FCC Permits DBS To Phase-In HD Broadcast Carriage

In an expected decision and win for satellite providers, the Federal Communications Commission Thursday officially told DirecTV and Dish Network that they don’t immediately have to carry every TV station’s local HD signal come the digital transition early next year.

In a 34-page order, the FCC put into writing a number of concessions that the two direct-broadcast satellite providers had been seeking regarding local HDTV carriage, giving them until 2013 to roll out full HD carriage across the country.

Word that the FCC was planning to grant DirecTV and Dish Network some of their requests first leaked last week.

FCC Chairman Kevin Martin, referencing the transition to all-digital broadcast signals next February, said in the order, “The American consumer is, and continues to be, our highest priority. Without the proper policies in place, some viewers may be left in the dark or be unable to realize the full opportunities offered by digital technology.”

The satellite companies had told the FCC that they needed several years to prepare to carry all local station HDTV signals, because they lacked the channel capacity to offer them all immediately.

“DirecTV applauds the FCC for adopting a reasonable schedule for implementation of an HD ‘carry one, carry all’ requirement,” DirecTV said in a statement Thursday.

“The FCC strikes an appropriate balance to reach its public policy goals, while recognizing satellite's unique infrastructure and capacity challenges,” DirecTV said. “The order, moreover, preserves existing service and helps to ensure a smooth digital transition to over 30 million satellite TV households in 2009.”

Dish Network also lauded the order.

“Dish Network applauds the FCC for recognizing the capacity challenges facing the satellite industry,” the company said in its statement “The FCC's order underscores that carry one, carry all obligations impose a significant burden on DBS providers. Because of differences in technology between cable and satellite, the added burden of an HD obligation disproportionately impacts the DBS industry.”

The FCC is giving DirecTV and Dish Network four years to carry all TV stations in HD in any market here they have elected to carry any station’s signal in HD. The clock on the “carry one, carry all” mandate is triggered when s satellite provider starts carrying local signals in HD.

“By adopting a 2013 deadline, the FCC has ensured that a new regulatory obligation does not harm DBS efforts to provide a smooth digital transition to over 30 million satellite TV households in 2009,” Dish Network said.

In its order, the FCC set forth HDTV benchmarks for DirecTV and Dish Network. By Feb. 17, 2010 they must provide full HD carriage in at least 15% of their HD markets; by Feb. 17, 2011, they must provide full HD carriage in 30% of their HD markets, with 60% HD carriage by 2012 and 100% by Feb. 17, 2013.

“After much discussion with the DBS and broadcast industries, we adopt a four-year schedule for satellite carriage of local HD signals in all local-into-local markets by 2013,” FCC commissioner Jonathan Adelstein wrote. “This phase-in, planned implementation provides clear, quantifiable local HD carriage benchmarks for each year from 2010 to 2013.”

But Adelstein noted that while the FCC has granted this phase-in of HD carriage for DBS providers, it has declined to grant similar concessions regarding digital carriage to small cable operators, who also face bandwidth constraints.

“Without adequate reasoning or justification, the Commission requires the smallest of cable operators to undergo an expensive, time-consuming burdensome and often unpredictable waiver process before the Commission,” Adelstein wrote.

“Many leaders in Congress have expressed concern about the Commission’s misguided approach,” he added. “Today, I ask my colleagues to extend to small cable operators the same level of fairness and consideration we provide to DBS providers…Fair is fair.”

The National Association of Broadcasters, which was expected to oppose the FCC’s ruling, couldn’t be reached for comment Thursday.

“Dish Network already provides local service in 174 out of 210 markets,” Dish said in its statement. “Most of the remaining local markets are missing one or more of the big four broadcast affiliates (ABC, NBC, CBS, or FOX), and broadcasters are opposed to granting satellite providers the right to bring in the missing stations, thus making service to additional local markets uneconomical. We look forward to working with the NAB and Congress to address this issue, so that more Americans in rural areas can enjoy their local stations."