Washington (DC) - Despite Sen. John McCain’s (R - Arizona) efforts to characterize the debate over the transition to digital television (DTV) as an urgent national priority, a panel representing leading service providers presented their argument to Congress over the current "must-carry" provisions. The panel convened before this morning’s session of the Senate Commerce Committee, to debate a proposal to set a firm deadline for US TV broadcasters to convert their analog signals to digital on or before 31 December 2008.

"Retrieving the analog spectrum and completing the digital television transition is the most critical communications issue facing the 109th Congress," said Sen. McCain in his opening remarks to the Committee. "For over 20 years, regulators in Washington have been debating the transition to digital television. It was during the 1980s that broadcasters first brought forth policy proposals on high-definition television. Some believe that broadcasters sought the transition not to provide clearer pictures and better sound to their viewers, but rather to prevent competition from the new broadcast stations and wireless carriers that the FCC had considered licensing on unused channels."

The solution proposed by McCain is an amendment to the National Intelligence Reform Act of 2004, originally created to implement the key legislative recommendations of the 9/11 Commission. The amendment would mandate the 12/31/08 deadline in order to cede the current analog TV spectrum to emergency response systems, thereby addressing one 9/11 Commission suggestion for upgraded communication between public agencies in a time of national crisis.

But the panelists sidestepped the national security issue entirely, and instead focused on the principal roadblock facing their industry today : the implications of extending the so-called "must-carry" provision into the digital era - whenever that begins. Established in 1992, the provision mandates that every cable TV (CATV) provider must carry the signal of each of the over-the-air broadcasters that designates itself as "must-carry," within the provider’s service area. As the digital TV era begins, the amount of bandwidth consumed by each broadcast signal should increase. But on top of that expansion, broadcasters are increasing the capacity of their signal by adding multicast channels - extra content transmitted in parallel. If the must-carry provision still holds after the DTV changeover date, CATV and satellite providers may not be able to afford the extra bandwidth, as Kyle McSlarrow, President and CEO of the National Cable and Telecommunications Association, argued before the panel.

One solution, argued McSlarrow, is to enable cable operators to downconvert some digital broadcasters’ DTV signals to analog resolution, and to let those operators foot the bill. Downconversion might be necessary anyway to enable existing TV sets to display programming after the conversion date. "But instead of embracing this solution," McSlarrow testified, "the broadcasters continue to ask you [Congress] for special favors," in the form of special allowances and perhaps even subsidies to fund the transition.

"The most plausible interpretation," McSlarrow continued, "is that the broadcasters hope to goad the cable industry into joining them in their passive-aggressive opposition to a hard [transition] date. Perhaps a more charitable interpretation is that they view this as one more opportunity to make a land grab. In any event, they are making your task harder, not easier. Broadcasters are not the only ones in America making the transition to digital, and they should not be given preferential treatment in a competitive marketplace, especially by government mandate." McSlarrow argued that broadcasters are seeking to extend the existing must-carry provisions to cover "carriage of multiple streams of programming."

McSlarrow’s comments came in response to the opening statement of Edward Fritts, Pres. and CEO of the National Association of Broadcasters, who argued that since cable operators would no longer be required to carry both analog and digital broadcast signals after the conversion date, broadcast bandwidth would end up consuming less of a CATV provider’s bandwidth, not more - perhaps, Fritts argued at one point, by as much as one-half, though he conceded that argument later. Fritts later stated that broadcasters would be willing to submit to a kind of litmus test for multicast signals, ensuring that they met "quantifiable public interest obligations" to their local audience. This way, multicast signals which ended up being full-time pickups of national feeds, as McSlarrow argued many such signals are today, would not be carried redundantly dozens of times by CATV and satellite TV operators.

Deepa Iyer, a digital television analyst with Parks Associates, who followed this morning’s proceedings along with Tom’s Hardware Guide, told us she believes multicast signals are "another way of reaching a broad spectrum of audience. It’s way of providing more options to consumers." Cable operators’ true objections to mandated carriage of multicast streams, Iyer argued, concern the fact that cable operators could not legally sell advertising space of their own over those streams. "The cable operators now have the monopoly to control the type of programming," she told us. "They are thinking of models way ahead in time that revolve around building advertising revenue. If these multicasting channels are going to be free for consumers, then they need to start thinking about alternative (e.g. advertising model) model to build revenue." But as the NAB’s Fritts testified, said Iyer, "it’s the consumer who is going to make a final choice. Increasing the number of channels may not lead to an increased revenue stream."

The Committee’s hearings continue later this afternoon, with a demonstration of DTV technology. Tom’s Hardware Guide will provide an updated report when the afternoon session concludes.