POWELL SUGGESTS DTV TRANSITION PLAN IN LETTERS TO CONGRESS
FCC Chmn. Powell offered his own plan to spur national DTV transition Thurs., telling Sen. Hollings (D-S.C.) and Rep. Tauzin (R-La.) in letters that he would seek commitments from cable operators, broadcasters, satellite providers, equipment manufacturers and retailers for his voluntary, 5- part proposal. Powell said his plan wasn’t intended to be comprehensive or to resolve many of weighty issues, such as copyright protection and equipment compatibility, hampering transition. “Rather, it is intended to provide an immediate spur to the transition by giving consumers a reason to invest in digital technology today, while we continue to work on resolving the longer-term issues,” Powell wrote. One of major obstacles to DTV transition is lack of digital programming and low demand from consumers, many of whom find HDTV sets too costly. Aides to Hollings and Tauzin confirmed their offices had received and were reviewing Powell letter. Both lawmakers were traveling during congressional recess and couldn’t be reached for comment, staffers said. Letters were made public as many TV officials were leaving for NAB convention in Las Vegas.
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Powell plan calls for top 4 broadcast networks and cable networks HBO and Showtime to provide high-definition or other “value-added DTV programming” in at least 50% of their prime- time schedule, beginning in 2002-2003 season. Powell said he wanted networks to provide programming that would give “consumers something significantly different than what they currently receive in analog.” One of cable operators’ major criticisms of broadcasters is that they haven’t offered enough DTV programming for their subscribers. Plan is intended to remove much of that objection. It asks DTV affiliates of top 4 networks in country’s top 100 markets to pass through network DTV signals without degrading signal quality by Jan. 1, 2003, or as soon thereafter as they commence DTV broadcasting. Powell also asked affiliates to inform their viewers about their digital content with on-air promotions over their analog broadcast facilities.
Powell told Hollings and Tauzin he would seek commitment from cable operators to carry, at no cost, signals of up to 5 broadcast or other digital programming services that were providing value-added digital programming in at least 50% of their prime-time schedules. Plan also asks cable MSOs to provide their subscribers with option of leasing or purchasing single set-top box to make possible display of DTV programs. Powell said boxes should include digital connectors if subscriber asked for them. Finally, he asked cable operators to market DTV products they provided on their systems and in monthly bills so subscribers would know what programming was available and how to get it.
NCTA Pres. Robert Sachs said Powell offered “thought- provoking proposals,” several of which cable industry was “already actively working to accomplish.” Sachs said other Powell proposals warranted further study. Comcast and Time Warner Cable said they would defer to NCTA on issue. Cable industry sources called Powell’s plan good framework, but said several questions remained, including clarification of definition of “other digital programming services that are providing value-added digital programming.” Hang-up over that language in large part is because such services, for example, multicasting, could add multiple channels. “It’s tough to commit to something when you're not sure of all the parameters,” cable source said. Plan also doesn’t specifically address dual digital must-carry controversy. Broadcasters want cable operators to carry both their analog and digital signals -- something cable vigorously opposes. However, one cable source pointed out that Powell’s plan would give MSOs choice of any 5 DTV networks and/or services to carry, and HBO, Showtime and HDNet, all of which already are tiered cable services, would satisfy 3 of those services immediately.
Broadcaster reactions to Powell proposal were generally positive, though cautious. One broadcast official expressed concern whether carriage of 5 DTV channels would be upper limit, rather than full DTV must-carry, and said carriage of cable-originating DTV channels could mean requirement for only 2 broadcast DTV stations. NAB Pres. Edward Fritts called letter “a major step forward in breaking the DTV logjam.” He said there were “concerns over elements of the proposal,” but didn’t specify them, and congratulated Powell on initiative: “We stand ready to work with the FCC and Congress to bring consumers the next generation of television.” Disney Pres. Robert Iger immediately wrote letter to Powell saying ABC “hereby accepts your challenge to provide HDTV programming for at least 50% of our prime-time schedule beginning with the 2002-2003 season.” He didn’t comment on other aspects of plan. CBS spokesman said network “applauded” plan and said CBS had been airing virtually of its prime-time schedule in HDTV for 2 years. NBC didn’t comment.
One broadcast official said Powell was putting pressure on cable to contribute to DTV transition, saying he expected congressional support for plan. “Right now, the pressure begins to build on cable,” broadcast official said. “We have not had an FCC chairman in the past to take the DTV initiative like this. That can’t be anything but positive.” Cable sources denied there was any pressure on them and said Powell, in fact, was putting onus on broadcasters to finally provide DTV programing cable had asked for all along.
Letter “shows the chairman is fully engaged and using the bully pulpit” to boost DTV transition, said attorney Richard Wiley, who headed FCC’s DTV Task Force: “This is the most far-reaching and specific thing anyone at the FCC has done since the transition started.” Wiley called plan “a reasonable and serious proposal for consideration” that “needs to be looked at by the industries… Maybe we'll get some more movement.” MSTV Pres. David Donovan said letter was “a measured step in the right direction.” He said he was pleased it appeared to move toward solving DTV tuner problem and recognition that DTV “pipeline” was as important as copyright issues. Asked what cable gets in return for carriage, Donovan said cable would benefit if consumers were encouraged to buy more DTV receivers because that could ease provision of advanced services over their networks.
Fourth rung of Powell’s plan asks providers of direct broadcast satellite (DBS) service to carry signals of up to 5 digital programming services that were providing digital programming in at least 50% of their prime-time schedule, by Jan. 1, 2003. Advancement of DTV is “just another reason for the govt. to approve the proposed EchoStar/DirecTV merger,” DirecTV spokesman said: “We both have limited spectrum… The sooner the merger receives approval, the sooner we can begin to take advantage of the spectrum rationalization.” Ultimately, combined company plans to offer 12 high- definition channels, spokesman said. Currently, DirecTV offers 2 HDTV channels and will add 3rd this quarter, he said.
Powell plan asks equipment manufacturers and retailers to commit to meeting demand for cable set-top boxes that allow for display of high-definition programming and to market broadcast, cable and satellite DTV options at point- of-sale. He asked them to include over-the-air DTV tuners in new broadcast TV receivers according to set schedule: (1) 50% of 36” sets and larger by 2004 and 100% by 2005. (2) 50% of 25"-35” by 2005 and 100% by 2006. (3) 100% of 13"-24” sets by 2006. Finally, he asked that manufacturers and retailers include digital inputs on all new HD-capable TV receivers and display devices by 2004. CEA, which has been major player on DTV, didn’t return phone message seeking comment. CEA and NAB recently began DTV promotional campaign in cities across country, and NCTA recently committed cable advertising resources to that effort.
Although many of Powell’s ideas are “laudable,” CEA Pres. Gary Shapiro said, “the chairman’s proposed tuner mandate is unnecessary.” He said DTV sales were tied directly to amount of DTV programming, and “a tuner mandate will undercut consumer choice.” Shapiro also urged Powell to focus on “plug-and-play” cable compatibility.