FCC OKs Dual TV Carriage Rules
But the agency, acceding to a plan conceived of and proposed by the cable industry, agreed to sunset the mandate three years after the transition. Although that portion of the order is set to expire in 2012, the FCC plans to conduct a formal review of the matter during its final year.
FCC Chairman Kevin Martin was seeking a dual must-carry plan, absent a temporary compromise.
Following a lengthy delay to a meeting originally scheduled to get underway Tuesday at 9:30 a.m. ET, the FCC voted 5-0 in favor of the Order at about 10:04 p.m.
Under the FCC's Third Report and Order and Third Further Notice of Proposed Rulemaking, cable operators will be required to carry a broadcaster's digital signal in analog format, or carry the signal only in digital format, provided that all subscribers have the "necessary equipment" (digital set-tops) to view the broadcast content. The rules are intended so that all cable subscribers can continue to get local TV stations following the February 2009 cutoff. (See FCC Adopts Cable DTV Rules.)
The FCC also reaffirmed that operators must also carry the high-definition signal of broadcasters in hi-def format.
MSOs and their lobbying arms had complained that a permanent dual must-carry mandate was unconstitutional, and would require operators to deliver programming in three formats, eating up valuable plant capacity unnecessarily. The National Cable & Telecommunications Association (NCTA) has also argued that the digital-only option is in reality no option at all because supplying the necessary set-tops would cost the industry about $6.3 billion. (See Cable's All-Upset Over All-Digital.)
Tuesday's action also offered some relief to smaller operators that would find themselves cash- and capacity-constrained in complying with the dual must-carry rules in time for the DTV transition. The FCC is allowing MSOs with activated capacity of 552 MHz or less the option to request a waiver on the requirements. By comparison, most cable plant considered upgraded generally have capacity of 750 MHz, 860 MHz, or more.
Although he voted in favor of the measure, FCC Commissioner Jonathan Adelstein dissented, in part because he believes the ruling does not provide enough relief for smaller operators.
"While I am pleased that the Order provides for waivers, it is not fair to ask these tiny rural systems to engage lawyers in Washington when a simple exemption would have sufficed," he said.
The American Cable Association (ACA) , a pressure group representing small and independent cable operators, wasn't thrilled with the must-carry ruling. ACA President and CEO Matthew Polka, in a statement, said the equipment and labor costs required to carry signals in multiple formats could exceed $150,000, making "it more difficult for operators of small systems to stay in business."
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