ABC, Affils Eye Digital News

[Gregg Lengling]

The ABC Network and key affiliates are in advanced discussions about jointly launching a 24-hour news venture as a key element in the local stations' proposed digital channel lineup, sources said. A decision on whether to proceed could be made by year-end.

"We're working with ABC to develop a joint affiliate/ network initiative that's heavy on localism," said Deb McDermott, chair of the ABC Television Affiliates Association and executive VP of Young Broadcasting. "It won't be just another national cable network."

No business plan is set, and several factors could derail the effort. One of those is uncertainty about whether cable operators will be forced by the Federal Communications Commission to carry the signals, which is currently the subject of intense discussions in Washington. Sources said the channel will need that kind of broad broadcast and cable distribution to be viable.

Assuming a go-ahead, the network would be delivered over one of several multiplexed programming streams available on digital broadcast channels, with its local coverage distinguishing it from competitors such as CNN and Fox News Channel.

Sources said the concept of a joint DTV venture between ABC and its affiliates has been under discussion since summer, with the affiliates represented by a committee headed by John Lansing, senior VP, Television Station Group. E.W. Scripps Co. ABC executives involved in discussions, according to sources, include David Westin, president of ABC News, and John Rouse, ABC TV Network senior VP, affiliate relations.

The idea was originally promoted as a way to create a business that would work for both partners in the affiliate/network relationship. That relationship has suffered increasing strain in recent years in disputes over such issues as affiliate pre-emptions of network programming and cutbacks in network compensation payments to the affiliates.

The launch of a new news channel would be something of a vindication for ABC News, whose much ballyhooed efforts to expand in the news business have often turned into embarrassments.

For instance, ABC News had an early foot in the door of 24-hour cable news as a partner with Westinghouse in the Satellite News Network. It launched in 1983, lost many millions of dollars and was shut down after only 16 months of operation when ABC was cutting costs to make itself a more appealing purchase for Capital Cities. The assets were sold to CNN, then run by founder Ted Turner, who then launched CNN Headline News as a hedge against other cable news wannabes.

In late 1995, ABC News announced plans to develop a cable news channel, only to have management pull the rug out from under the project at the 11th hour because start-up costs would be too high and any profit too far down the road.

In 2001, ABC News and CNN held talks about merging into a free-standing operation, potentially saving parent companies Disney and AOL Time Warner, respectively, $100 million. That dream died because neither side was willing to cede control.

Instead, ABC launched "ABC News Live," a 24-hour, fee-based broadband package of ABC News clips and time-shifted news programs, extended press conferences and headlines.

Besides offering a business opportunity, the new venture would enhance the stake that ABC and its affiliates have in each other. "It would lead to a more constructive working relationship between the networks and affiliates because you're business partners creating value together," one source said.

Several affiliate sources said that unless the FCC revises the rule to require cable carriage of all of the free programming streams broadcasters offer on their DTV channels, all new broadcast DTV networks may be in jeopardy. Currently the FCC is only requiring cable to carry one DTV stream offered by the broadcaster-the stream that carries the main programming.

"To make this financially viable, we have to have coverage," said an ABC affiliate source. "You can't launch it with broadcast-digital-only coverage."

ABC officials, who have been testing local digital multicast transmissions at affiliate KFSN-TV in Fresno, Calif., for more than a year, declined comment on plans for a new network.

"We are in ongoing discussions with our affiliate board regarding uses of the digital spectrum that can benefit the network, our affiliates and the public," ABC said in a statement.

But ABC Owned Television Stations President Walter Liss told the FCC last week that the company plans to offer multicasting on the DTV frequencies of all of the company's 10 TV stations "in the near future," including Los Angeles, New York and Chicago. He also reaffirmed ABC's belief that a rule change is needed to require cable carriage of all free broadcast DTV programming streams. "We believe that when cable operators carry a DTV signal (whether pursuant to must-carry or retransmission consent arrangements), the cable operator should not block the customer's reception of any portion of the DTV signal that the customer otherwise could receive for free," Mr. Liss said in a Nov. 20 letter to the FCC.

NBC's owned-and-operated stations recently briefed the FCC on similar plans to launch several new digital multicasting TV networks with NBC affiliates, including a weather channel.

In addition, DIC Entertainment has offered to launch a 24-hour children's TV network for broadcast DTV channels on the condition that the FCC require carriage of all of a broadcaster's free DTV programming streams.#