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Cable Carriage of Digital TV Broadcast Signals

July 22, 2007

On May 4 the FCC released a "Second Further Notice of Proposed Rulemaking" that lays out its ideas for how cable subscribers should get their broadcast TV programming after the end of the DTV transition, i.e. February 17, 2009.

Cable systems carry broadcast channels (e.g. NBC and ABC) under different legal/financial arrangements than the non-broadcast channels they carry (i.e. "cable" or "national" channels - e.g. HBO and Bravo). Broadcast channels are carried either with mandatory "must-carry" status or negotiated "retransmission consent" agreements.

The comment period on the FCC's proposal ended on July 16; I'll present the comments from the different segments of the TV industry below. They're very telling, and it looks like the cable industry is already planning to take its case to court in the event they don't like the FCC's final rule (they certainly don't like the proposal).

On August 16 "reply comments" will be due and after that the FCC will decide what it's going to do. ("Reply comments" are the various parties' rebuttals to their opponents arguments -- in this case cable vs. broadcaster.)

For years nobody worried how cable subscribers would weather the DTV transition. The focus was on people who received their programming via antenna. And indeed, the new ATSC digital TV standard is a broadcast standard.

The "Consumer Alert" warnings for analog TVs say "Analog-only TVs should continue to work as before with cable and satellite TV services." But is that true? And what about digital TVs?

Now that the end of the transition is fast approaching, it seems the cable situation is not so clear. Without government action, millions of TV viewers could be in for a surprise come February 2009. If no action is taken, many cable subscribers with high-definition TVs will continue to see nothing but downconverted standard-definition analog versions of high-def network programming. It would indeed be "as before" for many cable subscribers--as in, before the U.S. got a new digital/HD TV standard.

Others with analog TVs could get nothing at all.

For whatever reason, the government, broadcasters, and TV manufacturers all apparently assumed the cable companies would send their subscribers whatever signal was appropriate to the type of TV they owned. That may not have been the plan.

Some of this potential mess can be blamed on procrastination and a "business as usual" mentality. Something else is also at work. For many cable companies, the last few years have seen a huge change in their business model. Their expansion into broadband data and voice services has pinched the available bandwidth for their traditional video services.

Accommodating both analog and digital viewers after the end of the transition is either going to cost them bandwidth, or alternatively, will cost their subscribers money.

The FCC's proposal aims to see that cable subscribers are not screwed, or as they put it - disenfranchised. They were "mindful of the need to minimize the burden imposed upon consumers by the end of analog broadcasting in order to facilitate the successful and timely conclusion of the DTV transition."

The Proposed Rule

The FCC's proposal would modify for the digital era how a couple of Congressional mandates are implemented.

First: Since broadcast TV carries with it public service obligations, including reporting local news and airing a certain amount of kids' programs, Congress decided that cable companies had to carry broadcast channels (e.g. CBS, NBC, Fox, etc.) on their basic service tier, and further, that those channels had to be viewable by all of their subscribers.

Going into an all-digital era, then, with cable subscribers having both digital TVs (conforming to the new ATSC standard) and legacy analog TVs (conforming to the old incompatible NTSC standard), the FCC is proposing to require that cable companies deliver broadcast signals to both types of TVs. They would have the option of doing that in either of two ways:

1) For cable systems that have both analog (signal in a frequency-modulated wave form) and digital (signal composed of "1"s and "0"s) components, the signal from each broadcast channel must be delivered both in analog and in digital formats. Analog to subscribers with analog TVs who do not wish to use a digital cable set-top-box, and digital to subscribers with digital TVs and/or digital set-top-boxes.

2) For cable systems that have converted to all-digital program distribution, subscribers with analog TVs must be provided with a digital-to-analog set-top-box (sold or leased).

Second: Local broadcast signals must be delivered without "material degradation" to cable subscribers. In the past this has been a subjective (eyeball) standard, which was fine with the mediocre quality of analog TV programming. The old standard was further refined by specifying that cable operators had to deliver broadcast network signals with quality at least as good as any other non-broadcast channel carried by the cable company.

That was also fine when all programming conformed to a single analog standard resolution. With digital broadcast signals, we have Full-HD, 720p, and standard definition. Cable systems can deliver Full-HD in standard-definition analog form and still comply with the requirement, as long as everything else is in SD-analog.

The FCC is now proposing that cable companies deliver high-definition programming in HD to their cable subscribers who have HDTVs. The FCC also wants to use an objective standard to determine if there has been any material degradation of the broadcast signal by a cable provider. Specifically, they are calling for cable companies to deliver all content "bits" that are in the original broadcast signal to their subscribers' televisions, ensuring that they will see the same quality picture as people getting that program directly over-the-air.

