Policy

After Analog Sunset, More Digital Daylight

6/18/2012 12:01 AM Eastern

Ding, dong: Analog TV is dead.

Well, not entirely — cable operators will choose to
keep delivering some broadcast analog TV signals for
several more years, if they decide enough customers
want them or if retransmission-consent deals require it.
But now the Federal Communications Commission has
put an expiration date on the “viewability” rules that
force MSOs to provide
must-carry broadcast
stations in analog (see
Rules).

The change, set to
take effect Dec. 12, will
give cable operators
more flexibility in deciding
how and when
they retire spectrumhogging
analog channels
to free up space
for more HD and video-
on-demand, as well
as faster broadband.
Analog TV signals take
up about 10 times the
amount of bandwidth
as digital ones.

The demise of the
analog-carriage requirement
— more than three years after the broadcast
digital-TV transition — is a clear win for cable, according
to analysts. “It’s actually refreshing in many ways that the
FCC unanimously (and quickly) decided to rapidly sunset
an antiquated rule,” ISI Group analyst Judah Rifkin said.

Th at said, for operators that have already completed
substantial analog-reclamation projects, including
Cablevision Systems and Suddenlink Communications,
the rule change is less significant. The FCC already has
allowed MSOs to eliminate analog TV, but with a high
bar that they provide 100% of their programming digitally
and give subscribers free or low-cost digital set-tops
or adapters.

“Today, we offer all-digital lineups in substantially
all areas,” Suddenlink senior vice president of communications
Pete Abel said. “Hence, the question about
[the FCC rule change] accelerating plans is really not
relevant to us.”

For its part, Comcast has completed a nationwide digital-
TV conversion, using free digital terminal adapters
(DTAs), and expects
to be all-digital in
75% of its footprint
by December. What’s
new under the analog-
sunset provisions
is that “hybrid” operators
— which deliver
both analog and digital
TV — may begin
to migrate must-carry
channels to digitalonly.
However, MSOs
must offer customers
digital boxes for free
or at “an affordable
cost that does not substantially
deter use,”
according to the FCC.

More than anything,
the analog-TV
sunset removes any uncertainty cable operators may
have had about having their hands tied in formulating
long-range network migration plans. Now, phasing out
analog is mainly a customer-service, engineering and
network-operations issue rather than a regulatory one.

“My sense is that the timing is good for the industry,”
SNL Kagan analyst Ian Olgeirson said. While the viewability
requirement was not a significant barrier for analog
reclamation, he added, “if it continued, it would have
become more of a concern for operators in a position to
fully complete the all-digital process.”

September