FCC Rejects TV Stations’ Bid to Add Channels

In a blow to the potential advertising revenues of TV broadcasters, federal regulators Thursday shot down the industry’s request to require cable systems to carry its programming on multiple channels.

Currently, cable operators provide a single channel for each broadcast station in its area. For instance, Adelphia Communications Corp.’s cable system in Southern California features the programming of more than 20 local stations -- not only majors such as CBS but also an assortment of ethnic, religious and other broadcasters.

The stations were pushing to expand their reach to at least six different channels apiece on a cable system, as television moves to digital technology and space is freed for new programming.

But in a 4-1 vote, the Federal Communications Commission rejected the industry’s plea for broader access, concluding that Congress never mandated it.

The FCC also brushed aside the broadcasters’ argument that they needed the advertising revenues from multiple channels to ensure their economic survival in the digital age.

The evidence “cannot justify a conclusion that multicasting is necessary to the continued preservation of the benefits of broadcast television,” said FCC Commissioner Kathleen Q. Abernathy, a Republican.

The cable industry hailed the FCC’s decision on the so-called must-carry rules.

“The marketplace, not the government, will determine which programs local cable systems carry, ensuring greater consumer choice and ... better-quality programming,” said Robert Sachs, president of the National Cable & Telecommunications Assn.

Large cable-TV providers such as Comcast Corp. and Time Warner Inc., as well as smaller operators, had warned that new services such as telephone, high-definition television and video-on-demand could be derailed if they were required to devote space on their networks to broadcasters’ channels. FCC engineers, however, say that with current technology, six digital channels can be packed into less space than one analog channel.

Independent cable programmers also celebrated the decision, which they said would allow them to better compete for shelf space on cable systems with major broadcast networks.

“Why should someone go to the front of the line just because they have a broadcast license?” said one cable executive.

For its part, the National Assn. of Broadcasters vowed to keep the fight alive in the courts and Congress.

Building up ad revenue is crucial for the broadcasting industry. The nation’s 1,700 TV stations collectively face $1 billion in costs as they upgrade equipment from analog to digital.

What’s more, many worry that digital video recorders, like those made by TiVo Inc., are encouraging consumers to skip commercials. That threatens to undermine the very foundation of their business.

With these pressures looming, local broadcasters had hoped to sell advertising packages across several channels, each carrying slightly different programming. For instance, one channel might focus on weather, while another features traffic and a third sports.

Several lawmakers and aides reached Thursday said it was too early to tell how Congress might react to the FCC decision.

Members of the Congressional Black Caucus wrote the FCC before Thursday’s vote in support of the broadcasters. Caucus members argued that if the industry had access to more channels, it would produce more programming reflecting the diversity of local communities.

But most experts predict that the industry is going to have an uphill battle in Congress.

They noted that Thursday’s vote marked the second time in five years the FCC has sided with the cable industry on this matter. In addition, Rep. Joe Barton (R-Texas), chairman of the House Commerce Committee, has been critical of broadcasters, reprimanding them for airing indecent programming and pushing them to speed up the adoption of digital technology.

Despite these obstacles, broadcasters are still hoping to convince lawmakers that they provide something special and thus deserve multi-channel distribution on cable -- the medium through which 60% of U.S. households watch TV.

Local TV stations “are the only ones who provide any substantive local news and information programming,” said Robert W. Decherd, chairman of Dallas-based Belo Corp., which owns 19 stations around the U.S. “We intend to let Congress know that.”

FCC Commissioner Kevin J. Martin, the lone dissenting vote Thursday, maintained that smaller broadcasters didn’t have the leverage to negotiate for channel space with cable giants.

“This decision will have the most adverse impact on small, independent, religious, family-friendly and minority broadcasters,” Martin said. “These broadcasters play an important part in their communities, and we should not be hindering them from investing in new, free programming for their viewers.”

The FCC’s decision was the latest setback for the broadcasting industry in Washington.

On Wednesday, a House subcommittee voted to raise indecency fines for broadcasters from $32,500 to $500,000 per incident. Two weeks ago, the Bush administration said it would not seek Supreme Court review of a lower-court ruling that made it harder for the nation’s media giants to own multiple TV stations in a single market.

“Broadcasters are clearly in a slump,” said Blair Levin, a media analyst in the Washington office of investment firm Legg Mason Equity Research. “I don’t think the odds are very good they can get this one reversed.”

Times staff writers Meg James and Sallie Hofmeister in Los Angeles contributed to this report.