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FCC's Transition Plans, Congressional Hearing, and More

June 24, 2007

Blockbuster has chosen sides in the high-def DVD format war, and the winner is Blu-ray Disc. This came out last Monday and is old news, but perhaps worth a recap.

Blockbuster entered the high-def disc market with 250 stores carrying both Blu-ray and HD-DVD titles. Based on its customers' overwhelming preference for Blu-ray, Blockbuster decided to stock Blu-ray titles exclusively in its 2nd wave of HD-stores--that's 1450 stores that will now carry Blu-ray and not HD-DVD.

The original 250 stores will continue to carry both formats.

Does this tell us something? What would happen if a Best Buy decided to go Blu-ray exclusive? The end of HD-DVD?

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I reported last week that Congressman John Dingell had written FCC honcho Kevin Martin urging him to appoint a member of the broadcast industry lobby group to the FCC's Consumer Advisory Committee. Well, his wish was apparently Martin's command.

On June 18, John Sander, representing the National Association of Broadcasters was appointed to that Consumer Advisory Committee, which had just been rechartered to focus on the transition to the new U.S. digital TV standard.

Specifically, the new charter declares that "Through its work, the Committee will provide valuable insights that should further the Commission's goal of ensuring that all consumers, especially the elderly, low-income, non-English speaking consumers and people with disabilities, are aware of the transition and understand what specific steps, if any, they must take to continue watching television after the transition is complete on February 17, 2009."

Don't expect too much. The Committee's first meeting under the new charter is August 10, 2007 (in 2006, the Committee met only once). At that meeting, working groups will be formed to discuss possible recommendations "on how the Commission can best ensure a smooth transition."

Sometime later in the year the working groups will meet, then sometime later the Committee will get together again to discuss the working group recommendations, then they will make a report to the Commission, who might then initiate proceedings to implement the recommendations. Is it 2009 yet?

The Committee must also devote time to a host of other consumer issues within the FCC's jurisdiction.

I discovered that the new NAB appointee will not be the only industry lobbyist making recommendations on consumer issues. In fact, the Commission has appointed Ms. Debra Berlyn as the chairperson of the Consumer Advisory Committee. She just happens to represent the Digital Television Transition Coalition, a newly created industry lobby group that brings together the National Association of Broadcasters (NAB), the Consumer Electronics Association (TV manufacturers), and the National Cable & Telecommunications Association (cable companies).

The Digital Television Transition Coalition is the TV industry's voluntary alternative to mandatory consumer education efforts. The industry has been telling Congress and the FCC--hey, don't worry about consumer education; we've got it covered. So far, their strategy has worked--no mandated consumer education.

Unfortunately, the Coalition has let it be known that they do not intend to start educating until next year. One industry rep said starting any sooner would cause enormous consumer confusion. Duh . . .

Of the 28 members of the consumer committee, only ten represent consumer interests. Others represent the disabled, and state and local governments. Besides the new NAB member, Cablevision, the Consumer Electronics Association, Echostar Communications Corporation, and Verizon Communications are represented, not to mention the all-important industry chairperson who directs the Committee's work and conclusions.

All of which fits in with the next topic --

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The government points fingers at different parts of itself. A dysfunctional family?

Chairman John Dingell, Chairman of the House Energy and Commerce Committee, has decided that the FCC should be the one to educate the American public about the transition. You may recall that the same Committee under the Chairmanship of Joe Barton last year approved DTV consumer education provisions, which later were dropped in a Senate/House conference.

This year Dingell is not proposing a new consumer education bill (he has complied with the powerful broadcast industry lobby, which wants a voluntary program). Nevertheless, he thinks consumer education is important, so he's hitting up the logical proxy -- the FCC -- to do the educating.

Trouble is, the FCC seems to be miffed at the Congress for last year inexplicably giving $millions and responsibility for educating the public to the National Telecommunications and Information Administration (let's call it NTIA).

Must have been for spite--someone powerful in Congress had it in for the FCC? The NTIA is totally unprepared to deal with public education or, for that matter, the converter box subsidy program which NTIA has been criminally late in getting started.

So anyway, on May 24 Dingell wrote a nasty 5-page letter to the FCC asking why weren't they moving forward with educating the public about the transition.

"We are concerned about a number of matters associated with the digital transition.

"First, the present lack of leadership, direction, and focus at the Federal level is jeopardizing the transition."

