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Cable Association Says HD exemption warranted for “must carry” mandate

The American Cable Association (ACA) asked the FCC to retain an exemption in the “must carry” rules that will allow eligible small cable operators to distribute analog TV signals received at their headend facilities in a digital high-definition format.

“The record makes plain that in order to avoid harm to small cable systems and consumers, the FCC must extend the HD carriage exemption, and it also demonstrates that the FCC should permanently exempt analog-only systems from the HD must-carry mandate,“ said Matthew M. Polka, ACA President and CEO.

The ACA stated its views in reply comments recently filed with the FCC. The group said evidence in the record suggests that the total number of systems utilizing the HD carriage exemption decreased since 2008, but the need for the exemption among small cable systems still relying on it has increased.

The ACA stressed that the evidence in the record, which includes an ACA Member survey. It supported the FCC’s tentative conclusion that extending the exemption would avoid imposing a significant economic burden on small cable systems and serve the public interest.

In 2008, the FCC adopted the HD exemption ahead of broadcasters’ 2009 transition to digital-only transmission mandated by Congress. Under the FCC exemption, cable systems with less than 553 MHz of capacity or cable systems with fewer than 2,501 subscribers (not including systems affiliated with large cable operators) would be allowed to provide HD signals of must carry TV stations in analog or digital standard definition (SD). The HD exemption applies to TV stations that invoke their right to uncompensated cable carriage—thus ”must carry.”

The ACA also urged rejection of a recommendation from the NAB that the FCC should withhold the HD exemption from small systems transmitting one or more signals in HD. NAB, the ACS said, failed to show that small cable systems that currently utilize the HD carriage exemption but carry HD programming would not be significantly burdened by carrying the HD must-carry signals of broadcasters, or that they would be any less significantly burdened than systems that offer no HD programming.

At a minimum, 52 ACA operator members representing 385 systems across the country are still relying on the HD carriage exemption. Many cable operators with less than 553 MHz that are utilizing the HD carriage exemption are channel locked.

If forced to distribute must carry signals in HD, these operators would be required to move other channels—including ones more desired than the must-carry channels—to less subscribed digital-only tiers that require customers to lease, purchase, or already own equipment capable of receiving digital signals.

For systems with fewer than 2,501 subscribers that currently rely on the exemption, the financial situation has not improved, and in many cases has become worse over the past three years, ACA said. Costs for these systems keep rising precipitously, especially for programming, shrinking net income related to video.