Martin Proposes Eased DTV Carriage Rule at Cable Summit
FCC Chairman Martin will let small cable systems out of some digital must-carry obligations in an order he sent to colleagues Tuesday, he told an American Cable Association conference. Martin stopped by on short notice, interrupting a panel discussion on the small cable operator association’s lobbying goals to make the announcement. If approved, Martin said his order would exempt cable systems that have less than 552 MHz capacity from a 2001 order requiring them to carry broadcasters’ signals in high definition.
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Cable operators have been seeking such an exemption to the must-carry rules since the commission reaffirmed the HD carriage requirement at its Sept. 11 meeting but set up a waiver process for small operators (CD Sept 11 Special Bulletin p1). ACA welcomed Martin’s proposal. “It’s dead on what we had talked about,” said ACA President Matthew Polka. The exemption would benefit the entire cable industry because even large operators such as Time Warner Cable have systems that would fall under the exemption, said New Wave Communications’ Tom Gleason.
The NCTA has been pushing for the exemption as well and praised Martin’s proposal. “We look forward to working with members of the commission toward swift adoption of an order that advances the DTV transition and provides appropriate relief and needed certainty to all owners of small cable systems,” NCTA President Kyle McSlarrow said in a written statement.
Martin also said he supported giving cable operators more flexibility in the way they sell expensive programming. If a programmer -- broadcast or otherwise -- seeks more than “maybe 75 cents” in monthly affiliate fees per subscriber, then the distributor should be able to offer than network a la carte, he said. “Anybody who wants to charge over that figure, consumers should be able to pick and choose whether or not they want that network,” he said, drawing applause from the audience.
Under Martin’s proposal, smaller cable systems still must provide must-carry signals to all their subscribers, but the dual obligations would vanish, he said: “I understand that smaller systems are capacity constrained.” Systems with analog-only service won’t be required to deliver must-carry stations’ signals in digital. Likewise, “if your system has both analog and digital subscribers and your digital subscribers are able to view an analog signal, you can down-convert broadcasters’ digital signals to analog and send them to all of your subscribers exactly as you do today,” Martin said.
For systems with both digital and analog customers where digital subscribers “are unable to view an analog signal,” the cable operator must send an analog version of the must- carry stations’ signal to analog subscribers, and a separate digital signal to digital subscribers, Martin said. Cable operators in that situation are already doing that today, he said: “Most likely, that is by carrying an SD feed.”
Between 3 and 4 million cable subscribers are served by ACA members with systems below 552 MHz, Polka said. The vast majority of them offer no HD programming, ACA Chairman Patrick Knorr said. The lack of HD offerings hasn’t hurt their business, Knorr said: “Small businesses should be allowed to find their niches, and in some cases that niche may be broadband.” -- Josh Wein
ACA Summit Notebook…
Small cable operators will visit more than 150 Hill offices this week and make the rounds at the FCC to lobby for retransmission consent reform and to support an overhaul of wholesale programming buying rules, ACA said. Small cable operators need relief this year from retransmission consent rules because broadcasters are approaching the upcoming negotiating cycle with greed, ACA Chairman Patrick Knorr said. The FCC’s inquiry into wholesale programming contracts is the best opportunity for that, he said. Broadcasters’ insistence on cash for carriage could backfire in the long run, Knorr said: “Eventually, I think broadcasters are going to be on the losing end of this deal… Their best chance is the next [negotiating] cycle. After that there are a lot of things that are going to be in our favor in the long run.” One point cable operators will try to hammer home with elected officials is the pricing discrimination they say they face from programmers. They lament that broadcasters are typically able to win richer contracts from small operators because those operators lack the leverage of a industry behemoth such as Comcast. Too often, broadcasters approach negotiations with a “take-it-or-leave-it” offer, said Wide Open West General Counsel Craig Martin. Lawmakers also will hear why access to programming helps broadband deployment, said Bevcomm Assistant General Counsel Jim Beattie. “Access to affordable programming has really driven our broadband deployment rates in Minnesota.”