Fcc Hdtv

Byline: ALICIA MUNDY

The radical plan proposed by the chairman of the Federal Communications Commission to jump-start the transition to digital TV isn't supposed to be about one industry. Nonetheless, the cable industry appears to be a primary focus of concerns within the FCC and on Capitol Hill, where government officials are watching cable's reaction to Michael Powell's plan. Should cable be worried about what could happen to it if the industry is perceived to be stalling the transition? "Yes," says the director of the FCC's new Media Bureau, Ken Ferree. "Yes," says Rep. Billy Tauzin (R-La.), Chairman of the House Commerce Committee.

Late last week Powell sent letters to Tauzin and to Fritz Hollings (D-S.C.) the Senate Commerce Committee Chairman, proposing voluntary actions by the broadcast networks, TV stations, cable operators, satellite companies and TV manufacturers, that were intended to extract digital, high-definition television from the quagmire in which it has languished for the past two years. "I think he was trying to spread the pain," said Dick Wiley, a network lobbyist, former FCC chairman and the "godfather" of digital TV in Washington. Indeed, representatives from the broadcasting, cable and consumer electronics industries all indicated some reservations with parts of the plan. But in a meeting with reporters on Friday, Ferree made it clear that while cable was "not being singled out," the industry could face problems on the Hill and at the agency if it were seen as a "laggard."

Asked what incentives the cable industry had for going along with the proposals, including one that systems carry, at no cost to broadcasters, the signals of up to five broadcast or other digital programming services that are providing improved digital content for half their prime-time schedule, Ferree had a loaded answer. "The cable industry really is sitting in a very good place, regulatory-wise." It's in cable's interest, he expounded, to "be good actors in the transition and not be stonewalling." In this he was echoing Powell's own comments in private to the board of the National Cable Telecom Association on Feb. 5 (Cable World, March 25). Like Powell, Ferree also noted that it was a good business move for cable to sell digital product and other "high-margin stuff."

Currently, several issues involving cable ownership and regulation are being considered at the FCC. When asked if cable operators should be concerned about the possibility that the FCC would take the industry's response into account as it reviews these issues, Ferree responded, "They should be thinking about that, yes." He noted that a lack of cooperation could have "negative ramifications with the Commission and the Hill."

Powell's move seems rather well strategized, which is not a verb much associated with major FCC actions in the last decade. The plan was announced the same day as the FCC report showing a 7.5% increase in basic cable rates. More important, Powell worked closely with the Hill in advance to make sure Tauzin and Hollings were supporting the plan. Since Congress wants broadcasters' analog spectrum returned as quickly as possible so it can be resold to help balance the budget, several key politicians were willing to tell Powell they will play enforcer for him. That could mean a willingness to legislate.

High-definition TV is a key element of the new plan. The FCC and Tauzin have met several times with industry reps and tried to prod them to produce more programming and pass through the high-def signals without signal degradation. This could leave News Corp.'s Fox in an awkward position, as its "wide-screen" transmission is not what the FCC or the Hill considers true HDTV, which include only the 1080i or 720p standards. Ferree also said he believed the FCC had the authority to mandate that TV manufacturers build digital, high-definition tuners into new TV sets.

Regarding the request that cable carry five, full HD bandwidth signals during prime time at no cost, Ferree explained that during this "cycle" of the transition, the FCC hopes that networks, broadcasters or cable will not seek retransmission or carriage fees; it should be a "wash" for both sides.

In a statement, NCTA president Robert Sachs applauded the Powell plan, but added that some of his proposals "warrant further study." The NCTA declined to comment on Ferree or congressional staff remarks.

When asked how serious Powell and Congress were about the new digital, HDTV initiative, Ferree responded, "The train is leaving the station. Get on it, or you'll get run over."

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