For Don Moore, the troubles began just about a year ago.It was July 19, 1985, one of those sparkling clear summer days on Cape Cod when fishermen are out of Chatham harbor by 6 a.m. and Route 28 is bumper-to-bumper with beach traffic well before noon. At 9 a.m. that morning, 1.2 million watts of broadcast signal beamed out over the Cape Cod peninsula for the first time from a tower in West Barnstable, Mass., and Don Moore sat back in quiet celebration. All those years working his way up through the ranks of broadcasting had now brought him his own television station. A $2.5-million gamble looked as if it were about to pay off.
Later that same day, at 1:07 p.m., a seemingly routine story, datelined Washington, D.C., came clattering over the Associated Press wire machine in the newsroom of WCVX. It read: "The U.S. Court of Appeals today threw out the federal requirement that cable television systems carry all local broadcast stations." Don Moore took one look at the lead paragraph and, as he remembers it, "I damn near died."
What Moore understood was that, in a single stroke, a panel of three federal judges had changed the rules of American television, disturbing the careful balance of power and profits between over-the-air broadcasters, who used to own the television industry, and over-the-wire operators of cable television systems, who now control access to 50% of TV households. The court's decision was to deregulate in an area of communications law in which even the deregulation-minded Reaganites of the Federal Communications Commission had declined to act. The effect on Channel 58 in Hyannis was immediate and profound: the station lost the majority of its potential audience, and its fate was put in the hands of its competitors.
Moore himself was not even a party to the court case, brought against the FCC by a small cable company in Washington State and ultimately joined by Atlanta superstation owner Ted Turner. Their complaint was with a 20-year-old FCC regulation called the "must-carry" rule, requiring cable operators to carry all the broadcast signals in their region as part of the basic service to all subscribers. In the days when cable operators were started for programming, local broadcast signals were a matter not of "must carry" but "want to carry" -- better reception of broadcast signals, not better programming, was what drove the early cable industry. But now with superstations like Turner's and dozens of programming services to choose from, cable operators want the freedom to choose from the offerings that will make cable service most attractive. As important, cable operators have begun to compete head-to-head with local broadcasters for the sale of commercial airtime. "Must carry" means that cable operators carry not only the broadcasters' programs, but their advertising as well.
The legal assault was framed in more lofty terms. "Must carry," they argued, was an infringement on the constitutional right to commercial free speech, the right of a cable company to carry whatever program it chooses on the limited number of channels that cable systems can offer. The FCC, in defense of its "must-carry" regulation, argued that there was a substantial government interest in protecting "localism" in TV broadcasting that justified "must carry," and outweighed the claim to commercial free speech. The judges didn't see it that way. "The 'must-carry' rules are fundamentally at odds with the First Amendment," wrote Judge J. Skelly Wright.
The ruling affected different stations in different ways, but perhaps no broadcaster was affected more than Don Moore. His Channel 58 was to be one of about 100 stations newly authorized by the FCC to serve small markets. But the population he was hoping to serve -- Cape Cod, the islands of Martha's Vineyard and Nantucket, and southeastern Massachusetts -- was more heavily cabled than most: 11 cable companies serving about 130,000 subscribers. Unless those 11 operators were to agree to carry Channel 58, which was unlikely, its signal would be effectively unavailable to 60% of the households in the region.
Well, not quite unavailable. Moore has tried to convince viewers that, even with their cable connections, they can see Channel 58, too. All they have to do, he explains, is switch off the cable controls and hook up an antenna to the back of the set, either in the TV room or on the roof, and then let 'er rip. ("No, ma'am, the remote control that comes with the cable hookup won't work if you do that.") Needless to say, this pitch hasn't been all that convincing.
So for the past year, Don Moore has been living out an answer to an old philosophical question: if a tree falls in the forest but there is no one there to hear it, does it make a sound? From 7 a.m. to 11:30 p.m., seven days a week, Moore is putting a signal out from his $2.5-million plant, which secures the $2.5-million line of credit that allows him to meet his payroll and keep the station on the air. But who is watching? It's hard to say. So far, advertisers are slow to buy commercial airtime, which Moore is offering at bargain-basement rates by broadcasting standards -- $50 per 30-second spot on the local news show -- but still several times what the subscriber-supported cable systems are charging. And Moore is also offering videotape production and editing time at rates most Boston producers would consider a steal. In a good month, Moore takes in about $30,000, or about $120,000 less than his expenses. "I've got a year," he shrugs. "Maybe."
The funny thing is that Donald P. Moore is anything but a stranger to the communications business. He learned it from ther ground up, starting as an engineer for radio and television stations in Boston. More at home with the details of sophisticated equipment than sophisticated business plans, he was still among the first to see the coming business potential of Cape Cod. Hyannis's own John Kennedy was President when Moore took preliminary steps toward winning a Cape Cod radio station license in 1961. It took nine years, two applications, 23 separate FCC filings, and one hell of a lot of perseverance before Moore finally won approval in June 1970 to operate WQRC-FM.
