Too Much of a Good Thing?Guest Commentary 11/02/2003 07:00:00 PM Eastern
I feel a bit like Henny Penny declaring that the sky is falling. But digital must-carry may not be the panacea that many broadcasters think it is. Let me explain.
The FCC gave each TV station a second channel to make a smooth transition from analog to digital. Stations would operate in both modes for a number of years before finally giving up the analog channel.
The FCC would like the analog channels back in 2006, but the giveback is really tied not to a date but to the ability of TV homes to receive broadcasters' digital signals. According to the FCC Web site, the giveback must occur when "85% of the TV households in a market are able to receive digital TV signals off the air either with a digital TV set or with an analog set equipped with a converter box or subscribe to a cable-type service that carries the DTV stations in the market."
This is a market-by-market review: When digital television is available to 85% of the households in a market, the market will
transition. The 85% is an aggregate of cable, satellite, broadcast and or any other medium capable of delivering the broadcaster's digital signal. In many markets, probably most, the 85% will be easily obtained through this aggregation.
Under pressure from broadcasters, the FCC is likely to require cable systems to carry broadcasters' digital signals and only the digital signals. Broadcasters have given up on rules requiring dual must-carry—carriage of the analog and
digital signals—in favor of rules requiring carriage of their entire digital signals, even if they include multiple programming services.
Without question, digital must-carry would hasten the transition from analog to digital terrestrial broadcasting by increasing the count of homes where the digital signal is available. But the attainment of digital must-carry could be bittersweet, at best, for the broadcaster and the consumer.
It would be bittersweet because broadcasters would be forced to give up their analog channels and service prematurely. They would be forced to abandon most of the 15% of their viewers who still rely exclusively on over-the-air television. Plus, the 100 million analog TV sets found in our nation's kitchens and bedrooms and not wired for cable or satellite will just quit working.
I believe the most foreboding aspect of all this is the potential effect on the television broadcaster's business. Do the math on a 15% drop in broadcaster ratings. What will this mean for the broadcaster's ability to serve the public?
Cable once built the business through quality delivery of the local television stations. Local broadcasters are once again providing key ingredients to the success of cable's digital tier by providing high-definition programming, public service and localism.
Times have changed since 1978. In 2003, cable carriage is vital to provide access to the home. However, inclusion in a 500-channel universe is not the same as dominating a 30-channel basic-cable service.
All things considered, I believe the probability of quickly returning the analog channels is pretty high. Broadcasters should prudently prepare for this eventuality. The sky doesn't fall till 2006.