On June 18 Chairman Martin wrote 14 pages back explaining what they were doing (with little digs about Congress not giving them any money for the task, despite their asking for it).

"Please be assured that the Commission is doing everything within its statutory and budgetary capacity to make sure that no American is left behind in this part of the digital revolution."

The FCC is actually doing good work now that the end of the transition is getting close. For too long they went along with the TV industry footdragging, but no longer.

For example, they are now actually sending inspectors out to hundreds of retail stores across the country and enforcing the analog-only TV labeling requirement, and have assessed fines against two TV manufacturers who were not putting digital-receivers in their sets.

But still no effective consumer education. Everyone talks; nobody acts--the industry is still in control.

So what did Martin (in his 14-page letter) say the FCC had planned for ensuring a good DTV transition?

  • The FCC is working on proposed rules that would ensure that the 32 million analog cable subscribers will not lose access to broadcast signals at the end of the transition, when analog over-the-air signals will be turned off. That will leave cable companies with only a digital (broadcast TV) signal to distribute to their subscribers; cable companies for the most part have not yet figured out how they are going to deal with that.

    Martin does not want cable subscribers to be forced to rent a set-top-box to view broadcast programming.

  • The FCC is also working on proposed rules that would require cable companies to deliver high-definition broadcast programming intact to their subscribers who have HDTVs. In other words, cable subscribers with high-definition sets should not be forced to accept HD programming downconverted to some lesser quality.

  • The Commission recently proposed rules that would make sure that broadcasters were taking steps to bring their digital broadcast facilities to completion by February 17, 2009.

  • Martin is working on a proposal that would require cable companies to deliver to subscribers all broadcast station's digital sub-channels. More channels for consumers. This may or may not see the light of day, as their is no consensus on this (I'm opposed, because when sub-channels are broadcast at the same time as the primary HD-channel, the video quality of the HD-channel by necessity is degraded.)

  • The FCC has a DTV web site and has developed some materials for DTV education which it has distributed to other organizations for the eventual use in educating. Martin talks about what it could do if it received funding, but many things, like e.g. placing flyers in local grocery stores, would have very little impact.

    One statement: "We hope to encourage the news media to highlight the upcoming transition in the ongoing news coverage." Time's a wasting, Kevin.

  • With respect to rulemaking actions that the FCC could take to promote consumer education, Martin said he has initiated an internal proposal that would 1) require cable and satellite companies to insert periodic notices about the transition in customer bills, 2) require broadcasters to report on what consumer education measures they are voluntarily undertaking (moral persuasion?), 3) require manufacturers to include educational materials with television sets, and 4) require (in cooperation with the NTIA) retailers who will be selling subsidized converter boxes to detail their employee training and consumer information plans.

  • This potential proposed rulemaking action might also require television broadcasters to air periodic public service announcements and a rolling scroll about the digital transition. (This last item would be the most effective; a similar provision was in a failed Senate bill last year. Broadcasters are resisting.)

There you have it. At its regular monthly meeting on June 28, the FCC will consider proposed standards to ensure bidirectional compatibility of multichannel video programming distribution systems (cable TV) and consumer electronics equipment (TVs). This issue has dragged on for years without resolution in secret industry committees--basically what would be a two-way CableCARD system. The impending (July 1) "integration ban" is forcing action; new two-way(bidirectional) proprietary cable set-top-boxes will be no more.

The details of the proposal are typically released during the week following the meeting; the basics will be announced on the 28th. I'll have a report next week.

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The FCC's final rule on penalties for obscene, indecent, and profane broadcasts was published on June 20. It raises the maximum fine from $32,500 to $325,000 for each violation or each day of a continuing violation (not to exceed $3,000,000). This rule implements "The Broadcast Decency Enforcement Act of 2005," signed into law by President Bush on June 15, 2006.

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Congress is reviewing more ways to protect kids from the bad things that come out of TVs. (Tell them to read more books? Well, no.)

The Senate has rescheduled their media violence hearing for June 26. The House held its "Images Kids See on the Screen" on Friday (22nd).

I was pleasantly surprised to discover that the House hearing was mostly about health issues, i.e. getting cigarette smoking off TV and movie screens, and doing something about all the junk food ads and product placements during kids TV shows.

Here's what the witnesses in the hearing had to say:

Dan Glickman (Motion Picture Association of America), which has assigned the MPAA ratings since 1968:

"We all share the goal of shielding children from inappropriate images."

