DTV Order Will Cost Cable

To some extent, operators will have to boost capital spending regardless of which option they choose under the Federal Communications Commission's new digital-television transition rules.

The two choices are either to convert all their analog-video subscribers to digital by February 2009 or be forced to carry one analog and one digital signal for all stations that opt for mandatory cable carriage, or must-carry, until 2012. (See “FCC: Carriage Will Last Three Years,” page 4.)

Which is the lesser evil? For much of the industry, the latter will be the preferred route, even though the National Cable & Telecommunications Association at one point called this tantamount to an unlawful seizure of private property. The alternative — converting to all-digital set-tops in the next 18 months — would cost upward of $6 billion, according to the cable industry.

Bresnan Communications vice president of strategic engineering Pragash Pillai said cable operators were expecting to continue offering most broadcast-TV stations in analog format anyway, no matter which way the Federal Communications Commission ruled.

“In our minds, there's no way we can just convert everything to digital and leave our customers hanging,” Pillai said. “The last thing we want to do ... is to leave our customers wondering where to go. That would cost us more in the long run.”

But operators will face new capacity demands, depending on the extent to which they're already simulcasting in digital.

Say a market has 10 stations that elect must-carry. If all demand carriage of high-definition signals, around five 6-Megahertz channels would need to be set aside, while those 10 would still need 60 MHz of spectrum for the analog versions (see “Translation Please,” page 50). If an operator also chooses to distribute those 10 in standard-definition digital, that would eat up another 6-MHz channel.

“The real worry is being forced to carry the HD signal, because it's significantly more bandwidth than the SD signal,” said John Connelly, executive vice president of marketing for BigBand Networks.

Operators will continue to look at boosting capacity using techniques already at their disposal, like employing switched digital video, upgrading to 1-Gigahertz or driving fiber deeper into their plants, said Motorola vice president of marketing for access network solutions Kevin Keefe.

In addition, operators will likely have to install new equipment because of the dual must-carry rules, Pillai said. Primarily that will consist of Advanced Television Systems Committee 8-level vestigial sideband modulation (8VSB) digital receivers that include an encoder to convert the signal into analog form.

Until now such 8VSB receivers with analog converters, sold by vendors like Wegner, KTech Telecommunications and Scientific Atlanta, have been expensive and used for testing purposes. “This is not something cable operators do on a widespread basis. Now it's a must-have,” Pillai said.

Still, the FCC rules could have been more onerous.

For example, there is no mandate for operators to “triple-cast” must-carry stations, NCTA vice president of communications Brian Dietz said. Some operators feared they would be forced to carry an analog signal plus two digital signals — one each for SD and HD formats.

Dietz said a broadcast TV station will have to decide whether to offer an SD or HD feed as the “primary” signal to a cable operator. “In the event that some must-carry broadcasters do introduce HD, they probably will still declare SD as their 'primary' signal to guarantee carriage of that and reach the widest possible audience,” he said.

And the NCTA's three-year sunset provision, which the FCC accepted, was an important victory, Pillai said: “Once we get to all-digital, we don't want to also have to continue sending analog [signals] forever.”

Cable also avoided a “carry-all-the-bits” requirement, which would have prevented operators from compressing digital signals or using statistical multiplexing technologies.

The FCC said cable must carry HD broadcast signals “so that the picture quality is at least as good as the quality of any other programming carried on the system.”