Digital Debate About to Heat Up

Aug 22, 2005  •  Post A Comment

Lobbying over the digital TV transition will rise to a fever pitch next month when lawmakers return to Washington from their summer recess. A quick resolution is expected in the long-running drama over exactly when the final switch from analog to digital television broadcasting will take place.

To meet a Sept. 16 budget deadline House and Senate leaders are expected to rush approval of legislation that will include the transition date and more.

The Sept. 16 deadline for the so-called budget reconciliation package is driving the DTV legislation because it will be used to determine future spending caps for congressional committees.

With the DTV legislation included, lawmakers on the House and Senate commerce committees will be able to rationalize spending on other programs over the next five years more than $4.8 billion, the minimum expected to be raised from auctions of rights to the analog TV channels that broadcasters are supposed to return to the federal government in the DTV transition.

“NAB is focused like a laser on the first few weeks of September,” said Dennis Wharton, a spokesman for the National Association of Broadcasters.

“The members get back on [Sept. 6]. Our reconciliation deadline is Sept. 16,” added a spokesman for the House Energy and Commerce Committee. “Sometime between now and then we should have a markup [committee vote on DTV legislation].”

A legislative draft released by the House Energy and Commerce Committee earlier this year would have forced broadcasters to make the switch to digital television no later than Dec. 31, 2008. But offering broadcasters hope for some wiggle room, sources last week said Senate leaders-including Sen. Ted Stevens, R-Alaska, the influential chairman of the Senate Commerce Committee-are considering postponing the deadline for the transition until June or July of 2009, when traditionally fewer people watch TV.

Postponing until summer a transition that could make obsolete millions of analog-only TV sets would diminish concerns of some lawmakers that an earlier switch could emerge as a campaign issue against them during the 2008 elections.

Sen. Stevens has also made clear he would prefer that the transition take place while Congress is in town, in case any last-minute legislative fixes are required.

On the day the switch is thrown to digital it is estimated that as many as 73 million U.S. TV sets will become obsolete. The change will also herald the launch of dozens if not hundreds of new digital over-the-air broadcasting outlets, most a brand extension of an existing station or network.

Broadcasters and cable TV operators are waging battle in particular over a multicast carriage requirement, with broadcasters arguing that a regulation is critical to survival of new programming opportunities for the public, while operators say such a rule would be an unconscionable assault on their First Amendment rights.

To influence the debate, NAB has already been flooding Capitol Hill with broadcasters, with a contingent of up to 80 TV station executives expected to make the rounds of lawmakers’ offices Sept. 7 and 8.

In addition, NAB has been sponsoring ads in Capitol Hill newspapers accusing the cable TV industry of trying to quash multicast carriage regulations to protect cable’s own programming and local advertising revenues from competition.

“Congress should require the cable monopolies to give viewers all the choices broadcasters offer,” said one recent advertisement.

As a sign of the broadcast industry’s hopes for new programming opportunities, NAB said that 585 local TV stations are already using their digital TV frequencies to multicast new channels.

To sweeten the industry’s lobbying pot, NAB President and CEO Eddie Fritts recently announced the association would be willing to discuss a deal with lawmakers under which broadcasters would accept new quantified public-interest obligations for the industry in exchange for a multicast carriage regulation.

“It’s a welcome thing,” Sen. Stevens said at the time.

Still, Rep. Joe Barton, R-Texas, chairman of the House Energy and Commerce Committee, has made clear he opposes any must-carry regulation-and he’s leading the charge for DTV legislation in the House.

In its countercampaign, the National Cable & Telecommunications Association is arguing that programming decisions should be left to the marketplace. NCTA also said some cable TV operators are already carrying some broadcast DTV multicast signals, even without a rule.

Said Paul Rodriguez, an NCTA spokesman: “Why should the broadcasters get a free ride on the cable industry’s lineup? They should have to compete like everybody else.”

“The industry has shown that we’re totally committed to carrying programming that serves our customers’ needs,” added Mr. Rodriguez. “We’ve made a commitment that we will carry the broadcasters’ primary signal, even in a post-analog world. In addition to that, if the broadcasters have compelling content available on a multicast basis, the industry has shown that it is willing to consider carrying those signals if it benefits our customers.”

Still, ABC’s efforts to launch ABC News Now, a 24/7 multicast news channel, with its affiliates was stymied by a lack of cable carriage assurances early this year, according to some broadcast industry sources. (It has since been refocused as a pay service for cable, telephone and broadband platforms.)

Sources said smaller NBC affiliates are finding it difficult to persuade cable operators to carry NBC Weather Plus, a multicast project that NBC and its affiliates launched last November.

“Time Warner owns CNN,” said one broadcast industry source. “Why would they want to put on a competitive 24-hour news channel that would compete with CNN?”

Still another major unresolved question is what to do about the 73 million analog-only TV sets that won’t be able to get DTV signals over the air after the transition without digital-to-analog converters, which are expected to cost at least $50 apiece. There is some concern it could become a political issue.

Some lawmakers want to provide a federal subsidy to pay for all of the converters needed-$3.65 billion, assuming a converter price of $50 and 73 million TV sets. Other lawmakers, led by Rep. Barton, would prefer to limit the subsidies to the neediest, at a cost of $500 million or so.

While the White House’s ultimate position remains unclear on providing money to subsidize converter boxes, the Bush administration has opposed it in the past. In response to a 2004 bill backed by Sen. John McCain, R-Ariz., that included a $1 billion converter subsidy, the White House said it would prefer to spur the DTV transition by taxing broadcasters that failed to make the switch by 2006.