For small and rural cable operators — some with as few as 10 subscribers at a single headend — the FCC’s recent decision to exempt them from carrying both digital and analog signals comes as a huge relief.
Some cablecos feared they might go out of business if they couldn’t convince the FCC to ease up on all-digital requirements. In fact, many didn’t start upgrading their systems in advance of the 2009 deadline, risking the chance that the FCC wouldn’t see things their way.
Fortunately, it did.
“It’s almost a miracle for us because we couldn’t have survived,” said Joe Sheehan, CEO of KLiP Interactive LLC, a rural cable operator headquartered in Georgia.
Of course, the exemption is temporary. It stretches out over three years, but that should be enough time for most of the affected cablecos to install new infrastructure and enhance channel capacity to broadcast digital signals. To qualify for the reprieve, providers must serve 2,500 or fewer subscribers per headend, and accommodate 552MHz or less capacity. The American Cable Association (ACA), the firm that lobbied most for the exemption, said thousands of cable systems meet those requirements and that, in sum, they only reach a few million people in the United States. Overall, the extended timeframe “was a reasonable request and one that was not out of the realm of reasonability,” said Matt Polka, ACA president and CEO.
In September 2007, the FCC said that, as of 2009, cable operators must broadcast in analog and digital. That was so viewers still could watch TV if their sets didn’t yet accommodate digital signals. But ACA was concerned about the drain on members’ networks.
“It would be a double-dip on using bandwidth to provide the same broadcast signal,” Polka explained. “Our solution was to give relief to the small systems.”
Those companies will upgrade their equipment and bandwidth regardless, he said — this just gives them more time since most don’t have the financial resources that Cox Communications, Comcast Corp.(CMCSA) and others have. If ACA members go digital in less than three years, “all the better,” said Polka. “It is in our members’ interests to transition as quickly as possible because then they have a deeper, broader platform.”
The FCC and ACA have said viewers won’t be affected by the three-year extension.
So, when news broke in late August that the FCC had agreed to give the little guy a break, operators were grateful.
“Rather than be forced into making some decisions that would require us to drop programming or potentially discontinue operations altogether, now we’ll be able to make a more customer-friendly transition to an all-digital platform,” said Bill Haggerty, CEO of Allegiance Communications, one of the companies that hadn’t started the shift to digital.
