In the waning days of his contract as chief of the cable lobby, Robert Sachs is not drifting quietly into retirement. The outgoing president and CEO of the National Cable and Telecommunications Association launched a media offensive this week with a blast at must-carry and a swipe at telcos. He will follow up his year-end media briefing Monday, Dec. 20.
A DTV downconversion proposal by the broadcast lobbies inspired Sachs to fire yet another volley at must-carry. The proposal, submitted in an ex parte filing with the FCC in late October, would require cable operators to transmit complete digital broadcast signals from the headend and downconvert them in homes with analog sets. The proposal parted ways with an FCC-crafted plan espousing downconversion at headends. Having plunked down millions for HD facilities, broadcasters failed to embrace the concept of allowing cable operators to control their end-product. However, just to be nice, the broadcast proposal included an option to allow cable operators to downconvert at headends as long as they also carried the full, unconverted DTV signal as well.
Sachs, who, in addition to his Georgetown law degree, possesses a master's degree in journalism from Columbia University, had the sense to put dollar figures in his argument against the scheme. Said argument was summarily dispatched to FCC commissioners and distributed via the NCTA's press release queue.
"In 2006, there will be an estimated 141 million analog television sets hooked up to cable that would require a box under this plan," Sachs wrote. "With cost estimates ranging from $50 to $200, the price tag in 2006 for converter boxes alone could range from more than $7 billion to more than $28 billion industrywide."
That Sachs responded to the broadcast proposal nearly two months after it was filed is further evidence that he earned his salary. He waited until the FCC was widely anticipated to issue some sort of ruling on DTV particulars to unleash such key phrases as:
"This multibillion dollar tax on cable customers is wholly unnecessary."
With those 10 words, Sachs gave regulators a glimpse at the cable strategy should the home-downconversion model be adopted. Nothing draws the attention of the consumer press and the ire of its readers like the word "tax."
"There is simply no need to force cable customers to spend billions of dollars on converter devices designed to enable them to view the same thing they receive today on the same television set," Sachs wrote.
A few days later, in an address at the Washington Metropolitan Cable Club, Sachs accused telecom giant SBC of "redlining," or marketing its new Project LightSpeed video service to wealthier households.
"SBC's business plan is based upon the company targeting what it calls 'high-value' and medium-value' customers; those who the company believes have the ability to pay at least $110 a month for its services," Sachs said.
Cable operators are enjoined from this type of "cherry-picking" by local franchise authorities, and telcos ought to be subject to the same rules, Sachs said. He warned his constituents to be "vigilant" about telcos getting into television, because even though the business is littered with spectacular failures, the phone companies are getting serious this time and sinking billions into fiber.
Sachs also used the cable club podium to implore lawmakers intent on reforming the 1996 Telecom Act to tread lightly. The cable rate deregs in the '96 Act opened up the floodgates of investment capitol, and in turn led to a bevy of new cable services, Sachs said.
"Re-opening all titles of the Communications Act could create a lengthy period of regulator uncertainty, and chill new investment," he said.
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