Must-carry

In cable television, governments apply a must-carry regulation stating that locally licensed television stations must be carried on a cable provider's system.

North America

Canada

See also: 9(1)(h) order

In the mid-to-late 1970s, the Canadian Radio-television and Telecommunications Commission (CRTC) implemented a rule that a cable system must carry a broadcast television station at no cost to the broadcaster so long as the transmitter emitted an equivalent isotropically radiated power of at least 5 watts. This CRTC rule may have changed over the years, but in principle, a broadcast television station transmitting at 1 kW EIRP must be carried. The status of terrestrial digital only channels with respect to the must-carry requirement is untested as, unlike the U.S., some television stations in Canada did not operate digital signals until the August 2011 and the digital broadcasters that were active prior to then were merely high definition simulcasts of those stations' existing analog signals in major centres such as Toronto and Vancouver with no additional digital subchannels offered due to broadcasters opting not to carry any due to CRTC rules that require subchannels to be licensed separately.

CITY-TV in Toronto (according to its own website and annual reports) owes its financial success as an independent station to this CRTC must-carry rule. It is assumed that this must-carry rule was aimed at smaller television stations in Ontario and Quebec, many of which are not carried by satellite television providers.

For many years, the Canadian must-carry rules created very little friction between terrestrial broadcasters and cable systems, as providers are allowed to more aggressively implement other digital telecommunications services (like cable internet services and IP telephony) with less overall regulation than their U.S. counterparts. However, in 2008, Canada's two largest commercial television networks, CTV and Global, began to demand that the CRTC permit them to charge a fee for cable carriage, even alleging that some smaller market stations would be forced to cease operations if this was not allowed.

In regards to cable channels, services which are licensed as Category A networks must be distributed (though not necessarily as part of the basic service) by all digital television service providers which have the capability to do so.

United States

In the United States, the Federal Communications Commission (FCC) regulates this area of business and public policy pursuant to 47 U.S.C. Part II.[1] These rules were upheld in a 5-4 decision by the Supreme Court of the United States in 1997 in the case Turner Broadcasting v. FCC (95-992).

Although cable television service providers routinely carried local affiliates of the major broadcast networks, independent stations and affiliates of minor networks were sometimes not carried, on the premise it would allow cable providers to instead carry non-local programming which they believed would attract more customers to their service.

Many cable operators were also equity owners in these cable channels, especially Tele-Communications, Inc., then the nation's largest multiple system operator (MSO), and had moved to replace local channels with equity-owned programming (at the time, TCI held a large stake in Discovery Communications). This pressure was especially strong on cable systems with limited bandwidth for channels.

The smaller local broadcasters argued that by hampering their access to this increasing segment of the local television audience, this posed a threat to the viability of free-to-view broadcast television, which they argued was a worthy public good.

Local broadcast stations also argued cable systems were attempting to serve as a "gatekeeper" in competing unfairly for advertising revenue. Some affiliates of major networks also feared that non-local affiliates might negotiate to provide television programming to local cable services to expand their advertising market, taking away this audience from local stations, with similar negative impact on free broadcast television.

Although cable providers argued that such regulation would impose an undue burden on their flexibility in selecting which services would be most appealing to their customers, the current "must-carry" rules were enacted by the United States Congress in 1992 (via the Cable Television Protection and Competition Act), and the U.S. Supreme Court upheld the rules in rejecting the arguments of the cable industry and programmers in the majority decision authored by Justice Anthony Kennedy. That decision also held that MSOs were functioning as a vertically integrated monopoly.

A side effect of the must-carry rules is that a broadcast station cannot charge a cable television provider license fees for the program content retransmitted on the cable network under the rule. But note that must-carry is an option of the station and the station may, in lieu of must-carry, negotiate license fees as part of a retransmission consent agreement.

Applicability

There are a few exceptions to must-carry, most notably:

Digital must-carry

Digital must-carry (also incorrectly called "dual must-carry") is the requirement that cable companies carry either the analog (over a hybrid analog/digital cable system) or digital (over a digital-only pay television system like AT&T U-verse or Verizon FiOS) signal. They must still meet the every-subscriber/television receiver laws, i.e. "Pursuant to Section 614(b)(7) and 615(h), the operator of a cable system is required to ensure that signals carried in fulfillment of the must-carry requirements are provided to EVERY subscriber of the system,” of local stations. This has been opposed by numerous cable networks, which might be bumped off of digital cable were this to happen, and promoted by television stations and the National Association of Broadcasters, whom it would benefit by passing their high definition or digital multicast signals through to their cable viewers. In June 2006, the FCC was poised to pass new digital must-carry rules, but the item was pulled before a vote actually took place, apparently due to insufficient support for the chairman's position.