The TV Industry Reacts

The broadcast industry liked what the FCC proposed (requiring cable companies to deliver its programs in same-as-broadcast quality to all of its subscribers' analog and digital TVs). The cable industry wants to do their own thing. TV manufacturers offered some of their own ideas.

Broadcasters

The National Association of Broadcasters (NAB) elaborated on the issue of material degradation, pointing out the difficulty in making a subjective assessment with digital versus analog broadcast technology. Who gets to decide? Anytime you change the signal by compressing it, there will be some degradation. How significant must degradation be for it to be "material"?

They also had some thoughts about downconverting digital/HD material for delivery to analog TVs, suggesting the same technical standards used by the NTIA for the upcoming government-subsidized digital-to-analog converter boxes. They also want the broadcaster, not the cable company, to decide whether to "centercut" (chop off the sides) or "letterbox" (add black bars top and bottom) when converting widescreen digital programming for old 4:3 analog TVs.

Block Communications (a small TV market "privately-held, family-owned media and communications company") had a different, more basic take on the proposal. They also own small cable companies, so they are not fully in the broadcaster camp.

Block seems to have a somewhat unsophisticated understanding of the new digital/HD TV standard. Their TV stations don't do HD. They say, with respect to their cable companies:

"Second, for must carry stations offering HD, we would have to offer a separate HD channel of the station.

"Third, if the station had an HD and SD signal, the proposal would require us to carry both the HD and SD signal in addition to the analog signal -- a triple-carriage requirement."

Stations don't have an HD signal and an SD signal per se. After the end of the transition they will have one 6 MHz digital channel, capable of outputting 19.39 Mbps of data. They now have an additional 6 MHz channel for their analog broadcasts that can handle just one standard-definition analog channel--this extra analog channel will disappear at the end of February 17, 2009.

TV stations can use their 6 MHz digital channel for more than one channel, but "multi-cast must-carry" proposals (a requirement for cable systems to carry any broadcaster sub-channels in addition to their primary channel) are not part of this FCC rulemaking proceeding. The FCC has rejected such proposals in the past, and current policy is cable carriage of a station's primary digital channel (which may carry either HD or SD programs--for larger stations, typically HD in the evening and SD during the day).

The confusion may stem from the fact that many smaller TV stations (a substantial portion of the total number) have not yet upgraded their equipment to be able to transmit HD programming to their viewers. Some have no immediate plans to do so. They only broadcast in standard-definition. These small-market stations of course know that other stations are broadcasting in HD, and may assume that it's a "different" signal. Scary!

So that may be where their "triple must-carry" fears come from.

They continue (for their cable businesses):

"Rather than be forced to carry multiple feeds of each DTV must carry station, we should be able to convert DTV signals into a format we can deliver to all subscribers. For us, currently that would be conversion to analog. This would provide a DTV station with distribution on the basic tier."

All of this would seem to mean that the TV stations and cable companies that Block controls offer only standard-definition programming, whether their customers have HDTVs or old analog sets.

Block also can't see providing digital set-top-boxes for their analog customers in the event they decide to upgrade to an all-digital cable system.

Another small-market (low-power) TV broadcaster presented yet another unusual take on the move to a digital TV standard. United Communications had many of the same cost concerns as Block. It is also eschewing high-definition, and instead is splitting its 6 Mhz digital bandwidth into multiple standard-definition sub-channels in order to transmit both CBS and Fox program streams!

The Cable Lobby

It seemed the greater portion of the cable industry's comments, prepared by high-dollar lobbyists and their Washington law firms, was taken up by legal arguments challenging the FCC's authority to change the rules by which cable companies carry broadcasters' signals. They were essentially legal briefs--a message that if the FCC decides against them, they will present their case in Federal court.

The cable lobbies submitted comments -- the National Cable & Telecommunications Association (NCTA - representing the big cable companies), the American Cable Association (ACA - representing the small companies), the giant Comcast (definitely not friendly with the FCC), and Time-Warner. The Discovery Channel people also sided with cable.

NCTA: "What cable operators need to make the broadcaster's transition seamless for their customers is the continuing freedom to determine on a system-by-system basis how best to achieve that transition."

NCTA rejects the FCC's second option (all-digital cable systems with set-top-boxes for all analog TVs). They project 126 million analog TVs in cable subscribers' homes as of February 2009 -- that's a lot of boxes. (NCTA says there are 7,000 cable systems in the U.S. Of that number, more than 130 have promised the FCC they would be going all-digital by February 2009, so that possibly leaves close to 6,870 who will still operate at least a portion of their service in analog.)

