April 13, 2008
This week: Senate DTV status hearing (with coupon program news), DTV bad guys get fined by the FCC, a peek at future rules for small cable system carriage of broadcast channels, and more.
The Senate Commerce Committee held its DTV status hearing on Tuesday. With just the two ever-optimistic heads of the FCC and NTIA as witnesses, there was not a lot of drama.
In his opening statement, Committee Chairman Inouye said the FCC and NTIA needed to make the DTV transition their #1 priority. Lesser-co-chairman Ted Stevens echoed that sentiment. Senator Smith (Oregon) said there was no more important issue than the transition.
FCC-head Kevin Martin, who has never shown any enthusiasm for the transition (especially any sympathy for its impact on consumers), declared that the transition was "one" of the most important issues for the FCC.
Inouye also expressed disappointment about the repeated change in leadership at the NTIA--not a good thing for the continuity of the coupon program. (An aide to VP Dick Cheney has recently been named to replace Meredith Baker, who testified at the hearing.)
Senator Claire McCaskill was not as subtle (as usual) about her own irritation about the White House ouster of Baker, who McCaskill declared had been doing a very good job. She thought Baker should stay until the end of the transition, saying it was a bad time to play politics. Cheney takes care of his cronies -- that is, except for the ones he shoots.
Baker offered some new data about the coupon program:
- 60% of requests have been via internet; 38% by telephone; 1.6% by mail and fax.
- Approximately 48 percent of applicants identified themselves as fully reliant on over-the-air television.
- 89% of requests asked for two coupons.
- 350,000 coupons were mailed during the first few weeks after February 17 "to ensure operational success." That was a trial; they had originally planned to start their operational phase on April 1, so they weren't sure everything was going to work.
- It will take 2-3 weeks to process coupon requests after they work through the back-log. It has been taking five or six weeks, plus another week in the mail.
- More than a million coupons per week are now being mailed.
- NTIA has accepted more than 5.2 million requests for more than 10 million coupons, which represents approximately 46 percent of the program's base funding. If needed, additional funding is available for requests from over-the-air households only.
- 3.8 million coupons have been mailed out (of the more than 10 million requested).
- As of April 4, 2008, consumers have redeemed more than 280,000 coupons (about 7% of coupons mailed)
In response to requests made by Congress, NTIA has made estimates of the number of coupons that will ultimately be requested and redeemed. Not an easy thing to do.
Senator McCaskill was skeptical about NTIA's projected demand figures. Their assumption was that the demand will stay constant (rather than go up as the end of the transition gets close). McCaskill said that was not plausible, and asked about the source of the assumptions.
Baker conceded that their information came from several sources, and that 70% was pulled out of the air. The estimates ranged from 24 million to 50+ million coupons. Baker said if the demand spikes, they won't have enough.
Early redemption rate data will not be available until the end of May when the first group of coupons mailed out will expire. Baker thinks they won't get really good data until end-June / beginning-July. Many people requesting coupons will not redeem them, either because they are cable subscribers and did not understand that they don't need the coupons, or because when they go to the store to buy a converter box, they decide to buy a nice digital TV instead (or buy one before next February).
Several members of Congress are concerned they will have to appropriate more money for the program; they will need advance notice to keep the flow of coupons moving.
Senator Amy Klobuchar expressed some concern about the technical nature of digital reception and consumer need for antenna upgrades.
There has been some Congressional concern that people in nursing homes and other institutional living arrangements are not eligible for coupons, as well as people having only a post office box mailing address. Baker revealed that they expect to release a Notice of Proposed Rulemaking in the near future to address these concerns. In her written statement, she said "Changes to the rule, at this stage, will pose challenges for the Program, but we will meet those challenges."
In response to questions, Baker said that by the beginning of May stores will have ample coverter box models with analog pass-through. She said they did not require that feature because it results in a 3 dB signal loss (significant--50%), and adds to the cost. So if you don't need analog (don't watch any low-power or translator stations), it would be better not to get a box with the pass-through; you can always add one with a splitter and a short length of antenna cable if you discover later that you need one.
