[opendtv] News: Broadcasters Argue Transition Plan Is Political Poison
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Thu, 7 Oct 2004 07:58:06 -0400
DTV Lesson From Rosty; - Broadcasters Argue Transition Plan Is Political Poi=
son
October 7, 2004 12:00am
Source: Reed Business Information. All Rights Reserved.
Multichannel News: Washington-- Broadcasters are=20
airing a new battle cry: Remember Rosty.
In 1989, Rep. Dan Rostenkowski (D-Ill.) was=20
smacked with umbrellas and had his car mobbed by=20
dozens of seniors, furious that their Medicare=20
premiums would rise to pay for catastrophic=20
health-care insurance -- a new Medicare=20
entitlement that Congress thought would be a=20
winner with the gray panthers.
Rostenkowski, the gruff and imposing chairman of=20
the Ways and Means Committee, sped away from the=20
mob in a humbling getaway seen by millions of TV=20
viewers.
PREMIUM PUNCH
"It was going to be the be-all, end-all solution=20
to health insurance in this country -- until the=20
seniors found out what the premiums were going to=20
be," Martin Franks, executive vice president of=20
CBS Television, recalled last week at an industry=20
conference here sponsored by the Association for=20
Maximum Service Television. "The seniors were=20
standing around pounding on the car and a week=20
later, catastrophic health insurance got=20
repealed."
=46ranks offered the famous Rosty episode as a=20
friendly reminder to the Federal Communications=20
Commission, which is just weeks away from likely=20
adoption of a digital-TV transition plan that=20
could render 73 million analog sets useless=20
within four years.
The FCC plan could lead to another Rostenkowski rebellion, Franks predicted.
"If something like that passes to disrupt the=20
momentum of the transition, we're going to have a=20
whole lot more people banging on cars of=20
politicians," Franks said.
The FCC plan is the brainchild of Media Bureau=20
chief Kenneth Ferree, who is concerned that TV=20
stations will sit on $70 billion of analog=20
spectrum for many years to come without a push=20
from government, which wants to give some TV=20
airwaves to public safety groups and sell even=20
more to the bandwidth-hungry wireless phone=20
industry.
85%: A LONG WAY OFF
Under current law, TV stations can keep the=20
spectrum until 85% of TV households have digital=20
reception capabilities. Today, about 40% of TV=20
households have at least one digital-cable or=20
direct-broadcast satellite set-top box.
"If that is the standard, we are not going to=20
transition anytime in my lifetime, probably not=20
until 2050 or 2070 or something like that,"=20
=46erree said last week.
Instead, Ferree and his staff developed a plan=20
that would end analog broadcasting on Dec. 31,=20
2008.
The plan assumes market forces will guarantee=20
cable and satellite subscribers will continue to=20
be able to view their local TV stations. DBS is=20
already digital and cable companies can=20
downconvert the digital signal to analog.
"We expect that we would have essentially a=20
nationwide 85% trigger point met at that point,"=20
=46erree said.
Consumers that rely solely on over-the-air TV=20
would need new DTV sets with over-the-air tuners.=20
Only 2 million such sets have been sold.
Consumers can buy digital-to-analog converters=20
to keep their old analog sets running. Converters=20
go for about $300 today, but Ferree expects the=20
price to plunge to $50 with mass production.
The Ferree plan assumes that Congress will=20
subsidize boxes for low-income consumers, at a=20
cost of $1 billion.
With all these pieces of the puzzle in place, the=20
entire U.S. will make a flash cut over to digital=20
broadcasting on Jan. 1, 2009.
"The vast majority of viewers will not even know=20
that the transition occurred. They'll wake up=20
Jan. 2, pour their cup of coffee, turn on their=20
TV set and they'll get exactly the same thing=20
they got the day before." Ferree said.
Broadcasters think that millions of consumers=20
will see snow, creating a political blizzard on=20
Capitol Hill reminiscent of the one that led to=20
the about-face on Medicare after Rosty's run-in=20
with the seniors.
National Association of Broadcasters CEO Edward=20
=46ritts last week reminded everybody at the MSTV=20
forum of what Rep. Eliot Engel (D-N.Y.) said at a=20
House hearing a few years ago about a poorly=20
planned DTV transition.
QUOTE FROM ENGEL
"If we impose a strict, hard return of spectrum=20
of Dec. 31, 2006, one can be sure that we will=20
all be impeached on Jan. 1, 2007," Fritts said,=20
quoting Engel. [Some in Congress, including House=20
Energy and Commerce Committee chairman Rep. Joe=20
Barton (R-Texas) actually favor 2006 over 2009=20
for completing the transition.]
At bottom, broadcasters don't want the FCC to=20
even begin thinking about an analog cutoff until=20
85% of TV households have at least one DTV set=20
with a digital off-air tuner. That puts off the=20
transition indefinitely, because consumer=20
electronics companies don't have to equip nearly=20
all new TV sets with an off-air DTV tuner until=20
July 2007. Broadcasters are also concerned for=20
the fate of DTV households that own second and=20
third sets that are analog.
"The fact is you just can't turn off and displace=20
this many television viewers without having=20
enormous political consequences," Fritts said.
The NAB has supplied the FCC with figures=20
designed to slow the momentum behind the Ferree=20
plan.
According to the NAB, the U.S. has 280 million=20
analog TV sets, with 45 million of them in 20.5=20
million TV households that do not subscribe to=20
cable.
If the government fails to look out for these=20
consumers, their TVs will go dark on Jan. 1, 2009.
Cable and satellite homes have 28 million analog=20
sets that are not wired to the pay TV service,=20
the NAB also claims. Those sets also become just=20
boxes with wires if left stranded by the Ferree=20
plan.
The NAB has another beef: downconversion.=20
Allowing cable companies to take a digital signal=20
and convert it to analog, NAB says, would sap=20
consumer interest in the purchase of DTV sets.
"The Ferree plan is, quite frankly, a surrender on digital," Fritts said.
Speaking at the same MSTV forum, National Cable &=20
Telecommunication Association president Robert=20
Sachs endorsed downconversion as a temporary=20
measure that would cease at a point when a=20
substantial majority of cable subscribers had DTV=20
sets or set-top boxes.
NAB is preparing a counter proposal to the Ferree=20
plan, but Fritts did not provide any details. In=20
the past, NAB has insisted on an iron-clad=20
set-top subsidy program for off-air viewers,=20
funded with proceeds from the analog TV spectrum=20
auctions.
SACHS VS. MANDATE
It's probable that the NAB will call for a ban on=20
downconversion and require cable to pass through=20
the digital signals, with operators responsible=20
for providing consumers with as many digital=20
set-tops as they need.
The latter proposal was a nonstarter with Sachs.
"We think that's too high a price to impose," he=20
said, adding that NCTA also opposed mandatory=20
cable carriage of more than one DTV service=20
provided by local stations. Ferree has endorsed a=20
multicast carriage mandate on cable.
Does the Ferree plan have the votes to gain=20
adoption at the FCC? Chairman Michael Powell is=20
the only member who has seen a copy of the Ferree=20
plan.
"We have obviously nothing before us as=20
commissioners," said Johanna Shelton, media=20
adviser to FCC member Michael Copps. "If NBC can=20
figure out how to transition Jay Leno by 2009,=20
I'm sure all of us ... can figure out the digital=20
television transition."
<<Multichannel News -- 10/04/04, p. 2>>
<< Copyright =A92004 Reed Business Information. All Rights Reserved. >>
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