Broadcasters like to say that the DTV transition has been all pain and no gain, with billions of dollars spent but not one penny in return.
Federal regulators have tried their best to accommodate the cost pressures on the nation's 1,730 stations every step of the way. In fact, when 65% of commercial stations flouted the May 2002 deadline to begin digital broadcasting, the Federal Communications Commission did some finger-wagging, but not much else.
They Get Their Way
In a crunch, broadcasters present an almost unstoppable force at the FCC, when it comes to imposing regulatory burdens on other industries.
In 2002, they persuaded the agency to require the installation of off-air digital tuners in nearly all new TV sets by mid-2007. Two weeks ago, the agency adopted the broadcast flag, a sweeping prohibition on the unauthorized retransmission of DTV programming over the Internet.
Broadcasters could be on the verge of their biggest DTV policy victory before the FCC since 1997, when they temporarily received valuable digital spectrum for free. The commission is expected to vote Dec. 17 on whether to change policy and impose a multicast mandate on cable operators once the transition is over.
Cable systems are today required to carry one programming service per station.
Under a proposal floated by broadcasters, the FCC would require cable to carry four, five or perhaps even six multiple services emanating from each DTV station in a market — an expansion of the must-carry regime that the cable industry would fight in court.
They Need Incentive
The National Association of Broadcasters wants cable carriage of all services that are simultaneously provided free to off-air consumers. TV stations claim they need cable carriage because the off-air audience is not large enough to sustain ad-supported multicasting.
"There is no incentive for broadcasters to create additional free programming if the gatekeeper cable operators are going to thwart its delivery," NAB spokesman Dennis Wharton said.
Cable is making its case at the FCC. Over the last two weeks, National Cable & Telecommunications Association president Robert Sachs and Landmark Communications Inc. president and COO Decker Anstrom, whose company owns the Weather Channel, called on FCC leaders to advocate no new must-carry benefits for broadcasters until after TV stations have surrendered their analog spectrum.
Cable is willing to carry one DTV signal per station once analog broadcasting has ceased.
Following Sachs's Nov. 10 meeting with FCC member Kathleen Abernathy, the NCTA filed a letter with the agency arguing a multicast mandate "would not only interfere with the ability of cable operators to provide the array of services that best meets the needs and demands of consumers but would also raise serious constitutional problems."
The cable industry is skeptical that a digital multicast mandate imposed by the FCC would survive court review, given that the analog must-carry concept imposed by Congress just squeaked by the Supreme Court in a 5-4 vote in March 1997.
The debate at the FCC is not simply about carriage issues. Before broadcasters benefit from any new regulatory entitlement, people inside and outside the FCC are asking a simple question: What would the public gain from a multicast mandate?
FCC member Michael Copps said that the agency needs to address the public-interest requirements of digital broadcasters at the same time it decides the critical carriage issues.
"This is the most important part of the transition and this commission needs to address it, and we are not doing an adequate job of addressing it," Copps told reporters two weeks ago.
The Media Access Project and the Center for Digital Democracy — public-interest advocates fighting corporate giveaways at the FCC — support Copps's position.
"Before the FCC decides on any new must-carry rules, it must first finish a proceeding on public-interest obligations for digital broadcasting," CDD executive director Jeff Chester said.
Entities with FCC broadcast licenses are required by law to serve the public interest, which typically means airing news and public-affairs programming serving the needs of their local communities. It also entails such things as three hours per week of children's educational programming, discounted commercial airtime for political candidates, and limitations on indecent programming.
Copps, a Democrat, noted that the Clinton Administration created a commission — called the Gore Commission, after Vice President Al Gore — to form recommendations on whether TV station owners ought to shoulder additional public-interest obligations if multicasting became a reality.
"We had the transition of government and the issue kind dropped out of sight," Copps said, referring to the 2000 presidential election.
In December 1998, the Gore Commission supported digital must-carry imposition while recognizing that immediate carriage of analog and digital broadcast signals would impose costly burdens on cable.
The panel also advocated a two-year moratorium on additional public-interest obligations on DTV stations that engage in multicasting. The FCC opened a rulemaking on the issue in 1999 but rules were not adopted.
Copps suggested that if the FCC fails to take action, broadcasters could use multicasting to dilute the effectiveness of current obligations.