Washington

FCC Proposing To Sunset Dual-Carriage Viewability Rule

Would take effect Dec. 11; order would extend small-operator HD waiver for three more years 6/06/2012 07:26:24 PM Eastern

Cable operators will no longer be required to provide both an analog and digital versions of must-carry TV station signals as of December 2012 if FCC Chairman Julius Genachowski gets his way, with low-cost converter boxes considered a sufficient vehicle for allowing analog customers to continue to view TV station signals.

That would be a win for cable operators, who had been looking to get out from under the mandate--though they had voluntarily agreed to dual carriage to help out in the DTV transition. It would be a defeat for broadcasters, who had pushed to retain the rule.

An order, which has been circulated to the commissioners, according to a source close to one of those commissioners, says that cable operators will no longer have to provide an analog version of a TV station digital signals to their analog cable customers starting Dec. 11, 2012--providing a 6-month transition period beyond the June 12 sunset date of the three-year mandate.

It also requires cable operators to provide plenty of notice to their analog customers.

"We believe the viewability requirement is best read to give the operator of a hybrid system [digital and analog] greater flexibility in deciding how to comply with the viewability mandate," the order reads. "In particular, while such an operator may continue to carry must-carry signals in a format that is capable of being viewed by analog service customers without the use of additional equipment, rapid changes in the marketplace and technology, in particular the widespread availability of small digital set-top boxes [that] cable operators make available at low or not cost to analog customers of hybrid systems provide alternative means by which must-carry television signals can be made viewable to all analog customers."

According to an order circulating at the FCC in advance of a June 12 deadline for action, the commission is proposing to sunset the viewability requirement that cable operators deliver all TV stations' digital signals in analog format to analog customers or, alternatively, make sure all its customers have the equipment to view a digital signal.

The FCC in issuing its Notice of Proposed Rulemaking in February indicated that "the available market evidence seems to indicate that the viewability requirements remain important to consumers." The order concludes that viewability remains important, but can be achieved through low-cost boxes currently being offered, rather than a dual carriage mandate.

It also stresses the benefits of using the analog capacity for new digital channels and increased broadband, which is one of the FCC's major focuses.

"The low-cost set-top box offers reflected in our record will satisfy our new interpretation of the viewability requirement," says the order, according to a source reading from the document, "permitting the cable operator to make the must-carry signal available by offering analog customers the necessary digital equipment at an affordable cost." For example, says the commission, "we note that Comcast for a period of time after migrating a system to all digital, typically offers two or three free DTA's [digital boxes] to customers, and charges lessthan two dollars for additional boxes." It also points to Bright House's offer of boxes for $1 a month. While the order does not require cable to continue to offer low-cost boxes--and the FCC cannot rate regulate the prices--it "strongly urges all operators not to raise those prices," says the source.

The FCC decided in September 2007 that in order to ensure that all must-carry TV stations are viewable by all subscribers after the switch to all-digital broadcasting, cable operators, for a period of three years, would be required--in addition to carrying digital signals--to convert digital signals to analog, either at the headend or with converter boxes, for their analog cable customers. Cable called that a "dual-carriage" mandate at odds with earlier FCC rulings, while broadcasters framed it as a clarification an the existing "viewability" mandate for must-carry stations.

In comments to the FCC in March, the National Cable & Telecommunications Association said it was ready to get out from under the mandate, saying it was consumer-unfriendly, unwieldy, no longer justifiable in a fiercely competitive marketplace, and unconstitutional.

NCTA argued that operators need the bandwidth being taken up by continued analog and digital carriage of must-carry stations for more consumer-friendly uses like over-the-top video. It points out that the monopoly tag the Supreme Court put on cable in upholding must carry narrowly (5-4) in the Turner decision no longer applies, and even if it did, a dual-carriage mandate would not hold up even under intermediate First Amendment scrutiny today, when cable no longer has the "bottleneck" control over access to customers.

The order, if approved, would be a dual victory for cable operators since it will extend for three years a waiver for smaller cable operators from the mandate that cable operators deliver broadcasters' HD signals in HD to all their customers, whether or not they get cable channels in HD, something the American Cable Association had pushed for.

At press time, the other commissioners had not voted the item, though they must do so by June 12 or both the HD waiver and the viewability rule would sunset immediately. Circulating the item is effectively the chairman's "yes" vote.

The issue has been getting a lot of attention as the June 12 deadline drew near, with black churches having vowed to protest the FCC and NCTA headquarters over the potential sunset.

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