DTV on cable: Sharper words over digital carriage

Originally published in Current, March 24, 2003
By Dan Odenwald

The cable industry has firmly rejected public TV's latest request that the FCC impose must-carry rules on cable operators during the digital transition.

In a March 20 letter to the FCC, the National Cable & Telecommunications Association (NCTA) said public TV's proposal would inflict unnecessary costs on cable systems, programmers and subscribers without advancing the transition. APTS responded to NCTA's letter as "proof positive as to why it is time to stop holding our breath waiting for cable to do its part."

In February, PBS, CPB and APTS asked the commission to require cable companies to carry both public TV's analog and digital channels during the DTV switchover years. Must-carry rules are crucial to the successful rollout of DTV, public TV argued.

The rollout will be done and analog TV can be shut down when 85 percent of U.S. households can receive DTV signals, according to Congress. Since more than 70 percent of homes get their TV reception through cable, pubcasters argued that dual must-carry--both analog and digital--is necessary to reach 85 percent.

Market forces alone will not get the country to 85 percent, pubcasters said. Without must-carry, it could take until 2020 or longer. Major cable operators carry less that 10 percent of the 779 digital TV stations, according to the National Association of Broadcasters. Of the 75 carried, 55 are on Time Warner Cable systems.

For the past three years, public TV attempted to negotiate national carriage agreements with the country's largest cable operators but achieved little success, pubcasters said. To date, they have penned deals that cover just 20 percent of all cable homes with the nation's second-largest cable system, Time Warner, and the ninth-largest, Insight Communications. Attempts at other national agreements failed, APTS said.

A basic conflict is that the broadcasters' digital channels generally carry the same content as their analog channels, which makes them deadweight for cable systems that thrive on a variety of programming. And too few digital channels have the technical advantage of high-definition, the cablers complain.

Some cable companies want to carry only high-definition programming, while others are "simply not far enough along in their digital strategy to have meaningful discussions," according to PBS.

Most cablers also see no advantage in carrying more than one public TV station in a market, since the largest station usually carries the bulk of the national PBS feed.

Comcast Corp., the largest cable operator, has signed individual carriage deals with the largest stations in several markets--including New York's WNET, Philadelphia's WHYY and Washington, D.C.'s WETA. But the company is unwilling to carry more than one public station per market, even where stations offer differentiated programming, pubcasters said.

According to pubcasters, the commission is clearing all the major hurdles blocking the transition except the one that matters most.

Public TV's must-carry plan proposes that cable operators set aside 28 percent of their bandwidth for broadcasters' analog and digital channels--5 percent less than the government requires for analog channel carriage. Cablers would also have to carry more broadcast DTV channels as they expand transmission capacity. Small operators would be exempt from carriage rules, and no system would be required to carry duplicative programming. The cable system will no longer have to carry analog channels when all of its subscribers have access to public TV's digital signals.

In a separate FCC filing, public TV reps asked the commission to compel cablers to carry all their multicast offerings.

From the cablers' viewpoint

NCTA said the FCC has already settled the dual carriage and multicast issues. In January 2001, the commission tentatively ruled that digital must-carry rules would be unconstitutional and that cable companies would only have to carry a broadcaster's "primary video" channel.

Attempts at national agreements failed because cablers "have found little or no flexibility in APTS' position" on the issue of carrying more than one PTV station in a market, cable reps said. Nor did APTS provide specific market-by-market programming plans to warrant carriage, NCTA said. APTS refuted that claim in its response.

Cable companies have found greater success in arranging independent carriage deals with specific stations, and public TV understates the progress made on that front, NCTA said. For example, pubcasters glossed over the fact that Comcast and Cox Communications have penned individual deals with 24 PTV stations in the top 100 metro markets, according to NCTA.

Public broadcasters can expect additional deals as they begin offering more HD services, NCTA said. HD is what will drive consumer purchase of expensive DTV sets, said Robert Sachs, NCTA president, in a March 11 speech to the annual meeting of the Advanced Television Systems Committee, the multi-industry body behind DTV.

The cable industry has spent more than $70 billion upgrading systems to digital with plans to market HDTV, video-on demand, broadband and cable telephony, according to NCTA.

"The reality is the cable channel capacity is tight, even on upgraded systems," said Jill Luckett, NCTA's v.p. for program network policy.

Cable reps also argue that public TV's must-carry plan would do little to advance the DTV transition. How soon broadcasters turn off their analog transmitters and return analog channels to the FCC depends not on cable--which rarely serves 85 percent of all homes in a market--but over-the-air viewers and satellite subscribers.

Non-cable subscribers are the least likely viewers to invest in expensive new digital TV sets or converter boxes, and many satellite dish owners receive no local stations, cable reps said. Even if cable companies are forced into dual carriage, the country would still fall short of the 85 percent threshold, NCTA said.

