FCC Denial of Urban TV Must-Carry Plan Spurs Talk Ion/Johnson Will Abandon It
The FCC has denied the most ambitious multicasting must-carry proposal (CD Dec 31/08 p3). The Media Bureau said the petition to start a new TV network targeting urban, African-American audiences won’t fly. Using Urban TV as a multicast broadcast signal that would be guaranteed pay-TV carriage doesn’t comport with existing rules, Video Division Chief Barbara Kreisman of the Media Bureau wrote Ion Media and billionaire Robert Johnson’s company. Urban TV’s proposal to “separate a multicast DTV channel currently controlled by ION and establish a new license for each programming stream” isn’t “consistent with our licensing rules,” Kreisman wrote.
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The denial prompted speculation Ion and Johnson’s RLJ Cos. will abandon the plan. The companies may not file an application for review of Kreisman’s ruling, and so wouldn’t seek a vote by commissioners on the plan, TV-industry lawyers speculated. The companies don’t appear yet to have decided how to proceed, said a broadcast attorney. Bounce TV, getting multicast carriage from many TV stations but not with must-carry status, may meanwhile continue adding black viewers in urban areas, broadcast lawyers said. Ion and RLJ had no comment.
The petition to get guaranteed carriage status for 42 Ion stations’ multicast signals, which would carry Urban TV full-time, was considered by some to be a gambit by the companies to take advantage of the inclination of the FCC under then-Chairman Kevin Martin to favor expanding must-carry. Martin had unsuccessfully tried to expand must-carry rules to cover multicast signals. Under the agency as led by Chairman Julius Genachowski, the 2008 request from Ion and RLJ didn’t appear much of a priority, industry lawyers said. A bureau spokeswoman declined to comment.
Opponents to Urban TV’s plan said it violated Section 73.1715 of FCC rules, Kreisman noted. That section “contemplates share-time operations that involve primarily a division of time, not a division of spectrum and assignment of a portion of the spectrum to a new licensee,” she wrote Ion and Urban TV LLC Jan. 6. The letter was subsequently posted in the correspondence folder of an Ion station (http://xrl.us/bmpkuh) and released in a public notice Monday. Cable and DBS companies had opposed the petition. The NCTA is happy the FCC agreed “that these types of license-sharing arrangements are inconsistent with the commission’s rules and, as a result, these applications had to be dismissed,” a spokesman said.
It also was dismissed because the share-time license proposal is ripe for a rulemaking, Kreisman wrote. She noted that in 2010 the agency issued a rulemaking notice on one 6 MHz broadcast station sharing channels. The rulemaking asked about letting stations that sold spectrum in any incentive auction continue broadcasting on smaller slices of radiowaves. Since the petition was made, “channel sharing arrangements quite different from that proposed have become the subject” of a rulemaking notice that’s pending, Kreisman wrote. “Any departure from our current licensing rules with respect to channel sharing are properly the subject of that pending rulemaking.” The rulemaking said the FCC’s proposal won’t expand TV stations’ must-carry rights, noted broadcast lawyer Peter Tannenwald of Fletcher Heald.
Johnson and Ion probably “weren’t really all that hot” for Urban TV, and the billionaire and the owner of the Ion broadcast network haven’t been vocal in recent years about the need for FCC approval for the plan, Tannenwald said. Bounce could find a TV-station owner and approach the commission with a similar plan, he noted. But a station owner might not want to reduce its ownership of the stations, which would be needed for such a plan, Tannenwald said. Bounce may eventually get widespread carriage on pay TV without must-carry rights, he predicted. “Cable systems aren’t afraid to carry the .2 on a full power if they like the content,” he said of the channel position of such multicast stations. “For Bounce to be on the .2s, if they're any good, they'll be on cable in a year.” Tannenwald represents low-power TV stations, who had expressed some concerns with Urban TV’s plan at the time the commission sought comment on it (http://xrl.us/bmpkvn).
Bounce reaches 72 percent of black U.S. households, which it sees as an underserved audience, a spokesman said. There are “only a handful of cable channels dedicated to them,” he said of the demographic. Bounce’s business model includes getting carried on multicast networks, which represent all of the network’s distribution deals, the spokesman noted. The company has deals with News Corp.’s MyNetworkTV, Raycom Media and other broadcasters.
The market for terrestrial shows for blacks in cities is big enough to have room for both Bounce and Urban TV, said Minority Media and Telecom Council Executive Director David Honig. MMTC backed Urban TV in 2008 comments. “There certainly is a need for diverse programming,” he said. Urban TV “would have, had this succeeded, been a big opportunity to get what has alluded us over the years” with a dedicated over-the-air channel “focused on people of color,” Honig said. He said the problem with cable channels focused on blacks, of which there are “just a handful,” is that consumers “have to pay” to see the shows.