Broadcasters Hate Digital-TV Proposal

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What’s good for Berlin, Germany, isn’t so good for Berlin, N.H.

That’s the word broadcasters quietly put out last week in their effort to quell a bold plan by the Federal Communications Commission that would require TV stations to give back their analog licenses many years sooner than expected.

The FCC would like to get its hands on the analog spectrum as quickly as possible for reallocation to the wireless phone industry, which wants to deploy over-the-air broadband data services. Public safety groups also want a slice of the airwaves.

The FCC’s transition model is the German capital, which last August became the first major city in the world to complete the DTV transition and did so apparently without complication.

Broadcasting sources, who asked not to be identified, had nothing nice to say about elements of the FCC plan they had seen. They called it too complicated, politically naive — and generous to the cable industry on a scale not seen in many years.

“That’s its principal liability. It’s too complicated. This is like Hillary Clinton’s health plan,” a broadcasting source moaned.

FCC commissioner Kathleen Abernathy said the plan was likely a hard sell to Congress, but worth doing.

“I think there is a major hurdle. It’s worthwhile going up and getting people thinking about it,” Abernathy told reporters last week.

Congressional reaction would likely determine the plan’s viability, she said.

“I am pretty much in a wait-and-see mode. I’m going to see what the reaction from Congress is,” she said.

Central to any transition plan is the process for ensuring that consumers with analog equipment do not lose service.

Berlin broadcasters didn’t lose any cable or satellite viewers because local pay-TV providers converted digital signals to analog. Nor did they lose any off-air-only consumers, because those viewers were guaranteed access to digital-to-analog converters either for free or at subsidized rates.

The FCC plan, developed in recent weeks by FCC chairman Michael Powell and Media Bureau chief Kenneth Ferree, borrows heavily from the Berlin model.

It would require cable to downconvert off-air digital signals to analog. Those cable households, combined with satellite subscribers with a local-TV signal package, would be included when counting how many TV households in a market were digital-ready.

Congress decreed that TV stations would give back their analog licenses on Dec. 31, 2006, or when 85% of TV households in market have a digital cable box or a DTV set with an off-air turner, whichever is later.

The 85% test — or the 85% loophole, as some call it — puts off the analog giveback indefinitely because relatively few households today have the necessary equipment.

Under the Powell-Ferree plan’s way of calculating 85%, dozens of markets would meet the penetration test immediately, requiring the return of the analog spectrum at the end of 2006.

A broadcasting source referred to the Powell-Ferree plan as a “political time bomb” for Capitol Hill, the point being that Congress created the 85% test for the purpose of minimizing the number of consumers that would have to purchase digital TV sets or digital-to-analog converters involuntarily.

The Powell-Ferree plan’s approach to the 85% test would widow the analog equipment of millions more off-air-only consumers than Congress ever intended, broadcasters said.

Broadcasters were also concerned Congress would make them pay for digital-to-analog boxes that off-air only consumers would need.

An FCC source said the Powell-Ferree plan addressed only a new methodology for reaching the 85% threshold. It did not design a plan for solving the problems of off-air-only consumers, leaving that part of the transition to Congress.

Requiring cable to downconvert DTV signals was also a problem, broadcasters said.

They said this feature gave cable little incentive to carry TV stations’ HDTV signals after the stations spent billions of dollars to make HDTV available. And the fact that cable would continue to carry local TV stations in analog would work as a disincentive for consumers to buy DTV sets capable of displaying high-resolution images.

“This would be as blatantly pro-cable as the FCC could possible adopt,” a broadcasting source said.

<p>Powell-Ferree Plan On DTV Transition</p>

• Require cable to carry DTV signals In analog;

• Count downconverted cable homes and DBS local-TV subscribers toward 85% threshold;

• Take back analog spectrum in markets at 85%; and

• Remove cable downconversion requirement when 85% of TV homes In a market have a DTV set.

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