NOTEBOOK

Television Digest with Consumer Electronics, Jan 18, 1999

Any FCC delay in acting on DTV must-carry "likely will preempt a marketplace for digital broadcast television," MSTV Pres. Margita White said in letter to FCC Chmn. Kennard. Letter was in response to Kennard statement at news conference that "it's not appropriate to preemptively say how the marketplace takes shape" for DTV.

White also said lack of action "preempts the mandate of Congress" that she said required FCC to apply must- carry to DTV, as well as preempting action on DTV carriage decisions other than must-carry. Letter acknowledged that future of DTV market is unclear, but White said "that fact has not daunted or held back the Commission's efforts to establish a regulatory regime for other aspects of digital operations." ------ Global Media said it will deliver live music and video streaming content to its licensees and affiliates via RealNetworks' Real Broadcast Network, www.global-mediacorp.com. Companies will begin building infrastructure that will allow Global Media to unveil its e-commerce network later this quarter. They also are working on joint marketing campaign to promote Global Media Entertainment Network. ------ FCC approved new Form 323 -- Commercial Broadcast Station Ownership Report. It incorporates racial, gender and ethnic information on license holders. Agency said stations should use new form for filing of annual ownership reports, due Feb. 1. ------ Justice Dept. gave AT&T more than usual amount of time to divest its holdings in Sprint PCS as part of its okay of AT&T-TCI merger, DoJ disclosed in Federal Register. Consent decree, published for public comment by March 15, approved merger provided 2 companies divest most of TCI's holdings in Sprint PCS in 3 years, and all within 5. Usually, DoJ said, such sales are required within 6 months, but quick sale "potentially could adversely affect the value of new stock that would be issued by Sprint." Trustee is being named to handle sale of TCI holdings. Meanwhile, Dallas City Council approved AT&T-TCI franchise transfer by 9-6 vote without open access provision, disappointing Internet service providers (ISPs). But fight is far from over, said Lee Thurburn, pres. of local ISP FlashNet. He said "100%" of City Council agreed that open access should be added to franchise, and those who voted against simply thought "proper forum to address it" would be franchise renewal, which comes up in fall. As expected, King County (Wash.) Councilman Greg Nickels introduced AT&T-TCI franchise transfer ordinance with open access provision. Pittsburgh, also looking at open access issue, is scheduled to take preliminary vote on transfer Jan. 20, final vote Jan. 26. National Assn. of Telecommunications Officers & Advisers (NATOA) drafted policy statement last week supporting right of municipalities to impose open access conditions during and after transfer. TCI will merge TCI Communications (TCIC), cable TV arm of TCI, into parent in anticipation of AT&T merger, it said. ------ It has been custom for years for TV and cable networks -- and even PBS -- to bestow gifts on writers during semiannual TV critics' tour. But not last week in Pasadena after TV Critics' Assn. banned practice. Some gifts were very expensive -- such as leather jackets, and Fox TV Networks in year it won NFL rights for first time gave writers official NFL football jerseys with their names on back. To commemorate gift ban, CBS distributed brown paper "gift bag" to each writer's room with word "gift" marked out. Bags were empty. ------ CEMA announced "Retailing on the Internet" conference May 18 at Omni Dallas Hotel. Assn. cited estimate that Internet retailing will reach $300 billion by 2002 -- 703-907-7616. ------ Senate Communications Subcommittee Chmn. Burns (R-Mont.) criticized FCC for what he charged was failure to implement Sec. 706 of Telecom Act provisions that would allow faster introduction of broadband services. He said in Jan. 11 letter that he was concerned that agency "has misunderstood the purpose and intent" of those provisions. Burns said law requires that Commission conduct inquiry to determine whether advanced telecom capabilities are being deployed and "take immediate action to accelerate deployment" if it finds services aren't being developed in "reasonable and timely manner." He said he disagreed with FCC's conclusion in Aug. 7 order that Sec. 706 gave agency independent authority to forbear from regulation. If that's case, he asked, why would Congress pass that section? He said he anticipated that FCC would determine that no additional action was necessary, but argued: "I can see no way that the Commission can draw this conclusion based on the facts." He said that less than 2% of households have high-speed capabilities and urged agency to "take deregulatory action to remove barriers to deployment by all carriers," including totally deregulating advanced services. Burns said he opposed FCC decision to require incumbent telcos to provide advanced services through subsidiary. Information Technology Assn. of America (ITAA) Pres. Harris Miller disagreed, saying that FCC was following procompetitive policy. ------ Home shopping, infomercial and direct marketing programming should be subject to 5% spectrum fees as ancillary or supplemental DTV services, Media Access Project (MAP) and others said in petition to FCC for reconsideration of earlier decision. MAP said such programming "fits squarely under" definition of services that should be subject to fee because "licensee directly or indirectly receives compensation from a third party in return for transmitting material furnished by such third party." Petition said Congress didn't exempt existing services from fees, so FCC