Public TV's must-carry proposal isn't likely to win much support in Washington either. Like the FCC, House Energy and Commerce Committee Chairman Billy Tauzin (R-La.) has already rejected a dual-carriage requirement as unconstitutional. Tauzin aide Jessica Wallace said such a provision won't be in the digital TV bill likely to move through Congress this spring.

But pubcasters continue to push dual carriage because policymakers must realize the nation will never get to 85 percent without must-carry, said APTS President John Lawson. "Right now, they don't see that," he said.

Lawson acknowledges that public TV still has considerable work to do in persuading lawmakers. But "there's a good possibility that those attitudes will change as policymakers focus on how to get to 85 percent."

Lawson is more hopeful about gaining support for public TV's multicasting position. Tauzin's digital TV bill will address the issue and certain FCC commissioners favor full carriage of multicast channels, he said.

The primary station gets carried

As national negotiations sputter, Comcast and Cox are signing individual carriage deals with the largest PTV stations in certain markets. But those deals ignore smaller stations.

In Philadelphia--Comcast's hometown--the cabler carries WHYY but not New Jersey Network, Lehigh Valley's WLVT or the region's alternative station, WYBE.

For months, the four stations jointly campaigned to secure carriage, but Comcast wanted only one public TV channel. In the midst of the lobbying push, Comcast offered carriage to WHYY.

"In the end, WHYY had a choice to make," said Kyra McGrath, the station's general counsel. "If we said no, they would have gone to another station in the market. I think it's understandable the decision we made given the position we were in."

WYBE General Manager Sherri Hope Culver doesn't fault WHYY for its decision, but she thinks her station deserves carriage as well. WYBE doesn't duplicate WHYY programming but offers its own non-PBS service geared toward minority audiences, Culver said.

"We're serving people that aren't being served in any other way," she said. "I think we're in a strong position to get carried."

Cable companies are interested in carrying different programming, Lawson said. Overlap stations will get carried if they vary their schedules. Unlike the largest PBS station in a market, second, third and fourth stations "will have to make their own case," he added.

Public TV doesn't want to be left vulnerable to digital copying

Public TV programs should be afforded the same copyright protection as commercial programming, public TV lobbyists argued in an FCC filing last month. "Public interest" and "educational" programming ought to be protected by any "broadcast flag" technology that the FCC permits to safeguard digital TV programming from illegal copying and distribution, they say.

APTS, PBS and CPB responded Feb. 18 to a suggestion by the Consumer Electronics Association (CEA) and the computer industry that "public interest" and "educational" programming be exempted from copyright protection. Making such programming freely available would encourage civic discourse, the CEA says.

"Textbook authors aren't required to give their books away for free," said APTS President John Lawson. "I believe we should have the right to protect our material."

Excluding public TV programming from copy protection rules would be "devastating" to public broadcasting and "greatly impair" program production, lobbyists argue. Without protection, investment in public TV programming would decline dramatically.

Producers of most public TV programs need to protect their copyrights because they rely in part on revenue from sales in the home video, educational, foreign broadcast, cable and satellite retransmission markets, lobbyists said. Similarly, producers would have trouble cultivating funding partners who invest in programs in exchange for foreign broadcast rights or the home video market.

Lack of copy protection would also complicate the already difficult task of obtaining rights to archival material within programs such as film clips, photos and music, according to the filing.

Public TV reps also warned the FCC that it could face censorship issues if it tries to decide which programs are educational and not eligible for copy protection.

--Dan Odenwald

Public TV defends its option to lease digital capacity

Federal appellate judges grilled FCC and public TV lawyers March 10 about how public TV stations intend to use their digital spectrum for financial support.

The Media Access Project (MAP) is challenging a 2001 FCC ruling that allows public TV to lease surplus DTV transmission capacity.

The judges asked if public TV stations would compete with commercial vendors and if they would sell political ads, according to APTS President John Lawson, who observed the oral arguments. Public stations will compete in some instances and partner with them in others, attorneys told the three-judge panel. Most stations will likely avoid selling political ads because of conflicts of interest, the lawyers added.

Judges also inquired whether taxpayer dollars would help develop their side businesses. Not one cent, the attorneys said, adding the FCC ruling also requires public TV stations to reserve a "substantial majority" of their spectrum for noncommercial, educational purposes.

MAP attorney Harold Feld told the court Congress prohibits advertising on public TV broadcasts and that the FCC overreached when it approved the for-profit ventures. But public TV's defenders argued that Congress makes a distinction between "broadcast" services and "nonbroadcast" services such as addressable subscription services. The FCC already allows subscription services on public TV's analog channels, they said.

Most of public TV's business plans involve leasing spectrum to schools and state agencies for delivery of large data files to personal computers, including over-the-air university courses and teacher training. NJN, for example, is already datacasting interactive content over night to schools and job training centers.

Pensacola's WSRE is leasing part of its DTV capacity to an Internet service provider.

--Dan Odenwald