January 19, 2001

STATEMENT OF COMMISSIONER SUSAN NESS

APPROVING IN PART AND DISSENTING IN PART

Re: *Carriage of Digital Television Broadcast Signals, CS Docket Nos.
98-120, 00-96, 00-2*

After a long wait, we finally are addressing some of the issues
involving the carriage of digital broadcast signals on cable. I would
have hoped that this digital must carry proceeding would provide
finality and clarity for industry participants who need sufficient
lead-time to develop business plans. Unfortunately, it does not. While I
support the majority of decisions in this Order, along with the Further
Notice to establish a better record on the effect of a dual carriage
requirement, I dissent to the tentative conclusion regarding dual
carriage. I also write separately to emphasize the importance of our
Further Notice regarding "program related" material in the digital
context.

# Dual Carriage

I support the Further Notice to collect additional information regarding
cable operators' system capacity, the status of digital retransmission
negotiations, and the practical effects of a dual carriage requirement.
I dissent, however, from the Majority's "tentative conclusion" on a
matter of law, which in effect states that industry has failed to meet
its constitutional burden.[^1]

First, drawing such a tentative conclusion is gratuitous. The item
concedes that the record is insufficient to accurately discern the
impact on cable operators' speech posed by a dual carriage requirement.
Indeed, the Commission now asks for the very information \-- including
cable system channel capacity \-- that I have been asking the Commission
to collect for over two years. This information is significant
especially in light of the upgrades being executed by the major MSOs,
many pursuant to Social Contracts with this agency. Such system capacity
information is solely at the disposal of cable operators. We also
request important data on the status and scope of digital retransmission
consent agreements. To what extent are cable operators voluntarily
carrying digital broadcasts? The Majority should not form an opinion,
even a tentative one, without first considering such fundamental data.

Second, the tentative conclusion addresses only one aspect of the
intermediate scrutiny test. Specifically, the intermediate scrutiny
standard established under *U.S.* *v. O'Brien,* as applied in the
*Turner* decisions, requires that a content-neutral law affecting speech
further a substantial or important government interest.[^2] As the item
points out, that interest in the must carry context boils down to (1)
the preservation of free over-the-air television; (2) the promotion of
the widespread dissemination of information from many sources; and (3)
the promotion of fair competition.[^3] Would a dual carriage requirement
further that substantial government interest? The item is silent on this
point. Such willingness to put the ball in industry's court while
punting on the subject of our own legal burden is emblematic, I believe,
of the Commission's need to develop a clearer, more visionary picture of
its own role in the digital transition, regardless of what we ultimately
decide on the question of dual carriage.

The government has a substantial interest in facilitating a successful
digital transition for the American public. As all communications media
go digital, broadcasting must follow suit or find its place in the
history books along with the Passenger Pigeon. A successful digital
transition thus would ensure that the public has access to free,
over-the-air broadcasting in the digital age and beyond. A successful
digital transition also would serve the government's interest in
promoting viewpoint diversity by providing a greater variety of
independent programming sources.

Finally, there is no need to state a "tentative conclusion" at this
time. The item states that the statute "neither compels dual carriage;
nor prohibits it" and that "in order to weigh the constitutional
questions inherent in a statutory construction that would permit dual
carriage, we believe it is appropriate and necessary to more fully
develop the record in this regard."[^4] I agree. I therefore believe
that it is unnecessary, and ill-timed, for the government to weigh in
with a premature assessment of the constitutionality of dual carriage
before we have collected and analyzed the evidence that would address
this question. Moreover, such a determination might prejudice the
outcome of any ongoing market-based carriage discussions. I also
seriously question whether a federal court would entertain review of
such a tentative conclusion, since it is not a final agency action.
Accordingly, I would have issued the Further Notice without drawing a
tentative conclusion on the issue of the burden to cable operators posed
by a dual carriage requirement.

