Broadcasters attack cable’s DTV strategy

May 6, 2002  •  Post A Comment

Broadcast industry representatives last week charged that a cable TV industry plan to spur the digital TV transition appears designed to benefit cable at the expense of broadcasters.
“They’re flashing the bird at broadcasters,” said Nat Ostroff, VP of new technology for Sinclair Broadcast Group.
Under the plan, the nation’s 10 largest cable multiple system operators last week officially endorsed a proposal by Federal Communications Commission Chairman Michael Powell aimed at giving consumers incentive to buy DTV sets.
The key commitment from the MSOs is that they carry up to five high-definition television or other enhanced DTV signals on many of their systems beginning in January of next year.
But to the dismay of many broadcasters, cable’s commitment gives operators discretion to exclude broadcasters from their DTV lineups altogether. Instead, they could fill their DTV carriage commitment entirely with digital cable channels. “The cable industry has very cleverly disguised a non-concession for their own benefit,” Mr. Ostroff said.
A problem for broadcasters is that Mr. Powell’s proposal, released April 4, never asked operators specifically to carry broadcasters. It only asked that they carry, at no cost, “the signals of up to five broadcast or other digital programming services that are providing value-added digital programming during at least 50 percent of their prime-time schedule.”
“That was a weakness in the chairman’s proposal, and it’s a shame that the cable operators appear to be taking advantage of it,” said Greg Schmidt, VP, new development, and general counsel, LIN Television.
But Marc Smith, a spokesman for the National Cable & Telecommunications Association, defended the cable industry’s interpretation of the FCC chairman’s request. “He asked us to commit to carrying programming that would drive the sale of DTV sets, and that’s what we’re doing,” Mr. Smith said. “If broadcasters have HDTV programming or value-added DTV programming that creates an incentive for consumers to buy DTV sets, it’s in our interest to carry that programming to our customers.”
The message, according to broadcasters, however, is that the deal leaves cable in the driver’s seat to determine what will be carried-and a cable industry source confirmed that’s not likely to include simple simulcasts of a broadcaster’s analog programming or multiplexed feeds of standard-definition fare.
Nonetheless, Preston Padden, executive VP, worldwide government relations, The Walt Disney Co., said he expects his company’s ABC signals to be carried. “Given that ABC is going to be doing more than half of our popular prime-time programming in HDTV, I’d be surprised if the cable people didn’t make that part of their package,” Mr. Padden said.
In a statement, Eddie Fritts, president and CEO of the National Association of Broadcasters, said, “We’re pleased the cable industry is moving toward carriage of digital broadcast signals. We look forward to the day when cable operators carry all digital broadcast signals in their entirety.”
Said Sinclair’s Mr. Ostroff in response, “It’s incredibly naive for our industry leaders to assume they have a victory when they’ve just been slapped in the face and they don’t know it yet.”
Another broadcast industry source, who asked not to be identified, said, “There’s going to be a donnybrook down the road if cable says the five signals are only cable networks.”
Still, the cable industry’s commitment won a glowing accolade from the FCC’s Mr. Powell. “I applaud the cable industry for its leadership in helping us to deliver on the promise of digital television for the American people,” Mr. Powell said.
The NAB, subject to the review of its board, has at least tentatively endorsed the Powell plan. One of the Powell proposals asks Big 4 TV network affiliates in the top 100 markets to be able to pass through network DTV programming next year, and to promote their DTV fare on their analog channels.
Yet another proposal asks manufacturers to begin including DTV tuners in many of their DTV sets. “We’re talking internally to our members about the most effective way to support the goals of the chairman’s proposal, and we’ll get back to him shortly,” said Michael Petricone, VP of technology policy for the Consumer Electronics Association.
A hitch for consumers is that cable’s commitment does not preclude operators from charging whatever they want for the DTV signals. They only promised that the signals will be carried “at no cost to cable operators or broadcasters.”
The cable TV industry commitment came in the form of a May 1 letter to Mr. Powell from NCTA President and CEO Robert Sachs. The MSOs, according to Mr. Sachs, also agreed to begin ordering integrated HD set-top boxes with digital connectors and to provide those to customers who request them.
The 10 cable companies covered by the deal are AT&T Broadband, AOL Time Warner, Comcast Corp., Charter Communications, Cox Communications, Adelphia Communications, Cablevision Systems, Mediacom Communications, Insight Communications and Cable One.