Policy

NAB Unveils Carriage Plan

11/07/2004 7:00 PM Eastern

Washington— With a controversial digital television plan nearing a vote at the Federal Communications Commission, TV broadcasters are promoting a gambit that would likely place a large financial burden on cable companies and their subscribers.

A key feature of the plan would deny cable systems the unfettered freedom to convert DTV signals to analog at the headend to protect consumers without digital TV sets or set-tops.

That would mean cable companies would likely have to deploy millions of set-tops or transmit a duplicative version of the DTV signal in analog — chewing up bandwidth to ensure continued viewing on all TV sets wired to cable.

EQUIPMENT CONCERNS

The proposal, floated Oct. 29 by the National Association of Broadcasters, clashed with recent DTV transition proposals advanced by the National Cable & Telecommunications Association.

The cable trade group is trying to avoid loading huge equipment costs on cable subscribers as analog transmission is phased out.

NCTA officials recently told the FCC that cable systems should have authority to downcovert DTV signals at the headend until digital equipment penetration — either via set-tops or DTV sets — has reached 85% of TV households.

“The broadcast industry’s submission does nothing to advance the digital-TV transition or promote a serious discussion about how to complete the transition,” NCTA president Robert Sachs said in a prepared statement on Nov. 1.

The NAB’s new proposal to the FCC would mandate that by the end of the transition, cable systems would be required to transmit DTV signals from the headend to consumer homes.

After that threshold had been met, NAB would leave cable two choices: Either provide set-top boxes to consumers with analog TV sets, or send a downconverted analog signal to satisfy subscribers with analog sets who do not want set-tops.

“Thus, any plan to end the transition and return analog spectrum must ensure that all consumers are able to receive, at their TV set, the full program offerings provided by free over-the-air broadcast service,” NAB said in the FCC filing.

NAB also said that TV spectrum auction proceeds should be tapped to defray the cost of conversion equipment for analog-only consumers, a proposal that has caught the interest of some on Capitol Hill after such an approach succeeded in Berlin, Germany, last year.

However, it’s unclear whether the federal government would auction the analog-TV spectrum prior to the end of the transition to have the funds on hand for the set-top subsidy. The Bush administration is opposed to funding consumer devices. Instead, the White House supports taxing analog spectrum to give TV stations a financial incentive to clear airwaves expeditiously.

FCC staff wants to end the transition on Dec. 31, 2008. At that point, TV stations would elect whether cable carried their signals in analog or digital.

Unlike NAB’s proposal, the FCC plan would not force cable to provide set-tops to analog-only consumers.

The FCC is expected to vote on the plan by year-end. An effort to end the transition by 2009 led by Sen. John McCain (R-Ariz.) was killed by the Senate Commerce Committee in September. Later, McCain reached agreement to reclaim four TV channels, or 24 Megahertz, by Jan. 1, 2007, even though the agreement contained a few loopholes.

The NAB is evidently concerned that if cable isn’t forced to provide DTV equipment in the home, downconversion at the headend would occur by default, so that even consumers with digital sets would not receive a digital picture from the cable company.

“Consumers that have invested in digital sets — an investment that the government has sought to encourage — should not face uncertainty whether after the transition they will be able to receive HDTV and other digital services from their cable system,” the NAB said.

POTENTIAL SUB DISRUPTION

The NCTA wants downconversion authority because the inability to serve analog-only consumers would require installation of conversion equipment, a process that NCTA has called potentially disruptive for “tens of millions of cable customers.”

Cable operators are voluntarily carrying about 450 digital stations, mostly network affiliates that transmit in HDTV. Some TV stations offering high-definition signals aren’t being carried because they are demanding cash.

Others aren’t getting carriage because they are not offering HDTV.

“It’s unfortunate that a majority of broadcasters have yet to offer any high-definition programming,” NCTA’s Sachs said.

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