FCC Seen Likely To Adopt ACA/NAB Compromise on HD Carriage

The FCC is likely to affirm a compromise between NAB and the American Cable Association over the ACA-requested extension of an exception of the HD-carriage requirement for small cable systems distributing must-carry stations (see 1505150052), cable attorneys said in interviews Tuesday. The current exemption is set to expire June 12. The proposed compromise wouldn’t have an expiration date, said an ACA and NAB filing posted Friday to docket 98-120. Instead, small cable systems would be exempt from carrying HD must carry broadcast stations in that format as long as they don’t carry any high-definition programming, and would cease being exempt the moment they began carrying any high-def content.

The compromise will keep ACA members that use analog technology from having to make a costly transition to digital HD technology and will lead to more cable carriage of HD broadcast signals sooner than an exemption extension would, the communications attorneys said. An ex parte filing on a May 1 conference call among ACA, NAB and staff from the bureau and Office of General Counsel mentions the idea. ACA and NAB “noted that there may be circumstances under which they could settle on a joint set of principles,” they said. The conference call was “requested by or made with the advance approval of the Commission or staff,” the filing said. ACA, the bureau and NAB didn’t comment.

Broadcasters were concerned the exemption in its current form lets cable carriers invoking it upgrade capabilities during the three-year exemption period and carry other HD signals while not carrying high-def broadcast signals, said NAB filings. The compromise proposal addresses that by taking away the exemption as soon as a carrier transitions to HD, said Mintz Levin cable attorney Seth Davidson, who has argued in favor of extending the exemption. Since the compromise doesn’t compel non-HD cable systems to upgrade and provides a transition period from June until December 2016 for formerly exempt cable companies that no longer qualify, it’s not seen as burdensome as the lack of an extension would have been, Davidson said. Market pressure on cable companies to offer HD service will likely lead some operators to upgrade themselves out of the exemption sooner than they would have to under a three-year extension, Davidson said.

NAB had been the primary opposition to the ACA request for an extension, so its support of the compromise proposal is seen as clearing the way for the commission to take action, cable attorneys said. WTA would support the compromise proposal because, like ACA, it has members that still use analog systems and can’t offer HD programming, said WTA Director-Government Affairs Patricia Cave. With a small cable system, it's difficult to absorb the cost of transitioning to digital, she said.

Along with making carrying HD programming the threshold for the exemption, the compromise proposal would redefine small cable systems as those having an activated channel capacity of 552 MHz or less or with 1,500 or fewer subscribers and not affiliated with a cable operator serving more than 2 percent of all multichannel video programming distributor subscribers, said ACA and NAB. They said it would also require any system using the exemption that starts offering HD programming to notify all broadcasters in its market.