Massillon Floating Massive Free-Cable Plan

Guaranteed Carriage of Local TV Stations’ Analog, Digital Lineups

By Ted Hearn -- Multichannel News, 6/20/2007 7:33:00 PM

Millions of American households would receive free cable-television service while all local TV stations would have guaranteed cable distribution rights of their analog- and expanded digital-TV-channel lineups, according to a new, seven-year digital-TV-transition scheme proposed by Ohio-based Massillon Cable TV.

The Massillon plan, unveiled last week in private talks with Federal Communications Commission officials, is largely designed to mitigate the impact of the federally mandated shutdown of analog broadcast TV in early 2009 on an estimated 20 million households that rely exclusively on free, over-the-air TV and have yet to acquire the necessary equipment to view digital-TV signals.

With 45,000 subscribers, Massillon is a small cable company taking the lead on an issue that has been the source of bitter conflict among the largest media companies in the United States for more than one decade.

House Energy and Commerce Committee chairman John Dingell (D-Mich.) has stated that a poorly executed transition could have serious political repercussions, despite the $1.5 billion in federal money set aside for consumer subsidies.

Key to the Massillon plan’s success is agreement from local TV stations that in exchange for cable’s commitments, they would not seek negotiated cable carriage of their content for the first seven years after analog-TV signals go dark Feb. 17, 2009.

“This proposal is designed to benefit consumers -- the public interest. Broadcasters and [pay TV providers] both have benefits and costs, but consumers are the primary beneficiary,” Massillon president Bob Gessner said.

National Association of Broadcasters spokesman Dennis Wharton said his group “was not aware of the proposal, but we will be interested in studying it.”

Under the Massillon plan, a broadcast-only home that obtained a $40 coupon to buy a digital-to-analog converter box under the federal subsidy program would receive free analog-basic cable for seven years on every TV set in the home, with free installation.

The customer would need to surrender the coupon to the cable company, which would then return it the federal government for possible recirculation.

“Cable operators, while they will accept the vouchers, will return them to the government and receive nothing in return,” Gessner said, adding that coupons would not become available until January.

“One of the primary reasons why we came up with this is … there aren’t enough [converter coupon] vouchers,” Massillon outside counsel Mark Palchick said. “We know for a fact that the program was designed not to have enough vouchers.”

A cable home with a converter coupon for a TV set not connected to the pay TV service would receive a free hookup from the cable company, again with the customer required to yield the coupon.

TV stations within the markets of participating cable companies would have to forfeit their right to receive cash for cable carriage. Instead, cable systems would be required to distribute every TV signal in analog, in addition to carrying a station’s primary digital signal and any multicast services offered to the public free-of-charge.

"At this point, it's hard to say if this will get traction, but even if it doesn't, it might get people thinking more about some kind of package deal involving carriage and DTV coupons,” said Paul Gallant, a media analyst with Stanford Washington Research Group.