NAB also argued against the First Amendment claims raised by cable operators. “There is no principled distinction between the arguments the cable industry makes against the viewability requirements and their arguments against must carry in general,” it said. “To mount a First Amendment challenge, cable must satisfy the burden of demonstrating that the effect of extending the Viewability Rule would substantially burden cable systems in a way that is different than Congress and the Supreme Court contemplated,” it said.