Policy

Stevens Bristles at DTV Uncertainty

7/15/2005 8:00 PM Eastern

Washington— Senate Commerce Committee chairman Ted Stevens (R-Alaska) is unhappy with cable’s approach to the digital-TV transition.

At a hearing last Tuesday, Stevens fired several pointed questions at National Cable & Telecommunications Association president Kyle McSlarrow regarding cable’s wish to take DTV signals and convert them to analog for an indefinite period.

“I am not comfortable with the answers I got this morning,” said Stevens, who is drafting legislation that would force all TV stations in the United States to surrender their analog licenses in 2009. The precise date, hour and minute are still to be determined.

“We do expect to have a hard date in 2009. We haven’t agreed on it yet, but we will,” Stevens said.

Some want to end the DTV transition on Dec. 31, 2008 — when Congress is adjourned. But Stevens has other ideas.

“I favor a date when Congress is in session, because I think there’s liable to be a last-minute glitch that would require some type of modification to make this transition really work,” he said.

After analog signals go dark, cable operators expect about 50% of their subscribers to receive digital signals. To minimize consumer disruption, cable operators want authority, at least with respect to must-carry stations, to downconvert digital signals to analog at the headend.

“In terms of our proposal, the transition is seamless,” McSlarrow said.

If cable can’t downconvert, digital signals can’t be seen on analog TVs without a set-top box, a solution that is going to cost someone — either cable subscribers or the federal government — billions of dollars.

CABLE’S OFFER TO PAY

By contrast, the NCTA’s proposal will be funded by cable, and installing such equipment in headends would cost tens of millions of dollars, rather than billions, McSlarrow said. The decision on when to stop downconverting should be up to the cable companies, he added.

After the hearing, Stevens told reporters he would try to negotiate a compromise with cable in an effort to ensure that broadcasters’ digital signals stop at the home, not the cable headend.

“I do believe that we have to keep in mind that if we mandate conversion to digital, it doesn’t make sense to say, 'OK, but if you’re on a cable system, we’re going to downgrade it to analog as long as we want to do so,’ ” Stevens said.

The NCTA’s plan would not reduce the amount of digital programming cable now supplies, McSlarrow explained, because some TV stations would continue to be carried in analog and digital after the transition.

“It means that many stations — including public television stations, network affiliates and other stations that have negotiated agreements with the cable industry — would be carried in digital, just as they are today,” he said.

Patrick Knorr, general manage of Sunflower Broadband, a small cable company in Lawrence, Kan., said he didn’t have the channel capacity to provide local TV signals in both analog and digital.

“Cable operators need the flexibility to downconvert a digital signal without the burden of mandated dual carriage,” Knorr told the Senate panel. Knorr is also vice chairman of the small-operator American Cable Association.

The big news from the hearing came when National Association of Broadcasters president Edward Fritts revealed that organization would consent to a 2009 analog cutoff, even if millions of homes lack digital-reception equipment.

“Broadcasters accept that Congress will implement a 2009 hard date for the end of the analog broadcasts, and we’re ready,” Fritts told the Senate panel.

Fritts said the NAB board adopted that position a few weeks ago.

“I think that’s a welcome thing. We expected that,” Stevens said.

On prior occasions, the NAB had voiced general support for a hard date, especially one that took into account the needs of consumers who own 73 million analog sets, which will go dark after the deadline without set-top boxes or cable or satellite connections.

Now, the NAB is apparently going to leave it up to Congress to figure out how to keep those analog sets running. At a minimum, Congress is expected to subsidize boxes for millions of low-income viewers.

Many in Congress hope to fund set-tops with proceeds from the auction of analog-TV spectrum, which could bring in as much as $30 billion for the U.S. Treasury. Some of that spectrum will be given to police, fire and other emergency teams around the country, as recommended by the panel that investigated the Sept. 11 terrorist attacks on the U.S.

“If it costs money, it’s going to come out of the sale of that analog that is not needed for the first responders and law enforcement,” said Stevens. He declined to commit to a specific subsidy dollar amount. “I am not crossing that bridge yet,” he said.

A dispute over the size of the set-top subsidy involving billions of dollars has stalled DTV transition legislation in the House since the end of May.

Some lawmakers know that the set-top issue is political dynamite. “If you want an uproar from the people of this country, have their TVs go off,” Sen. George Allen (R-Va.) said.

But Sen. John Sununu (R-N.H.) said consumers would find a way to get digital equipment to avoid service disruption.

“Everyone is using the specter of consumer confusion to further their own interests. I think it does the American public a disservice to suggest that they can’t handle this transition,” Sununu said.

In another first, Fritts told the Senate panel that NAB members were prepared to accept “quantifiable” public-interest obligations for their multicast services — the extra channels created by flexible use of the digital spectrum.

But Fritts insisted on mandatory cable carriage of multicast services, calling the development of hyper-local TV services one of the greatest benefits that could come from the DTV transition.

Cable has long objected to such a mandate. McSlarrow said the NAB wanted to provoke a multicast battle with cable so that no hard-date bill passes and TV stations can retain their analog and digital licenses indefinitely.

“The most plausible interpretation is that the broadcasters hope to goad the cable industry into joining them in their passive-aggressive opposition to a hard date. Perhaps a more charitable interpretation is that they view this as one more opportunity to make a 'land grab.’ In any event, they are making your task harder, not easier,” McSlarrow said.

McSlarrow got some support on the multicasting issue from Richard Slenker, executive vice president of DirecTV Inc., who was adamant that multicasting mandates would eat up satellite capacity and force the company to stop providing local TV signals in many markets. DirecTV today serves 135 local TV markets.

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