June 21, 2000 BY HAND Magalie Roman Salas, Esquire Secretary Federal Communications Commission The Portals 445 12th Street, SW, Room TWB204 Washington, D.C. 20554 Attention: Ms. Deborah A. Lathen Chief, Cable Services Bureau Dear Ms. Salas: Guenter Marksteiner, permittee of Station WHDT-DT("WHDT"), Channel 59, Stuart, Florida, by his attorneys, hereby seeks a declaratory ruling regarding cable TV mandatory carriage. Specifically, Marksteiner requests a ruling that a new DTV-only television station which seeks carriage of only a single channel of video programming (without ancillary or supplementary services) is entitled to mandatory carriage of such programming, subject to other applicable existing requirements of the Communications Act and Part 76 of the Commission's rules. This is a unique and narrow request, not involving issues of carriage of multiple digital channels, or carriage of both the analog and digital signal of the same station. In essence, a ruling is sought that for mandatory carriage purposes, the transmission of a single channel of television programming, equivalent in bandwidth and function to the transmission of an analog TV station and converted to analog format at the cable TV headend, is the transmission of a "full power television broadcast station", and thus eligible for mandatory carriage. As a DTV-only station in a time when DTV receivers are still rare, rapid clarification of the Station's rights to mandatory carriage is necessary if this vanguard station is to survive, and the Commission's mandate of encouraging DTV transmissions is to be followed. Since the Station is quickly approaching the window for declaring its election of carriage status, if the Bureau is going to determine that, as a matter of law, at least a single video channel of DTV-only stations such as this are entitled to carriage, then it would benefit all parties (the Station, the Bureau and cable TV operators) to resolve the matter now, rather than in a drawn-out must-carry complaint proceeding, which would be complicated by other factual and legal issues arising from the specifics of that station and cable system. I. Background The Commission granted Marksteiner's initial construction permit for DTV station WHDT on April 25, 2000. This permit is not associated with any analog television station. Construction on the Station has commenced, and Marksteiner hopes to begin broadcasting in the next few months. The programming will uniquely serve the public interest with locally produced news and informational programming; international news, arts and informational programming from the German network Deutsche Welle; and American syndicated programming and movies. In transmitting solely in DTV format, the Station is on the vanguard of the DTV revolution that the Commission has mandated. It is believed that currently there are no other DTV-only stations authorized by the Commission, though some will likely be authorized in the future. While Marksteiner is optimistic about the future of DTV, because only a very small portion of the public have DTV television receivers now and in the next few years, the Station is essentially dependent on cable carriage to reach viewers, and thus to obtain the advertising necessary to survive. The transmission of programming to the cable TV subscriber will be accomplished easily and inexpensively as follows: the Station will broadcast its DTV signal in a manner that delivers a high quality signal to cable headends. Marksteiner will provide at his own expense to each cable operator, a standard antenna "cut" to receive channel 59, as well as a small DTV receiver. This receiver is a slightly modified version of an off-the-shelf set-top device, approximately the size of a standard video tape. The device converts the Station's signal from digital to analog. Once the signal comes out of the receiver in analog form, it is no different in format or bandwidth than the signal the operator receives from any analog NTSC station. It is the functional equivalent in every way of the signal from a traditional analog station. Indeed, the signal of many analog stations go through a similar process after their signals are delivered to cable TV headends via microwave or fiberoptic links. In sum, the signal ultimately received by the cable TV headend will be identical to an analog TV signal from a new station. Yet because of the uncertainty over resolution of broader DTV must-carry issues that do not impact this case, Marksteiner has reason to believe that cable operators will not carry the Station without guidance in the form of a declaratory ruling from the Commission. II. DTV-Only Stations Seeking Carriage of a Single Video Channel Are Entitled to Mandatory Carriage In 1992, Congress adopted very broad mandatory cable TV carriage requirements designed to ensure that viewers have access to local over-the-air broadcast television stations. The mandatory carriage provisions did not exclude application to DTV stations. Indeed, the only provision referring to the then-designated "advanced television" signals required the Commission to ensure their carriage. The 1992 Cable Act was premised on the principles of preserving the existence of local broadcasters