FCC Analog Signal Ruling Doesn’t Impact IPTV

With the federally mandated end to analog broadcast television due to go into effect in 2009, an FCC panel has voted unanimously to require cable companies to continue broadcasting local stations as an analog signal until 2012. According to FCC estimates, 40 million American homes have televisions that don’t support digital signals, and while they are making plans to subsidize the purchase of digital-to-analog converter boxes, FCC chairman Kevin Martin expressed the government’s primary concern:

If the cable companies had their way, you, your mother and father, or your next-door neighbor could go to sleep one night after watching their favorite channel and wake up the next morning to a dark fuzzy screen.

While I’d suggest that would be the greatest thing to happen to the intellectual life of Americans since the First Amendment, politicians are justifiably concerned that so many constituents might find themselves unable to watch the latest campaign advertisements. The ruling leaves the cable companies two choices — either set aside bandwidth for up to five analog channels, or buy every legacy subscriber a converter box. But there’s one class of video content providers that won’t be affected: IPTV services.

Neither Verizon (VZ), which is slowly rolling out FiOS TV services over fiber optic connections to the residential market, nor AT&T (T), which can use existing phone networks to deliver the company’s U-verse service, currently carry any analog signal. According to a company spokesperson at AT&T, “The ruling doesn’t impact us. Whether a customer has an analog or digital TV, he can receive programming from U-verse TV today and after the digital transition date.” That’s because the service was digital from the beginning, and all of AT&T’s more than 100,000 installed set-tops already support both analog and digital sets.

So while cable providers are already facing bandwidth issues as they scramble to provide high-definition offerings in order to compete with satellite providers, the prospect of having to cede a portion of their network to analog for at least three years certainly isn’t an attractive option. Neither is spending money to upgrade existing customers when they could be investing in upgrades to the network (or banking profits). IPTV already has a bandwidth advantage over cable, because IPTV providers don’t have to send every single channel offered to every customer at the same time.

While the AT&T spokesperson didn’t feel that being exempt from the must-carry laws gives the company any particular competitive advantage, it certainly doesn’t hurt. And it goes to show that being ahead of the regulatory curve is a good place to be if you’re investing in new technology.