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Broadcasters Vow to Fight Ferree Plan

Apr 19, 2004  •  Post A Comment

The broadcast industry last week expressed its determination to block a controversial proposal that could force it to switch to digital TV by the start of 2009.
“This is a political bomb being delivered to Capitol Hill,” said one industry source, who asked not to be identified.
“It should be immediately rejected,” added Dennis Wharton, a spokesman for the National Association of Broadcasters.
But Ken Ferree, the Federal Communications Commission’s Media Bureau chief-and the agency’s most prominent proponent of the measure-attributed the opposition to the broadcast industry’s desire to hold on to both its analog and digital TV channels indefinitely.
“They’d rather eat their children than give up this spectrum,” said Mr. Ferree, who is planning to bring his campaign for the proposal to NAB’s annual convention in Las Vegas this week.
“We’re going to try to help them see … that this is in their best interest,” Mr. Ferree added.
At a press conference in Washington, Mr. Ferree-one of FCC Chairman Michael Powell’s top lieutenants-said the plan would expedite the DTV rollout by essentially changing the agency’s must-carry rules to switch a broadcaster’s cable carriage rights from its analog to its digital channel as of Jan. 1, 2009.
Also according to the plan, Mr. Ferree said, cable operators would have the leeway to meet their obligation to ensure that a must-carry broadcaster’s digital signals are available to all of its customers by downgrading the broadcaster’s digital signal to analog at a system’s head end.
Major Loophole
Under the existing ground rules for the DTV transition, broadcasters were given a new channel to help them make the switch to digital by the end of 2006, at which point they were supposed to return their analog channels to the government for auctions.
But under a major loophole in the law, broadcasters are free to keep both their analog and digital TV channels until 85 percent of the homes in their community are able to receive digital.
At his press conference, Mr. Ferree-like many other industry observers before him-said that without some sort of major shift in the ground rules, the 85 percent mark is unlikely to be hit for decades.
“My kids will have died by the time this happens,” Mr. Ferree said.
But under his new proposal, Mr. Ferree said that cable’s subscribers would all be counted toward the 85 percent mark as of 2009, even though they may ultimately be receiving an analog feed from their system.
Broadcasters said they oppose the plan in part because it would force consumers to buy digital-to-analog converters for the more than 80 million TV sets that aren’t currently hooked up to cable or satellite.
In addition, broadcasters are claiming that the proposal could derail the DTV transition altogether by robbing the incentive of cable subscribers to buy a DTV set.
“If those signals are going to be down-converted to analog, why would I as a consumer go out and buy a digital TV set?” said one broadcast industry source.
“How would allowing a cable operator to degrade a local broadcaster’s high-quality HDTV signal into analog further the DTV transition?” added NAB’s Mr. Wharton. “NAB remains concerned that the Ferree initiative is simply a spectrum reclamation plan that would strand both consumers and broadcasters who have collectively spent billions embracing the best television technology on the planet.”
But Mr. Ferree said that the proposal has been playing to “very positive” reviews on Capitol Hill, and will be voted on publicly by the agency, assuming he first gets the nod from a majority of the agency’s commissioners.
Mr. Ferree also said the government-planned auctions of the broadcasters’ analog channels could raise “tens of billions of dollars” for the U.S. Treasury, and that he would recommend that some of that money be used to subsidize consumer acquisition of digital-to-analog converters.
The media bureau chief also said the auctions were important because the spectrum could be used to create new business opportunities in the United States instead of ceding the upper hand to foreign-based companies. “Do we want to be left behind in this race?” said Mr. Ferree. “I think the answer is no.”