DTV Transition Oversight Hearing

The House Subcommittee on Telecommunications and the Internet held a hearing Tuesday on the status of the digital television (DTV) transition which will take place in February 2009. Rep Ed Markey (D-MA) chaired the hearing will the goals of:

1) extracting lessons from this month's field test of the transition in Wilmington, North Carolina;

2) assessing ongoing governmental efforts toward a successful transition,

3) examining consumer education initiatives and ways to improve them; and

4) exploring any other policy issues affecting the future of digital television.

One of the lessons from the Wilmington early analog shutoff was the number of out-of-market viewers of NBC affiliate WECT-TV there that lost the signal. Federal Communications Commission Chairman Kevin Martin told the Subcommittee that the FCC was working on ways to help out viewers of the approximately 15% of TV stations with digital-TV signals that will not reach as many viewers as their analog signals did. Chairman Martin said possible solutions include antennas.

Meredith Attwell Baker, the acting head of the National Telecommunications and Information Administration, said the NTIA sill does not have the inclination or authority to reissue digital-TV-to-analog converter-box-subsidy coupons to households that did not or could not redeem them before the 90-day expiration date. said that to do so could "jeopardize" a smooth transition and represent "potentially substantial costs and delays." She suggested that even if the NTIA wanted to do it, it probably could not be done before early 2009 (the DTV switch is set for Feb. 17, 2009). She added that such a change could "seriously compromise" the incentive to apply for the coupons promptly and could lead to a "last-minute" rush and potential shortages of converter boxes in the late stages of the transition. Besides, she added, "it would be unfair to consumers who redeemed coupons in a timely manner, consistent with the statutory 90-day-expiration deadline requirement and existing coupon-program regulations."

Baker also outlined the NTIA's proposal last week to ask Congress for the authority to move some more money into the administrative category to cover the additional coupons it will be able to issue given that one-half of the coupons are going unredeemed. Without that flexibility, she added, the NTIA would be able to issue 44.5 million coupons without that money -- 50 million if it got it -- and urged immediate action. Baker promised to get back to Congress in 30 days with a plan to help deal with an expected spike in coupon requests.

The hearing turned into a fight over retransmission-consent negotiations. National Cable & Telecommunications Association president Kyle McSlarrow used his time on the witness stand to focus entirely on the issue, calling it "a coming storm." McSlarrow told the committee that historically, the retransmission-consent playing field has been relatively level in most cases, although never a free-market negotiation. But he said that in the current economy, with economic pressures on broadcasters from private-equity owners and "hedge funds looking for a quick buck," there are some broadcasters who want to ratchet up their prices, some by 500%.National Association of Broadcasters president David Rehr, seated next to McSlarrow at the witness table, said checks and balances remain on the negotiations, adding that he could count the number of problems in those negotiations on fewer than 10 fingers and that the FCC has never found a broadcaster not to have bargained in good faith. But he also reiterated the NAB board's support for the one-month quiet period. McSlarrow countered that the problem was not good faith but the bad structure of the negotiating process that allowed for "exorbitant cash demands" that will change the historic balance of the negotiations, with cable operators left with the choice of either passing those costs on to subscribers or insisting on "something lower."