. . . while keeping in mind that the first amendment protects movies and TV shows as "forms of expression."

He says they must "aggressively and creatively to empower parents so they can take advantage of what's good, and set limits for what they do not want their children to be exposed."

They maintain www.parentalguide.org, a comprehensive central site which provides parents with information about the various ratings systems. The MPAA has a free email alert service called Red Carpet Ratings which automatically sends parents ratings and ratings reasons for the most recently released movies. Parents can sign up for the service at the MPAA website at www.mpaa.org or on the film rating website.

Interestingly, he noted that many parents continue to take their children to R-rated movies. Because of that, they've added an additional warning to the definition of R-rated movies: "Generally, it is not appropriate for parents to bring their young children with them to R-rated motion pictures."

It is their position that parents have more technological tools at their disposal than ever before to help filter what their children see and hear, including the V-Chip and the controls in every digital set top box. He argues that these parental controls "are far less restrictive methods of protecting children from inappropriate content than government imposed content controls."

Kyle McSlarrow (National Cable and Telecommunications Association) named kid-friendly shows that cable offers: Nickelodeon, Discovery Kids, Disney Channel, PBS Kids Sprout, Toon Disney, ABC Family, National Geographic, and the Hallmark Channel, among others.

McSlarrow also touted the advanced parental controls that the cable industry makes available.

"Almost all cable programming (other than news, religious, and sports) is rated to identify the age-appropriateness of the programming and, where appropriate, specific types of material (e.g., language, sexually-oriented material, depictions of violence) that is included in the programming."

His arguments (and Glickman's) are aimed at keeping sexual content, violence, and language from young eyes. But as the hearing progressed, it was clear that the parental controls and ratings do little to keep the allure of cigarettes and junk food from kids.

McSlarrow threw out his legal argument against new legislation, citing a 1996 Supreme Court case that dealt with cable's blocking technology: "No provision, we concede, short of an absolute ban, can offer certain protection against assault by a determined child," wrote the Court. But "we have not, however, generally allowed this fact alone to justify reduc[ing] the adult population . . . to . . . only what is fit for children."

As for a la carte channel pricing, McSlarrow was emphatic that "Mandated a la carte would not be an effective tool for parents in managing content, would harm consumers and threaten program diversity."

Jon Rand (National Association of Broadcasters) began by citing the TV stations he manages having a public service campaign called Healthy Choices=Healthy Families, which focuses on combating childhood obesity.

And on parental controls, he claimed many players in the TV industry "are now conducting an extensive campaign to educate parents on how they can use these myriad of tools to control effectively their children's television viewing."

"Empowering parents in this manner is a better -- and more First Amendment friendly -- way to address concerns about content on television than legislation seeking to restrict the programming that all viewers, including adults, can watch on television."

He said "approximately 68% of the country's 110 million television viewing households do not include children under the age of 18 at all. Thus, for the majority of households in the country, restrictions on content, including violent content, would do nothing but impinge on the viewing choices of adults." (emphasis supplied)

Adam Thierer (The Progress and Freedom Foundation) wrote a parental controls tools and methods booklet (tv, internet, etc) - it's a free download at www.pff.org/parentalcontrols.

Donald Shifrin (American Academy of Pediatrics). "It takes a village to raise a child, but our concern is that the electronic village is supplanting parental values."

He testified that advertising directly to young children is "inherently deceptive", and called for government restrictions on junk food ads directed at kids

He also noted that "having a TV in [a child's] bedroom has been reported to be a strong predictor of being overweight, even in preschool-aged children."

He said "media violence can contribute to aggressive behavior, desensitization to violence, nightmares, and fear of being harmed."

On cigarettes in the media, he said "Preventing young people from starting to use tobacco is the key to reducing the death and disease caused by tobacco use." and "Mainstream movies are one of the most important factors in recruiting preteens and teens to begin smoking."

Cheryl Healton (American Legacy Foundation), which was created as a result of the Master Settlement Agreement (MSA) between forty-six states and the tobacco companies.

She said "Smoking is the largest preventable cause of death in the U.S. with over 400,000 Americans dying every year from tobacco. Approximately 8.6 million Americans suffer from tobacco-related disease. One of the most pernicious aspects of the smoking epidemic is its reliance on teen-agers. Over 80% of all smokers start before their eighteenth birthdays and 90% start before they are twenty. The tobacco industry has chillingly referred to teen-agers as 'replacement smokers' for its older customers who die or manage to quit."

