Digital transition could cost cable customers
WASHINGTON (AP) - April 11, 2008 So cable customer Doris Spurk was surprised to learn that thanks
to the transition, she would have to rent a converter box for $5.95
per month, per television set, plus pay for a $60 service call to
install it. With five televisions in her home, the conversion would
increase her bill by 75 percent.
"It really ticks us off," the 63-year-old central Florida
resident said. "If they are in the right and can do this - charge
these prices - then the educational effort that the FCC (Federal
Communications Commission) is doing is really misleading
everybody."
Thus far, government and the broadcast industry have focused
their consumer-education efforts regarding the transition on
viewers of over-the-air television programming. But information
about how the transition will affect cable subscribers has been
scant.
The congressionally mandated transition requires all full-power
television stations to broadcast only in a digital format starting
in mid-February. Anyone with a non-digital television who uses an
antenna will need a converter box. The government is giving out two
$40 coupons per household to subsidize the cost of the boxes, and
about 10 million coupons have been requested so far.
What hasn't been widely publicized is that the transition also
will affect some cable subscribers.
There are about 65 million basic cable subscribers in the United
States, according to the National Cable and Telecommunications
Association. About 37 million of them are digital subscribers,
meaning they most likely have a set-top box. Those customers will
not be affected by the broadcast transition, regardless of the age
of their television.
But the 28 million customers who receive analog service -
meaning they probably plug their cable wire straight into the wall
and not a set-top box - may have reason to worry.
(Satellite customers, except in rare instances, aren't affected.
Subscribers to Verizon's Fios TV system aren't affected unless they
have secondary televisions that are not digitally equipped.)
Cable companies have two options for dealing with their analog
customers when broadcasters turn off their non-digital signals.
They can either convert the digital broadcast signal to analog
at the transmission source, referred to as the "head end"; or
they can make their systems all-digital and supply customers with a
set-top box that will convert the signal back to analog for viewing
on older TVs.
The government-subsidized converter boxes, meant for use on
televisions that get signals through an antenna, will be of no help
in this situation.
Big cable companies like Comcast Corp., the nation's largest,
are expected to take the first option and pump both digital and
analog signals through their systems.
"There won't be changes in prices because the broadcast
channels are going digital," said Comcast spokeswoman Sena
Fitzmaurice. "But there may be changes in prices and services for
other reasons."
Cable companies may move some programming from the analog tier
to digital, as they have been doing increasingly; but FCC rules
require that local broadcast channels remain viewable to analog
customers.
Over time, a complete migration from analog to digital service
is inevitable. An analog signal takes up more space on the network
than a digital signal and subscribers pay less for it. With
digital, cable companies also are able to offer additional
services, like telephone and Internet.
Smaller cable systems are expected to have a more difficult time
with the transition.
Jess King is president of Cablevision of Marion County LLC,
which is about 40 miles south of Gainesville, Fla. King recently
spoke to a gathering of residents of an "over-55" retirement
community, including Spurk.
"My decision was, whether I continued to try to muddle along
here with all of my channel space being used up with a few analog
channels or whether I would go all digital," King said. "So I got
an FCC variance to go all digital."
King's company is small, he says, with fewer than 10,000
subscribers, and he is facing increasingly intense competition from
satellite companies that offer large packages of high-definition
channels - an option not available to him due to capacity
limitations.
But according to Spurk, King blamed the shift on the government.
"Immediately he starts the meeting with, 'If you don't like
what I'm going to say here, blame the FCC, because they're the ones
forcing the transition on us,"' she said.
The digital conversion will allow broadcasters to offer a better
picture. It will also free up parts of the broadcast spectrum for
commercial users and emergency responders. Last month, the FCC
wrapped up an auction that drew more than $19 billion in bids for
airwaves that will be freed up by the transition.
King said the primary purpose of the meeting was to educate
consumers about the limitations of the government coupon program.
Whether or not cable companies like King's can pass on costs
related to the transition to customers is a subject the industry
and the FCC generally avoid.
The FCC's digital transition Web site says if a cable company
goes all digital and requires customers to get a set-top box, "any
costs related to it will be determined by the cable company."
But FCC regulations approved last fall seem to contradict that
point.
The rules require cable companies to provide local broadcast
channels to analog customers through February of 2012. Certain
smaller cable systems can request a waiver.
They also note that a provider that goes the all-digital route
must supply analog customers with the equipment needed to view the
local broadcast channels, and that "any costs incurred by a cable
operator in down-converting or carrying alternative format versions
of signals ... shall be the responsibility of the cable operator."
If that were the case, King said it would bankrupt him.
"I can't put that much money into these homes," he said. "How
can anyone - I'm talking about the government or even an individual
- think that a company could absorb that kind of a cost?"
Nothing in the rules would prevent operators from continuing to
offer both analog and digital signals, however.
Brian Dietz, spokesman for the National Cable and
Telecommunications Association, said his organization interprets
the rules to mean cable companies are prevented from recovering
costs stemming from the head-end down-conversion, not the costs of
set-top boxes required by the all-digital option.
But fine print aside, analog cable customers just want to know
if the digital transition is going to cost them more money. And
that, according to Dietz, is "a decision that's left up to
individual cable operators."
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On the Net:
FCC digital transition site: http://www.dtv.gov
To order a coupon for a converter box: www.dtv2009.gov