Ted Hearn

For Cable, 9/11 Might Become Kevin/Eleven
September 11, 2007

Washington – For people who toil in the cable industry, 9/11 might take on expanded meaning after today. As the years roll on, cable loyalists might also choose to recall this solemn date as Kevin/Eleven.

Today, Federal Communications Commission chairman Kevin Martin, a committed foe of nearly all things incumbent cable, is hoping to achieve his biggest political victory yet over the pay-TV giant after a two-and-a-half-year campaign of truculent pursuit.

The FCC is scheduled to meet today in open session at 9:30 a.m. in Washington, D.C., working from an agenda loaded with Martin-planted landmines for big cable players like Comcast and Time Warner.

If all goes according to plan, the sun will set on the Potomac with broadcasters awarded new cable carriage gifts and with EchoStar and DirecTV empowered to peek at certain cable programming contracts under expanded, Martin-endorsed legal discovery rights related to program access disputes.

To show how badly Martin wants to nail his cable coonskin to the wall, he is evidently willing to forget that he voted against the same carriage rules for broadcasters a month before he became chairman in 2005; and that he only grudgingly approved extension of the program access rules in July 2002, a period in his FCC career when Martin seemed more interested in annoying then-FCC chairman Michael Powell than anything else.

It seems as if Martin, a 40-year-old Republican Bush appointee, has adopted this formulation as his operating philosophy: It’s better to be seen doing something that yields bad results than to be seen doing nothing that yields good results.

Decisions worth billions of dollar could be made today and years of settled expectations could be tossed out the window, all because, in the view of National Cable & Telecommunications Association president Kyle McSlarrow, cable industry officials have refused to embrace Martin’s pet cause: the a la carte sale of cable channels.

With the powerful TV station lobby backing him, Martin wants to force cable operators to carry hundreds of local TV stations in both digital and downconverted analog formats for free and, if need be, forever.

It’s a mandate that would swallow network bandwidth until the industry rashly spent at least $6 billion on digital set-top boxes, potentially angering millions of customers who would need to attach those devices to 126 million analog TV sets.

Martin’s open-ended dual carriage mandate would kick in Feb. 18, 2009, the day after all full-power TV stations are required by law to terminate analog wave transmission and rely exclusively on the binary digital format of ones and zeros.

Martin insists the dual carriage requirement is voluntary because cable will always have the set-top option, which would result in digital-only networks and the reclamation of valuable analog channel capacity.

Cable's cost and consumer inconvenience concerns somehow do not factor into Martin's analysis.

To borrow a long-ago line by former NCTA president James P. Mooney, Martin and the broadcasters are today essentially asking cable operators whether they want to be boiled in oil or water.

Less well known is Martin’s proposal to force cable operators to deliver “all content bits” of a DTV station, however redundant the exercise.

The impact here is that cable’s ability to fit two HD signals within one 6 MHz channel would probably vanish if the use of compression and statistical multiplexing techniques were banned.

On program access, the law today requires vertically integrated programmers (meaning they’re owned by cable operators) to sell their satellite delivered networks to DirecTV, EchoStar and other cable operators. Without FCC extension, the “exclusivity ban” is to sunset on Oct. 5.

Martin supports a five-year extension today. Based on statements he made five years ago, Martin was deeply skeptical that the exclusivity ban was “necessary” in the sense of being essential or indispensable to pay-TV competition.

With AT&T and Verizon panting for cable-affiliated programming like CNN and the Golf Channel, Martin has evidently reconsidered his view that “necessary” imposes a very high burden on the FCC.

Cable can live with five more years, for sure. But it’s trying to scuttle another Martin proposal: Allowing EchoStar and DirecTV to eyeball cable programming contracts as a right of legal discovery.

From cable’s perspective, Martin’s plan could make it harder to license programming in the first place because confidentiality can’t be guaranteed; and it could lead to a surge in program-access complaints by parties primarily interested in exploiting an FCC-created incentive to see if someone else got a better deal.

With the clock ticking, Martin is coming under pressure to support just a five-year extension. On dual must carry, NCTA has broached a compromise: Three years of dual carriage for big MSOs, but exemptions for all cable systems 550 MHz and smaller or any system with 5,000 or fewer subscribers.

Martin wants dual must carry because he doesn’t want to inconvenience analog cable customers who would need to lease a digital set-top box in order to view local TV stations that their cable company has elected to transmit only in digital after Feb. 17, 2009.

Martin’s position stands directly in conflict with the instructions being provided consumers who visit the FCC’s digital TV information Web site. “Cable and satellite subscribers with analog TVs should contact their service providers about obtaining converter boxes for the DTV transition.” http://www.dtv.gov/consumercorner.html

We’ll know in a few hours whether Martin has come to his senses -- or whether today will also be remembered by cable as Kevin/Eleven.

Posted by Ted Hearn on September 11, 2007 | Comments (0)