06.08.2004 12:00 AM
Hearing Considers FCC Plans for 2009 Analog Shutdown
Based on testimony at the House Subcommittee on Telecommunications and the Internet hearing last week to examine the FCC Media Bureau proposal for advancing the DTV transition and the shutdown of analog TV broadcasting, there is a very good chance that five years from now if you turn on an analog TV set connected to an antenna you will see nothing but noise. There is also a good chance that if your analog TV set is hooked up to cable TV without a digital set-top box, some broadcast stations' channels may not be available, even though you will probably be able to pick up many other cable channels.

In his testimony to the Subcommittee, FCC Media Bureau Chief Kenneth Ferree outlined the Media Bureau's proposal. Under the proposal, on or before Jan. 1, 2009 broadcasters' must-carry rights on satellite and cable would switch from their analog to their digital signal. Cable operators would then have to make this signal available to all subscribers by one of two methods. They could downconvert a single digital broadcast stream from digital to analog at the cable headend so that all cable subscribers, including those without digital TVs or set-top boxes, would continue to see the broadcast signal. Alternatively, if the cable system has been converted to "all digital" transmission, they could pass through the digital signal to subscribers' homes where all subscribers would have the capability of receiving the signal either on a digital TV set or with a set-top box that converted it for viewing on an analog TV set.

Satellite operators would be required to carry one stream from each broadcaster in the market, downconverting it from HDTV to standard definition if necessary or they could pass through the broadcasters' digital signals to subscribers if all subscribers had the ability to receive and display the broadcasters' programming. Broadcasters would be allowed to negotiate with the cable operators for passthrough of HDTV, multicasting or other "high-value" digital programming. However, once a broadcaster is transmitting in digital only, they may notify the cable company that they want to have the signal passed through to subscribers' homes rather than being downconverted. The cable operator would be required to notify subscribers that if they want to continue to receive the broadcaster's signal, they would have to obtain the "necessary equipment from the cable operator or at retail." Cable operators would not be required to provide the equipment for viewing digital programming.

Ferree testified that under this plan, the statutory 85 percent threshold for ending the transition could be met nationwide on Jan. 1, 2009 by counting all cable households and all satellite households in local-into-local markets that receive the local broadcast package in addition to counting the households that purchased a new TV set covered under the FCC's DTV tuner mandate and all households that purchased a "plug and play" DTV set. When will analog TV be shut down? According to Ferree's testimony, "As soon as possible after January 1, 2009, the FCC will make the appropriate findings that the 85 percent threshold is met in the relevant markets and reclaim the analog broadcast spectrum. There may be anomalous markets in which the 85 percent threshold is not met immediately, but it is expected that the proposal effectively will result in a nationwide transition on January 1, 2009."

The FCC Media Bureau Chief suggested that, "If true digital must-carry meant that broadcasters were entitled to carriage of all free broadcast streams, including free broadcast HDTV and/or "multicast" programming, it would give broadcasters additional incentive to return their analog licenses in a timely manner. From a policy perspective and in the context of this proposal, the Media Bureau would recommend that as part of this Bureau proposal, true digital carriage would mean carriage of all free content bits, including carriage of all multicast programming. This proposal combines moving more quickly and certainly to the end of the transition, which both hastens the broadcasters' spectrum return and provides them opportunities to offer more programming to viewers."

While recognizing cable operators' claim that carrying multiple broadcast streams would be a burden, Ferree said, "we believe the net result will be less cable capacity required to be devoted to broadcasters' programming as the transition moves more rapidly to all digital cable systems. The digital carriage obligations for satellite operators will be determined in a proceeding at the FCC examining alleged capacity constraints and potential technological solutions."

NAB President/CEO Eddie Fritts cautioned about numerous problems with the FCC Media Bureau plan in his testimony. He noted that if broadcasters chose the "digital pass through" option after analog broadcasting is shut down, in addition to the 15 percent of viewers without the ability to receive DTV broadcasts allowed under Congress' transition threshold "millions of more cable and satellite homes without DTV receivers or converters will lose local broadcast service unless their cable or satellite provider voluntarily provides either a converter or agrees to carry a down-converted signal in addition to the digital signal. These homes will lose access to local news, local political broadcasts, local emergency announcements, publicity for local charities and community groups and all the other services local stations provide."