can't grandfather them. Meanwhile, NAB said FCC set 5% figure too high because it failed to consider NAB data showing "low and declining value of comparable spectrum." Broadcasters said FCC should reconsider percentage of total revenue that would go to govt. because percentage was based on value of broadcast spectrum, while new services by definition would be nonbroadcast. Lower fee also would encourage innovative use of spectrum, NAB said. ------ Cox is launching digital cable in 3 of its largest systems using Scientific-Atlanta Explorer 2000 set-top box, companies said. Cities are Phoenix (600,000 subscribers), where launch already has started, Oklahoma City (121,000), San Diego (500,000). Cox said first new service available will be digital tier with 100 additional channels. ------ TV industry today suffers from "ageism," which makes it nearly impossible for older writers to get their programs on TV, veteran producer-writer Norman Lear said. At UPN session before TV critics extolling 1999 inductees into Academy of TV Arts & Sciences Hall of Fame, he said "so many of the executives that are buying the ideas... at all the networks and cable stations and so forth, are very young." He said there's "a degree of political correctness throughout the land that's very destructive of innovation, of risk." He said that his ground-breaking program of the 1970s, All in the Family, "just wouldn't get on" today because programmers would be "too afraid of it for all the reasons of political correctness and all of the communities of interests that come down so hard on anything that breaks that kind of ground." Today, Lear said, "you've got so many smart-ass kids on television" that have no relationship to real children. Writer- producer-director-actor Carl Reiner (who will be inducted into Academy's Hall of Fame in ceremonies to be telecast March 11 by UPN) said that "the language of today [on TV] is not our language." Academy Pres. Meryl Marshall agreed, saying: "We have some lines, some Chinese walls, that have been created between ages, between races, between genders." ------ Rep. Berman (D-Cal.) said there should be "lots of areas for common ground" among House Judiciary Committee members on intellectual property issues. Speaking on CES panel in Las Vegas, he said committee will be "so tired of fighting" on impeachment that members will have "deep desire to find consensus" on issues on which agreement can be reached. Berman also confirmed that he hoped to become senior Democrat on Intellectual Property Subcommittee. He said one big issue for committee, after impeachment managers return to normal duties, will be to work on copy protection for content across "product and industry lines." Also on panel, Rep. Goodlatte (R-Va.) listed batch of issues he expects to come up, including encryption, privacy, Internet gambling, e-rate reform, database production, Y2K liability. ------ Broadcasters shouldn't have to turn off TV cameras when Senate begins actual impeachment debate, RTNDA Pres. Barbara Cochran said in letter to Senate Majority Leader Lott (R-Miss.). Even though jury deliberations typically are secret, Cochran said jury and Senate aren't same: "To turn off the cameras at the point where the Senate debates... would deprive the public of the opportunity to see and judge the full record for itself." She said closing debate "would blemish a record of openness that is in keeping with the needs of a democracy on the verge of the 21st century." ------ FCC asked for further comment on how it defines small business for purpose of giving special treatment such as bidding credits in auctions. Commission said Small Business Administration told FCC it couldn't approve definitions used for upcoming Feb. 23 Location & Monitoring Service (LMS) auction as well as Wireless Communications Service (WCS) auction that closed April 25, 1997, because Commission's original requests for comment weren't specific enough. FCC said that won't affect outcome of WCS auction. ------ There's widespread support for requiring broadcasters to pay for their digital channels, according to poll for Benton Foundation. Survey also found that respondents felt that as long as broadcasters get their spectrum free, they should take larger role in providing educational programming, supporting public broadcasting and cutting back or eliminating commercials on children's shows. Benton Exec. Dir. Larry Kirkland said at Washington news conference Jan. 14 that e-rate was payoff to public from telecom industry in exchange for Telecom Act reforms, and there should be same kind of benefits to public in exchange for transfer of digital spectrum. Other findings in survey: (1) 52% of respondents think broadcasters pay for use of spectrum. When told otherwise, 54% favor charging them for use of any additional spectrum, 57% endorse charging for digital spectrum. (2) Public would like broadcasters to pay 5% of their revenues to support public broadcasting. (3) There's strong support for extending kidvid programming requirements for digital channels. ------ FCC hasn't made decision on whether to investigate claims that radio group owners are collecting fees from music promoters in return for airing their records ("payola"), said Charles Kelley, chief of Mass Media Bureau's Enforcement Div. Kelley said claims reported by L.A. Times "certainly look like they could be potentially problematical" but Commission hasn't made any determination about their validity. Newspaper, in 2nd article on issue, said Jan. 14 that Chancellor Media billed record label $237,000 for marketing campaign that affected air play for specific song. Paper also said Cumulus Bcstg. signed $1 million deal with consultant giving him right to pitch songs to company's