Ars Technica reports: Smaller cable companies have won a big victory from the Federal Communications Commission, which ruled that they don't have to carry high definition versions of broadcast signals until February 17, 2012--three years after the digital TV (DTV) transition.

The American Cable Association immediately hailed the decision. ACA President and CEO Matthew M. Polka called the exemption "a reprieve to thousands of cable system operators who had neither the extra bandwidth nor the budget to comply with the digital must-carry obligation." The big broadcasting trade associations lobbied against the proposal.

The ruling takes cable companies off the HD must-carry hook if they have 2,500 or fewer subscribers, have an activated channel capacity of 552MHz or less, and don't affiliate with a big cable operator. They also need not copy the signal in standard digital (SD) format, as long as they transmit a viewable signal in reconverted analog. But the Commission's Order emphasized that if an operator has subscribers that can't pick that up, they could be required to broadcast an SD signal.

The Communications Act says that the FCC must adopt material degradation rules that make sure that "to the extent technically feasible, the quality of signal processing and carriage provided by a cable system for the carriage of local commercial television stations will be no less than that provided by the system for carriage for any other type of signal." But the FCC argued that because SD and reconverted analog use the same resolution: 480i, "there should be no perceivable difference between the two versions of the signal."

The National Association of Broadcasters and the Association for Maximum Service Television (MSTV) strongly opposed this decision, charging that the ACA had asked for "what amounts to a blanket waiver from the [FCC's] viewability rules." The two associations argued in early March that the HD must-carry rule did not represent a significant strain on smaller operators, and that new technologies make it easier for them to comply. At minimum, "cable systems should be required to show that they are technically and financially unable to comply with these requirements," NAB and MSTV wrote.

But filers like cable operators Charter, Medicom, and Sequel Communications argued that many smaller, rural outfits can't afford the HD transmittal expense, and could close operations as a result. "The cost of digital simulcasting cannot be justified or sustained in such small markets," they wrote in April. The FCC agreed. "In some areas, due to poor over-the-air reception, loss of a small cable system could mean loss of any access to some or all broadcast signals as well," the Order warns.

The Commission says it will review the situation again as the three-year exemption period expires.

Class A TV must carry?

Today's decision was unanimous, with FCC Democrat Michael Copps issuing a separate statement wishing that the ruling had been made sooner. But various digital must-carry loose ends remain to be tied. These include whether must carry rules should apply to Class A television stations, as advocated by the Community Broadcasters Association (CBA).

Class A TV stations are low power broadcasters that must, by law, run at least three hours of local programming each week. There are over 550 of them in the United States, many serving minority and rural audiences. CBA's filings with the FCC argue that there is little point to the localism requirement if the majority of these stations only serve the 12 to 15 percent of households in their areas that watch over-the-air TV.

The cable associations oppose this proposal, arguing that they already carry some Class A stations. CBA counters that many don't. "We can't rely on the good intentions of cable companies, the gatekeepers of broadcasters," CBA technology Vice President Greg Herman told Ars. The filing debate took place within the FCC's proceeding on improving broadcaster diversity, which ended on August 29.

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