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FCC turns DTV sites on cable

As promised, FCC Chairman Michael Powell last week pushed ahead on two of three components that broadcasters say are crucial to the successful transition to DTV: DTV tuners and copy protection. The final key—making sure it's easy for consumers to hook up digital sets to cable TV—is next on his agenda.

"We're working on it," he said shortly after ushering through a new rule aimed at ensuring that American homes will be equipped to receive DTV and proposing strong copy-protection measures intended to prevent widespread copying and streaming of content over the Internet.

All three initiatives are aimed at speeding the transition from analog signals used since the Depression era to digital transmission allowing broadcasters to offer high-definition pictures, multicasts of standard definition signals, high-speed Internet and other services.

Faced by a perception that the digital transition is going too slowly, Powell is under pressure from Congress to add momentum. Since April, he has been pressing, with varying success, to get broadcast and cable nets to offer more high-definition programming and to get stations to commit to carrying network digital programming.

As for incorporating digital tuners, TV-set makers have largely refused. Powell, however, is convinced that the sale of 25 million analog-only sets each year jeopardizes the digital transition.

So far, the FCC hasn't weighed in on the third critical component in the mix: technical standards necessary for "plug-and-play" sets that work with cable without the need for extra converter boxes that consumers must buy or lease. Ensuring cable/DTV compatibility is critical because 70% of Americans rely on cable for their TV (another 15% rely on satellite).

"That's what has to be done next," said FCC Media Bureau Chief Ken Ferree, who will call various industry parties to one of his frequent DTV "hoedowns" in the next couple weeks to resolve some of the lingering disputes. In addition to stalemates over plug-and-play standards, there are disagreements between the cable industry and consumer electronics makers over copy-protection capabilities, standards for two-way interactive communication, and interfaces used between cable-industry security devices and retail set-top boxes.

"There is a golden opportunity for the industries to get involved and resolve some issues and keep the commission out to the extent they can," Ferree said. "We would prefer industry-driven solutions."

Said Marc Smith, spokesman for the National Cable & Telecommunications Association, "We're optimistic the industries can resolve this and save our friends at the FCC some work."

Other FCC commissioners agree that cable disputes are a top priority. "We must quickly address cable-compatible issues," said Commissioner Michael Copps. Commissioner Kevin Martin, noting that only 15% of Americans rely on over-the-air tuners to get TV, went so far as to cast the lone vote against last week's mandate because no cable-compatibility requirement was included.

Martin's dissent echoed the complaints of the Consumer Electronics Association, which plans to fight the tuner mandate in court. CEA says the requirement could add up to $250 to the price of each television set, a figure the National Association of Broadcasters disputes as far too high. That is probably no deal-breaker for the big-screen sets costing $2,000 and up that initially must face the mandate, but could double the cost of smaller sets, says CEA. Others say that, even if CEA is right, costs will decrease rapidly as more of the new tuners enter the market.

But CEA President Gary Shapiro retorted, "If 70% of Americans are relying on cable to get their broadcast signal, then let's set a national plug-and-play standard as Congress time and time again has asked the FCC to do."

CEA members Zenith and Thompson broke with the trade group and told Powell that they could live with the mandate. As a reward, the FCC relaxed the phase-in schedule by a year to 2007.

Cable has opposed government compatibility mandates, but the FCC action does not necessarily run counter to standards pushed by the industry and its technology-development arm, CableLabs. For instance, the FCC might decide it must back cable's insistence that equipment manufacturers sign licensing agreements that would greatly limit home copying.

Meanwhile, broadcasters were cheering the FCC. "Today's decisions represent the most important action on digital television since adoption of the DTV standard in 1996," said NAB President Eddie Fritts.

CEA is gearing up to fight the tuner mandate in court. Reps. Billy Tauzin and John Dingell and Sen. Fritz Hollings, the lawmakers reigning over communications policy, insist the All Channel Receiver Act that forced set makers to add UHF to television dials also gives the FCC authority to mandate a digital tuner. But CEA disagrees. When the act was created in the 1960s, broadcasters were the only avenue for delivering television, and the government had a compelling interest in making sure UHF could be received.

Consumer advocates are backing the set makers. The FCC and its supporters are "stuck in the past chasing the Holy Grail of over-the-air television," said Mark Cooper, research director for the Consumer Federation of America. Rather than help broadcasters, the FCC should let them try to survive by creating compelling programming. In the meantime, he says, the FCC could best help consumers by lowering cable prices and stopping media consolidation.

Powell says he is on firm legal ground and derides predictions of consumer burdens as "absolutely ridiculous" because prices will drop rapidly as tuners are mass-produced. The All Channel Receiver Act, note FCC officials, gives the agency authority to impose any receiver standards necessary to ensure that TV sets can receive all allocated frequencies. "It's pretty straightforward stuff," Ferree said.