News

Cable to TV Rescue

4/19/2008 2:00 AM Eastern

Cable operators and TV stations are starting to cooperate on ways to help minimize consumer disruption resulting from the legally mandated cutoff of over-the-air analog TV signals next February.

Comcast announced an agreement last Monday with Raycom Media, a broadcast company with TV stations in 12 Comcast markets. Both plan to air ads informing viewers about the DTV transition — and that signing up for cable can prevent any analog TV set from going dark.

The effort, unveiled at the National Association of Broadcasters convention, will feature the marketing of a low-cost “lifeline” programming tier limited to just local TV signals in analog format, public-access channels and perhaps a few cable networks.

“We’ve come to an agreement with Raycom to advertise the DTV transition and help [its] stations retain their viewers in our markets,” said Brad Dusto, president of Comcast’s Western Division. “We would encourage other station owners to consider that as well. Any Comcast system would be happy to make that same offer.”

The analog TV cutoff is planned for Feb. 17, 2009. Millions of analog TVs could go dark the next day in homes that have not adequately prepared for the event.

Some broadcasters have hoped that the DTV transition would renew consumer interest in watching over-the-air TV instead of cable and satellite TV on the theory that the quality of the new digital picture would captivate the audience.

But the Comcast-Raycom agreement runs counter to that approach. Raycom CEO Paul McTear said encouraging broadcast-only homes to subscribe to lifeline cable and cable-only homes to connect all their analog TVs to cable was the right business move.

“I’ll be glad to help them do that, to be perfectly honest with you,” McTear said. “It has a potential impact on my ratings.”

Cable provision of high-speed data was another justification, he said.

“The more broadband customers are in a market, the greater my potential is that people will watch my Web site. That’s a growing source of revenue for television stations,” McTear said.

Time Warner Cable CEO Glenn Britt, speaking on a panel with Dusto and McTear, endorsed cooperative ventures with local TV stations.

“We at Time Warner are eager to do that with broadcasters also,” Britt said. “Some of those homes who watch television only over the air today may well use this juncture of the digital transition to decide they should buy cable. So we’ll get more customers out of that.”

Bob Miron, chairman and CEO of Advance/Newhouse Communications, owner of cable operator Bright House Networks, said he was also developing a lifeline promotion that would cost even less if purchased with a broadband subscription.

“We will work out a plan that has a lower cost basic service with some sort of package. We’re still trying to develop it,” Miron said.

By law, cable companies must provide a basic package that includes all local TV signals and customers must buy it before they may purchase another programming tier or a premium service. Comcast, Dusto said, charges between $10 and $14 for its basic tier.

Efforts like the Comcast-Raycom deal could drive pay-TV penetration so high that TV stations might have too few over-the-air viewers to justify retention of spectrum worth many billions of dollars, according to one broadcasting executive.

“Congress will have to wrestle at that point with whether they’re still committed to an over-the-air system,” NBC Universal vice president Bob Okun told the trade publication Communications Daily.

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