Last Update: March 19 @ 7:09 PM
Telecommunications
FCC scrutinizing cable-TV pricing

By PBN Staff
COURTESY FEDERAL COMMUNICATIONS COMMISSION
THE FCC is “asking cable operators to tell us what they were informing their customers about any changes they were making,” Chairman Kevin Martin said at the commission’s monthly meeting. The panel meets in the Portals 2 building, above, where the FCC has its national headquarters.


WASHINGTON – Federal regulators have launched a probe into allegations that cable companies are using broadcast television’s upcoming digital changeover as an opportunity to overcharge subscribers.

“Many consumers may have been misled that they’re having to make the switch over to digital as a result of the digital broadcast television transition, but that’s not something that’s true,” Kevin Martin, chairman of the Federal Communications Commission (FCC), told reporters at the commissioners’ monthly meeting yesterday in Washington, D.C., according to Bloomberg News.

The Consumers Union, publisher of Consumer Reports magazine, last week charged that Comcast Corp. and other cable operators are moving analog channels to digital-only service, to free up bandwidth for other uses, including high-definition broadcasts (HDTV) broadcasts. Subscribers who previously did not need a set-top box now must rent them, at a monthly cost of $4 to $10 per TV, to keep receiving the channels that are moved to digital-only transmission, Consumers Union analyst Joel Kelsey told Bloomberg last week.

With a switch to all-digital service, “consumers will benefit, because we will give them equipment for no additional charge,” Comcast spokeswoman Sena Fitzmaurice said in an e-mail. But while digital cable packages generally offer more programming than basic cable, they do so at a higher monthly cost, the Bloomberg report noted.

The FCC is “asking cable operators to tell us what they were informing their customers about any changes they were making,” Martin said yesterday in announcing the FCC probe. “Were they still charging them the same rate as they were charging them before, even though they removed channels from their [analog] package?”

The agency has sent letters to 11 cable companies and Communications Inc., which has a fiber-optic (FiOS) television service, asking about their pricing policies and the shifting of channels from analog to digital transmission.

• • •

Yesterday’s announcement follows a ruling Friday – by the U.S. Court of Appeals for the District of Columbia – upholding a requirement that cable providers continue to deliver broadcasts in analog form even after television stations complete their switch to digital transmissions.

It require that cable companies continue to provide TV signals in both analog and digital format for three years after the changeover takes place, at midnight on Feb. 17.

That rule was established by the FCC in 2007, to ensure that cable subscribers can continue to watch local stations after the changeover no matter how old their TV sets are. (Viewers who receive broadcasts directly, via an antenna, will need a digital TV or a digital adapter box starting in February.) It does allow cable providers to switch to all-digital transmissions if all subscribers have the equipment to see all channels.

The challenge was brought by companies including A&E Television, a joint venture of NBC, Hearst Corp. and Walt Disney Co.’s ABC Inc.; C-Span, a nonprofit created by cable companies; Discovery Communications; Scripps Networks; TV One Inc., which is partially owned by Radio One Inc. and Comcast Corp.; and NBC Universal’s Weather Channel, Bloomberg News noted.

“Obviously, we are disappointed” by the appeals court verdict, C-span General Counsel Bruce Collins told Bloomberg in an e-mailed statement. “The court’s decision said nothing about our still-valid First Amendment claims.” The cable companies had argued that having to carry many channels in duplicate would leave fewer available for other programming, and thus represented an unfair burden to their free speech.

“This decision represents a big win for broadcasters,” Dennis Wharton, a spokesman for the National Association of Broadcasters, said in an e-mailed statement. “We’re pleased the court accepted the FCC’s sensible viewability rules and rejected [the cable companies’] speculative claims.”

Martin, the FCC chairman, praised the court’s decision.

The ruling “will ensure that nearly 20 million households across the nation will continue to receive local broadcast channels over their analog cable service after the digital TV transition,” he told Bloomberg Friday in an e-mailed statement.

The Federal Communications Commission is a U.S. agency established in 1934 to regulate interstate and international communications. It oversees radio, television, wire, satellite and cable communications in the 50 states, the District of Columbia and U.S. possessions. Additional information is available from the FCC’s Media Bureau, Video Division, at www.fcc.gov.

For more information about the upcoming digital transmission of broadcast television service in the United States, visit www.dtv.gov.

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