That leaves dual must-carry -- digital/HD signals to digital-TV subscribers and a downconverted analog signal for analog-TV subscribers.

Incidentally, they refer to cable operators passing through "the HD signal to cable subscribers of an HD package." I read that as: if you want HD, you're going to pay extra for it!

NCTA says "There is no . . . compelling government purpose to set firm deadlines for the digital transition for cable customers. It should proceed at its own pace, as consumer interest and wise business practices direct."

"Wise business practices?"

NCTA raises a good point about broadcasters being insincere in their crusade to maintain the highest video quality for their HD programming. Broadcasters routinely compress their own network HD fare in order to add one or more standard-definition sub-channels to their primary HD broadcasts, and claim they can do it without a "significant" degradation in quality. (!)

NCTA also mentions broadcasters' plans to further erode HD bit-rates in order to add a mobile programming stream (as I reported last week). NCTA is not disputing the broadcasters' claims; they are using them to justify their own further compression of broadcasters' high-definition signals.

The American Cable Association (ACA), while "strongly supporting the Commission's initiatives to facilitate the delivery of digital broadcast signals to all Americans," claims it "does not have the authority to require cable systems without HD capability to cablecast must-carry broadcast signals in HD."

The ACA says "approximately a quarter of ACA members will be unable to provide any digital broadcast signals on one or more of their cable systems by the February 17, 2009 DTV transition." The ACA has 1100 members, serving 8 million customers.

It wants the FCC to retain the old interpretation of material degradation, thereby allowing its members to convert HD and other digital programming to analog for delivery to all subscribers. They describe conversion from digital to analog as a "technical change," and argue that for many of its members, "it would cost too much to upgrade to provide HD broadcast signals."

Comcast suggests that there "are no legitimate 'viewability' or signal 'degradation' issues that warrant Commission action." They further assert that absent government action, February 17, 2009 "should come and go without disruption" for America's cable subscribers. (Of course, that date might come and go without high-definition TV appearing on many of those subscribers HDTVs. Could the appearance of HD programming be characterized as a disruption?)

Comcast further says that customers with analog TVs will not be disenfranchised by the transition "given the ease with which they can buy or lease the necessary equipment." From Comcast, I assume.

Time-Warner: "There clearly comes a point where the number of TV households without [cable or satellite] service has declined so much that any interest in preserving access to free over-the-air television loses its status as an important governmental interest for purposes of intermediate first amendment scrutiny."

What they are asserting is this: broadcast television has lost its importance to American society and therefore the cable companies have a Constitutional 1st amendment free speech right to put whatever they want on their systems. The FCC can't tell them they have to carry broadcast television signals.

Other cable commenters asserted a 5th amendment Constitutional right against the impermissable taking of private property (in this case bandwidth) by the government, without a compelling public policy interest.

TV Manufacturers

The Consumer Electronics Association (CEA), while not directly in the line of fire, does apparently have some interest in the outcome of this proceeding. And strangely enough, this time its interests seem to be aligned with those of consumers.

The new TVs its members build finally all have digital receivers--both 8-VSB for over the air, and QAM for digital cable demodulation. Being ATSC TVs, they decode broadcast signals using MPEG-2.

Therefore if cable companies send digital broadcast signals unencrypted and with all their content bits intact (i.e. no further compression using the more efficient MPEG-4, for example), people with digital TVs can simply plug the cable into the back of their TVs and see all the broadcast programming in their original form -- no set-top-box needed.

CEA points out that consumers paid for this digital receiving and decoding capability when they bought their TV; they shouldn't have to pay for it again in the form of a cable box that does essentially the same thing.

CEA is therefore proposing that the FCC require cable operators to carry digital broadcasts that are:

1) "in the clear" (unencrypted),

2) "not subject to codecs that are incompatible with receivers covered by the Tuner Mandate" (meaning cable should retain the broadcast programming's original ATSC-specified MPEG-2 codec), and

3) "not subject to 'switched digital' transmission that would make this programming unavailable to such receivers."

"Switched digital video" is a technology being adopted by the cable industry that sends only those programs to a subscriber's home (or small group of homes) that are being watched. That saves on bandwidth, but means the consumer needs a bi-directional interface connected to the TV to tell the cable company which program is being selected. Digital TVs in their current form are one-way (unidirectional) and cannot do switched digital.

Broadcast network programming is very frequently watched compared to the average cable channel. Therefore, routing broadcast signals to all subscribers' homes all the time might not have a significant adverse impact on overall bandwidth efficiency.

Implementing these three measures would certainly make it simple for those cable subscribers who want only basic tier programs and no set-top-boxes.

Now we wait to see what happens.