Telecom headlines

Gary Handman (
Thu, 28 Oct 1999 16:17:53 -0700 (PDT)

>Issue: Digital Television
>The good news is that broadcasters started transmitting the first digital
>signals last year and more than half of all US homes should be within
>reception range of at least one DTV signal by next month. The bad news is
>that DTV is still very expensive and consistent good reception wanes. Some
>recent developments haven't helped ease the way for digital TV: 1.) the FCC
>has been petitioned to reconsider the transmission standard due to
>reception problems in urban areas, 2.) digital TV sales are lagging and a
>congressional study has indicated that prices won't drop fast enough to meet
>the FCC's full transition target of 2006, 3.) broadcasters are about to fall
>behind the FCC's rollout schedule, with only about 100 out of 120 stations
>sending out signals in November and 4.) few cable companies are passing
>along high-definition signals to subscribers. Industry leaders say they do
>not consider any of these issues to be critical.
>[SOURCE: USA Today (7D), AUTHOR: Mike Snider]

> Digital Must Carry Must Happen (B&C)
> FCC Hears Duop Pitch (B&C)
> Nets Likely to Keep Cap (B&C)
> Auctions rake in $57 Million (B&C)
> Battle By The Bay (B&C)
> A Radio Record (B&C)
> Radio Bemoans Net Loss (B&C)
> Stations' seasonal plea: shelter from DBS (Current)
>Issue: Digital Television
>[OP-ED] FCC Cable Service Bureau Chief Deborah Lathen has said that the
>Commission will decide on "must carry" rules for digital television
>broadcasts by the end of the year. Congress and broadcasters should make
>sure this is a promise the FCC keeps, writes Paxson. "Make no mistake,
>without must carry broadcasters will lose the digital marketplace, and the
>Supreme Court's prediction about the cable bottleneck will come true." The
>plan to convert to digital TV by 2006 is in serious trouble according to a
>number of sources, strong "must carry rules are needs because: 1) the
>digital must carry rights of television stations have already been
>guaranteed by Congress, 2) broadcasters will not gain carriage on cable
>through negotiations with cable operators, and 3) all broadcast stations are
>in the process of making the costly conversion to digital and need the
>guarantee of must carry. The broadcast industry is thriving with must carry
>-- "this is clearly in the public interest, convenience and necessity,"
>Paxson writes.
>[SOURCE: Broadcasting &Cable, October 25, 1999 (p22.), AUTHOR: Lowell W.
>Paxson, chairman, Paxson Communications]
>Issue: Ownership
>While federal regulations regarding TV ownership limits have recently
>been loosened, they are still not relaxed enough for many broadcasters.
>Paxson communications, along with the National Association of Broadcasters
>and the Association of Local Television Stations, submitted comments to the
>FCC last week requesting the agency to revise the ownership rules that they
>approved just this August. The FCC's new rules allow companies to own two
>stations in a market for the fist time. Broadcaster dissatisfaction with
>the regulations arises from the fact that ownership of two stations is
>restricted to markets that will have eight remaining TV voices after any
>station combos are formed. They say that other media should be included in
>this "voice test." "The new rule is out of step with the reality of
>competition from any other media sources faced by TV broadcasters today,"
>Paxson's attorney told the FCC.
>[SOURCE: Broadcasting&Cable, 25 October (p.20), AUTHOR: Bill McConnell ]
>Issue: Ownership
>The Federal Communications Commission is not likely to increase the 35%
>limit on a station group's audience reach. The agency is only currently
>reviewing the limit because a provision in the Telecommunications Act of
>1996 requires biennial review of its regulations. There are also
>bills in Congress to raise the cap, but they are unlikely to be passed. No
>change by regulators is likely unless a Republican takes the White House in
>2000 and restaffs the FCC with more conservative commissioners, says NBC
>lobbyist Robert Okun.
>[SOURCE: Broadcasting &Cable, October 18, 1999 (p18.), AUTHOR: Bill
>Issue: Ownership
>The latest Federal Communications Commission auction, which ended October
>8th and consisted of 118 broadcast licenses, 94 FM outlets and 12 full-power
>TV outlets, yielded the government a total of $57 million. WinStar purchased
>the hottest station on the auction block, channel 21 in Virginia Beach, for
>$8.75 million. Flinn Broadcasting paid $1.05 million for permits to build
>FM stations in Mississippi, Arkansas, Montana and Utah. Flinn also stands to
>gain the properties that were taken off the auction block because companies
>teamed up to try to get them for free. The FCC's top radio bid was for the
>right to build a station in Oro Valley, Arizona for $5.06 million, even
>though some say the station will eventually get interference from
>communities in Mexico.
>[SOURCE: Broadcasting &Cable, October 18, 1999 (p8.), AUTHOR: Bill
>Issue: Ownership
>NBC is playing hardball in an attempt to scare off rival bidders for
>Chronicle Publishing's San Francisco NBC affiliate KRON-TV. NBC President
>Bob Wright sent a letter to Chronicle Publishing's investment banker
>Donaldson, Lufkin Jenrette that is being described by some as a thinly
>veiled threat. The letter indicates that any buyer of the affiliate other
>than NBC will face significant changes in KRON-TV's affiliation with
