Policy

Powell, Ferree Eye Rigid Digital-TV Transition

3/12/2004 4:05 AM Eastern

Federal regulators are thinking anew when it comes to the digital-television transition.

Feeling heat from Congress -- which is under pressure from the spectrum-hungry wireless-phone industry -- the Federal Communications Commission is trying to map a plan that would set a firm date for the return of broadcasters’ analog spectrum.

The FCC’s Baedeker appears to be the city of Berlin. Last summer, the German capital became the globe’s first major city to shut down off-air analog TV in a flash-cut to all-digital broadcasting that came off without any documented displays of civil unrest.

According to government and industry sources, FCC chairman Michael Powell and Media Bureau chief Kenneth Ferree, learning from the Berlin example, are mulling a few options and bouncing them off congressional staff on Capitol Hill for a read on their political viability.

Powell and Ferree are considering new ideas because the digital transition in the United States contains legal loopholes, by design, making it virtually impossible to determine when exactly the FCC can expect to recover broadcasters’ analog spectrum, which is said to be worth many billions of dollars.

Initially, Congress set the analog-giveback date at Dec. 31, 2006, but the deadline was negated by subsequent legislation that tied the spectrum return in a market to 85% penetration of digital-TV-reception equipment in the home.

Broadcasters that have caught wind of the Powell-Ferree plan are not elated by the details, but they called it too early in the process to stage a rebellion.

At the core of the Powell-Ferree plan is a new methodology for calculating when 85% of households in a market would be considered capable of receiving digital broadcast signals.

No market today is even remotely close to hitting 85%. As the 85% test is currently interpreted, a household is not considered digital-ready unless it has the means to decode digital signals, which usually means possession of a cable or direct-broadcast satellite set-top or a digital-TV set with an off-air tuner.

In a change, Powell and Ferree are floating the idea of requiring cable companies to carry digital TV signals in downconverted analog format.

In theory, every cable home served in such a manner -- and every DBS home that purchased a local-TV-signal package from DirecTV Inc. or EchoStar Communications Corp.’s Dish Network -- would magically qualify as digital-ready for purposes of the 85% test.

Powell and Ferree are confident that the vast majority of the top 100 markets -- which happen to include 85% of U.S. households -- would either meet, or come very close to meeting, the 85% threshold. Thus they would be instantly eligible to make the switch to digital in a flash, just like Berlin.

A spokesman for the National Cable & Telecommunications Association declined comment on the Powell-Ferree plan.

But the NCTA, in a June 2000 letter, told the FCC, "It may not be objectionable" for cable to carry digital-TV signals in analog "provided that the television station presents an analog feed of its television signal to the cable operator at the headend." The NCTA was referring to carriage of a single programming channel.

The Powell-Ferree plan has some loose ends.

If broadcasters went all-digital in a sudden shift, every analog TV set not connected to cable or satellite would be useless.

For more on the Powell-Ferree plan, please see Ted Hearn’s story on page 50 of Monday’s issue of Multichannel News.

March