The Federal Communications Commission (FCC) last night initiated a new rulemaking addressing cable carriage of broadcast signals after the digital transition occurs on Feb. 17, 2009. The rulemaking puts in play the possibility that the Commission might impose significant new signal carriage obligations on cable operators, including requiring the carriage of must-carry signals in both analog and digital; regulating the bit rate for the transport and delivery of broadcast signals; and supplying digital set tops to all television receivers.
Focusing on statutory language requiring that must-carry signals must "be viewable via cable on all television receivers,” the rulemaking suggests two alternatives:
- For “all-digital” systems, the digital must-carry signal could be carried only in digital.
- For all other systems, the digital must-carry signal must also be offered in analog format to all analog cable subscribers.
If the FCC's proposal is adopted, cable systems would be required to transmit all must-carry signals in analog format as long as any programming services are offered in analog. This would effectively impose a “dual" must-carry regime for those systems providing both analog and digital cable service, which the FCC has twice previously rejected during the transition period. As a result, the cable industry believes that the proposal raises serious constitutional concerns.
At the same time that the FCC is considering requiring cable operators to continue analog delivery of must-carry signals after the digital transition; it is also seeking to clarify technical requirements regarding digital carriage. In particular, the FCC reaffirmed that cable systems must carry high definition broadcast signals in HD format. The cable industry has been troubled by the burden associated by this obligation, particularly when a television station transmits only occasionally in HD. The FCC is also seeking comments on establishing an objective technical standard to ensure that cable systems carry digital signals without “material degradation.” One suggestion advanced by the FCC would be to require retransmission of a station’s primary signal and all related “content bits,” which Commissioner Jonathan S. Adelstein separately criticized as failing to sufficiently address the “material degradation” issue by “establish[ing] the ceiling – the best resolution possible – not the floor.” The FCC also asked for input regarding how to measure and verify that any “material degradation” standard that is adopted has been satisfied on each cable system.
As the deadline for completing the digital transition approaches, it is evident that the Commission is increasingly focused on the potential disruption to consumers. The text of this rulemaking has not yet been released, and its precise scope will not be clear until that occurs. We will provide more details about this proceeding, if warranted, once the full text has been released.