If broadcasters do not choose the "digital pass through" option, then cable homes with digital sets would not be assured of access to HDTV or multicast services offered by the stations. NAB noted this proposal would "discourage the demand for digital sets and for new digital features" as consumers with analog sets would have little incentive to buy new sets if they would only receive analog versions of DTV signals.

Fritts pointed out another problem with the Media Bureau plan: "No television service of any kind for analog over-the-air households, including many rural and poor viewers: Over-the-air viewers with digital sets would continue to receive service after 2009, but over-the-air viewers with analog sets, unless they purchased set-top boxes, would lose service. Many rural viewers and the poor would be disenfranchised, and broadcasting would lose its proud achievement of providing universal service." See Fritts' testimony for additional concerns about the plan.

At least one person testifying didn't seem to care about the fate of free over-the-air television. Mr. Thomas Lenard, Senior Fellow and Vice President for Research of the Progress and Freedom Foundation testified "In this Internet age, it is not too early to start thinking about freeing up all of the spectrum allocated to broadcast, because it may not be long before virtually all Americans will get their TV from another source. When that day comes, as Chairman Powell has said, 'what are we protecting?'" Powell's comment that "all Americans--perhaps in 10 years--will have pay-TV" was attributed to an Oct. 23, 2001 article "FCC's Powell Sees Big Change in Broadcast Environment" in Communications Daily. Read Lenard's testimony to see why his group feels there is value in reclaiming the entire 402 MHz allocated to broadcast TV and auctioning it off for other, higher-valued uses.

Gary Shapiro, President and CEO of the Consumer Electronics Association, generally supported the Media Bureau's plan, but like NAB felt that some modifications are needed to "ensure that it achieves both of the equally vital goals of recovering broadcast spectrum and completing the digital transition for the benefit of all consumers." Shapiro's testimony recommended that cable and DBS operators should be required to transmit broadcasters' signals digitally instead of downconverting them at the head-end by January 2009.

Shapiro stated, "By 2009, cable operators will have had ample time to deploy digital-to-analog converters to customers with analog sets. Cable digital-to analog converters should be available in large volumes at low cost by that date. Most major cable systems will be almost completely digital by this time, given that more than 30 percent of cable customers are already subscribed to digital cable. In addition to carrying all DTV broadcast content digitally, cable operators, of course, may also choose to transmit the downconverted version of the signal as well. It is important that the FCC ensure all parties rely on the 'Plug and Play' standards for digital TV sets."

Gary Shapiro recommended the FCC not allow cable operators to reduce the sound or picture quality. He echoed the Media Bureau and NAB recommendations that cable companies be required to carry "all free bits," including multicast programming. Broadcasters, however, were criticized for not delivering a full power DTV signal, noting, "Only 477 of the 1362 commercial broadcast stations are actually delivering a full power DTV signal." Shapiro said, "the FCC should require all broadcasters to be on their permanent digital channels and digitally transmit at their full authorized power by January 1, 2006." In addressing the consumers with analog only TV sets that would lose TV when analog TV broadcasting was shut down, he applauded the FCC's recent announcement (see last week's RF Report) that it would study how many viewers would be affected by this and provide guidance to Congress on how to help them, perhaps through subsidies or tax credits.

Robert Sachs, President and CEO of the National Cable and Telecom Association testified on behalf of his organization. Sach's testimony touted the efforts the cable industry has made to promote DTV and HDTV and generally supported the Media Bureau plan. There was disagreement, however, on some points. Sachs took issue with the broadcaster, not the cable company, determining "when and whether a cable operator can down-convert its digital signal to analog at the head-end." He felt it makes more sense to allow the cable operator to make this decision, noting, "Giving broadcasters control would limit cable operators' ability to serve cable customers in the least disruptive manner or effectively impose a dual must carry regime on cable operators." He also argued against expanding must-carry rights to include more than one program stream.

The debate on the details of the transition will continue, but the debate is no longer about whether analog TV broadcasting should be shut down in 2009, but the best way to do it with the least disruption to TV viewers. The U.S. Senate Committee on Commerce, Science and Transportation will hold a hearing on Completing the Digital Television Transition this Wednesday, June 9, starting at 9:30 a.m., EDT and will be Webcast live. To keep up with future House hearings, refer to the Subcommittee on Telecommunications the Internet web site.


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