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FEBRUARY 1, 2005
By Burt Helm Free Distribution May Cost Networks Carrying public TV's digital content gratis may help cable operators ease "must-carry" rules regarding broadcasters such as ABC and CBS
An agreement guaranteeing free distribution of digital content for public TV stations was announced Jan. 31 by the National Cable Television Assn., the principal trade association of the cable industry, and the Association of Public Television Stations. For local public TV stations that decide to broadcast solely in a digital format, cable operators will provide up to four "multicast" channels, allowing them to vary their content and offer high-definition programming as well. If ratified by the individual operators and the local stations, it will ensure a digital broadcast for at least 80% of cable customers. "PUBLIC RELATIONS COUP." The agreement means much more than a high-definition Antiques Roadshow. It comes less than two weeks before the Federal Communications Commission discusses "must-carry" regulation for digital TV on Feb. 10. These rules, originally set for traditional or analog TV in 1992, compel cable, satellite, and new Internet protocol television, or IPTV, companies to include broadcasters in their plans. This guarantees solid distribution for networks affiliates of NBC, ABC, CBS, Fox, and other broadcasters, as well as public television. But the regulations can be a headache for satellite and cable operators, who would rather negotiate agreements with broadcast stations on their own. Working out how distributors will offer broadcast TV digitally is a crucial step before mandating that all stations switch over to digital, says Laura Behrens, senior media analyst with Gartner. The public broadcasting agreement, reached without the aid of the FCC or Congress, lets cable operators "show they can make agreements in the marketplace" without a government mandate, says Behrens. FCC Commissioner Jonathan Adelstein added in a press conference, "It shows these two groups can sit down and reach a voluntary agreement." No doubt, ensuring a place for public television "is a phenomenal public relations coup for the cable industry" says Todd Chanko, an analyst Jupiter Research. The cable industry, which has recently come under heat from Congress for steep price increases "now can say: Look! We're here also as a public service!" says Chanko. EVADING A BIGGER BURDEN? Public broadcasters are also happy with the deal. In addition to ensuring digital distribution, it allows these stations to show that they're on the cutting edge of the digital and high-definition trend "and not just some musty repository of Sesame Street" says Chanko. A benefit to cable and public TV the deal may be. But for commercial broadcasters, who are still pushing for strict "must-carry" regulation, FCC officials' enthusiasm for the move is worrisome. "Because of government underwriting of PBS, it's easy to see why the cable industry was motivated to reach this tentative agreement" said the National Association of Broadcasters in a statement. Public stations comprise a much smaller piece of the broadcast pie, making it less of a burden for cable concerns. If the FCC gives satellite and cable TV distributors carte blanche to negotiate their own contracts, the NAB fears it could mean fewer network affiliates offered on cable and satellite plans. "It takes a lot of wind out of the sails of the National Association of Broadcasters," says Behrens. For cable operators, a good turn for Big Bird could help get them out of helping an even bigger bird -- the NBC peacock and its network brethren.  Helm is a reporter for BusinessWeek Online in New York
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