The road not yet traveled: why the FCC should issue digital must-carry rules for public television "first".

• Author: Cotlar, Andrew D.

1. THE DIGITAL TRANSITION: BUILD-OUT OF THE INFRASTRUCTURE II. THE DIGITAL TRANSITION: PUBLIC TELEVISION'S ROLE III. THE FCC RULING ON CABLE CARRIAGE AND ITS IMPACT ON PUBLIC TELEVISION IV. DIGITAL CARRIAGE FOR PUBLIC TELEVISION "FIRST". A. Plain Language Statutory Differences B. The Historical and Economic Context: There Is a Market Failure for Noncommercial Educational Services that Derives from Public Television's Reliance on Mandatory Carriage as the Sole Counterweight to Cable's Compulsory Copyright License C. The Universal Service Mandate of the Public Broadcasting Act D. Public Television Has Uniquely Received Federal, State, and Local Support E. A Public-Television-First Approach Would Be Constitutionally Defensible 1. The Governmental Interests in the Preservation of Public Television Are Greater Than Those Associated with the Preservation of Commercial Television, As Is the Need for Carriage 2. Carriage Rules Favoring Public Television Would not Be Impermissibly Content-Based V. CONCLUSION After having recently adopted a variety of complex and controversial decisions concerning the digital television transition, the Federal Communications Commission ("FCC") may be poised this year to address the issue of mandatory cable carriage of digital broadcast television signals. (1) This issue has been a matter of hot contention in Washington for three years since the FCC issued its last decision on this topic in 2001. The final resolution of the issue was repeatedly delayed, apparently due to a deadlock among the FCC Commissioners. As the FCC considers the issues, it should recognize that it may decide the critical issue of cable carriage in a careful and incremental manner. In this regard, it may reasonably consider the possibility of crafting digital carriage rules for public television stations first without ruling positively or negatively on carriage of commercial stations. This action may legitimately be based on the unique legislative and factual differences between the noncommercial and commercial service and would be constitutionally permissible. In fact, a stronger constitutional case can be made for carriage of public television stations than for commercial stations. Nor would such a distinction constitute content-based discrimination, for the FCC has made, and may continue to make, valid distinctions based on the differences in the purpose, support, and operation of the various classes of licensees under its jurisdiction. Moreover, such an approach has the additional advantage of accommodating public television stations without harming commercial interests. In this regard, the FCC need not decide either for or against commercial carriage until it has, perhaps, conducted a study of the market conditions and need for commercial carriage: an approach that would guarantee the regulatory support public television stations need while realistically respecting the political sensitivities of commercial broadcasters.

   This Article sets forth the legal basis for a "public-television-first" approach. Part I discusses the digital television build-out. Part II describes the role of public television stations in the digital build-out. Part III explains the FCC's 2001 ruling on digital cable carriage, describes the state of the record since the order was issued, and explains the impact of the order on public television stations in particular. Lastly, Part IV argues that a "public-television-first" approach is a reasonable, content-neutral, and therefore constitutionally permissible, exercise of the FCC's authority to address the unique needs and circumstances of public television stations.

1. THE DIGITAL TRANSITION: BUILD-OUT OF THE INFRASTRUCTURE

   Federal law requires that after December 31, 2006, all television licensees must broadcast solely in digital (2) unless the FCC extends the deadline in a particular local television market because direct digital television ("DTV") reception or indirect reception of DTV signals via cable or satellite is not widely available to at least 85 percent of households in that market. (3) At the end of the DTV transition, the spectrum not necessary for digital operation must be returned to the federal government for reallocation. (4)

