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2009: An FCC Media Bureau Odyssey

Ken Ferree endeared himself to sound-bite hungry reporters this week when he said broadcasters would rather "eat their young" than give back their analog spectrum.

Ferree, chief of the FCC Media Bureau, let fly his pique of facetiousness during a press conference outlining a plan to get the spectrum returned by Jan. 1, 2009.

The Ferree plan endorses an either/or must-carry model, in which a broadcaster would choose, by October 2008, to have his or her digital signal carried on either the analog or digital cable tier. Ferree reasoned that if a broadcaster selected carriage on the digital tier, it would be in the cable operator's best interest to also down-convert that signal for analog subscribers accustomed to receiving those channels, (something cable operators do now, in some instances). Therefore, he reasoned, by virtue of market forces, broadcast signals would conceivably reach every home hooked up to cable.

The cable households receiving digital broadcast signals would be counted in the formula that triggers the return of analog television licenses, i.e., when 85 percent of the TV households in a given market can receive digital broadcast signals. (The DTV statute actually refers to "15 percent or more" of TV households that cannot receive a digital signal, meaning the coverage threshold must exceed 85 percent, however slightly. Such is the syntax upon which attorneys are fed.)

Ferree said the arrangement amounted to "marketplace dual must-carry" as opposed to the government-mandated type. Cable operators have remained close to the vest about Ferree's proposal, which was first leaked in mid-March. At a press briefing today, NCTA President Robert Sachs praised the FCC and the Media Bureau for at least looking at ways to get to the end of the digital transition. Beyond that, a spokesman said the cable lobby is seeking the input of member companies regarding the plan.

Meanwhile, the broadcast lobby said the plan would seriously hinder the transition to digital and high-definition television.

The statute, codified in the Balanced Budget Act of seven years or $500 million ago, decrees a deadline of Jan. 1, 2006 for the return of analog spectrum. Given that less than 2 percent of U.S. TV households have acquired over-the-air DTV reception devices since their introduction six years ago, reaching 85 percent DTV saturation by '06 would be a stretch for the most imaginative prognosticators.

Minus the 2009 deadline and the assumption that cable operators everywhere will down-convert broadcast signals for their analog customers, Ferree's proposal is the DTV statute, which states:

"A television broadcast license that authorizes analog television service may not be renewed to authorize such service for a period that extends beyond Dec. 31, 2006, [except when]:

15 percent or more of the television households in such market do not subscribe to a multichannel video programming distributor that carries one of the digital television service programming channels of each of the television stations broadcasting such a channel in such market; and do not have either at least one television receiver capable of receiving the digital television service signals of the television stations licensed in such market; or at least one television receiver of analog television service signals equipped with digital-to-analog converter technology capable of receiving the digital television service signals of the television stations licensed in such market."

Ferree, apparently accustomed to giving technically advanced presentations, illustrated his proposal with a stick-figure drawing on a dry-erase board. Dotted lines representing broadcast signals were shown leaving a pair of hastily erected towers and entering a cable head-end box and exiting into multiple analog and digital stick houses, presumably inhabited by stick figures. While Ferree waxed ardently on how the plan could actually complete the digital transition in our lifetimes, reporters focused instead on what it meant to the stick figures, in terms of dollars.

Currently, digital cable tiers are more expensive than analog tiers, and getting HD reception often incurs an additional charge. It's feasible that cable operators could simply switch analog tiers to digital without changing content, but the expense incurred for switching out set-tops would have to be made up somewhere.

There also remains the question of what to do with the 16 million or so households that rely soley on over-the-air television.

"I'm not going to pretend it's not an issue with these people," Ferree said, "but that's the way the statue works. We can deal with it now, or we can deal with it in 2050."

Ferree said it was possible the Commission would recommend subsidizing digital receivers for analog-only over-the-air households, although it would ultimately fall to Congress to do so. Based on the assumption that receiver technology prices would come down over time, Ferree estimated that such a subsidy would cost in the range of $1 billion to $2 billion -- a sum easily recouped from spectrum auctions. However, the assumption about receiver technology does not take into account how market forces will affect is development.

Nat Ostroff, outspoken vice president of new technology for Sinclair Broadcast Group, bemoaned the fact that the FCC has refused to define operational standards for over-the-air reception. Sinclair filed a petition in the plug-and-play proceeding, beseeching the FCC to add reception standards. The agency has instead deferred the issue to the Advanced Television Systems Committee, which is finalizing a set of recommended "best practices" for set makers. However, Ostroff noted, there is nothing to compel set makers to use the best available reception technology when they are catering primarily to a cable and DBS customer base.

"If the commission wants to go forward with this kind of plan, they must address the receiver standards issue so the public has the option to receive an over-the-air HDTV signal," Ostroff said.

Also absent from the Ferree plan is the question of multicast carriage, something Ferree said he was not ready to address. The DTV statute, he said, addresses only "programming."

At press time, broadcasters had not confirmed any particular culinary designs on their offspring, although one did cryptically indicate he had to end an interview and pick up his "dinner."