When it went on the air, WQRC broadcast out of a garage where tombstones had been sold. Yet from those humble beginnings, Moore turned it into the dominant station in his area, with a blend of easy listening and classical selections, clustered commercials, and solid local news. When Moore put the station up for sale 15 years later, its market share was 20%, its gross revenues $1.5 million, and the selling price a cool $4.7 million.
The sale had become inevitable when Moore began making his move into television. Actually, it's more accurate to say he was pushed.In the early 1980s, the FCC had begun to issue what are known as low-power broadcast television licenses around the country. And Moore was beginning to get phone inquiries from people interested in leasing space on his radio transmitter tower to broadcast TV signals across the Cape. Moore figured that if somebody was going to get into television in one of the fastest-growing areas of the fastest-growing regions of the country, it might as well be him.
His reasoning was sound. Cape Cod and the islands of Martha's Vineyard and Nantucket are a bit betwixt and between, on the fringes of both the Boston and Providence markets but really part of neither. The Cape is blessed with a distinctive identity and a distinctive base of advertisers. And an influx of thousands of wealthy retirees with plenty of time and money was fueling a year-round economy that ran right beside the booming resort economy -- the two passing the baton back and forth with barely a break in stride.
In small-market television, Moore saw potential for growth much like he had seen in radio 20 years before. So he decided to preempt the competition, and, in January 1984, after more than a year of preparation, put, a fledgling low-power television station on the air. The signal was weak -- 14,000 watts -- but the investment by television standards was modest -- around $500,000. Channel 58 was on a shakedown cruise.
The cruise ended prematurely. In August 1982, the FCC authorized a full-power television station in, of all places, Martha's Vineyard, population 8,900 year-round. At first blush, the idea seemed ridiculous, requiring a multimillion-dollar investment in a market in which four-digit line items are considered hefty. Moore wouldn't have paid too much attention to it but for one thing: the designated station, should anyone ever apply to take the license, would broadcast as Channel 58, preempting Moore's own low-power signal. His future in television was in jeopardy.
Moore fretted, hoping no one would force his hand. As it happened, someone did. Wallace E. Carroll, the chairman of the board of Katy Industries Inc., a conglomerate based in Illinois, owned a summer house on Martha's Vineyard, and he and his son fell in love with the idea of owning a station on a prestigious little vacation island off the Massachusetts coast. Early in 1983, he filed his application with the FCC. Moore was left no choice but to file a competing bid.
The negotiations began almost immediately. There was talk of a partnership, threats of FCC battles, but in the end Moore did what had to be done. One Saturday in the spring of 1984, he and his lawyer flew out to Katy headquarters outside of Chicago, faced a battery of lawyers and executives from the other side, and sat through a business lunch that Moore expected to be a fancy buffet but turned out to be takeout from McDonald's. By the end of the afternoon, Moore left Chicago, having bought out Katy's interest for $287,500. The FCC granted him the license in November 1984.
At first glance, it might look as if Don Moore was positioned into a business venture that, not long before, he had thought crazy for anyone to try. But Moore was not just anyone. He already had a tower on Cape Cod tall enough to serve the islands, and thus satisfy the FCC that this was a "Martha's Vineyard station." He had experience operating a television station. He had extensive contacts and goodwill with advertisers from his radio station. He had the money: selling his radio station was a condition set by the FCC for granting the full-power TV license. And he had a track record local banks appreciated. If anyone could make a go of it, surely it was Don Moore.
But most crucial of all, he had "must carry" working for him, giving him access to Cape Cod houses that even his full-power signal could not reach. "Everything I did was predicated on it," Moore says.
In hindsight, Moore admits he should have realized that the winds of change were blowing against him. Although the "must-carry" rule was "last on everyone's list" for deregulation, according to William Johnson, acting deputy chief of the FCC's Mass Media Bureau, it is now a safe bet that any regulation is in jeopardy in Reagan's Washington. Certainly Ted Turner's participation in the "must-carry" court challenge was another bad omen.
"But we figured, who cares?" Moore recalls thinking. "They'll never take away 'must carry.' Too many important stations are involved. We thought we were safe."
In fact, most of the nation's most powerful TV stations were unaffected. Unlike Moore, they are network affiliates, carrying the popular network programs that cable companies still need. Some day, independent producers may make the networks, and their affiliates, obsolete. But not yet. So for the moment, that leaves small, independent broadcasters like Moore with tne most to lose.
Both sides are trying to work things out in negotiations, and they have come up with the outline of a new "must-carry" regulation they think could pass constitutional muster. Though the cable operators are sitting with the winning hand one ace in the hole: their is the programming most people still prefer, and without "must carry," they may be allowed to charge cable operators a hefty premium for the right to air all that copyrighted material.
Whatever the outcome of the negotiations in Washington, however, it is clear that, long term, history is not moving in Moore's direction.After a slower-than-expected start, cable is fast becoming the arbiter of what most people will get to watch on their television sets. And the sparring between the two media now looks more and more like a fight to the death for over-the-air broadcasting. Don Moore, who has spent 20 years in the communications business staying a step ahead of the industry, now finds that his last great leap forward may have left him something of an anachronism. Ironically, his best hope in this era of almost mindless deregulation may be a burst of regulation -- from many of the same people in Washington who helped to get him in this pickle in the first place.