FCC Chief Relaxes Stance On Dual Carriage


Washington --  Federal Communications Commission chairman  Kevin Martin last fall declared new agency rules would force virtually all cable systems in America to carry TV stations in both analog and digital formats  starting next February, if those stations had mandatory carriage rights on their local systems.

On Tuesday, Martin yielded to pressure from Capitol Hill stoked by cable trade groups and agreed to relax that so-called dual carriage mandate, which posed channel capacity concerns for small cable systems with bandwidth constraints.

For cable operators with 552 MHz or less of bandwidth in their systems, Martin said at the annual legislative summit of the American Cable Association that he wanted the FCC to adopt new rules that would modify the  dual-carriage mandate, once broadcasters at the end of Feb. 17, 2009 begin transmitting only digital signals over the air. Martin proposed that:

* Systems that are all-analog now and in the future may provide must-carry signals to their customers in just analog format.

* Systems with digital tiers of programming may provide must-carry signals in analog if their digital set-top boxes tune in analog channels.

Dual carriage, Martin added, would still apply if digital boxes were incapable of tuning in analog signals. An example: Motorola's DCT-700 box.

Martin said that his legal basis for the change was an  FCC policy adopted in 2001 that banned cable operators from  unilaterally degrading high-definition must-carry signals to standard definition (SD) signals or analog format. He proposed an exemption to the 2001 order, allowing operators of systems with 552 Mhz of bandwidth or less to not carry high-definition signals of local broadcasters in high-definition.

Last fall, the FCC reaffirmed the 2001 policy in the same order that codified the dual carriage mandate, which exempted only the very few cable  systems that have gone all-digital.

Martin said, in a statement, that under his proposal, all systems with 552 MHz capacity or less would be free to "downconvert" must-carry signals from HD to SD and analog.

But Martin in his statement did not explain how creating a rule that permits small systems to degrade HD signals as they see fit  was the basis for deciding that small cable operators didn't have to  carry  must-carry signals in digital form at all.

Martin's proposal came in an "impromptu" appearance at the summit of the American Cable Association, a trade group of 1,100 cable operators serving 7.5 million subscribers that protested Martin’s original plan that required them to hire expensive Washington D.C. lawyers and seek individual waivers from the agency.

“I am always sensitive to capacity constraints faced by small cable operators,” he told attendees of the ACA summit in an unscheduled visit that was squeezed in to a late- morning panel session on retransmission-consent issues.

Martin said that operators of systems with 552 Mhz worth of bandwidth or less would be allowed to “downconvert” digital signals sent out by local broadcasters into analog form after the federally mandated date of Feb. 17, 2009.

That’s the last day in which broadcasters across the country can send out signals in the analog form that can be picked up by old-style TV sets. After that, all signals must be sent out in digits, a process that conserves over-the-air spectrum, but can leave owners of analog sets unable to view their local TV stations.

Currently, cable systems use 6 Mhz of bandwidth to send out a single channel of programming in analog form; and can send out seven or more digital channels in that same space. A single HD channel would take up the full 6 Mhz, potentially; and a requirement to carry a channel in both analog and high-definition digital form would take 12 Mhz.

In large cable systems with 750 Mhz or more of bandwidth, digital channels are typically carried above 552 Mhz. Larger systems must carry, by FCC mandate, both analog and digital signals for three years after the transition date.

ACA president Matt Polka said Martin’s proposal meant that small cable operators under the 552 Mhz ceiling would only have to provide an analog signal to all households in their market areas, after the digital TV transition date.

Polka said he was “very pleased” with Martin’s remarks and said they were “dead on” with the ACA’s position that small operators should not have to carry both analog and digital versions of a local broadcast TV signal, after the transition date. The proposal “frees up capacity” and “frees up cost” of smaller systems.

Martin did not say for how long small systems would be allowed to rely on the blanket exemption he now supports

The National Cable & Telecommunications Associations and ACA had lobbied to include any system with 5,000 or fewer subscribers but Martin refused, probably because large-capacity operators like Comcast Corp. and Time Warner Cable would have qualified in some cases.

An FCC spokeswoman said the blanket exemption would be permanent unless the cable system increased capacity above 552 MHz.

At the ACA forum, Martin broke things down this way for eligible small-cable systems relative to the must-carry of TV stations, which theoretically starts on Feb. 18, 2009.

*Analog-only systems: Operators of such systems could “downconvert” digital signals from their local TV broadcasters and send them out to subscribers in analog form;

*Analog and digital systems where digital viewers can view analog signals. Operators of such systems could “downconvert” and send the signal to all subscribers “exactly as you do today”;

*Analog and digital systems, where digital customers can’t view analog: Operators can “downconvert” to analog for analog customers while “also making the signal viewable to your digital subscribers”;

* No carriage of signals in high-definition; conversion to analog or standard-definition would be permissible;

* Hybrid analog-digital systems may provide just an analog signals if digital set-tops can display analog signals.

The one instance where dual carriage would still apply involves hybrid systems that had deployed digital set-tops, such as the Motorola DCT-700, that are incapable of tuning in analog signals.

Last fall, Martin refused to accept the concerns of small cable, claiming the FCC had done nothing that would impose additional regulatory burdens

“They are not going to be required to do anything additional, which is one of the reasons why I was skeptical of their concerns …,” Martin told a House subcommittee at the time

Without giving any ground, he added: “We will take a look at the waiver process. But I think we have to put it in context. The digital transition should not be an opportunity for cable operators to disenfranchise consumers from the broadcast stations they receive today.”

Martin addressed the ACA forum just hours before he was set to go before the Senate Commerce Committee. Last November, seven senators from that panel complained that Martin was imposing needless burdens on small cable.

“We can not find a compelling reason to force small cable operators to incur unnecessary financial hardship. With the majority of the cable industry on the same page, we request that you reconsider your position on this matter,” the lawmakers said in a Nov. 15 letter.

The letter was signed by two Democrats and five Republicans, including Sens. Jay Rockefeller (D-W.Va.), Byron Dorgan (D-N.D.), Trent Lott (R-Miss.), Olympia Snowe (R-Maine), Gordon Smith (R-Or.), Jim DeMint (R-S.C.), and John Thune (R-S.D.).

In February, six major cable TV programmers, including C-SPAN and Discovery Communications, sued the FCC in federal court over its dual must carry mandates, which exempted only the few cable systems that have all digital facilities.

Martin labeled his conversion remarks at ACA as examples of where the FCC and cable operators “stand on common ground.”

Other examples, he said, include:

*Programming bundles. The FCC wants to eliminate requirements that operators must contract to carry many programming networks from a given supplier, instead of just those they want. “If a cable operator only wants to carry one channel, he should not be required to buy 10 or 20,” he said;

*Forced distribution of networks on widely viewed tiers of programming. “I am increasingly concerned about the amount of money” that programmers want to charge operators and that operators have “to collect from consumers” in the form of per-subscriber fees each month.

This, he said, “is not just a retrans issue. It’s not just broadcasters” seeking such fees,” he said. “It’s sports and other”programmers as well.

His solutions?

Allow consumers “to express their choice” as to whether they want to pay that additional cost before it is “passed on to them.”

And allow operators means to allow that choice.

The “easiest way to do that,” he said, was to figure out when the fee went “over X amount” that the network gets moved to a less-distributed tier or marketed “on a standalone basis.”