   To initiate this conversion, the FCC allocated nearly all full-power broadcast television stations an additional 6 MHz channel with which to begin digital broadcasts, (5) required these stations to construct DTV facilities according to a graduated schedule, (6) and set forth operational rules governing the nature of digital broadcast operations, including requirements concerning replication of the analog coverage area, (7) maximization beyond the analog coverage area, (8) analog-digital simulcasts, (9) minimum hours of operation, (10) and penalties for unexcused failure to construct digital facilities on time. (11) A key feature of the FCC's plan to migrate television broadcast operations solely to digital operation was a transition period during which television licensees would be required for a period of time to operate both their analog and their digital stations. In this regard, it was determined that a transitional period was necessary to ensure continuity of service until digital reception capability becomes so widespread that the cessation of analog service would create a minimal adverse impact on the public. (12)

   While a successful transition to a fully digital broadcast service may seem to simply be a matter of time and consumer acceptance, there are a number of factors affecting the pace of the digital transition. Such factors include the widespread distribution of digital programming content, an effective means by which digital programming content is protected against illegal copying and distribution, the inclusion of over-the-air receivers in all DTV sets or related devices, standards for the connection of "cable-ready" sets to cable systems, and carriage of local broadcast DTV signals by multichannel video programming distributors, such as cable or satellite. Recently, the FCC has made great strides to address all of these issues, save the remaining issue of cable carriage. It has encouraged the production of quality digital content. (13) It has concluded a proceeding designed to protect digital broadcast content from illegal piracy and unauthorized distribution on the Internet. (14) It has mandated the phased-in inclusion of over-the-air digital tuners in all television sets over a certain size. (15) It has also conditionally approved an industry agreement to facilitate the connection of consumer electronics reception equipment and digital cable systems. (16)

   Regarding cable carriage, over three years ago, the FCC tentatively decided that full mandatory carriage of both the analog and digital signals of local television broadcasters during the transition was unconstitutional and that after the transition broadcasters could elect mandatory carriage of only one of their multicast streams. (17) This decision has been the subject of multiple petitions for reconsideration and heavy lobbying by broadcasters, cable industry representatives, public interest advocates, and many others. Since its decision was issued, the FCC has neither reconfirmed nor reconsidered its tentative conclusions, creating considerable uncertainty and potentially undermining what progress has been made to advance the digital transition.

   This issue, however, may be one of the most important of the factors affecting the transition to digital. Indeed, as the Congressional Budget Office and the U.S. General Accounting Office have concluded, digital carriage is essential to successfully complete the digital transition. (18) With approximately 66 percent of American homes subscribing to cable, (19) and 20 percent subscribing to satellite-delivered programming services, (20) it is a mathematical impossibility that the country will achieve the 85 percent digital penetration required for the digital transition to be complete without cable carrying broadcasters' digital signals in the interim. (21)

   Moreover, as this Article attempts to demonstrate, cable carriage is the single most important factor for determining the success of the digital transition as it affects this nation's public broadcasters. Without carriage of their digital broadcast signals, public television stations are placed in a position that is even worse than what occurred in the mid-1980s when the FCC's analog must-carry rules were temporarily ruled unconstitutional. As discussed below, the digital transition offers private and public broadcasting the promise of newly enhanced educational services in ways that could not be accomplished with analog technology. But the transition comes with a cost to public broadcasting that is unique. Without cable carriage, a number of public television stations may not survive the digital transition. Public television's unique position therefore requires a unique remedy tailored to its needs.

2. THE DIGITAL TRANSITION: PUBLIC TELEVISION'S ROLE

   Since the inception of the digital proceedings, Public Television has played a leadership role in digital television. (22) With its higher-quality images and sound, and its inherent flexibility to broadcast either a high-definition or multiple standard-definition streams, along with additional streams of data, digital television gives public television stations new and exciting tools to expand their educational mission in ways that were not possible in the analog world.

   For instance, public television stations are regularly producing new and exciting high-definition digital programming for national, regional, and local distribution. (23) In addition, multicasting will bring new services to the public that could not be made available under the constraints of a single analog program stream, including an expanded distribution of formal educational services, workforce development services, children's programming, locally-oriented...