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Cable giant strikes DTV carriage deal
No FCC action on must-carry, so public TV turns to negotiations

Originally published in Current, Oct. 2, 2000
By Steve Behrens

Leading pubcasters are hoping their "agreement in principle" with Time Warner Cable will serve as a model for other cable operators' policies toward carriage of public TV's digital broadcasts.

In the tentative deal, negotiated with PBS and APTS officials and announced Sept. 19 [2000], the second largest cable operator agrees to carry multicast channels, high-definition programs and program-related data that public TV puts into its DTV transmissions.

"If I elect to identify four standard-definition channels, that's what they'll work with," says Ed Caleca, PBS's senior v.p. for technology and operations, who was a key negotiator. "They have said they will not degrade the service. They're using all the right words."

The agreement applies only to the local cable systems that Time Warner has upgraded to 750 MHz capacity, says APTS Vice President Marilyn Mohrman-Gillis, but the company expects all of its systems to be upgraded by the end of the year. A 750 MHz cable system can carry 250 to 300 channels, according to Caleca.

Time Warner systems, which pass about 20 percent of American homes and have 12 percent as subscribers, are clustered heavily in the New York metro area, Tampa, Orlando, Houston, Milwaukee, Los Angeles and parts of Ohio and North Carolina.

Public TV's negotiators already have talked at length with the largest cable operator, AT&T, and will seek agreements with them as well as Cox, Cablevision, Comcast and other big MSOs.

The proposed deal will take effect if APTS and PBS get approval by Nov. 2 from 80 percent of the 140 public TV stations viewed in areas served by Time Warner Cable. And that approval seems likely, if you believe a quick sampling of general managers.

"We're enthusiastic about it," says James Heck, g.m. of WUSF in Tampa.

"My general feeling is that it's a very good deal," comments Don Thigpen, g.m. of WCEU in Daytona Beach, Fla, where Time Warner will be confronted with digital signals from three overlapping public TV stations.

"It looks pretty good to me," says a Midwestern manager. "It's better than we thought we could do."

Details of the agreement have not been released. It's not clear yet, for example, whether Time Warner limited the number of overlapping public DTV stations that it will carry--a matter disputed about analog signal carriage in the past. A joint press release said the deal provides for "carriage of more than one public television service per market under certain circumstances."

"We're not going to know who is carried until the end of the process," says Greg Ferenbach, PBS general counsel. "There's the potential that a lot of stations will be carried."

If public TV transmits data for paying customers in its surplus DTV capacity, that part of the signal may not get free cable carriage from Time Warner, the release implies. The company agreed to carriage of "program-related material," the press release said. Data unrelated to programs will be subject to a later negotiation, according to one station manager.

Cable companies are eager to earn new revenues from electronic transactions over cable, says Caleca of PBS. "We had to make sure they would deal with our pledge issues and our auction issues and not get that caught up in a revenue model."

Public TV turned to negotiations when it became apparent that neither Congress nor the FCC would extend must-carry laws into the realm of DTV.

"The overall pulse of the [FCC] commissioners was they wished there was a way to solve this without their getting involved," recalls Sherri Culver, g.m. of Philadelphia's WYBE--one of three managers of small overlapped stations who lobbied the commission for digital must-carry.

"The FCC has had the issue of digital must-carry before it for two years," comments Mohrman-Gillis of APTS. "That's what makes the voluntary agreement with Time Warner so important."

Sid Topol, PBS Board member, former chair of Scientific-Atlanta and a well-connected man in the cable world, urged public TV to negotiate and then chaired a PBS-APTS committee that oversaw the talks.

"For the last year and a half, I've been suggesting that we do a marketing job with the cable industry to convince the cable industry that our programming is compelling, our technology is compelling," Topol told <I>Current<I> this spring. "And I was sure that if we approached the MSOs, we could voluntarily work out a very viable arrangement."

Public TV fielded a team of negotiators that included Mohrman-Gillis, Caleca (and before him, John Hollar), former PBS lawyer Jeannette Austin and WGBH's David Liroff.

The cable company clearly wanted to keep offering public TV programs, says Caleca. "There was also the fact that we have been very aggressive with the interactive trials. That played very well when we talked with the cable folks. And there's the good-corporate-citizen angle that I'm sure plays into this."

Fred Dressler, Time Warner's senior v.p. of programming, called the deal "a win-win situation for Time Warner Cable, public television and the viewing public."

On the commercial side of TV, carriage negotiations have involved "a lot of tit for tat" and "some money changing hands," says Caleca.

In a recent analog/digital carriage deal between Time Warner Cable and a big Dallas-based broadcaster, for instance, A.H. Belo Corp. gave the cable operator consent to retransmit the programming of its network-affiliate stations, and in return the cable company gave Belo access to 550,000 subscribers for Belo's new Texas news channel.

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