AT&T decision could have major implications

Besides the contention by the cable industry that multichannel must-carry is unconstitutional, there's also the problem of bandwidth.

Cable operators constantly complain about not having the necessary bandwidth to continuously add new services to attract subscribers. However, newer IPTV systems don't have the same bandwidth constraints.

Because IPTV systems transmit only the programs currently being watched by subscribers, operators can provide access to as many channels as they want to host from their servers. Thus, it's far easier for AT&T to deliver on its promise to broadcasters to carry all their digital signals.

AT&T obviously feels its decision will give it a competitive advantage over its cable rivals.

However, Todd Chanko, an analyst at Jupiter Research, told Ars that AT&T's move could backfire on the telco, which is also steadfastly opposing network neutrality legislation in Congress.

If AT&T supports federal must-carry requirements for its television business, can it really turn around and argue that the government has no right to impose nondiscrimination requirements on its Internet business? As Chanko puts it, “If the company, whose stock is up 13.2 percent year-to-date, supports federally mandated use of one communication platform, can it realistically oppose another?”

If the FCC approves multicast must-carry this week, broadcasters probably won't see their multicast stations appearing on cable networks anytime soon. The cable industry has already announced plans to fight the issue in court if necessary.