Digital-delay fray

McCain, b'casters butt heads over rollout

WASHINGTON — A fed-up Sen. John McCain (R-Ariz.) on Thursday derided broadcasters for continuing to sit on $70 billion of free digital spectrum, and predicted they soon will use their silver-lined lobbying clout to delay the 2006 deadline to go all-digital.

“There’s not a snowball’s chance in Gila Bend, Ariz., that we’ll be on track,” McCain said during a tense hearing of the Senate Commerce Committee, which he chairs.

After continued prodding from McCain, broadcasters confirmed what everyone’s been buzzing about for months — that it will be impossible to complete the digital transition by the deadline.

Broadcasters say their only hope is further government intervention.

Barring such assistance, Washington will have to wait to reclaim the analog spectrum, a commodity that is expected to bring in billions of dollars once it’s auctioned off to other industries.

McCain said the broadcasters blame everyone but themselves for the troubled transition, and told reporters there’s not much he can do in terms of legislation until he rallies more support.

Missing masses

Fisher Broadcasting exec veep Ben Tucker, testifying on behalf of the National Assn. of Broadcasters, said the key ingredient in the equation — the American consumer — is still missing, considering the prohibitive cost of digital TV sets, not to mention a lack of programming.

“Our goal is to reach our viewers as quickly as possible. It’s not in the best interest of the broadcasting industry to delay the DTV transition,” Tucker testified. “However, for your constituents — our viewers — to enjoy the wonderful benefits, we need three things.”

First, broadcasters say cablers must be ordered by the Federal Communications Commission to carry broadcasters’ digital and analog signals during the transition period. After that, if a broadcaster decides to multicast, cablers must be required to carry all such channels.

Second, Congress should direct the consumer-electronics industry to include both an analog and a digital tuner in all TV sets made after Jan. 1, 2002.

Third, digital TV sets and set-top boxes must be made inter-operable. Otherwise, someone who has purchased a digital set won’t be able to receive any cable programming.

Shouldering the burden

Cable exec Michael Willner, testifying on behalf of the National Cable Telecommunications Assn. (NCTA), strongly disagreed that his industry is in any way colluding against broadcasters. Willner, prexy-CEO of Insight Communications, reiterated the unfairness of requiring cablers to carry more than one signal from a particular broadcaster, thus cutting out other programming.

“Cable is not seeking to hamstring a competitor or to blame anyone. We simply don’t want to be the scapegoats for broadcasters’ problems,” Willner said.

Other witnesses, including economists and consumer groups, told McCain’s committee that the digital transition is no less complicated than withdrawing troops from Bosnia, or Mikhail Gorbachev’s achieving perestroika.

Rent control

Sen. Peter Fitzgerald (R-IL.), a new member of the McCain’s committee, suggested that broadcasters pay rent for analog spectrum they don’t return by 2006.

The proposal is not a new concept: For the past several years, the White House has proposed a similar fee in its annual budget to Congress. The provision, however, has never been approved by lawmakers.

In his budget sent to Capitol Hill earlier this week, President George W. Bush also included such a provision.

Bush’s plan would bring the federal treasury roughly $1.4 billion, spread over an eight-year period, beginning next year. It also would delay the auction of certain components of the analog spectrum in order to bring in a higher bidding price, possibly worth over $7 billion.

At Thursday’s hearing, most of McCain’s colleagues expressed reservations about imposing additional restrictions on broadcasters, monetary or otherwise. In varying degrees, they sympathized with the broadcasters’ argument that the consumer is still out of reach when it comes to digital TV.

Fitzgerald, on the other hand, wasseen as a welcome ally to McCain, who has often been a lone critic on the issue.

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