News Page Banner Graphic

Breaking News

FCC Clarifies “Dual Carriage” Order; Announces Small System Relief

September 8 , 2008
printable version
           
            The FCC has released a Fourth Report and Order (“Fourth Report”), clarifying the “viewability” and “material degradation” standards associated with cable carriage of local broadcast stations as of the February 17, 2009 digital television (“DTV”) deadline.  In addition, the FCC announced that smaller cable systems would be exempt, for a three-year period following that deadline, from carrying the high-definition (“HD”) signals of local “must carry” stations.

As reported in our previous Memoranda to Clients, dated February 8, 2008 and December 3, 2007, the FCC’s “Dual Carriage” Order released last year interpreted the Communications Act as requiring cable operators, on and after the DTV transition deadline, to ensure that the signals of all must carry broadcast stations are “viewable” by all subscribers and that those signals are carried without “material degradation.”  Briefly stated, under the “viewability” standard, cable systems are obligated to ensure that every subscriber is able to view every must carry signal, by means of downconversion from digital to analog if necessary.  Carrying a signal without “material degradation” requires cable systems to deliver an HD broadcast signal in HD and to carry all digital broadcast signals in a format and with a resolution that is no worse than the manner in which the system carries all other broadcast and non-broadcast digital signals.  The NCTA and ACA did not object to the “viewability” component of the “Dual Carriage” Order, but sought an exemption from the “material degradation” provision for smaller systems

The Fourth Report first clarified that cable systems that are mixed analog and digital, regardless of size, are not required to carry a broadcast station in both downconverted analog and standard definition (“SD”) digital formats. The FCC reasoned that because both the SD digital and the analog version of the digital signal received at the headend would have the same resolution type (480i), the differences in the two versions of the signal would be imperceptible to the viewer, thus making carriage of both versions unnecessary.  However, in order to comply with the “viewability” requirements, a cable operator may be required to carry an SD version of a must carry signal if there are digital subscribers who would not be able to view that station if it was provided only in analog format.

The Fourth Report also recognized the burden that would be placed on smaller systems if they were required to carry all local HD broadcast stations in HD.  Therefore, the FCC exempted, for the first three years following the DTV transition deadline, the following types of cable systems from having to carry HD signals in HD format: (1) those with an activated channel capacity of 552 MHz or less; and (2) those with 2,500 or fewer subscribers that are not “affiliated with” a cable operator serving more than 10% of all MVPD subscribers nationwide (i.e.,  Comcast and Time Warner).  The FCC indicated that it would review the exemptions during the February 18, 2011 – February 17, 2012 period to determine whether they should be extended.

In addition, the FCC reminded all operators that waiver requests still would be considered on a case-by-case basis and that it would expedite the waiver review process for systems with 5,000 or fewer subscribers by shortening the comment and reply period such that the waiver requests would be acted upon within 30 days of filing.

Finally, the Fourth Report rejected a proposal that would have required must carry broadcasters to pay the costs of downconverting their signals to analog for carriage by smaller cable operators. Instead, cable operators will be expected to incur such downconversion costs on their own.

Please call us with any questions regarding carriage issues associated with the DTV transition.