Certainly sounds more dangerous than witnessing a Janet Jackson wardrobe malfunction or hearing Nicole Richie say "shit."

"Widespread images of smoking in the media are a major cause of youth smoking. Peer- reviewed research establishes that movie depictions of smoking recruit about 390,000 new youth smokers every year. Smoking appears in approximately 75% of all movies and a clear majority of youth-rated movies."

Her organization advocates four actions:

  • Rate new smoking movies "R",

  • Certify no pay-offs. (meaning payment for tobacco product placement),

  • Require strong anti-smoking ads (before a movie), and

  • Stop identifying tobacco brands.

(Movie measures flow over to television)

Patti Miller (Children Now) said that in addition to smoking, there are two other media issues that pose significant health risks for our nation's youngest consumers of media: 1) media violence and; 2) the advertising and marketing of unhealthy foods and beverages.

To combat the ill-effects of media violence on children, she advocates that the TV industry should: 1) Provide parents with more accurate and descriptive content-based ratings, and 2) Increase public education efforts.

"For example, as television transitions from analog to digital, broadcasters should take advantage of emerging click-through, interactive technology to provide on-demand ratings information to parents. Parents should be able to click on a TV rating on the screen to find out what it means as well as more detailed information about why it received that particular content descriptor."

She suggests that businesses: 1) Shift the balance of advertising and marketing targeted to kids to products and beverages that are lower in calories, fat, salt, and added sugars and higher in nutrient content, and 2) Assure that licensed characters are used only to promote foods and beverages that support healthful diets for children and youth.

Mary Sophos (Grocery Manufacturers/Food Products Association) made the rather amazing statement: "Reducing childhood obesity and encouraging healthy lifestyles is a top priority for the food and beverage industry."

She then added that others have to do their part: "Multiple strategies and the commitment of many stakeholders will be necessary to address this important public health issue."

What did the members of the committee have to say?

Chairman Ed Markey (Sub-committee on Telecommunications and the Internet) noted that he ran the hearings that resulted in the V-chip requirement (for TVs made starting 2000) -- the Parents Television Act. He said the V-chip gets good marks by parents who use it, but that lots of parents do not know about it or do not use it. He said it's hard for parents to compete with popular characters pushing junk food. On smoking, he noted that if a kid makes it to 18 without smoking, he or she will likely not start.

Ranking minority member Upton (MI) who has a reputation as being business-friendly, said we tend to lay blame on others for our ills, rather than take personal responsibility. He said children become obese because of what they eat, and not what they watch. Parents are ultimately responsible; they control the clicker, not the child.

He noted that Kellogg is located in his district, and has made a pledge to improve the nutritional content in their kids foods.

Regarding a la carte channel pricing, he said it is not the answer -- parents could already block any channel or block by rating.

He declared that cable operators should be commended for their efforts (providing parental controls).

He laid claim to being responsible for raising the fines for indecent broadcasts. He proudly noted that Mary Sophos (the grocery lobbyist) was his good friend and former boss.

Hilda Solis (CA) is also chairperson of the Congressional Hispanic Task Force. She is concerned by the obesity problem in minorities.

Regarding a la carte channel pricing, she believes FCC Chairman Martin's proposals would present serious issues since it would raise costs and limit choices. (Clearly, she has fallen under the spell of the cable industry.)

Nathan Deal (GA) clearly counts himself in the right wing of the Republican Party; he said he was a former prosecutor and one who prosecuted the first pornography cases. He said TV stations are the local community's conscience.

He has long been concerned about "the level of violence and sexual content that holds a prominent place in movies, commercials and television." He declared that "common sense tells us that when our media glorifies violence, promiscuous sex, and other forms of questionable behavior, as a society we are undermining the very principles we seek to uphold."

No mistaking his position.

The big media companies are to blame.

Baron Hill (IN) was in the health impact camp--worried about the spread of diabetes as a result of the obesity epidemic. He cited statistics on junk food ads (thousands) versus ads for fruits and veges (zero). He's for putting phys ed back in schools.

Well, there was lots more discussion, but you get the idea, and I need to get this thing posted while it's still Sunday. It didn't seem that anyone learned anything new, nor was anyone's mind changed. Doesn't look good for a la carte channel pricing. I suspect the status quo will win out.