and promoting competition in the provision of video programming. The Supreme Court upheld the constitutionality of the must-carry provisions of the Act, and the principles underlying them. In the present case, as shown below, carriage of DTV- only stations is mandated by the must-carry provisions of the Act, and consistent with the principles underlying those provisions and the rationale used by the Supreme Court to uphold them. Section 614(b)(1)(B) of the Communications Act reads: A cable operator of a cable system with more than 12 usable activated channels shall carry the signals of local commercial television stations, up to one-third of the aggregate number of usable activated channels of such system. [emphasis added.] Section 614(h)(1)(A) of the Communications Act reads, in pertinent part: [T]he term "local commercial television station" means any full power television broadcast station, other than a qualified noncommercial educational television station ..., licensed and operating on a channel regularly assigned to its community by the Commission.... [emphasis added.] DTV-only stations such as WHDT fully meet the requirements set out in Section 614 of the Communications Act. WHDT is clearly a "local commercial television station", in that it is a full power commercial television broadcast station, licensed to and soon to be operating on a channel (59) regularly assigned to its community (Stuart, Florida) by the Commission. It should be noted that the definition of "local commercial television station" is very broad, encompassing any full power commercial station licensed by the Commission. If Congress had intended to exclude the carriage of DTV stations, which were explicitly anticipated by Congress at the time of the passage of the Cable Act, it would have so indicated in Section 614. Yet it did not do so. Indeed, the only applicable reference is in Section 614(b)(4)(B)'s requirement that the Commission ensure the cable carriage of signals of "advanced television" stations, as DTV stations were then denoted. In sum, not only do the broad provisions of Section 614 clearly apply on their face to DTV-only stations, but Congress explicitly anticipated their application to such stations. The principles underlying the must-carry provisions also apply to DTV-only stations. In upholding the must-carry provisions of the 1992 Cable Act, the Supreme Court noted that the provisions advanced three interrelated important governmental interests: (1) preserving the benefits of free, over-the-air local broadcasting television, (2) promoting the widespread dissemination of information from a multiplicity of sources, and (3) promoting fair competition in the market for television programming. These principles apply as much to DTV-only stations as to analog stations, if not more so. First, as noted above, cable carriage now is necessary if Station WHDT is to survive to provide free over-the-air service to viewers who will be purchasing digital receivers over the next few years. Second, Station WHDT will be providing unique news and informational programming to local viewers, including locally-produced informational programming, and international programming not otherwise available in the U.S. Third, as a new video service (and potential competitor for advertising revenue), there is little incentive for cable operators to commence carriage of the Station. Indeed, the Supreme Court held that Congress could reasonably conclude that the threat of non-carriage due to competitive threat is even greater for stations such as WHDT, which are independent and which broadcast movies. See Turner II, 137 L. Ed. at 394-95. Thus, the must-carry provisions of Section 614 of the Communications Act, and the principles underlying them, apply to DTV-only stations. Accordingly, DTV-only stations are entitled to mandatory carriage, subject (like other local commercial television stations) to other applicable existing requirements of the Communications Act and Part 76 of the Commission's rules. III. Mandatory Carriage of DTV-Only Stations Is Necessary to Fulfill the Mandate to Promote Free Broadcast DTV Service. While the requirements of Section 614 of the Communications Act are a sufficient basis for applying must-carry to DTV-only stations, further support comes from the mandate established by the Commission to promote free over-the-air digital broadcast service. Yet, the Commission cannot expect broadcasters to rapidly move into digital transmission without some certainty that an audience from cable carriage will assist them in surviving while the universe of digital receivers grows. The Commission stated that the primary goal in MM Docket No. 87-268 ("Advanced Television Systems") was "to promote and preserve free, universally available, local broadcast television in a digital world." Interestingly, this goal is remarkably similar to the principles underlying Section 614 of the Communications Act, and the rationale used by the Supreme Court to uphold that statutory provision. Thus, it comes as no surprise that in the DTV proceeding the Commission recognized that "participation by the cable industry during the transition period is likely to be essential to the successful