TV-Transition Bill Spares Cable
House Panel Leaves Multicast Mandate on Cutting-Room Floor
By Ted Hearn -- Multichannel News, 10/30/2005 7:00:00 PM
Washington — Washington— A House committee last week approved a digital television bill that failed to include provisions that cable “must carry” in the future every free digital service local TV stations may pump out .
Rep. Edward Markey (D-Mass.) had planned to offer an amendment that would have included enhanced public-interest obligations covering the multicasting of digital programming services by local stations. Markey did not state the number of program services cable would have to carry or the scope of the public-interest programming obligations.
| Transition Plans | ||
|---|---|---|
| Where the House and Senate stand on the end of analog TV broadcasting | ||
| Issue | Senate | House |
| Set-Top changeover subsidies | $3 billion | $830 million |
| Deadline | April 7, 2009 | Dec. 31, 2008 |
| Multicast must-carry | No | No |
| Dual carriage | No | For Five Years |
| Spectrum auction of 60 MHz | Yes | Yes |
| Public-safety spectrum allocation of 24 MHz | Yes | Yes |
Markey never offered the amendment. A Markey aide and cable lobbyists said the lawmaker ran out of time, even though the House Energy & Commerce Committee remained in session from 10 a.m. to 6 p.m. last Wednesday to consider amendments.
In the end, the House panel produced a bill that called for ending analog broadcasting on Dec. 31, 2008. It included a net $830 million to subsidize set-top boxes to keep millions of analog TVs working after the transition.
The measure, rolled into a much-larger budget bill, passed 33-17. It still requires full approval by the House. The Senate Commerce Committee approved a bill with $3 billion for set-tops and an April 7, 2009, transition deadline
McSLARROW: 'IT’S A WIN’
“It’s a win,” National Cable & Telecommunications Association president Kyle McSlarrow said of the House committee vote. He sat for hours in the audience thumbing his Blackberry as the committee debated a raft of amendments.
Broadcasting lobbyists said Markey’s decision to fuse multicast must-carry rights to enhanced public-interest obligations meant that both cable and broadcasters would have rallied in opposition.
“It didn’t change our stance,” McSlarrow observed. “We were going to oppose any multicasting amendment.”
No multicasting provisions were included in the Senate bill. Senate Commerce Committee chairman Ted Stevens (R-Alaska), a multicasting supporter, is planning to address the issue in a separate bill.
AUCTION CASH COMING
Congress is pressing to end the DTV transition because the auction of returned analog-TV spectrum is expected to yield at least $10 billion and contribute to deficit reduction. Lawmakers also want to allocate 24 MHz of former analog TV spectrum to first responders to improve mobile fire-and-rescue communications during crises.
Legg Mason media and telecommunications analyst Blair Levin said in a client note last Thursday that despite differences in the House and Senate bills, Congress would likely enact a DTV-transition measure this year as part of a broader budget bill.
Lawmakers have debated for months how to make the transition as painless as possible.
In the House DTV bill, high-capacity cable systems would need to carry must-carry TV stations in digital and analog for the first five years.
This would ensure that analog-only cable subscribers did not have to buy DTV sets or lease set-top boxes before 2014.
In an Oct. 21 statement, McSlarrow said NCTA’s willingness to accept a limited dual-carriage mandate was a “significant concession,” even though the two biggest cable companies, Comcast Corp. and Time Warner Inc., have announced voluntary dual-carriage plans company-wide.
The House bill also stated that must-carry TV stations beaming high-definition pictures were guaranteed no more than standard-definition cable carriage for five years.
Cable systems with bandwidth of less than 550 MHz capacity may transmit digital TV signals of must-carry stations in analog for five years starting in 2009.
Rep. Rick Boucher (D-Va.) offered an amendment designed to let pay-TV providers know that any degradation of HD signals wouldn’t be cost-free.
After requiring affiliated TV stations to pass through HD feeds of ABC, CBS, NBC and Fox, Boucher wanted to force cable and satellite to display a 15-second notice at the top of each HD network program that had been knocked down to SD. Boucher’s amendment lost, 31-16
The real clash came over the set-top program.
U.S. consumers today possess 73 million analog TV sets that rely exclusively on free, over the air broadcasting, including 45 million in 20 million homes that do not subscriber to cable or satellite. Pay TV homes account for the 28 million sets not connected to a pay service.
The bill sponsored by committee chairman Joe Barton (R-Texas) would allow each household to obtain two $40 coupons for set-top boxes. Democrats complained that the first 10 million households to receive two coupons would largely exhaust the $830 million in funding.
“Homes most reliant on over-the-air broadcasts will not get coupons, while it may very well be that vacation homes will,” said Rep. John Dingell (D-Mich.) “The plan is first come, first served — when the money runs out, you are out of luck.”
Barton insisted that the $830 million would be sufficient, claiming individuals that have made the digital transition on their own won’t bother to apply for coupons.
“We don’t expect multimillionaires to take advantage of the program,” Barton said.
Democrats are concerned that the elderly and minorities will fail to apply for coupons.
VOUCHER PLAN DERIDED
Yet Rep. Fred Upton (R-Mich.), chairman of the House Subcommittee on Telecommunications and the Internet, said the Democrats’ proposal of sending vouchers to every household was misguided.
“A number of folks will be confused. They will have no reason for those coupons,” Upton said, referring to cable and satellite homes.
Rep. Greg Walden (R-Ore.) said the Democrats’ universal coverage plan would be susceptible to fraud, with coupons being resold on eBay.
The Democrats’ plan, sponsored by Dingell and Markey, called for providing 106 million U.S. households with vouchers to buy up to two set-tops not exceeding $60 each in cost.
The Democrats said that sending vouchers was superior because people shouldn’t have to fill out forms to keep their TVs running. They also maintained that all 73 million broadcast-only sets would be covered at a cost of no more than $4 billion.
“We can easily afford $3.5 billion or $4 billion,” Boucher said.
Because the Democrats’ offer did not cap set-top funding, Barton complained that their program could cost $12 billion or $13 billion — an amount exceeding projected spectrum auction revenue needed to finance the set-top program.
But like the Republicans, Democrats dismissed ideas that someone who did not need a box would go to the trouble to get one. As a result, Democrats said set-top costs would not exceed $4 billion.
FULL FUNDING VS. 'EXPLOSION’
Democrats wanted full funding for set-tops, Markey said, because an underfunded transition would produce a “political explosion,” especially if analog TVs go dark on Jan. 1, 2009, just hours before the kick off of key college bowl games.
“This is a government-forced condemnation of private property,” Markey said. [Republicans] don’t have a remedy for the millions of people who are going to be adversely affected.”
Rep. Steve Buyer (R-Ind.) said case law refuted Markey that rendering millions of analog TVs useless would be a taking of private property without just compensation.
Markey and other Democrats said House Republicans refused to fully fund a set-top program because the majority party wanted to protect previously enacted tax cuts.
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