Senate Commerce Said to Be Working on DTV Delay; Stations Ready

The bill would reflect the wishes of President-elect Barack Obama. His transition team co-chairman sought a delay in a letter Thursday to Rockefeller and other lawmakers (CD Jan 9 p3). Officials in Rockefeller’s office didn’t reply to messages seeking comment. The letter and the attention it’s getting on Capitol Hill make it increasingly likely that the analog cutoff will be delayed, said broadcast lawyers and lobbyists.

Meanwhile, Rep. Edward Markey, D-Mass., has prepared a bill to lift Anti-Deficiency Act restrictions on the NTIA’s coupon program, to allow additional $40 vouchers to be mailed. The bill would change the assumed redemption rate to 70 percent from 100 and allow the agency to mail out new coupons by first-class U.S. mail. The NAB suggested the redemption rate modification, since 53 percent of coupons have been redeemed since the program began. The waiting list for coupons is up to 1.35 million, said an NTIA spokesman.

Government officials and broadcasters continued to disagree Friday about whether the analog cutoff should be put off. Commerce Secretary Carlos Gutierrez thinks the Feb. 17 date set earlier by Congress should stick, he said in a written statement: “It certainty has been a key element of efforts by the government and the private sector to raise awareness and drive preparedness.” But Obama’s request “highlights the vulnerability of millions of Americans to the impending analog shutoff,” Markey said. “It also underscores the need for prompt Congressional examination of his proposal.” FCC Commissioner Michael Copps thinks “more time can only help put in place the kind of consumer-focused outreach and assistance that should have been up-and-running months ago,” he said. Chairman Kevin Martin has said delay may not be a good idea. The other two FCC members couldn’t be reached to comment.

Broadcasters Split

Broadcasters are split on whether delay is a good idea. But all 12 companies we surveyed said they're ready technically to cut off all analog transmissions Feb. 17. That includes all stations owned by the Big Four broadcast networks, plus stations owned by Belo, Gray TV, Hearst- Argyle, Ion Media, Media General, Raycom, Scripps and Tribune. The companies own more than 300 stations total.

Broadcast networks seem more open to delaying the transition, while companies that own affiliates are warier of Obama’s proposal, judging from their written statements and interviews with their executives. Networks may be more favorable because they're better attuned to political trends, an industry lawyer said. Broadcast networks’ concern isn’t that they or other station groups will be unready come Feb. 17, but that some population groups will be, industry executives said.

“All 10 of the Scripps stations are fully ready to make the transition on Feb. 17th, and we're expecting to do exactly that,” a company spokesman said. “We are technically ready and fully prepared for a Feb. 17th transition to all- digital,” said Dave Folsom, chief technical officer for Raycom. “We absolutely, positively will be ready to go on February 17 if that still winds up being the date,” said a CBS spokesman. Fox is “on target with all of our milestones,” said a spokeswoman. NBC Universal likewise said it’s “prepared operationally and technically for the transition on Feb. 17.” All ABC stations are prepared, said Preston Padden, executive vice president of government relations for Disney.

Executive of other broadcasters that are ready, including Gray TV and Media General, said they want no delay. Gray’s budget assumes the company won’t have to continue paying electricity and other bills for analog stations after Feb. 17, said James Ocon, the vice president of technology. “We are sort of past the point of no return in many of our markets. So we intend, unless told otherwise by Congress, [to shut] all of our analog signals off Feb. 17 unless we're told not to. And that’s adamant. We feel very strongly about this.”

Ion believes “a delay in the analog cut-off raises technical and frequency allocation issues, but we have begun contingency planning to deal with them,” said John Lawson, executive vice president. “We share the transition team’s concern about the public’s readiness to make the switch.” Broadcasters have spent tens of millions of dollars getting equipment ready for next month’s digital switch, so any delay will increase costs, said David Donovan, president of the Association for Maximum Service Television. “We do understand political realities as well, but I think the key here is that there has to be some certainty regardless of what date is ultimately selected -- we need certainty as soon as possible.” The NAB declined to comment.

Congress ‘Worried’

If the NTIA coupon program hadn’t run into an accounting problem, talk about delaying the analog cutoff might not have materialized, said broadcast attorney John Hane. “My sense is that people are getting cold feet,” he said. “I don’t know if we have an accounting and perception issue or a real issue, but Congress is worried about issues whether they are real or perceived because they get blamed for them either way.”

Despite some protests, broadcasters would probably be the biggest winners if the date is pushed off, Sanford Bernstein analyst Craig Moffett wrote. Delay would “push back viewership and advertising disruptions that would be an inevitable consequence of the transition,” he wrote. It would also delay the handover of the 700 MHz spectrum that’s to be used for advanced wireless services, he said. “Practically speaking, not much would have happened in the way of 4G wireless network construction anyway. But already-battered wireless technology suppliers surely won’t be pleased.”

Broadcasters attending the Consumer Electronics Show last week in Las Vegas weren’t happy to hear about the growing possibility of a delay, said Jay Adrick, the vice president of broadcast technology of Harris Corp. “The broadcasters’ attitude to this was, ‘This is totally unnecessary.'” Delay would hurt small broadcasters most, an industry official said. “The ad market is so thin at this point that in some way adding $5,000 to $10,000 a month for four months [in energy costs to power the analog transmitter] is a huge amount of money for some stations, especially smaller ones.”

More time could help mobile DTV advocates hone their system before broadcasters have to leave the analog spectrum, but a few months is unlikely to give them much advantage, industry officials said. “You could make the argument that strategically, ‘if I delay the transition, then what I'm doing is holding off those organizations who bought the spectrum from turning on whatever new services they're going to turn on,'” an official said. If those services compete with mobile DTV plans, then delaying the switch could be a boon to broadcasters, the official said. “But is three or four months really going to make that much difference in the grand scheme of things? I wonder, and we don’t know how much of that spectrum is actually going to be used for things that are competitive for mobile DTV.”

If broadcasters begin promoting the new service, consumers may wait to buy competing subscription mobile video services, Hane said. But the ATSC mobile “chipsets are not in the phones yet,” he said. “I'm not sure how meaningful two or three months is.” Broadcasters pushing for mobile DTV aren’t thinking about what a delay would mean competitively, Adrick said. “I don’t think broadcasters are worried about that. They're more worried about getting their signal on the air.”