introduction of digital broadcast television ...." Such pronouncements in the abstract are inspiring, but now is the time when "the rubber hits the road": if the Bureau is to follow the mandate established by the Commission, it must act to ensure the survival of actual DTV stations, in a time frame rapid enough to make a difference. Rapid grant of the declaratory ruling sought herein is the opportunity to take such an action. IV. Conclusion Marksteiner recognizes that complex issues surround the enactment of must- carry rules for stations that broadcast both an analog and a digital signal, during the DTV transition. But such complex issues do not exist in the request brought forth in this letter. Rather, this is a unique and narrow request, not involving issues of carriage of multiple digital channels, or carriage of both the analog and digital signal of the same station. As shown above, DTV-only stations are clearly "local commercial televisions stations" entitled to the same mandatory carriage rights under Section 614 of the Communications Act as analog stations. The transmission of a single channel of downconverted DTV programming (without ancillary or supplementary services) is the equivalent in bandwidth and function to the transmission of an analog station, and carriage of such a signal is no more burdensome on a cable TV operator than carriage of an analog signal. Yet, the grant of the declaratory ruling sought herein is necessary to promote the ability of DTV-only stations to access their must-carry rights, and and to promote the Commission's goal of rapid provision of free over-the-air DTV service to the public. Thus, Marksteiner requests that the Bureau issue a declaratory ruling that a DTV-only station seeking carriage of only a single channel of video programming (without ancillary or supplementary services) is entitled to mandatory carriage of such programming, subject to other applicable existing requirements of the Communications Act and Part 76 of the Commission's rules. Please feel free to contact me if you have any questions, or if you need further information. Sincerely, Paul J. Feldman Counsel for Guenter Marksteiner cc: Mr. William Johnson, FCC Room 3-C742 Mr. Ron Parver, Room 4-A822 Mr. Guenter Marksteiner Frank R. Jazzo, Esq. Vincent J. Curtis, Jr., Esq. Marksteiner originally filed an application for an analog station on Channel 59, Stuart, Florida. After the settlement of competing applications for that alloted channel was filed, Marksteiner amended his application to specify DTV-only operation, pursuant to the Commission's Memorandum Opinion and Order on Reconsideration of the Fifth Report and Order in MM Docket 87-268, 13 FCC Rcd 7418 (1998). Deutsche Welle is the largest international news network in the world, other than CNN. The programming presented on Channel 59 will be predominently in the English language. See, e.g., Fifth Report and Order in MM Docket 87-268, 12 FCC Rcd 12809 (1997)(adopting rules for the transition from analog to digital television broadcasting). The Commission's Notice of Proposed Rulemaking on cable carriage of DTV stations was released in July of 1998, but no resulting Report and Order has been issued. The Notice clearly did not address the sole issue raised in this Letter, i.e., carriage of a single video channel of a DTV-only station. Cable Television Consumer Protection and Competition Act of 1992, P.L. 102-385, 106 Stat.1460 (1992) (the "1992 Cable Act"). Turner Broadcasting System v. FCC, 512 U.S. 622 (1994) ("Turner I"); Turner Broadcasting System v. FCC, 137 L. Ed. 369 (1997) ("Turner II"). Turner I, 512 U.S. at 662. See also, Turner II, 137 L. Ed. at 388. The Court referenced the findings set forth in Sections 2(a) 8-10 of the 1992 Cable Act. The Court also specifically upheld the reasonableness of the findings in Sections 2(a)2-5, 15, 16 and 19. Turner II, 137 L. Ed. at 388-89. In upholding Section 614 of the Communications Act, the Supreme Court used the O'Brien test, holding that must-carry advances important governmental interests, and does not impose burdens greater than necessary to advance those interests. Turner II, 137 L. Ed. at 388-409. The advancement of important governmental interests by applying must-carry to DTV-only stations was discussed above. However, it should also be noted that the burden of applying must-carry to a single video channel of DTV- only stations is insignificant. First, for an individual cable system, it is no different than the burden imposed by must-carry of an analog station, a burden which the Court has already found to be acceptably small. Furthermore, on a nation-wide basis, it is believed that Station WHDT is currently the sole DTV- only station. In the transition to DTV, there will likely be only a few other DTV-only stations. Fifth Report and Order in MM Docket 87-268, 12 FCC Rcd at 12811. See note 7, supra, and the associated text. Fourth Further Notice of Proposed Rulemaking/Third Notice of Inquiry in MM Docket No. 87-268, 10 FCC Rcd 10541, 10542 (1995) (emphasis added). Indeed, without a matching analog signal, cable carriage is even more essential to the survival of DTV-only stations than to stations with both an analog and a digital signal.