MARTIN'S DTV LEASE PLAN DRAWING LITTLE SUPPORT

FCC Chairman Kevin Martin's plan to create a new class of "small and independently owned" TV broadcasters using digital channels leased from conventional, licensed broadcasters is generating more confusion than enthusiasm.

So far, only religious broadcasters have embraced the idea. Most others are waiting to see the full proposal before passing final judgment. It's now being circulated among the other FCC commissioners.

Under Martin's rent-a-channel plan, the digital broadcasters would have all the obligations of regular broadcasters, but would also have all the rights.

In other words, they will have to air three hours a week of children's programming, but they will also be able to demand carriage on local cable systems.

The opportunity would be limited to "small and independently owned businesses," Martin suggested in a March 9 speech before the American Women in Radio and Television.

"Small businesses that are often owned by women and minorities would be the primary beneficiaries of this initiative," he said. "This would help ensure that viewpoints and perspectives of these groups are represented on the air. It would also create new job opportunities in the broadcast industry."

That all sounds good to the National Religious Broadcasters.

"This is a very significant first step and we applaud Chairman Martin," says NRB's Craig Parshall, senior vice president and general counsel. "On paper it looks like it may take care of some of our concerns.

"Our goal is to increase competitive quality within cable viewing and we think that can only be accomplished by having a significant amount of religious broadcasting and noncommercial broadcasting included in that," Parshall says.

"Ultimately, it gets down to the battle between profit and public interest," he continues. "We think public interest is going to be better served by making sure there is a substantial amount of religious broadcasting."

As the NRB understands the proposal, Martin would limit the lessees to noncommercial entities. "We think that limitation sets a good precedent," Parshall says.

There's been some speculation that Martin is pushing this idea in the hope that NRB might drop its opposition to mandated cable a la carte requirements.

But Parshall says no deal. "It's not a bone we're going to take in return for changing our position on a la carte."

The Martin proposal may be appealing to the spectrum have nots, but not so much to the haves.

The leading religious broadcaster, Trinity Broadcasting, shows little interest.

Trinity didn't make such an enormous investment in digital TV "just to become a modified common carrier," says Trinity's Washington attorney Colby May. "They want to provide content."

Trinity is already using its digital spectrum to multicast five channels of programming, Mays says. What it wants from the FCC is must-carry rights for all of it, he says.

Commercial broadcasters are taking a wait-and-see attitude, even though it might open up a new leasing business and revenue stream for them.

"There are a lot of questions about what the chairman has suggested," says Alan Frank, president of Post-Newsweek Stations and chairman of the NAB TV board.

"Obviously broadcasters support the idea of diversity, but, until we know the details, I am not sure how the chairman's idea will work."

Frank points out that Martin cited Post-Newsweek Stations alliance with LATV as an example of "embracing the diversity concept."

But it doesn't fit the business model that Martin is proposing, Frank says. The LATV-Post-Newsweek arrangement is more like a traditional network-affiliate model, he explains.

"There's no question of us giving up a channel or them paying us a fee to own the channel. We sell [ad] time. We're going to make a local channel of it."

If the FCC goes forward with the proposal, licensed broadcasters would want protection from what's aired on the leased channels, says Frank. "We're responsible for what we air."

"It's certainly worthy of consideration. We're always open to looking at new ideas," says Paul Karpowicz, president of Meredith Corp.'s broadcasting group.

Martin has pitched the idea to the Minority Media and Telecommunications Council.

``We like the concept to the extent that it benefits minorities," says Council Chairman and former FCC Commissioner Henry Rivera.

Rivera's group would prefer the proposal specifically designate minorities as the potential third-party broadcasters rather than "small business and independent entities."

But that's not something Martin could embrace because he is wedded to a race-neutral approach, says Rivera.

Media Access Project President Andy Schwartzman calls the plan "promising," but says the specifics will matter a great deal.

"How is a third party defined? How are the public interest obligations going to be defined?" he asks.

Because it extends must-carry rights, the National Cable & Telecommunications Association is almost certain to oppose at least that element of the proposal, but, for the moment, it isn't commenting.

A cable attorney is not so reticent. "There's absolutely no chance it will pass constitutional muster," he says.

And even broadcast lawyers are saying privately it would face high hurdles to extend must carry rights. "I can't imagine that the lawyers at the commission would sign off on this," says one skeptic.

Martin is hoping to sign on at least two other commissioners to the proposal so that it can be put it out for public comment—the first step toward making it a rule.

And, at this stage, Martin would like to get the full support of the commission. But that may be tough.

The real question is "who benefits," says one FCC insider. "Would it be religious broadcasters or small minority groups? It's not clear."

"The NRB is not what most people mean by minority participation," the insider adds.