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Broadcast Carriage Disputes Threaten Digital Television Transition

NTIA Supports ‘Quiet Period’; Confirms that Pulled Broadcast Signals Cause a Coupon Demand Increase

PITTSBURGH, November 14, 2008 - The National Telecommunications and Information Administration (NTIA) has endorsed a carriage agreement quiet period to limit potential confusion and service disruptions during the upcoming Digital television transition (DTV) and confirmed that pulling broadcast stations from pay television subscribers increases digital-to-analog converter box coupon requests.  In a letter sent to Congresswoman Anna Eshoo (D-CA) and Congressman Nathan Deal (R-GA) today, the NTIA stated its support for the initiation of a carriage agreement quiet period for operators and broadcasters during the time before and after the February DTV transition to avoid public confusion that could cause added strain on the government's transition assistance program. 

In today's letter, NTIA Acting Assistant Secretary for Communications and Information, Meredith Attwell Baker said, "a retransmission consent ‘quiet period' would be helpful in reducing consumer confusion during the DTV transition."  The letter was written in response to a recent request for information by Reps. Eshoo and Deal regarding a month-long service disruption in 10 cities when LIN TV pulled 15 broadcast stations from Time Warner and Bright House cable subscribers.  

"The DTV transition is fast approaching and we can't afford to let anything prevent a smooth and successful switchover," ACA President and CEO Matthew M. Polka said.  "With the GAO already unsure that the NTIA coupon program will be able to handle the growing demand for coupons, it is essential the FCC prohibit broadcasters from pulling signals in the months before and after the transition.  Dropped stations confuse cable and satellite customers who then needlessly request digital-to-analog converter boxes.  To ensure dropped broadcast signals do not needlessly increase coupon demand and threaten the sustainability of the coupon program, and the success of the DTV transition, a quiet period must be in place before the end of the year when thousands of broadcast carriage agreements expire.  We call on FCC Chairman Martin to immediately issue a notice of proposed rulemaking on the quiet period with an expedited comment and reply period." 

According to the GAO's September 15 Congressional Report, an increase in coupon requests as the transition date nears, could mean that consumers who actually need a box would incur a significant wait time before they receive their coupons, and might even lose television service before the coupon arrives (the report is available here).  Some lawmakers and policymakers have also raised concerns that the NTIA's coupon program does not have enough funding to meet the demands of all broadcast-only homes.  

The increase in coupon demand in the markets examined by the NTIA was caused in part by confused cable customers, an assertion supported by official government findings.  A June report by the GAO to Congress found that among households that would be unaffected by the transition, which includes many cable and satellite TV customers, 30 percent actually had plans to ready themselves - despite the fact that no action is required on their part to maintain television service (the report is available here).  

FCC Chairman Kevin J. Martin told reporters on November 11 that he would issue a notice of proposed rulemaking on the quiet period, which the other four commissioners have already voted to release.  To date, the Chairman has not yet issued the rulemaking. 

On October 22, Eshoo and Deal sent a letter (available here) to the NTIA and the FCC requesting data to determine the increase in coupon demands in the markets affected by the broadcast carriage dispute between LIN TV and both Time Warner Cable and Bright House.  Eshoo and Deal both support the establishment of quiet period in which neither broadcasters nor video operators may drop signals around the time of the transition. 

Thousands of broadcast carriage contracts between broadcasters and cable and satellite operators are set to expire on or before December 31, 2008.  When broadcasters and operators are unable to reach an agreement, one party may choose to pull the signal until a new contract is signed.  In October 2008, LIN TV blacked out 15 of its stations to as many as 1.5 million Time Warner Cable and Bright House subscribers in 11 television markets during a month long dispute. 

In July, the American Cable Association (ACA) first urged the Commission to prohibit broadcasters and operators from pulling television stations from cable and satellite TV customers for a period of time around the digital transition that lasts until at least May 31, 2009 (the filing is available here).  In May, the ACA first notified Congress that there was risk that upcoming broadcast carriage negotiations could derail the digital television transition (the testimony is available here).

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Based in Pittsburgh, the American Cable Association is a trade organization representing 1,100 smaller and medium-sized, independent cable companies who provide broadband services for more than 7 million cable subscribers primarily located in rural and smaller suburban markets across America.  Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business. For more information, visit www.americancable.org.

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