Kennard Wants Data on Channel Crunch

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Las Vegas-Federal Communications Commission chairman William Kennard last week opened a new front in the digital must-carry debate, saying that he wants to learn about cable's capacity to carry digital-television signals before the commission acts.

Kennard, in comments following a speech to the National Association of Broadcasters convention, said he was in no hurry to force cable to carry DTV signals until he knows whether it can handle the load.

"We are not going to rush to judgment on the must-carry issue," he declared.

Kennard's message didn't sit well with NAB leaders, who are pressing the FCC to force cable operators to carry stations'analog and digital signals during the transition, scheduled to conclude in 2006 with the return of the analog spectrum.

Were the FCC to postpone digital must-carry, NAB president Edward O. Fritts said, Washington policymakers can expect a "train wreck." Stations would refuse to upgrade to digital unless they are assured that they can reach two-thirds of their viewers over cable, Fritts predicted.

Fielding a question from a packed auditorium, Kennard indicated that the FCC had to be concerned about the impact of mandatory carriage of both analog and digital signals on cable's overall channel capacity. Current law requires cable operators to set aside up to one-third of their channels for analog signals.

"One of the key issues in my mind, for example, is what is the channel-capacity of these cable systems, particularly the ones in the process of upgrading," Kennard said. "That's an important question that we need to know before we start mandating that cable systems carry even more broadcast signals than they already have to carry."

Kennard declined to take questions from the media. But Tom Power, his senior legal adviser for cable and mass media, confirmed that the FCC is considering seeking further comment on the cable channel-capacity question.

"We are looking at it," Power said.

Earlier in the week, Power told an American Bar Association conference here that he expects the commission to decide the must-carry issue in the spring or summer. It was not clear whether an FCC decision to seek additional comment on cable capacity would alter that timetable.

In the past, FCC officials including Power have predicted when the commission would act on digital must-carry rules, only to see those dates slip by due to the agency's preference for marketplace solutions.

"I was wrong. I didn't predict right," said FCC commissioner Susan Ness, who had expected the release of digital must-carry rules last year.

Kennard said the FCC is not only concerned about the legal ramifications of forcing digital must-carry on channel-locked cable operators, but also about the wisdom of stepping in at a time when broadcasters' digital business plans seemed to be in a state of flux.

Dozens of TV stations have recently signed deals that dedicate a portion of their bandwidth to experimental data services.

"My frustration with this particular issue is that it seems to me too simple an answer for broadcasters to come to government, the FCC, and expect that we would mandate dual must-carry.before you know or I know or any of the affected industries know exactly how this transition is going to work out," Kennard said.

After Kennard's remarks, Fritts told reporters he was troubled that the FCC would reopen the record for additional comments. But he expects the agency to do just that.

"I can give him the data right now," Fritts said. "All he's got to do is ask for it. We've got it. The world has it. This is not a big deal."

The idea that cable lacks the channel space to carry both analog and digital signals during the transition is a "myth," Fritts said.

"The cable industry advanced that item the last time around and lo and behold, there is no problem. Nobody lost C-SPAN. Nobody lost anything. Everybody gained by doing that," he said.

The cable industry says the law requires carriage of either the analog or digital signal, but not both. Dual carriage, the cable industry says, would also amount to a taking of private property without just compensation, in violation of the Fifth Amendment. Cable operators also have First Amendment concerns.

National Cable Television Association president Robert Sachs touched on this issue in a speech last week to the Cable Television Public Affairs Association's Forum 2000 in San Antonio, Texas.

"In the digital must-carry context, broadcasters are asking the FCC to increase the regulatory burdens on the cable industry by mandating carriage of not just the original broadcast channel, but also a digital duplicate of every channel," Sachs said.

Power said the FCC is trying to cope with a requirement that cable operators carry a TV station's "primary video signal" and determining whether both analog and digital feeds are primary.

"Usually there's only one," he said. "But there are arguments on the other side, and I understand that."

The FCC launched the digital must-carry rulemaking in 1998, one year after the Supreme Court ruled 5-4 that Congress could require cable to fill as much as one-third of a system's channel capacity with all local TV stations without unconstitutionally intruding on operators' First Amendment rights.

In a proposed rulemaking, the FCC sought comment on various proposals that ranged from immediate carriage to a phase-in approach based on the channel capacity of the cable operator.

In addition to legal obstacles to ordering digital must-carry, Power has said that the FCC was concerned that cable systems might have to raise rates when adding digital-broadcast signals. Kennard has repeatedly complained that cable rates are already too high.

The FCC would like to see cable carriage of digital TV stations occur through private negotiations, with broadcasters seeding the airwaves with digital product that consumers want-and cable carries-and with TV set makers building the receivers.

"That's the ideal and I guess that would keep us out of the regulatory approach to it," Power said. "I guess that's what we are hoping to see somewhat."

The FCC's preference for letting the industries solve their own problems also extends to compatibility issues between cable and digital-TV set makers, Power said. Broadcasters have complained that consumers will not buy digital TV unless they are certain that they can view cable programming.

The NCTA and the Consumer Electronics Association recently reached agreement on a range of compatibility issues. But the CEA declined to commit its members to installing the IEEE-1394 interface on all digital TV sets, citing the added cost to low-end sets.

The CEA's decision sparked a new round of talks to determine how to label TV sets without the interface, but so far no agreement has been reached.

Kennard last week began a rulemaking on the labeling issue and on the licensing terms of technology to protect digital content from illegal copying.

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