Staff Reporter

Until March 31, KZKI-TV Channel 30 in West L.A. was an obscure UHF infomercial station with ratings on the bottom reaches of the Nielsen Media Research chart.

It still is a little-known, low-rated home shopping channel, but after the U.S. Supreme Court upheld the 1992 “must carry” law last week, it became potentially something much more: the local owned-and-operated affiliate for a seventh major broadcast television network.

KZKI is owned by West Palm Beach, Fla.-based Paxson Communications Inc., whose ambition is to form a new network based on the 49 mostly UHF stations it owns across the country.

Until must-carry was upheld last week, industry analysts thought the odds of that happening were slim; now, the plan seems far more realistic.

Cable television operators in a given region are obliged to carry on their systems all broadcast stations with “must carry” licenses in their area. In the L.A. television market, there are 17 must-carry stations seven VHF channels and 10 UHF.

Cable operators have been trying for years to overturn the must-carry law, hoping to replace low- or unrated community channels with more lucrative pay-per-view programming or home shopping networks.

On March 31, the Supreme Court destroyed those hopes and fueled the ambitions of both Paxson and Barry Diller’s Silver King Communications, both of which are seeking to build new networks by using UHF stations.

Silver King and Paxson are able to boost the viewership of their home shopping channels by forcing cable operators, under the must-carry law, to carry them. The must-carry broadcast stations in a given market do not pay cable operators a dime for being carried, nor do the cable companies pay the stations.

For other kinds of home shopping networks, such as QVC Network Inc. or Home Shopping Network Inc., cable operators usually charge the network a percentage of their sales in exchange for carriage.

Now that must-carry has been approved, Diller and Paxson Chairman and Chief Executive Lowell “Bud” Paxson both plan to replace the home shopping programming now running on their stations with entertainment fare.

Paxson, who is reportedly negotiating with DreamWorks SKG and Columbia TriStar Television, is seeking a programming partner for his venture, and expects to announce a deal within the next three months.

Asked his reaction to the must-carry decision, Paxson replied, “Ecstatic. Elated. Happiest man in America. Pick one.”

Paxson estimates that had the Supreme Court decision gone the other way, the 22.5 million American households now reached by his stations would have dropped to somewhere between 10 million and 12 million, because most cable operators would have dropped Paxson stations.

Owners and managers of local UHF stations were also overjoyed by the ruling. Ray Beindorf, Chairman and CEO of International Media Group (which owns West L.A.-based KSCI-TV Channel 18), estimates that his station would have dropped from 100 percent carriage in the L.A. cable market to about 85 percent carriage had the law not been upheld.

“It would have been a real tragedy had it not passed this way,” Beindorf said.

The danger for stations such as KSCI, which runs a diverse slate of weekly programming in 17 different languages, was that without the must-carry law, cable operators might have forced the stations to pay a fee for carriage.

“There’s the likelihood that we could have been held hostage, so to speak,” said Martin Duggan, general manager of KWHY-TV Channel 22 in West Hollywood.

Duggan, like Beindorf, believes his station’s programming is popular enough that most cable operators would have opted to continue receiving it even if they weren’t forced to do so. KWHY broadcasts financial news in English from 6 a.m. to 2:30 p.m. on weekdays, then switches over to Spanish-language programming for the rest of the day.

While the Supreme Court decision will have a powerful impact in the short term, technological innovations expected in the near future might make the issue moot. Cable companies are in the process of developing digital set-top boxes that will allow them to squeeze eight channels into the space now occupied by one thus freeing up a huge amount of channel capacity. The boxes are expected to be rolled out by mid-1998.

But what technology gives, technology consumes. Broadcast stations are also going digital, meaning broadcasters in coming years will be able to squeeze five channels into the space of one. Whether or not the must-carry law will apply to all those new channels has yet to be determined.

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