In September 2007, the Commission approved a regulation that requires cable systems to carry the analog signals if the cable system uses both types of transmission. The FCC left the decision to also retransmit the digital signal up to the cable provider. Digital-only operators are not required to provide an analog signal for their customers (AT&T U-verse, Verizon FiOS). Small cable operators were allowed to request a waiver. The regulation ended three years after the date of the digital television transition (which occurred on June 12, 2009), and applies only to stations not opting for retransmission consent.

Cable operators (analog and digital) that transmit more than 12 channels need only provide a maximum 1/3 of their total channel size to this must-carry requirement. Thus with about 150 channels available to a 1 GHz operator, they are only required to support up to 50 analog channels (42 for 850 MHz, 36 for 750 MHz). Cable providers that decide to scale back their analog selection merely need provide written notification on their bill (or equivalent) for 30 days prior to their change. Customers already using digital cable set-top boxes will usually be unaffected (if anything after the change, they may get a large number of additional channels because each analog channel can be replaced by 2-51 digital channels). The requirement only applies to must-carry stations; most metro providers carry many more analog stations by choice, not law.

Other networks

A variation of "must-carry" also applies to DBS services like DirecTV and Dish Network, as first mandated by the Satellite Home Viewer Act. These providers are not required to carry local stations in every metropolitan area in which they provide service, but must carry all of an area's local stations if they carry any at all. Sometimes, these will be placed on spot beams: narrowly directed satellite signals targeted to an area of no more than a few hundred miles diameter, in order to allow the transponder frequencies to be re-used in other markets. In some cases, stations of lower perceived importance are placed on "side satellites" which require a second antenna. This practice has raised some controversy within the industry, leading to the requirement that the satellite provider offer to install any extra dish antenna hardware for free and place a notice to this effect in place of any missing channels.

Retransmission consent

If a broadcaster elects retransmission consent, there is no obligation for the cable system to carry the signal.[2] This option allows broadcasters who own stations, including those affiliated with major networks such as CBS, NBC and ABC or Fox to request cash or other compensation from cable or satellite providers for signals. These networks have usually attempted to gain further distribution of cable services and/or co-owned low-power television stations in which they also hold an equity position rather than direct cash compensation, which cable systems have almost universally balked at paying. In some cases, these channels have been temporarily removed from distribution by systems who felt broadcasters were asking too steep a price for their signal. Examples include the removal of all CBS-owned local stations as well as MTV, VH1 and Nickelodeon from Dish Network for two days in 2004, the removal of ABC-owned stations from Time Warner Cable for a little under a day in 2000, and the removal of all Hearst Television local stations from Time Warner for more than a week in 2012.[3]

In August of 2013, Time Warner Cable and CBS Corporation reached an impasse in negotiations over retransmission fees, forcing a one-month blackout of CBS-owned broadcast and cable networks similar to the 2004 Dish Network blackout. It was the longest such blackout to date, and has produced calls for Congress to revisit the issue of retransmission consent. TWC had offered affected customers a $20 credit on their bill for the inconvenience, but the blackout caused at least one class-action lawsuit against the cable operator, and others are pending.[4]

In the U.S., retransmission consent has often been chosen over must-carry by the major commercial television networks. Under the present rules, a new agreement is negotiated every three years, and stations must choose must-carry or retransmission consent for each cable system they wish their signal to be carried on. Non-commercial stations (such as local PBS stations) may not seek retransmission consent and may only invoke must-carry status.[5]

See also

Europe

Republic of Ireland

In Ireland, cable, multichannel multipoint distribution services and satellite providers have Comreg regulated "must-carry" stations. For cable companies, this covers RTÉ One, RTÉ Two, TV3 and TG4.

The same rules apply to digital MMDS systems. Analogue MMDS companies are required to carry only TV3 due to serious bandwidth limitations.

Czech Republic

In the Czech Republic, all television stations that have a terrestrial licence (analog or digital) are required to be placed in the lowest (cheapest) offer of all cable, IPTV and satellite companies.

Must-carry regulations is applied to:

Asia

India

The Indian government has applied a must-carry rule for public broadcaster channels from Doordarshan by Cable, DTH and IPTV network. Cable TV operators must offer National (DD1), DD News, Loksabha, Rajyasabha and Regional channels to all subscribers. In addition, DD Bharti and DD Urdu must also be carried in their appropriate tiers.

References

  1. ↑ See 47 USC § 531 - § 537 for relevant sections of the Communications Act of 1934, and FCC regulations promulgated pursuant to the Act at 47 CFR 76.56: Signal carriage obligations
  2. ↑ 47CFR76.64: Retransmission consent
  3. ↑ Tampa Bay Times: "Hearst dispute with Bright House pulls WMOR-Ch. 32 and digital THIS TV off Tampa Bay cable system", July 10, 2012.
  4. ↑ http://www.hollywoodreporter.com/news/cbs-time-warner-cable-reach-619367
  5. ↑ http://www.fcc.gov/guides/cable-carriage-broadcast-stations

External links

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