There were some other interesting points that came out.
Senator Hutchinson (Texas) was worried about U.S. TV stations along the Mexican border. The PSAs on the air are not resolving the confusion; the Rio Grande valley has lots of OTA households, but only a few coupons have been ordered. Hutchinson says Mexican stations will continue to broadcast in analog after the end of the U.S. transition. Many Hispanics in Texas who have not gotten their converter boxes will then not be able to receive the U.S. TV signals and will watch only the Mexican stations. She wants a rule that allows U.S. stations to continue broadcasting in analog as well as digital after the end of the transition.
Senator Stevens told FCC's Martin to focus on the transition and stay away from a la carte channel pricing (which is a pro-consumer initiative strongly opposed by the cable industry) and network neutrality (another pro-consumer issue opposed by the big media conglomerates). Not surprisingly, 80+ year-old Stevens asked Martin if there was a plan for requiring transition public service announcements, oblivious to the high-profile FCC regulations already requiring them. Pretty typical for him.
Senator Sununu was even more of a brazen mouthpiece for special interest lobbyists. He said the FCC should stay away from must-carry (requiring cable companies to carry broadcast channels), internet rules (net neutrality), and a la carte.
Just as an example of the kind of special interest money being thrown around, the Associated Press has just reported on the National Association of Broadcasters (NAB). Last year that lobbying organization spent $8.9 million to influence Federal government policy makers on digital television, cable issues, and satellite radio.
The FCC's open meeting scheduled for Thursday was cancelled, but that same day they announced the DTV enforcement actions that had been on the agenda. The FCC ordered enforcement penalties and fines totalling more than $6 million.
Seven of these actions were for DTV analog-only TV labeling violations:
- Sears, Roebuck, K-Mart - $1,096,000 (Sears owns K-Mart)
- Wal-Mart Stores/Sam's West - $992,000
- Circuit City Stores - $712,000
- Fry's Electronics - $384,000
- Target Corporation - $296,000
- Best Buy Co. Inc. - $280,000
- CompUSA, Inc. - $168,000
Two companies illegally imported TVs without digital tuners:
- Syntax-Brillian - $1,266.100
- Precor Inc. - $357,900
Two companies were fined for inadequate V-chip hardware in their TVs:
- Polaroid Corporation - $775,000
- Proview Technology, Inc. - $300,000
This past week FCC Chairman Martin circulated among the other Commissioners a staff draft Report and Order on cable system carriage of broadcast signals.
The rule will address three main issues: 1) channel placement - what cable channel number can cable companies assign to broadcast channels, 2) format - who decides how digital widescreen programs will be presented on outdated 4:3 televisions, and 3) should smaller cable systems be exempted from existing rules requiring cable companies to carry digital and high-definition signals.
In an April 8 speech to the American Cable Association (lobby group for smaller cable systems), FCC Chairman Martin sought to reassure them that the proposed rules would not harm them.
He said his draft rules would give cable systems with 552 MHz or smaller capacity an exemption from the requirement to carry broadcast high-definition programming in HD.
He said analog-only cable systems could down-convert broadcasters' digital signals to analog and send them to their subscribers "exactly as you do today." For systems with both analog and digital subscribers, the small cable companies could down-convert broadcasters' digital signals to analog. If their digital subscribers are unable to view analog signals, they can continue to send them digital down-converted standard-definition programming.
Pity the small cable system subscriber with a new HDTV. Martin's draft final rule will not be adopted until he gets at least two other Commissioners to go along, but that shouldn't be a problem.
I've continued my search of the FCC's web site and finally found the hidden cache of Form 387 - DTV Transition Status Reports submitted by all broadcasters. I certainly didn't read all 1800+ reports, but the few I looked at revealed a range of preparedness.
Many broadcasters whose interim digital channel is the same as their post-transition channel are ready to go now. Broadcasters whose post-transition digital channel will revert back to their current analog channel have a more complicated switch -- often keeping their current analog channel antenna for their final digital channel. Broadcasters moving to a final digital channel that is different from both their current analog channel and their interim digital channel have the biggest challenges, and therefore have the most interesting reports.
