Cablecos Try Diplomacy in DTV Flap

Attempting to head off a regulatory battle, the trade association for the cable industry said last week it will suspend transitions to digital channel between Dec. 31 to March 1. The so-called “quiet period” is intended to minimize consumer confusion as the Feb. 17 deadline for the nationwide transition of broadcast channels from analog to digital arrives.

Most of the large cable companies, including Comcast Corp. (CMCSA )and Time Warner Cable (TWC), are planning to shift their programming from analog signals to digital to free up bandwidth for high-definition TV, video-on-demand and other premium services. That migration is not directly related to the broader move of all broadcast TV stations to digital, as required by the Digital Television Transition and Public Safety Act of 2005.

Photo: Consumer Reports

The DTV transition, as it’s known, has been messy as broadcasters resist the push to move to an all-digital world, consumers express confusion about the shift and cable companies urge customers to abandon analog service for more expensive all-digital packages.

Consumer groups have charged the cable industry with taking advantage of viewers’ fuzziness about the DTV transition to shove them into high-priced premium cable packages.

Strong-Arm Tactics?

Saying it has received dozens of complaints from consumers about cable operators switching basic analog channels to premium digital services, Consumers Union said in a letter to U.S. senators in October that, “Cable operators appear to be leveraging content to strong-arm confused consumers into paying much more every month.”

Responding to these charges, FCC commissioner Kevin Martin sent a letter of inquiry to major cable operators on Oct. 30, requesting details on the analog-to-digital changes, and asking whether the companies are attempting to mislead subscribers. Kyle McSlarrow, president of the National Cable & Telecommunications Association, called Martin’s investigation “unsupported.”

Now the cable industry seems to be taking a more conciliatory tack.

Saying that cable’s digital transition is “related but different from” the shift of broadcast TV to digital transmission, NCTA VP for communications Brian Dietz said in an interview, “part of the reason for declaring our own quiet period is to eliminate any consumer confusion about which channels are going from analog to digital.”

In a letter to members of the U.S. House and the Senate, McSlarrow outlined the plan, explaining that the proposed quiet period would run from Dec. 31, 2008, to March 1, 2009.

In addition, cable companies will supply free set-top boxes to customers choosing the “expanded basic” tier of service rather than switching to premium digital offerings. Attempting to win consumers to “triple-play” bundles that include Internet access, voice service, and TV along with premiums like video-on-demand and digital video recording devices, cable companies have long sought to free up bandwidth by shifting customers off older, analog services.

“From a long-term standpoint we’re offering some incentives” to induce subscribers to trade up, said Dietz.

Chairman Martin and cosumer activists, however, have criticized the big cable providers for escalating prices and using misleading marketing tactics. Discussing the recent unannounced shift of analog cable channels to digitals, Chris Koos, mayor of Normal, Ill., about 130 miles southwest of Chicago, told Bloomberg News, “It looked to us like they were cutting service and raising prices.”

So far efforts to minimize confusion over the DTV transition have had little effect. While less than 10 percent of U.S. households are unprepared for the shift, according to a survey by the research and ratings firm Nielsen, millions of consumers still do not fully understand their options as the cable and TV industry abandon analog technology, according to Consumer Reports’ National Research Center.

Representatives of President-elect Barack Obama's transition team met with a group of broadcast and cable executives, including McSlarrow, earlier this month to discuss the digital transition. Former NCTA head Tom Wheeler is now an adviser to Obama.