The Squeeze Play

House, Senate committees line up to speed analog giveback

The battle lines have been drawn. Broadcasters are in the minority—at least when it comes to keeping their analog channels. The FCC's plan to have broadcasters return their analog channels and switch to digital has new allies: leaders of the House Commerce Committee, including Chairman Joe Barton of Texas.

Worse news: Sen. John McCain (R-Ariz.), chairman of the Commerce Committee, may endorse the FCC proposal, too. He's holding a hearing on the state of the DTV transition.

Both committees oversee the FCC. Though the FCC could impose a plan on its own, commission Chairman Michael Powell wants their political blessing.

The joint backing is an ominous sign for broadcasters. If the plan is approved, TV stations will be forced to return their analog channels long before most viewers have purchased high-def TV sets. And by giving the FCC a green light, lawmakers will further delay the day when broadcasters can reach most homes with high-definition pictures and digital services.

Stations are spending billions to roll out, complains Greg Schmidt, director of new development for LIN Television. "Cable will be a bottleneck that limits access to broadcasters' digital signals," he says, "while consumers will have less incentive to buy digital sets and tuners."

Still, the FCC maintains a take-no-prisoners approach. It intends to reclaim the channels and sell them to new-technology businesses or give them to police and fire departments.

The 1997 law creating DTV requires broadcasters to return analog channels to the government when 85% of local homes can receive DTV signals. The FCC must be proactive, says Media Bureau Chief Ken Ferree; otherwise, decades will pass before the DTV transition can end.

The FCC proposal would count all cable subscribers as digitally served by local broadcasters—even if subscribers don't have a digital set. Satellite subscribers would also count, provided they buy local-channel packages. Ferree says the giveback date should be Jan. 1, 2009.

Why the rush? "Continued delay only serves to inhibit innovative companies and to dampen their ability to attract capital and create jobs," says Rep. John Dingell (D-Mich.).

Broadcasters are vehement in their opposition.

They argue they will have shelled out $16 billion on digital transmission equipment with no guarantee that cable viewers will receive their HD programming or other digital services. To soften that impact, Ferree recommends cable systems be required to carry all of a station's multicast signals. Winning multicast carriage rights doesn't appease NAB President Eddie Fritts, who calls the idea "against the best interests of the American consumer."