My local CBS affiliate falls into this latter class. They will be switching antennas this fall, after which digital signals will reach 83.7% of their nominal viewers. On February 17, 2009, they will switch to their final digital antenna, but their transmitter will only be operating at half power, so the signal will reach 85.2% of their nominal viewers. Sometime around March 31, 2009, they will complete final modifications and reach 100% power.
A couple of stations I looked at are located in the northern part of the country, with antennas up on mountains and therefore not amenable to work during the middle of winter. At one station in Oregon, they have the choice of making the switch in the fall, shutting off their analog signal at that time, or continuing to broadcast on their interim digital broadcast channel past February 19 until the spring. They plan on the latter, because their interim digital channel signal will not interfere with any other local stations after they make the switch to their final channels.
Another station in upstate New York is planning to take the other option, shutting off their analog channel this fall.
To see what your local channels are planning, here's what you do:
Click on this FCC web site link.
Fill in the call sign of the station in the appropriate box. (Some stations add "-TV" to the end of their call sign, but try without first - for example: "WRAL" first; if that doesn't work, then "WRAL-TV")
Then go down to the "Service" item and select "Television Station"
Then go down to the "Form Number" item and select "387"
You don't need to fill in anything else.
Then at the bottom, click "submit application search"
Here's another chapter of predatory cable practices. An MSNBC story from the Associated Press - "Digital transition could cost cable customers" - illustrates the plight of basic tier subscribers falling into the trap laid by the cable industry.
To wit, in its own transition to digital technologies, the cable industry is gradually making it impossible for people who simply want basic programming services to escape the new mainstream cable business model. That is, a bi-directional hookup that will give everyone the opportunity to buy video-on-demand, impulse pay-per-view, digital voice and data, and other extra-cost services.
Bi-directional will also enable the cable companies to implement switched digital technology, saving them gobs of bandwidth they can use for other services they can sell you.
They have resisted the establishment of a universal plug-and-play navigation device standard so that everyone will need a proprietary cable set-top-box. Everyone will need to transition to a higher cost digital service (by 2012) and if you want to see native high-definition broadcast programming in HD, you'll have to pay extra for it (otherwise you'll have to settle for downconverted standard-definition).
Of course all cable companies are not the same, but the smaller "nicer" companies are being swept along by the industry giants. They have too little buying clout to influence the path of cable technology. In order to ensure a market for new premium services, cable giants effectively killed a low-cost digital-to-analog converter box for cable, in favor of an expensive encrypted bi-directional box that would support premium services, and then they had the gall to call it "low-cost" and limited-capability in their arguments against the FCC's integrated set-top-box ban.
The era of simply plugging the cable into the back of your TV will soon be over, at least until the FCC gets around to adopting a universal plug-and-play bi-directional standard (and that will be for new sets only that meet that standard). Disclaimer: I have an anti-cable bias, so interpret my rants in that light.
But back to the story, which featured a cable subscriber in a retirement community. Here are some excerpts:
"So cable customer Doris Spurk was surprised to learn that thanks to the transition, she would have to rent a converter box for $5.95 per month, per television set, plus pay for a $60 service call to install it. With five televisions in her home, the conversion would increase her bill by 75 percent."
"It really ticks us off," the 63-year-old central Florida resident said. "If they are in the right and can do this -- charge these prices -- then the educational effort that the FCC (Federal Communications Commission) is doing is really misleading everybody."
The FCC isn't doing any educating--they have deferred to the broadcast and cable industries.
The local Cablevision president spoke to some of the residents of Spurk's community. She reported that - "Immediately he starts the meeting with, 'If you don't like what I'm going to say here, blame the FCC, because they're the ones forcing the transition on us,'" she said.
I'm not surprised. Blame someone else when you screw your customers. (He also was ignorant of who was responsible for the transition -- Congress, not the FCC -- but I suspect he tells his customers whatever sounds good to him.)
Until next week . . .