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Powell Pushes Back on DTV Plan

4/04/2004 8:00 PM Eastern

Broadcasters have not been shy about voicing concern about a digital-television transition plan brewing at the Federal Communications Commission.

Last week, FCC chairman Michael Powell decided to push back, though he stopped short of calling TV stations spectrum squatters.

DOUBLE THE FUN

“It wouldn’t surprise me that some broadcasters would be upset about it. Some broadcasters enjoy maintaining two sets of spectrum for as long as possible,” Powell told reporters last Monday.

In recent months, FCC staff has designed a plan that would recover TV stations’ analog spectrum many years sooner than anticipated.

The effort turned serious after Berlin, Germany, completed the transition last August without difficulty.

The core of the FCC plan would require cable systems to carry DTV signals that elect must-carry in downconverted analog format.

Those cable customers, along with direct-broadcast satellite viewers with a local-TV signal package, would count toward whether 85% of TV households in a market are capable of viewing off-air DTV signals.

Under current law, TV stations are required to yield their analog spectrum by Dec. 31, 2006 or when the 85% test is met, whichever occurs last.

But no one is sure when the 85% test would be reached, because so few TV sets with off-air digital tuners have been sold to consumers and just 30% of cable subscribers have digital set-tops.

Under the FCC staff plan, it’s likely that dozens of markets would meet the 85% test today.

Meanwhile, the wireless industry and public-safety organizations are clamoring to get their hands on broadcasters’ analog spectrum, putting pressure on the FCC.

Powell said the FCC staff plan was an attempt to put a firm date on the analog giveback and provide some certainty to interested parties.

“Broadcasters have an enormous drain on their economy, their resources. They’re operating two stations indefinitely. I think the market could use some increased certainty and stability in terms of when the transition might come to an end,” Powell said.

Broadcasters, along with their allies in Congress, argue that if cable is allowed to down convert, consumers won’t have any incentive to buy digital TV sets.

“In all fairness, to convert everything to analog converters is to set the digital transition back enormously. To me, it takes away the progress we’ve made to this point,” said National Association of Broadcasters president Edward Fritts.

The Consumer Electronics Association, whose members make DTV sets, agrees with broadcasters.

The FCC plan, said CEA president Gary Shapiro, is “inconsistent with our position that cable should not be downconverting.”

Rich Chessen, an FCC official who helped write the plan, said downconversion would not disrupt the status quo because consumers would continue to base their decisions to buy DTV sets based on HDTV programming available on cable and DBS systems, both today and in the future.

The National Cable & Telecommunications Association last week said cable systems are carrying 382 digital TV stations in 155 markets that include 84 million cable homes.

THE BIG QUESTION

The FCC’s plan does not address the biggest political headache if analog broadcasting is terminated soon in a market: What happens to broadcast-only viewers with analog equipment and to the second and thirds analog sets in cable and DBS homes not connected to those pay-TV systems?

In Berlin, which had 93% pay-TV penetration at the time of the switch, some consumers received subsidized converter boxes.

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