>NBC -- possibly even termination. If a bidder other than NBC acquires the
>station, NBC would impose new terms on the affiliate station including no
>compensation, a maximum of five hours of programming pre-preemptions
>and a requirement that the station devote a substantial amount of local
>airtime to promoting network programs while NBC would simultaneously
>eliminate the co-op advertising and promotion dollars currently allotted to
>the station. DLJ was informed that it had a "fiduciary obligation" to
>inform bidders that the station's financials going forward will be less
>favorable. KRON-TV could bring $1 billion in an open market bidding
>process, analysts say. However, NBC's tactic, if successfully, could scare
>off potential bidders and shave 10% to 15% off that price. NBC and Hicks
>Muse have made a joint bid for KRON-TV and Chronicle's other TV stations,
>KAKE-TV Wichita, Kansas and WOWT Omaha, Nebraska. Other companies looking
>to place bids on the station may include Gannett, Raycom and Young
>broadcasting. One broadcasting company not expected to heed NBC's warning
>is Fox, which also plans to place a bid. If Fox were successful, it would
>switch KRON-TV to a Fox affiliate. However, if the field is narrowed to
>Fox and NBC, NBC might be able to do the deal with greater ease since Fox
>is up against the 35% ownership cap and would have to spin off stations to
>buy KRON-TV.
>[SOURCE: Broadcasting & Cable 10/18/99 (p.6), AUTHOR: Steve McClellan & John
>Issue: Mergers
>Clear Channel Communications began conducting a sale last week of some of
>its radio stations. After announcing the $23.5 billion purchase of AMFM a
>few weeks ago, the company recognized the necessity of selling certain
>stations to get the sale approved by the Federal Communications Commission
>(FCC) and the Justice Department. This merger will make Clear Channel the
>third largest radio company -- but to conform to FCC caps (no company can
>own more than eight stations in a market and not more than five of one kind
>(AM or FM)), Clear Channel is making the divestitures now. Companies have
>until November 5th to submit bids and the asking price will be 16 to 18
>times the station's cash flow (currently prices for stations run 11 to 13
>times cash flow). Clear Channel may have to undergo more changes to get the
>Justice Department's approval as the agency looks at the percentage of the
>market served by the company as well as certain demographic monopolization
>(like the 18-34 male category). Clear Channel says they intend to sell some
>of their stations to minority buyers. This is politically smart, as FCC
>Chairman William Kennard has said that is one of his priorities. One
>possible bidder said, "This is highly political as well as financially
>[SOURCE: Broadcasting &Cable, October 25, 1999 (p6.), AUTHOR: Elizabeth A.
>Issue: Old vs New Media
>The radio industry is slow in getting its material onto the Internet, say
>executives and analysts. Arbitron Research shows that only a small
>percentage of people access radio stations via the Web on a weekly basis.
>Greg Verdino, vice president/general manager of Internet Information
>Services for Arbitron New media said, to get users to return to the sites,
>stations should offer "rich, detailed local community information" -- as 64%
>out of 4,500 people surveyed said that is what they want. Sixty-three
>percent of those surveyed wanted concert information, 58% wanted the artist
>and title of the songs, 53% wanted a webcast of the station and 48% were
>looking for contests. A study in June of 1999 showed that out of 351
>stations, only 20% were webcasting, while contests were being overloaded.
>Verdino pointed out that 75% of the sites have pictures of DJ's, which do
>not give web users a reason to return. At the Radio Ink conference this year
>speakers brought up the many perks of webcasting and giving people the
>materials they desire, there is ad revenue to be made, CD shopping, concert
>tickets and the like, which could ultimately make radio stations a lot of
>money. Verdino stated, "I firmly believe that every station needs to be
>webcasting already. You can't wait to see if it is going to work, because
>its going to work."
>[SOURCE: Broadcasting &Cable, October 18, 1999 (p14.), AUTHOR: Elizabeth A.
>Issue: Public TV/DBS
>When local public television station executives gather in Washington this
>week for PBS's Fall Planning Meeting and Member Meeting, the issue of
>direct broadcast satellite (DBS) service will likely be a hot topic of
>conversation. Local broadcasters are eager to ensure that viewers can
>easily distinguish any direct-to-home PBS programming from local public
>television fare. The PBS Board of Directors' New Technologies Committee is
>attempting to develop a DBS policy that encourages wide distribution of PBS
>programming, without creating competition for local stations. "Nobody wants
>these satellites out there serving our customers by bypassing our
>stations," said Dennis Haarsager, chairman of the committee. "But the
>reality is that they are there and the PBS programming will probably find
>its way up there," he concedes. A House-Senate conference committee is
>currently revising the Satellite Home Viewers Act, which will most likely
>require DBS providers to deliver all local signals to subscribers in a
>[SOURCE: Current, 18 October, 1999 (p.1), AUTHOR: Karen Everhart Bedford]

Gary Handman
Media Resources Center
Moffitt Library
UC Berkeley 94720-6000

"Everything wants to become television" (James Ulmer -- Teletheory)