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Digital Television: A Private Sector Perspective on the Transition
Subcommittee on Telecommunications and the Internet
Mr. Lowell Paxson
Thank you Mr. Chairman and distinguished members of the Subcommittee for providing me with the opportunity to appear before your panel today to discuss the Digital Television Transition. My name is Lowell 'Bud' Paxson and I am Chairman of Paxson Communications Corporation, the largest television station group owner in the United States, 65 stations strong, and the creator of the PAX-TV network, which reaches 82% of all American Homes. When we launched 2 ½ years ago we repeatedly heard from media pundits - no sex, no violence, no ratings. And yet here we are today, making a profit and proving that the public is looking for --and advertisers will support good, clean family television. Some have said that giving digital TV allotments to broadcasters was a $70 billion giveaway. I take strong exception to this charge. It is actually a governmental initiative to move TV broadcasters who now occupy channels 2 - 69 down into channels 2 - 51 thereby allowing the government to auction off the 52-69 spectrum to other users. There are well-respected sources who say that the government will net $70 billion from the sale of the 52-69 spectrum. Of course to accomplish this, we have to have a digital transition and clearly the transition is failing. The benchmark for the transition is the 85% rule. A strict reading of the rule says that broadcasters have to turn in their analog spectrum when 85% of all households have at least one digital television receiver or their analog set is equipped with a digital to analog converter. Clearly at the present pace of the DTV transition this is years and years away. Many are upset with broadcasters for the failure of the digital transition. However, the fault lies with many. The broadcasters, the FCC, the cable industry and the set manufacturers, simply have not created an atmosphere for the consumer to want to step up and into the digital television world. The solution lies with you and the FCC. The marketplace is not working. Act quickly to put the DTV transition back on track. Our future as an emerging network is tied to the success of the digital television transition in this country and to the requirement that cable and satellite must carry our stations' programming. That digital future is a potentially great one. Some networks see a future of high definition TV showing great sporting events and movies. We at PAX have always maintained that the highest and best use of our digital spectrum is multiple channels of high quality lifestyle news and entertainment centered on the family; enabling families to be more effective within their homes and communities. Statistics show that last year in the United States 33 million analog TV sets were sold compared to only 26 thousand digital TV tuners. We need a digital all Channel Receiver Act that would require that all television sets sold to the American public be capable of receiving both analog and digital TV signals. Consumers have a right when they buy a TV set to be assured that it will not become obsolete shortly. There are TV set copyright issues and contrary to reports, there are still cable, satellite and TV set inter-operability issues that must be promptly resolved once and for all by the FCC. After four years, it is obvious the marketplace is not solving any problems. The FCC needs to deal with these issues now. Undoubtedly, the most important issue for PAX-TV in terms of the digital transition is cable and satellite carriage of all 6 Mhz of our stations' digital signals. Like us, hundreds of other broadcasters and hundreds of public television stations believe that the capability to multicast several programming services is the key to their use of the digital spectrum. We don't feel our digital future is in devoting our entire digital capacity to a single stream of programming nor in using digital capacity for ancillary uses such as datacasting. But we need the assurance that our multiple free, over-the-air programming services will be received by the 70% of the homes of this country that are served by cable and satellite. Our concern is that a divided FCC last month adopted rules that not only will hurt the DTV transition but undermine hundreds of broadcasters' efforts to multicast free, over-the-air program services. First, the FCC said that television stations cannot request cable carriage of their digital signal until they turn in their analog channels. That will be years away. We think this is a bad decision that discourages broadcasters from building their digital stations and consumers from buying DTV sets and severely damages the chances for economic viability of digital television and, ultimately, the digital transition. The FCC also decided to permit cable operators to carry only one of a station's multiple channels of free, over-the-air programming rather than requiring cable systems to carry all such free programming. This decision was also wrong. It is not content neutral. It is contrary to the Congressional intent evidenced in 1992 when you adopted the must carry rules. Anyone reading the recent FCC decision will recognize that the Commissioners were clearly uneasy with their decision and, in fact, were reaching out to Congress for guidance. Cable and satellite are the gatekeepers to the American home. PAX-TV urges this Committee to take the opportunity to reaffirm the Congressional commitment to full digital must carry and to the preservation of free, local television by requiring multi-cast must carry of all free, over-the-air programming services. I have submitted a workable digital must carry plan as a supplemental filing with this committee. The cable industry will tell you that the carriage of digital signals is being handled in the marketplace. After four years, let's look at the record: AT&T has done a retransmission agreement with Fox & NBC; Time Warner with CBS, and ABC has reportedly finalized a similar agreement. These agreements only cover their owned and operated stations. Thus, about 90 stations have solved their digital carriage issues with cable by retransmission consent agreements; 1560 stations still await the required full digital must carry, including broadcasters associated with the emerging networks, and independent, religious and foreign language broadcasters. If content drives the DTV transition, then give the consumer access to all the free multichannel content that we, the local broadcasters, have the ability to air. Thank you for allowing me to testify.
SUPPLEMENTAL FILING TO THE HOUSE SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET
The Communications Act currently provides for must carry for analog television stations, at their election, and upon completion of the DTV transition, also provides a must carry election for the free programming services of digital television stations. During the digital transition years, PAX TV urges the Commission to provide mandatory carriage for either a station' s analog or digital channel at the election of the station. This procedure, which should apply to all multiple channel video providers, such as cable, DBS and DSL, would not apply to those stations seeking retransmission consent and would work as follows: Digital Carriage. Television stations could elect to have their analog signal removed from the cable systems and replaced with their digital signal(s). A station broadcasting a single digital signal and electing digital must carry would have its HDTV signal converted to analog and carried at the same channel location and on the same broadcast basic service tier as the existing analog signal. When a cable operator's digital set-top box penetration reaches 95% of its subscribers, the system would also begin to carry the digital signal in the system's digital tier. Stations broadcasting multiple DTV signals would have their primary digital signal replace their primary analog signal on cable systems at the same channel location and on the same broadcast basic tier of service as their existing analog signal. This primary digital signal requires approximately 1.0 to 1.2 MHz of the station's 6 MHz digital signal but will utilize a full 6 MHz of a cable analog channel. The remaining portion of the station's digital signal could be used to deliver four to five or more additional channels of free programming services to the cable system that would be carried on the digital portion of the cable system served by the set-top digital box. The number of additional programming services that could be accommodated within this limited amount of spectrum can be expected to increase as compression and other technological developments permit increased utilization of each MHz of spectrum. For a cable system that employs efficient digital modulation technology, this would only require 2 to 3 MHz on the cable system. This digital must carry plan would be subject to all of the other must carry rules and regulations adopted by the FCC pursuant to the 1992 Cable Act.
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