Cablers, Broadcasters Clash on Must-Carry at Hearing

A House hearing on far-reaching proposed digital TV legislation highlighted disagreements among sectors of the television industry and possible unintended consequences of a draft bill. Although many television players agreed on broad policy goals, cable interests and broadcasters showed that they're still far apart on how much DTV signal the government should require cable operators to carry.

House Commerce Committee Chairman Rep. Billy Tauzin (R-La.) warned that 10 years hence, the longstanding policy for a digital transition would be complete. The question was whether industries would figure out the needed compromises or have conditions legislated upon them.

And the stakes may be high, not just for the television players and viewers, but for the lawmakers themselves. Rep. Eliot Engel (D-N.Y.) warned other members of the House Subcommittee on Telecommunications and the Internet that the end of analog broadcasting in 2007, as proposed in the draft bill, could also be the end of many Congressional careers. Looking at the spectrum from another viewpoint, Thera Bradshaw, president of the Association of Public-Safety Communications Officials International, said emergency workers' need for the bandwidth was a matter of life and death, not just television.

But the most heated debate focused on the long-fought issue of mandatory cable carriage; the draft proposal specifically forbids the "dual-must-carry" of digital and analog signals that broadcasters have long claimed is essential for the digital transition to succeed.

Michael Willner, CEO of cable operator Insight Communications, repeated an oft-cited figure that cablers have invested $70 billion in their digital upgrades. Broadcasters received the valuable use of their extra digital channel and have invested but $5 billion in their digital plants, he said.

"Unfortunately, rather than invest in high-value digital content that will both attract viewers and give cable operators a market incentive to carry them, some broadcasters are asking Congress for yet another handout," he told the panel.

Crown Media United States President and CEO Lana Corbi, whose Hallmark Channel launched in August 2001, said that dual-must-carry gives broadcasters an unfair advantage against fledgling cable networks struggling for exposure.

"But we are not looking for any government handouts," she said. "When it comes to convincing cable operators to carry our new services, we are willing to make our case at the bargaining table based on the merits of what we are offering and consumer demand. Broadcasters should be willing to do the same."

Speaking for NAB, Dispatch Broadcast Group CEO Michael J. Fiorile cited a Congressional Budget Office report that cable carriage is central to the transition; and the swifter the transition, he said, the more quickly the government can reclaim the spectrum. "Unfortunately, the staff draft not only fails to take this important step; it prohibits it from being taken in the future," he said. Cable carriage, he said, would give broadcasters more incentive for local news, weather or educational offerings that benefit the public.

"All of the 'digital bits' of information we supply to our communities for free should be carried on cable without degradation. Cable should not be allowed to invade these bitstreams for anticompetitive purposes. These free bits must flow," he said.

Fiorile, who also chairs NAB's Television Committee, joined Gene Kimmelman, Consumers Union senior director of public policy and advocacy in warning against a mandatory shutoff of analog TV in 2007, which they said would render useless 300 million TVs.

Kimmelman went further in his attack on the bill, noting it calls for all new hardware (ending analog outputs on most equipment, for example) while "threading the needle" on a copyright-protection scheme that will somehow protect consumers' "fair use" while preventing illegal reproduction. And the draft bill, he said, turns DTV policy on its head, rewarding broadcasters with the spectrum rights while placing the costs on consumers, all before DTV has proven itself in the marketplace.

"Show us the equipment," he said, urging the panel to go "back to the drawing board" on the legislation.

"Consumers will not thank Congress for digital television if it also means they have Congress to thank for higher prices and inconvenience when they buy new TVs and new computers, or integrate their home entertainment systems," he said. "Requiring consumers to purchase additional TV sets or additional digital tuner hardware may have the benefit of allowing economies of scale to bring down the price of electronics in the long run, but it is undeniable that this mandate will impose significant new costs on consumers in the short run."

The draft bill also calls for plug-and-play cable compatibility for TVs and nondegradation of network signals by affiliates. It does not specifically call for any broadcasters to provide HDTV (unless their networks do), nor does it specify cable carriage requirements for digital multicasting.

But Tauzin, a veteran of the DTV odyssey, gave clues that the provisions of the draft bill will undergo major changes before the legislation is actually introduced - if it's ever introduced. Noting that neither a lengthy extension of the analog shutoff deadline or the abrupt 2007 cutoff was likely to be unacceptable, he urged the industries to find a "middle way."

"Progress has been made but these private, inter-industry negotiations seem to have come to their end point and time for a DTV transition is running out. Time is not on our side," he said. "Right now this transition is on a collision course with consumers and we must act now to turn things around."