executives. Federal law prohibits practice. ------ NAB budget for fiscal year starting April 1, approved last week by board in Naples, Fla., includes expected income of $51.7 million, up from $48.2 million for current fiscal year, with expenses of $38.5 million. Meanwhile, Norman Lear and his ground- breaking 1970s program All in the Family will be inducted into NAB TV Hall of Fame at April convention in Las Vegas. Cast members Rob Reiner and Jean Stapleton are expected to attend. Announcer Wolfman Jack will be inducted posthumously into NAB Radio Hall of Fame at April 20 Radio Lunch, which will be keynoted by Senate Commerce Committee Chmn. McCain (R-Ariz.). ------ Freedom Forum said it's preparing handbook of fairness guidelines for broadcast journalists. Project is being headed by Av Westin, former news executive for ABC, CBS and other broadcast groups. Westin said handbook will include "no absolutes, but there are guidelines, based on precedent and experience, which may assist television journalists." Freedom Forum also plans to create fairness handbook for print journalists, with project headed by Robert Haiman, formerly of St. Petersburg Times. ------ Senate Commerce Committee will hold organizational meeting Jan. 20, 9:30 a.m., Rm. 253, Russell Bldg. Senate Antitrust Subcommittee is planning 2 hearings in next few weeks. Jan. 27 it will hold hearing on EchoStar/MCI deal, 8:30 a.m., Rm 226, Dirksen Bldg. Panel also tentatively scheduled Feb. 10 hearing on 3rd anniversary of Telecom Act, although staff said time isn't fixed and date may change. ------ Canadian MSO Shaw Communications said it has expanded digital cable service to pass nearly all its 1.5 million customers. ------ NBC notified affiliates that it won't show Olympic rings logo during news shows, apparently in response to bribery allegations involving 2002 Salt Lake City Winter Games, which network is scheduled to carry. Network, which will continue to use logo in sports shows, had been promoting itself heavily as Olympics network but now faces pressure to cut ad rates during Games. ------ Dept. of Justice filed motion in U.S. Dist. Court, Wilmington, Del., addressing court's overturning of Sec. 505 of Communications Decency Act (TVD Jan 4 p4). DoJ asked court to: (1) Ensure that Playboy TV is only one permitted to air scrambled signal 24 hours daily despite signal bleed. (2) Amend decision to mandate that Playboy's contracts with operators to require notifying subscribers that under Sec. 504 they have right to free blockage of signal bleed. Court had called on Playboy to work with operators on subscriber notification but had expressed jurisdictional concerns on how much it could require. ------ U.S. Supreme Court refused to speed its decision on appeal of lower court ruling that would end ban on TV ads promoting gambling. Without comment, Supreme Court refused to bypass 3rd U.S. Appeals Court, Philadelphia, by allowing direct appeal of decision by federal judge in N.J. that said ban violates First Amendment. Clinton Administration had asked High Court to bypass appellate court and overturn decision. Other federal courts have upheld ban, and Supreme Court has agreed to hear appeal of New Orleans decision upholding ban. ------ Effort to force Reno TV stations to provide tapes of interviews with prisoner "ignore a bedrock principle of our democratic society -- the role of a free and independent press," RTNDA Pres. Barbara Cochran said in letter to Reno Dist. Attorney Richard Gammick. Gammick ordered search warrants against 3 stations, each of which turned tapes over to 3rd parties for safekeeping while protesting searches. ------ Cox said it expects 11-14% revenue growth in 1999, 2-2.5% gain in cable subscribers. It said total services, including online AtHome, telephony and digital cable, would increase 9-11%. About 2/3 of plant will be upgraded to 750 MHz and be 2-way capable by year-end, it said, up to 80% by end of 2000. ------ Staffers in FCC central reference room on 2nd floor at 1919 M St., and in International Bureau's reference center in basement of 2000 M St., said they had been told that those facilities won't move to Portals until April. Both had been scheduled to move earlier. ------ Hughes Network Systems (HNS) is moving into VCR business. DirecTV parent will ship Hitachi-sourced D-VHS deck in spring at $599 to coincide with arrival of its first Dolby Digital-equipped IRD ($350-$399). ------ Registration for NATPE conference in New Orleans Jan. 25-28 is 3% ahead of same time last year, Pres. Bruce Johansen said. Number of exhibitors is 711, vs. 700 year ago. ------ Hearst-Argyle TV signed exclusive agreement with Harris for digital and analog TV transmission equipment, terms not announced. ------ Cablevision Systems agreed to sell 2 N.J. cable systems to US Cable in move to satisfy FTC antitrust concerns arising from 1997 purchase from TCI of systems with 822,000 subscribers for 33% of Cablevision stock. FTC and MSO had agreed that Cablevision would sell systems in Hillsdale (204,328 subscribers) and Paramus (61,611), located near MSO's other systems in N.Y. metro area. Terms weren't disclosed. Cablevision also said it's offering pay- per-view event free to cable subscribers who spend $50 at Wiz stores, first of what MSO said could be several "synergistic deals" between company's Cable and Retail/Entertainment divisions. ------ Disney and Infoseek launched Go Network (www.go.com) with more than 8 million registered users and projected share of more than 36% of Internet users, companies said. ------ TelVue Corp. said it was completing trials on pay-per-view system for cable using Internet, which has "few, if any, technical hitches," rather than set-top box. Adelphia is among MSOs participating in trials.