CABLE, BROADCASTERS ENGAGE IN TUG-OF-WAR

A tug-of-war is taking place between the nation's broadcast stations and cable television operators over the carrying of broadcast signals on cable systems.

The nation's broadcast stations want compensation from cable systems for carrying their signals, while major cable operators such as Tele-Communications Inc. (TCI) want to continue carrying over-the-air channels without having to pay stations a fee.

The new, federal cable act allows stations to demand payment from the cable systems carrying their signals. But it also allows a cable operator to drop a station from its lineup rather than pay such a fee.

That's a concern to operators of broadcast stations who don't want to see their signals removed from cable systems. It's also a concern to cable subscribers.

"I would be worried about it," said Richard Paxton, station manager for NBC affiliate WPSD-TV, Channel 6, in Paducah, Ky. "If I were a subscriber, I would write to my cable company and I would write to my local cable commission and express concern to them," he said.

In a Roper poll conducted earlier this year, 68 percent of cable subscribers surveyed said they would likely cancel their cable service if it did not carry CBS-, NBC- and ABC-affiliated stations.

Today is the deadline for the nation's 1,152 commercial TV stations to declare whether they will invoke the retransmission consent clause or the "must-carry" provision.

Under must carry, a broadcast station can require that a cable system carry its signal on a channel of the TV station's choosing, said Howard Meagle, vice president and general manager of CBS affiliate KFVS-TV, Channel 12, in Cape Girardeau. The must-carry provision can only be invoked in a station's prime viewing area.

As to retransmission consent, Meagle said broadcasters have two options: allow a cable system to continue carrying a signal without any compensation or require payment.

"We have a variety of selections that we have to make," he explained. KFVS is on 170 to 180 cable systems within a five-state region.

In some cases, the station will demand payment for its signal. But Meagle said the station won't require compensation of small, cable systems such as one in southern Missouri that has only 70 to 75 customers or those on the fringe of its coverage area.

Paxton said Channel 6 also won't seek compensation from small, cable systems. "We have elected must carry for any cable system that has fewer than 750 subscribers," he said.

Like KFVS, WPSD must negotiate with nearly 200 cable systems that carry its signal.

Local broadcasters contend it's only fair that their stations be compensated by the major cable systems.

"It would be as if Kmart went out and by law was allowed to buy its products wholesale for nothing and turn around and sell them at retail," said Paxton.

"We are not asking for anything unreasonable," said Paxton. "We are asking for a fair compensation for the programming signal that we feel viewers watch most regularly."

Meagle said, "Cable systems pay for every other program source that you see on cable television, with the exception of local broadcast stations." Cable systems pay a fee per subscriber to cable channels such as CNN and ESPN.

He said the new law prohibits cable operators from passing on broadcast fee charges to subscribers for the first year, beginning in October.

But cable operators say ultimately such costs will get passed on to consumers. "I intend to negotiate with all those cable systems where we contribute a significant value," said Meagle.

He said negotiations must be finalized by Sept. 6. Under the new law, cable operators must give subscribers 30 days notice before dropping any station or channel from the cable system.

Meagle and other broadcasters contend that their over-the-air stations and their network programming are the prime attraction for cable customers. Imagine, he said, not being able to view the World Series or the Super Bowl.

"The average cable viewer spends up to 80 percent of his time watching over-the-air broadcast signals through the cable system," said Paxton.

He predicted cable companies will face strong public opposition if they drop popular broadcast stations from their lineup. "The cable subscribers are not going to stand for that," he said.

But officials of TCI, the nation's largest cable company, have insisted they won't pay to carry broadcast stations.

Dan DeLaney, vice president of operations for TCI Cablevision of Missouri, questioned why a cable operator should pay for a signal that the general public can receive free with a home antenna.

Still, he admits that dropping broadcast stations would not be a popular move. "It is going to be a public relations nightmare for both the broadcaster and us if we have to drop broadcasters," said DeLaney.

"I think there is going to be a great consumer backlash if anything does come to pass where channels are dropped," said Roger Harms, manager of TCI's cable system that serves about 13,000 subscribers in the Cape Girardeau and Jackson area.

Harms argued that broadcast stations benefit by being carried on cable systems, particularly in areas where the broadcast reception is poor.

For example, it's often difficult for Cape Girardeau residents to obtain good over-the-air reception of the NBC and ABC affiliate stations in Kentucky and Southern Illinois, respectively.

"A lot of apartments don't even have an antenna or you are behind a big hill and you can't receive it," said Harms.

He said cable channels such as ESPN have scrambled their signals so they can't be received free of charge. That's not the case with broadcasters, he pointed out. "They are charging cable operators for the public airways," he said.

Harms said the Big Three network affiliates (ABC, NBC and CBS) have notified his office that they intend to invoke the retransmission consent clause, thus necessitating negotiations.

KBSI-TV, Channel 23 in Cape Girardeau is affiliated with the Fox network. Fox has agreed to forgo fees in exchange for allocation of another channel for a new Fox cable network. However, TCI has agreed to pay Fox 25 cents per subscriber for the new channel.

Fox, in turn, will pay a portion of the TCI payment to its affiliate stations such as KBSI.

"I get a portion of that 25 cents plus I get to program and sell portions of that (new) channel," said Steven Engles, president and general manager of KBSI.

Fox is negotiating with the top 200 cable operators, and hopes to have agreements with all of them similar to the arrangement with TCI, said Engles.

KBSI is carried on 162 cable systems serving from 40 homes in some cases to as many as 14,000 in others, Engles said. Most of the cable systems in this region are operated by major cable companies.

Still, Engles said the station will have to negotiate with the smaller cable systems or those that don't reach agreement with the Fox network.

Engles and other broadcasters say TCI and other major cable operators are doing a lot of posturing. "It will be interesting to see who gets the blame and the heat when a cable company takes off a major television station," said Engles.

"Quite frankly, I hope everybody works it out in an amiable way," he said.