Cable Faces Multicasting Battle, Seeks Downconversion

Compromise between broadcasters and cable is possible, McSlarrow said. “Any bill that passes Congress is going to have some version of downconversion,” he predicted. “There’s a way to move everyone forward in a constructive way,” he said, “rather than throwing grenades.” One solution is for cable operators to voluntarily sign deals to carry broadcasters’ digital and analog signals during the DTV transition, McSlarrow said: “The market is working pretty well in terms of carriage.”

“The multicast provision has completely changed the dynamic,” McSlarrow said: “There’s a lot more intensity now, and there’s a lot more intensity behind our reaction to it.” He noted that the issue barely came up during a House Telecom Subcommittee hearing in May (CD May 27 p1), while it was the focus of many questions at last week’s DTV Senate hearing.

Some Hill staffers are skeptical that such a controversial option has any chance of inclusion in a budget reconciliation bill, the most likely place that DTV provisions will end up. The reconciliation process requires revenue goals to be met with a minimum of controversy, budget experts say. However, Stanford Washington Research Group analyst Paul Gallant, a former FCC staffer, said: “To the extent that Congress perceives that broadcasters showed good faith in supporting a hard [digital transition] date, there may be support for some sort of multicast requirement.” McSlarrow said compromise is achievable.

The NAB is making a strong push on multicasting and has 60 local TV representatives in Washington this week to “educate members of Congress on the importance of the issue to our future business,” a spokesman said. The group also has taken out ads in local Hill publications warning consumers that “cable monopolies” are trying to block local programming on terrestrial digital TV.

Cable operators probably won’t pay cash to carry digital broadcasts, McSlarrow said. “Why would you pay more to people… who are trying to force us to carry these things?” His remarks echoed comments made Mon. by Cox, which said it generally won’t pay cash for carriage. It has balked at what it called unreasonable demands by Nexstar, leaving 100,000 subscribers without some local signals (CD July 19 p10).

‘More Creative’ on Franchising

NCTA must bolster its strategy for state video franchising initiatives, McSlarrow said. One such bill is now stalled in the Tex. Senate (CD July 19 p1). Cable’s options include increasing efforts at the local level and having state cable officials lobby their federal representatives, he said. “We have to be more creative,” he said: “We will do very nicely in a competitive space with a level playing field. I am more worried… about [legislation] tilted one way or another.”

Federal franchising is likely to emerge on the Hill in the next few weeks as Sen. Ensign (R-Nev.) is expected to introduce a broad-based telecom rewrite. So is House Commerce Committee Chmn. Barton (R-Tex.). Senate Commerce Committee Chmn. Stevens (R-Alaska) also has asked for drafts in preparation for a telecom rewrite bill. Ensign’s approach to franchising is consistent with cable’s philosophy, McSlarrow said. On the issue of indecency, McSlarrow has spoken with Barton and Stevens, along with FCC Chmn. Martin, who agree that cable should take the lead on improvements for now, McSlarrow said.

Cable wants to take a self-regulatory approach to family-friendly programming. Pressure from some conservative and media activist groups hasn’t changed McSlarrow’s opinion a nationwide cable family tier is impractical. “We've not been able to discover any way that will work,” he said. Instead, the industry is carrying through with a previous plan to hold some 100 community education events about voluntary parental controls.

Seeking to stay competitive with Bells such as SBC and Verizon, who plan to offer their own pay-TV services, cable operators may add products of their own, McSlarrow said. Wireless is an example of a product that could be sold along with voice, DTV and broadband service. “Our companies have made clear that they're very interested in trying to think through how a wireless play completes the package,” McSlarrow said.

A cable customer could have a wireless headset double as a home phone that’s linked wirelessly to the cable network at home and to a cell site outside, McSlarrow said. “They're going to enter into some preliminary alliances, and they're going to test the waters,” said Carmel Group CEO Jimmy Schaeffler. “In the end, they've got to have the quadruple play… because it really is going to become internecine warfare at its worst in the next 12-18 months.” - Jonathan Make, Anne Veigle