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NAB: We've Got Issues With DTV Order

The Federal Communications Commission (FCC) has yet to publish a newly adopted order that apparently exempts some smaller cable operators from dual "must-carry" rules ahead of the February 2009 digital TV transition, but the National Association of Broadcasters (NAB) has some "major concerns" about it and how it might "undermine" the high-definition television movement.

"If the cable companies are unwilling to carry this high-definition programming… or the next generation of television content, it undermines the entire process that we've all worked to accomplish," an NAB spokesman argues.

The FCC expects to publish the official order "soon," but the proposal that was adopted is expected to give a three-year exemption to cable systems with 552 MHz or less of activated capacity or systems with fewer than 2,500 subs. The subscriber threshold won't apply to systems operated by MSOs with more than 10 percent of the U.S. TV household universe -- namely, Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC).

The waiver would exempt qualified operators from adhering to an order handed down in September that mandates cable operators (save for those that have pledged to go all-digital by February 2009) to deliver must-carry stations in analog and digital format. (See FCC OKs Dual TV Carriage Rules.)

Except for the 10 percent ownership provision, the order is a significant political victory for American Cable Association (ACA) and the National Cable & Telecommunications Association (NCTA) , which had urged the FCC to consider a blanket waiver for smaller cable operators. (See McSlarrow Backs the Little Guys and Small Cable Lobby Asks for DTV Exemption .)

They have argued in part that many smaller operators don't have the spectrum or the financial means to do dual carriage. Moreover, the blanket waiver ensures that those operators won't have to file for separate waivers and get socked with legal fees.

An exact count of the cable subscribers that could be subject to the new order is not known, but an ACA spokesman estimates that "it's definitely in the millions."

The NAB, meanwhile, holds that the cable industry has "boasted" about spending billions on infrastructure improvements. "Now they're making claims that they don't have the capacity or the bandwidth or the financial means to provide their customers with broadcast programming in digital format," the NAB official said. "If we're going to provide digital programming, we want to make sure that viewers can receive that digital programming."

The NAB has also argued that the small-market waiver could cause confusion among cable customers, particularly when it comes to what action they'll need to take in order to receive the digital signals from local broadcasters after the transition. (See Blanket Bewilderment?.) Some subscribers, for example, may need to obtain HD signals from over-the-air sources.

However, a growing number of small- and mid-sized operators are going all-digital. Some are doing so in order to obtain FCC waivers for relatively inexpensive, low-end set tops with integrated security. Others are also cutting things over with the expressed desire to gain headroom for more high-def services. (See Verizon & Others Get Their Waivers, Evolution Thinks Small , and HD No Longer an 'Advanced' Service?)

— Jeff Baumgartner, Site Editor, Cable Digital News

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