Key FCC Decisions Ahead

Encouraged by the Federal Communications Commission's mandate that nearly all the televisions of the future will include digital receivers, broadcasters are finding new hope in battles they've been fighting for years.
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Cable, broadcasters crank up the lobbying

WASHINGTON

Encouraged by the Federal Communications Commission's mandate that nearly all the televisions of the future will include digital receivers, broadcasters are finding new hope in battles they've been fighting for years.

Prognosticators are heeding FCC Chairman Michael Powell's not-so-subtle warning to the cable industry: The commission, under pressure from Congress and broadcasters to bring DTV viewership beyond its nearly nonextistent status, is reconsidering past decisions. Broadcasters could find their old arguments rising from the dead.

So the cable industry and the NAB have renewed their lobbying over whether cable should be forced to carry both analog and digital versions of local channels. They're debating whether the "primary signal" cablers must carry means one channel (as the cable industry claims) or the multiple channels broadcasters can squeeze into their digital signals (as broadcasters claim).

Parties to the debates don't know how soon the FCC will act, or what orders it may issue. But all indications are that the decisions may come before year's end. In a letter Aug. 9 to Rep. Ed Markey (D-Mass.), Powell said he'll present a report and order on some of those issues "in the near future."

"Powell seems to be on the warpath," said Gary Arlen, a telecommuncations analyst in Bethesda, Md. "He might as well keep the momentum going."

NAB and cable representatives, each hoping that momentum goes their way, spent much of August visiting commissioners and staffs.

Cable channel Bloomberg Television complained that it is hurt by even today's analog carriage requirement. The financial news channel claims it's been unable to get on cable in major markets because of large numbers of must-carry local stations. Doubling the carriage obligation to include broadcasters' analog and digital channels would make the situation worse, as well as give broadcasters an unfair advantage by mandating carriage of the multiple programs that DTV enables.

Indeed, the commissioners themselves had often expressed the view that expanding must-carry requirements would bump into tough constitutional questions. But the NAB is unfazed, maintaining that such statements and a previous decision made by the former commission, led by then-Chairman William Kennard, reflected only a "tentative" view of the issue.

"We think with a fresh look, perhaps there might be a fresh perspective on the issue," said NAB spokesman Dennis Wharton.

And NAB, elated by the tuner mandate, figures that the stars are finally right for the FCC to nail cable with increased obligations.

"So far there have been empty promises from the CEA [Consumer Electronics Association] and the cable industry of virtually every DTV issue," Wharton said. "Just because the FCC acted on one item, it's not going to complete the puzzle."

But even if the FCC rules in broadcasters' favor on must-carry, the cable industry could tie things up in court for years.

"The issue of must-carry will find a way into the battle for decades, for generations to come," Arlen said. "It's obviously the type of thing that will get the cable guys riled up real fast."

The cable industry is fighting another old battle with the consumer-electronics industry over standards for plug-and-play compatibility, which the TV makers, incensed at the new DTV tuner mandate, say is a needed piece of the DTV puzzle. Also up for action is a copy-protection, a debate full of technical and policy minefields.

That conundrum may be no closer to a solution than before the FCC initiated its rulemaking procedure Aug. 8, and so-called "fair-use" advocates, who fear tough restrictions on TV content, argue that pirates will find ways around any scheme. But broadcasters and cablers agree that without a viable way to prevent rampant copying, the sought-after digital content will remain elusive.

It's not clear how a policy body like the FCC will tackle that technical question. But interested parties have until Oct. 30 to offer initial suggestions.

A key to the future scheme could be the "broadcast flag," a watermark of sorts that would let equipment know the restrictions on a digital broadcast. And although the interested industries have been hashing it out for years, questions remain.

NCTA spokesman Rob Stoddard said his industry has a philosophical commitment to copy protection, but he added that the details remain complicated. He said NCTA would let the FCC know its views, but he declined to say specifically what the industry group would recommend.

The FCC indicated it may act soon on "plug-and-play," or the ability for televisions to be compatible with all cable systems. CEA and NAB blame the cable industry and its CableLabs consortium for restricting cable-compatibility to a few entrenched players, namely Scientific-Atlanta and Motorola. NCTA countered to the FCC that a market-based solution is preferable to the Congressional mandate now in place to end the current scheme of integrated set-top boxes in favor of universally portable sets or set-top boxes with separate security POD (point-of-deployment) modules.

None of the industry players are ready to speculate on if or when the commission will try to break the DTV deadlocks, but observers agree the FCC seems unlikely to ignore the pressure from Congress and the industries.

"Absent some bully-pulpit actions by the FCC, we could be sitting here in 2015 talking about the xDTV transition," Wharton said.