I caution parties not to view my dissent as addressing, pro or con, the
merits of a dual carriage requirement. I have great sympathy for the
many independent cable networks whose efforts to obtain carriage may be
adversely affected by broadcast digital carriage. My preference,
therefore, has been and will continue to be the fostering of
market-based solutions. In that vein, over the past few years, I
repeatedly have urged broadcasters and cable operators at gatherings I
attend, both public and private, to negotiate in good faith on carriage
of digital broadcasts during this transition period. I also have argued
that as the carriage capacity of cable systems expands, with upgrades
and the addition of digital capabilities, the burden of carrying
broadcast programming diminishes accordingly.

# Primary Video

I reluctantly conclude that the best reading of the statutory term,
"primary video," refers to one programming stream. I believe that this
interpretation is the most easily defensible, but it is by no means the
only reasonable one.

A single-stream interpretation of "primary video" could have the odd
result of requiring broadcasters and cable operators to continuously
examine broadcasters' content to determine whether the signal is primary
video, program related, or something else. For example, if a broadcaster
in a tri-state area offers a main news program, and then breaks away to
three video streams to cover local news in each state, would the entire
news program be primary video, would the breakout streams be program
related, or neither? A cable operator would have to draw these
conclusions. In contrast, a definition of "primary video" that includes
all free, non-subscription video programming streams would be easier to
administer.

Ironically, a single stream interpretation of primary video results in
cable operators using less, not more, spectrum for broadcast must-carry
at the end of the digital transition than they do today. Each analog
signal requires 6 MHz of spectrum on the cable system. By contrast, with
digital compression, and if broadcasters offer multiple program streams,
it is possible that the "primary video" will require 2 MHz or less of
capacity, not six.

Of course, retransmission consent agreements might resolve these issues.
For example, the cable operator might agree voluntarily to carry the
entire free, over-the-air video programming signal. Absent a must-carry
requirement, a broadcaster might be more willing to enter into
retransmission consent arrangements to carry a portion of the digital
signal in addition to the full analog signal during the transition
period.

While I support the decision to limit the definition of primary video to
one digital programming stream based on the current state of the record,
I would entertain on reconsideration new or refined support for a
statutory construction that justifies the carriage of multiplexed free
video programming. Although the statute mandates that the primary video
be carried, and expressly excludes mandatory carriage of ancillary and
supplementary services, is there discretion under the statute for the
Commission to find it in the public interest (and not unduly burdensome)
for the cable operator to carry a station's multiplexed free video
channels? While the statute does not preclude carriage of multiplexed
programming streams, it is hard to find legislative support for a more
expansive mandatory carriage requirement.

Finally, I am particularly concerned about public broadcasters. As
reflected in the record, and cited briefly in the item,[^5] public
broadcasters have developed innovative digital strategies that rely
heavily on multicasting. These include "a 24-hour children's programming
channel; an educational channel devoted to instructional video and adult
education; a channel focused on local legislative and public interest
issues; and the award-winning national programming schedule distributed
by PBS."[^6] To what extent does our construction of the "primary video"
term allow for such multicasting, especially given the apparently
broader definition of "program related" for noncommercial, educational
broadcasters?[^7]

# Conclusion

Given the complexity and importance of these issues, the Commission must
proceed carefully and expeditiously. I intend to continue working with
broadcasters, cable operators, content producers, and consumer
electronics manufacturers, along with my colleagues on the Commission,
to facilitate a transition to digital broadcasting that works for the
American people.

[^1]: Para. 3.

[^2]: Para. 114, *citing U.S. v. O'Brien*, 391 U.S. 367, 377 (1968).

[^3]: Para. 113, *citing Turner Broadcasting System, Inc. v. U.S.*, 512
    U.S. 622, 662 (1997) (*Turner II*). It is important to note that the
    deference the Supreme Court afforded Congress in *Turner II* might
    not extend to this Agency. Therefore, we cannot be assured that,
    even if we assemble a voluminous record, the *Turner II* decision
    would sustain a dual carriage decision, especially given the
    relatively scant legislative history concerning digital
    broadcasting.

[^4]: Para. 113.

[^5]: Para. 112, n. 4.

[^6]: *Letter from the Association of America's Public Television
    Stations*, January 18, 2001.

[^7]: See Para. 112 (*citing* sections 614(b)(3)(A) and 615(g)(1) of the
    Act).