Broadcasters Support Hard DTV Date, NAB Tells Senate Hearing

Broadcasters now accept a 2009 hard analog cutoff date “and we're ready,” NAB Pres. Edward Fritts told a Senate Commerce Committee hearing Tues. on the DTV transition. His declaration was a contrast to House hearings in May, when broadcasters didn’t unequivocally support a hard date.

Broadcasters’ concession to setting a deadline means nearly all players in the DTV debate agree a date during 2009 is needed - though one spectrum industry executive urged setting it as soon as possible to maximize auction revenue. “I don’t think pushing it out is a good idea,” said Aloha Partners Pres. Charles Townsend.

Committee Chmn. Stevens (R-Alaska) said he would ask the Congressional Budget Office to review its study of the revenue potential of a spectrum auction and its thoughts on the hard date, given budget implications. “We have basis for change in this bill,” Stevens said, due not only to budget matters but also urgency voiced by Sens. Rockefeller (D-W.Va.) and McCain (R-Ariz.) and others over releasing spectrum for public safety uses. A DTV bill is in draft, with details to be nailed down within weeks based on testimony at the hearing, a Senate staffer said.

Stevens told reporters he believes a hard date for ending analog transmissions is only part of the strategy needed for a successful DTV shift. Equally key “to make this transition work” would be requiring all sets as soon as possible have a DTV tuner chip built in to minimize disruption to consumers when analog service dies.

Mandating a DTV tuner chip would minimize the scope of a subsidy for over-the-air households darkened by analog cutoff, Stevens said. Besides serving the interests of “foreign” TV makers, failure to require the chip would require avoidable federal spending on tuner subsidies, Stevens said. Asked by a reporter how his proposal differ from a proposed rulemaking at the FCC to advance the final DTV tuner mandate deadline to Dec. 31, 2006, Stevens said he favors an earlier deadline.

“This is something we very much need to get done,” Sen. Sununu (R-N.H.) said of setting a hard date. Virtually all panel members and industry players agree a hard date is needed, but “a hard date is where the agreement ends,” Sununu said. Without naming names, Sununu chided “vested interests” that don’t necessarily back setting a hard date or returning analog spectrum yet won’t admit their motives. He criticized leadership on the DTV issues for using consumer “confusion” to further individual interests. “It doesn’t serve the crafting of this legislation,” he said, adding: “Whatever your issue may be, you need to put it on the table and be honest about it.”

Fritts seemed to surprise those on the panel and in the gallery, who assumed Sununu was aiming his comments at the NAB, when he said broadcasters would go on the record behind a 2009 hard date. He said the NAB board authorized the stance at meetings 3 weeks ago. In back a hard date, Fritts said the NAB also would support a new campaign telling the public about the analog cutoff. At a House Telecom Subcommittee hearing in late May on a DTV draft bill, NAB witnesses drew fire from some subcommittee members for sidestepping questions on their position regarding a Dec. 31, 2008, deadline in the draft.

CEA Vp-Technology Policy Michael Petricone told us CEA’s position on tuner mandates is well known -- March 2006 is the earliest set makers can get DTV tuners into all 25"-36” sets. CEA Pres. Gary Shapiro told the committee his group wants March 2007 as the earliest possible date for incorporating DTV tuners in sets 13” and larger. Any earlier deadline, such as the FCC wants, “will only result in the absence of smaller TVs and other products “as they are pulled from the marketplace in advance of the deadline,” Shapiro said.

Shapiro faced repeated grilling by Stevens on CEA’s membership and whether it includes only foreign companies that would benefit from the DTV transition. He said having a U.S. presence is a prerequisite for membership, adding that CEA members account for millions of U.S. jobs. “The reality” is that CE is doing a great job in “pulling along the U.S. economy,” Shapiro said. He said NAB depictions of CE makers as a foreign industry are “very deceptive,” and said sets still are being produced in Ark., Cal. and Pa.

Cable and broadcast squared off at the hearing over down-conversion. Cable said it needs to be able to down- convert digital signals to analog so customers can receive analog broadcast transmissions prior to transition. Cable said it’s willing to invest the “tens of millions of dollars” needed to re-engineer facilities for down- conversion, which won’t cost govt. a dime, NCTA Pres. Kyle McSlarrow said in testimony. “Over 40 million cable customers who can only receive an analog service will not lose access to must carry stations, and will enjoy the same service the day after the transition that they received the day before.” Fritts, queried by Sen. Inouye (D-Hawaii) about down-conversion, told the committee analog sets should carry analog signals and digital sets, digital signals. McSlarrow said broadcasters are forcing cable systems to carry all signals, which isn’t fair.

McCain, a frequent critic of NAB, lambasted broadcasters for delaying return of spectrum, and stressed the importance of returning spectrum to speed development of crisis-grade public safety communications gear. He said the London attacks show the continuing need to be ready for terrorist threats. McCain admonished broadcasters for clinging to spectrum, calling it the “great $70 billion giveaway… One of the most disrespectful chapters in history is what NAB has contributed to block the transition.”

The American Cable Assn. (ACA) told the panel it wants retransmission consent rules in the bill. The group told the committee its cable operators, especially in rural areas, face rising demands from broadcasters, who want cash for carriage in retransmission negotiations. “Congress created the retransmission consent laws in 1992 to protect localism and must change them in 2005 to protect consumers from the consequences of media consolidation in a new digital world,” said ACA Vp Patrick Knorr. To address the rising cost of programming, which affects prices charged cable customers, the group suggested the committee subpoena specific programming contracts and rate information directly from programmers, and from those sources develop a “Programming Pricing Index.” The index would be used to gauge how programming rates rise or fall while protecting individual contracts. “Without disclosure, there is no accountability,” Knorr said.

Motorola believes a DTV converter box would cost some $50 by Jan. 1, 2009, Mike Kennedy, senior vp-govt. relations, told the panel. Noting that his estimate undercut a $67 Motorola projection of a year ago, he explained that suppliers “are making changes that provide better integration of the converter components and prices are moving down.” Based on the $50 estimate, it would cost about $660 million to provide converters to all 13.2 million households and 38.3 million sets CEA says rely exclusively on over-the-air signals.

Shapiro defended CEA figures showing the ranks of at- risk households as shrinking yearly. He predicted the U.S. would follow the example of Berlin in 2003, when surprisingly few eligible households sought free converter boxes. But Gene Kimmelman, Consumers Union public policy senior dir., also defended his group’s estimates that analog cutoff will darken 80 million sets. If CEA is so sure of its projections, he said, the govt. should require the CE industry to pay the costs of a DTV converter box giveaway that exceed its expectations.