WASHINGTON As digital TV hits the airwaves next week, attention is turning in earnest to DTV's next big regulatory hurdle: whether cable operators will be required to carry new digital broadcast channels on their systems.
The "must carry" issue has heated up again in recent weeks as broadcasters and cable firms outlined their positions in comments to regulators. Microsoft Corp., which also has a large stake in the outcome, weighed in on the side of the cable industry.
Broadcasters who want the Federal Communications Commission to compel cable operators to carry digital programming are pressing the agency to reach a decision early next year on DTV compatibility issues. They said further delays could mean the next generation of HDTV receivers will continue to lack many features. FCC officials hinted at a broadcast conference on Tuesday (Oct. 27) that a decision on the must-carry issue is likely in the first half of 1999.
"We all know that there are strong arguments at both extremes but I've been interested in finding a middle ground," FCC commissioner Susan Ness told broadcasters.
"The cable industry will vigorously oppose just about any type of carriage requirement," Ness said. "Broadcasters, with some notable exceptions, have just as vigorously argued that all signals should be subject to mandatory carriage as soon as they go on the air."
As the broadcast and consumer-electronics industries lobby the FCC to mandate cable carriage of digital programming, Microsoft has joined forces with the cable industry in opposing government rules.
In comments filed with the FCC, the Redmond, Wash., company argued that "adopting must-carry obligations now for DTV would be premature and impractical [and] for the time being the Commission should defer adoption of any digital must-carry requirements."
Microsoft's filing cites the lack of a full-blown copy-protection mechanism and unresolved issues surrounding DTV's carriage of data using the Internet Protocol. "Imposing must-carry obligations before DTV technology supports IP transmission could hobble the development of DTV programming and services that integrate video, audio and data components," Microsoft argued.
The software giant's entry into the digital compatibility debate is seen as significant, since the company played a pivotal role in resolving DTV-format issues two years ago. Microsoft is positioning itself in the must-carry debate as neutral technology broker between the badly divided broadcast and cable camps.
Steve Guggenheimer, Microsoft's group product manager for digital TV, said Microsoft favors an industry-driven "neutral, technology approach" to DTV compatibility. A premature FCC ruling on the issue before copy-protection and data-transmission issues are nailed down will slow the migration to digital TV, Guggenheimer said, dismissing broadcasters' arguments that delays in resolving the must-carry controversy will slow DTV deployment.
"Getting good agreement between broadcasters and cable operators on how signals get to consumers will speed up deployment of DTV faster than must-carry rules," he said.
Instead of FCC regulations, Microsoft said inter-industry groups like the Advanced Television Enhancement Forum should be allowed to reach a consensus on DTV standards. The forum is a PC-centric group that favors current Internet technology for DTV data transmission using Java.
The best approach, Microsoft told the FCC, "is to rely for the time being on ongoing industry cooperation coupled with Commission oversight."
Other industry comments to the FCC on whether cable operators must carry digital broadcasts revealed deep divisions that industry groups may not be able to overcome.
"Carriage of digital signals is not just pro-consumer public policy, it is the law," said Gary Shapiro, president of the Consumer Electronics Manufacturers Association (Arlington, Va.).
The National Cable Television Association took the opposite tack, arguing the 1992 Cable Act and last year's balanced-budget law gave regulators no authority to compel cable operators to offer digital broadcasts. The group called the must-carry plan an unwarranted "taking" of property.