Stations, Cable 'Dual' Over Carriage

Broadcasters and cable operators have been crossing swords at the FCC over the issue of what cable operators' TV signal carriage obligations will be after the digital transition in February 2009. The cable industry says an FCC proposal being floated by the chairman and scheduled for a vote this week would give a new, and troubling, meaning to cable's vaunted “triple play.” Cable operators complain that under the chairman's plan, they would be required to carry up to three versions of the same TV station signal after the DTV transition—analog, digital and high definition—which would suck up precious bandwidth and perhaps elbow out networks like C-SPAN and Weather. Time Warner lawyers said this was unnecessary, unlawful and a disservice to customers.

Broadcasters argue the same proposal is ensuring that no cable customer with an analog set lose access to TV service, just as the government is trying to ensure no over-the-air viewers are left behind after the transition.

Cable operators argue the “viewability” proposal would constitute forced dual carriage of analog and broadcast signals, which the FCC has twice said it would not do. Broadcasters argue it is ensuring a viewable signal, and refining that definition by making cable operators pass through all bits of information. “Cable operators should not be permitted to...undermine the congressionally mandated digital transition…by degrading and stripping bits,” said Gary Cole, ABC Television Affiliates Association.

Cable operators compress and otherwise manipulate their signals, with some bits lost in the process, but without materially degrading the picture, they argue. Without that freedom, they say, and with the additional obligation to carry up to three channels—an analog, digital and HD version of some station—they would have less room for cable channels their viewers actually want to watch.

The NCTA launched a DTV education campaign last week that pointedly pitched the quality of its digital signal, and said it would leave no cable viewer behind. That prompted the NAB to ask the FCC why cable would oppose a viewability standard, given the PSA claim that cable customers will not lose access to broadcast television stations after the DTV transition.

For smaller cable operators, says the American Cable Association, the carriage requirement and the $100,000 it estimates it would cost to accommodate the signals could be financially fatal. “A small cable system is likely to shut down...if forced to carry must-carry broadcasters in three different formats,” said Matt Polka, president, American Cable Association.

“For a system that serves only 5,000 subscribers, these costs are significant. For smaller systems, the cost per subscriber to comply with a triple-carriage obligation would exceed the asset value of the entire cable system,” he said.

That point was seconded in arguments to the commission by cable programmers from the Game Show Network to the aforementioned Weather Channel.

Cable opposition notwithstanding, broadcast lobbyists were looking for a 3-2 vote approving the measure, with Republican Deborah Taylor Tate and Democrat Michael Copps joining the chairman and an outside chance that Republican Robert McDowell could make it four.

Copps has said that he is supportive of putting the carriage requirement on cable. He said in May that he would keep an open mind, but that it would take some effort to convince him otherwise, and that was “putting it mildly.”

Commissioner Jonathan Adelstein has been the cable-friendliest of the commissioners on the issue, pointing out that it is in the cable industry's “direct financial interest” to make sure its customers get a good signal.

“Today's proposal could force cable operators to move more and more channels from their expanded basic tier in order to reclaim capacity that will, in turn, be used to provide more high-definition programming,” Adelstein wrote in May. This is the main reason consumers are purchasing expensive HDTV sets, he says of the proposal, echoing the sentiments of cable operators.

The fact the item has been scheduled for a vote suggests FCC Chairman Kevin Martin has the votes, though in this commission that is no sure thing given the items that have been pulled and the meetings delayed or canceled over last-minute snags.

If the measure passes, it will be another defeat for an industry that has felt the hard side of Martin-backed proposals, including his attempts to mandate multicast must-carry and his push for a la carte cable.

E-mail comments to john.eggerton@reedbusiness.com