Analog Cutoff Is Panned on Hill

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Rep. Elliot Engel offered probably the best rationale for why Congress won't adopt a plan that would make an estimated 80 million TV sets go dark in four years.

"An end of the analog signal on Dec. 31, 2006 could also be the end of many of our congressional careers," said Engel, a New York Democrat, at a House Telecommunications and the Internet Subcommittee hearing last Wednesday. The proceeding on the digital-television transition included nine witnesses, representing a range of interests.

In particular, it focused on draft legislation crafted by House Energy and Commerce Committee chairman Rep. Billy Tauzin (R-La.) and Rep. John Dingell (D-Mich.) that would terminate analog TV transmissions on Dec. 31, 2006.

Because TV sets that aren't connected to cable or satellite would be practically useless, some consumers would have to shell out hundreds of dollars to buy digital TV sets or digital-to-analog converters at that time.

Engel said he feared the reaction of voters when "they wake up New Year's Day in 2007, turn on their TV and see only snow."

About half of the 80 million U.S. sets are located in broadcast-only homes, and the other half are in homes with at least one set connected to cable or satellite, Federal Communications Commission Media Bureau chief Kenneth Ferree told C-SPAN viewers last Monday.

Wright's pitch

The analog cutoff is just one issue shaping the debate.

Robert Wright, CEO of NBC and vice chairman of General Electric Co., told the panel that Congress needed to require cable operators to carry multiple digital signals from local TV stations for free. The cable industry has vigorously opposed that proposal as a broadcaster land grab that would hurt fledgling cable networks.

"All we ask is that government not place its thumb on the scale in a way that favors one set of speakers over another," said Lana Corbi, president and CEO of the Hallmark Channel, a cable network which reaches 40 million of the country's roughly 90 million pay TV subscribers.

Cable systems are willing to carry a station's primary video signal, but not several signals just because digital technology permits a station to transmit one high-definition signal during primetime and five or six standard-definition signals during other dayparts.

Broadcasters insist that because HDTV and multiple video streams occupy the same amount of bandwidth on a cable system — 6 megahertz — multicasting places no additional burden on the cable operator. And if consumers are expected to spend money to buy digital equipment, broadcasters said, they should benefit in the form of additional free off-air services — but those services won't be offered to anyone unless cable is required to carry them.

Testifying on behalf of MSOs, Insight Communications Co. Inc. CEO Michael Willner said a multicast carriage mandate's worst effect would be in giving local TV stations "an unfair advantage" over cable networks that do not have access to off-air viewers like TV stations do.

Wright's support for mandatory cable carriage of multicasting was something new from NBC. In the past, NBC and the other major networks have relied on retransmission consent (the legal term for bargaining with cable operators) for carriage of their broadcast signals and their various cable networks.

One cable lobbyist said "think Paxson Communications Corp." as an explanation for Wright's pitch. NBC owns 32 percent of Paxson, parent of Pax TV, and has an option to buy the rest of the local broadcaster until 2009. For years, Paxson has urged the FCC to require cable carriage of multicasting.

Michael Fiorile, president and CEO of Dispatch Broadcast Group in Columbus, Ohio, told the lawmakers that the 2006 deadline terminating analog TV was unacceptable. He called not only for cable carriage of multicast local TV signals, but also for carriage of both analog and digital signals until the transition to all-digital broadcast is complete.

Without these elements, he claimed, commercial TV stations would suffer "irreparable damage."

No dual mandate

Aware of the cable-broadcaster dispute on several fronts, Tauzin and Dingell have not taken a position on multicasting carriage, but plan to address it at a later date. The draft bill explicitly excludes a dual must-carry mandate, reflecting the FCC's finding in January 2001 that dual carriage violates cable operators' First Amendment rights.

Under early DTV-transition rules, analog TV was slated to cease on Dec. 31, 2006. Fearing that few consumers would have digital receivers by that time, Congress decided to waive the 2006 deadline in any market until 85 percent of households had digital reception equipment, whether a DTV set or some kind of converter. The Tauzin-Dingell proposal would scrap the 85 percent test.

Tauzin said he was committed to a legislative solution if the warring industries failed to reach a compromise, though he was unclear how much time he would provide.

"It will be worked out and American consumers will have a smooth transition to the digital age," Tauzin said. "We're going to finish it. I am committed to that."

The bill contains other provisions that, if not managed carefully, could spark a consumer backlash, Tauzin said.

For example, the draft bill would bar the manufacture of television equipment with analog outputs on July 1, 2005, a step supported by Hollywood studios to prevent the piracy of digital content. But there is one problem: DTV sets purchased after July 1, 2005 won't work with the millions of analog VCRs in American homes.

Tauzin said he needed help on this issue because "the two alternatives are awful." He said the digital transition won't be a success unless Hollywood can trust antipiracy technology, yet the toll on consumers — the obsolescence of analog equipment — might be too high.

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