DTV CARRIAGE DISPUTES WIDENING, DESPITE OPTIMISM ON TECHNOLOGY
LAS VEGAS -- DTV carriage by cable remains a major issue for broadcasters and cable, even as most other issues are being resolved, leading to hopes of a rapid takeoff of DTV, officials said at the CES here late last week. Increasingly, broadcasters want compensation for carriage of their DTV signals, making negotiations more difficult.
Congress isn’t likely to become involved in the DTV carriage dispute, said Rep. Terry (R-Neb.), even though he personally is concerned about the refusal of a CBS affiliate in Omaha to allow carriage of its HDTV signal unless it received payment. “This is incredibly frustrating for policy-makers,” Terry said: “This scares me.” However, he said Congress wasn’t likely to do much on any TV issue in this election year: “The most important issue is copy protection. This alone could slow down the [DTV] transition.”
An FCC rulemaking on DTV must-carry is “in front of us now,” said Rick Chessen, head of the FCC’s DTV Task Force: “I think we're prepared to give people an answer.” Among the issues to be resolved, he said, is a petition for reconsideration of the earlier FCC decision that broadcasters were entitled to must-carry for only one video stream, instead of their entire multicast.
DTV must-carry would “make a lot less difference than people think,” said Hal Protter, WB senior vp-distribution development. He said most broadcasters were seeking “some kind of compensation” in their carriage talks with cable, saying that WB had made a “multimillion-dollar investment” in HDTV programming and infrastructure and needed to be compensated for it. Even WB’s Sinclair-owned affiliates will offer DTV by the end of March, he said.
However, WB is “very frustrated” with its efforts to sign cable carriage deals for the DTV signals, Protter said. Six months ago, he said, the WB DTV was carried on only one cable system, and now it’s up to 3. However, he said the network was “trying to influence our affiliates to be more flexible on carriage” agreements in order to spur the overall DTV transition. If the transition is a success, he said, “maybe we can get compensation later.” FCC action also will have little effect because “we are beginning to see the market working it out after years of frustration.”
Negotiating DTV carriage deals has “become a cottage industry,” Cablevision Chmn. Charles Dolan said at an earlier session: “But we're getting through all that.”
Meanwhile, industry officials throughout the show expressed vast optimism about the takeoff of DTV this year (CD Jan 12 p2). HDNet Chmn. Mark Cuban said retailers throughout the country were “running out of” DTV sets and converters. Cuban discounted concerns about consumer confusion over DTV, saying “when a plasma TV gets down to $799 you are going to buy it.” DirecTV Chmn. Eddy Hartenstein said the takeoff of DTV is being fueled by “amazing prices.”
The FCC’s Chessen said the transition was “really picking up steam on all sides.” Brian Smith of Philips called it a “very fortunate time” for DTV because all of the roadblocks had “gone away, with broadcasters putting DTV on the air, cable carrying it, retailers doing a better job of selling it and products getting easier to understand, particularly with the arrival of plug-&-play.
The arrival of plug-&-play means “we will see a boom in the industry the likes of which we have never seen,” said Dave Workman, CEO of retailer Ultimate Electronics. HDTV already is available to 85% of Cox’s cable customers, Cox Vp- Product Mktg. David Pugliese said. He said 20% of the MSO’s HDTV customers were new to Cox, and 17% of them were attracted from cable, with the availability of local stations’ DTV signals the most important factor. He said most Cox systems carried 2 to 4 HDTV signals, with some 9 or more.
Digital rights management (DRM) remains a “large and significant issue” in the DTV transition, said Time Warner Cable Chmn. Glenn Britt. But he said the industries are “working together actively” on resolving the issue. Cuban said HDTV actually makes TV more secure from retransmission via the Internet, simply because of file size: “People just don’t download HDTV over the Internet…, so piracy has become almost a non-issue as far as the Internet is concerned.” He said processor speed growth has slowed, so it will be a long time before HDTV downloads are practical. -- Michael Feazel
CES Notebook…
Broadband remains a “national priority,” even as the number of broadband subscribers doubles every year, Commerce Undersecy.-Technology Phillip Bond said on an international regulatory panel here. He said a soon-to-be-issued Commerce Dept. report would show broadband in 25 million U.S. homes, but with broadband access at “very high levels” in this country if at-work access were considered. Daeje Chin, Korean Minister of Information & Communication, said that in his country more than 70% of households had broadband, with DSL accounting for 57% of the broadband market and cable modems 35%. The broadband currently is at 1-2 Mbps, but he said S. Korea would begin working next year on increasing that to 50-100 Mbps. Japan has 13 million broadband subscribers, including 800,000 with fiber to the home, 9.9 million DSL and 2.4 million cable modems, said Masahiro Tabata, senior vice minister of the Japanese Ministry of Posts & Telecom. In Germany, there are 4.5 million DSL customers, up from virtually zero in 2000, said Matthias Kurth, pres. of the German telecom regulatory authority. He said the move was being driven by independent carriers, who saw voice being “cannibalized” by mobile telephony and VoIP, so they had no option but go to broadband.