Late Tuesday night, in a meeting originally scheduled to start at 9:30 in the morning, the FCC adopted an order establishing the rules governing the carriage of broadcast signals by cable operators after the February 17, 2009 transition to digital television. While the full text of the Commission’s action has not yet been released (and may not be released for quite some time), based on the FCC’s formal news release and the statements made by the commissioners at the meeting and in their accompanying press releases, we can provide the following summary of these important FCC actions.
First, for a period of at least three years after the February 17, 2009 transition from analog to digital broadcasting, cable operators will be required to make the signals of local broadcast stations available to all of their subscribers by either: (1) carrying the television station’s digital signal in an analog format, or (2) carrying the signal only in digital format, provided that all subscribers have the necessary equipment to view the broadcast content. This rule reflects a compromise position offered by the National Cable & Telecommunications Association, and is regarded as less burdensome on cable systems then the FCC’s original proposal of an indefinite analog carriage obligation.
Second, the FCC reaffirmed its existing requirement that cable systems must carry High Definition (HD) broadcast signals in HD format, and further that it must carry signals with “no material degradation”, i.e., with picture quality as good as any other programming carried by the operator. In affirming its "no material degradation" standard, the FCC rejected a proposal by the broadcast industry that would have required operators to pass-through all of the bits in digital television broadcast signal.
Third, the Commission also voted at its open meeting to again extend for five years the existing prohibition on exclusive distribution agreements between cable operators and cable-owned programming networks, and to require disclosure to program-access complainants of certain network affiliation contracts. Finally, the FCC adopted a Notice of Proposed Rule Making (NPRM) commencing an inquiry into the alleged wholesale “tying” of marquee programming with less desirable or unwanted program services, which some think may also provide a segue into the issue of a retail “à la carte” programming mandate for cable operators.
Further details about these new rules and the new inquiry into the tying of programming can be found in Davis Wright Tremaine’s recent bulletin, which is available here. We will keep you posted and provide more details once the text of these decisions becomes available.