[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
PUBLIC, EDUCATIONAL, AND GOVERNMENTAL (PEG) SERVICES IN THE DIGITAL TV
AGE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
JANUARY 29, 2008
__________
Serial No. 110-84
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
U.S. GOVERNMENT PRINTING OFFICE
48-184 WASHINGTON : 2008
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC
area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC
20402-0001
COMMITTEE ON ENERGY AND COMMERCE
JOHN D. DINGELL, Michigan,
Chairman
HENRY A. WAXMAN, California JOE BARTON, Texas
EDWARD J. MARKEY, Massachusetts Ranking Member
RICK BOUCHER, Virginia RALPH M. HALL, Texas
EDOLPHUS TOWNS, New York J. DENNIS HASTERT, Illinois
FRANK PALLONE, Jr., New Jersey FRED UPTON, Michigan
BART GORDON, Tennessee CLIFF STEARNS, Florida
BOBBY L. RUSH, Illinois NATHAN DEAL, Georgia
ANNA G. ESHOO, California ED WHITFIELD, Kentucky
BART STUPAK, Michigan BARBARA CUBIN, Wyoming
ELIOT L. ENGEL, New York JOHN SHIMKUS, Illinois
ALBERT R. WYNN, Maryland HEATHER WILSON, New Mexico
GENE GREEN, Texas JOHN B. SHADEGG, Arizona
DIANA DeGETTE, Colorado CHARLES W. ``CHIP'' PICKERING,
Vice Chairman Mississippi
LOIS CAPPS, California VITO FOSSELLA, New York
MIKE DOYLE, Pennsylvania STEVE BUYER, Indiana
JANE HARMAN, California GEORGE RADANOVICH, California
TOM ALLEN, Maine JOSEPH R. PITTS, Pennsylvania
JAN SCHAKOWSKY, Illinois MARY BONO, California
HILDA L. SOLIS, California GREG WALDEN, Oregon
CHARLES A. GONZALEZ, Texas LEE TERRY, Nebraska
JAY INSLEE, Washington MIKE FERGUSON, New Jersey
TAMMY BALDWIN, Wisconsin MIKE ROGERS, Michigan
MIKE ROSS, Arkansas SUE WILKINS MYRICK, North Carolina
DARLENE HOOLEY, Oregon JOHN SULLIVAN, Oklahoma
ANTHONY D. WEINER, New York TIM MURPHY, Pennsylvania
JIM MATHESON, Utah MICHAEL C. BURGESS, Texas
G.K. BUTTERFIELD, North Carolina MARSHA BLACKBURN, Tennessee
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
Professional Staff
Dennis B. Fitzgibbons, Chief of Staff
Gregg A. Rothschild, Chief Counsel
Sharon E. Davis, Chief Clerk
David L. Cavicke, Minority Staff Director
(ii)
Subcommittee on Telecommunications and the Internet
EDWARD J. MARKEY, Massachusetts, Chairman
MIKE DOYLE, Pennsylvania FRED UPTON, Michigan
Vice Chairman Ranking Member
JANE HARMAN, California J. DENNIS HASTERT, Illinois
CHARLES A. GONZALEZ, Texas CLIFF STEARNS, Florida
JAY INSLEE, Washington NATHAN DEAL, Georgia
BARON P. HILL, Indiana BARBARA CUBIN, Wyoming
RICK BOUCHER, Virginia JOHN SHIMKUS, Illinois
EDOLPHUS TOWNS, New York HEATHER WILSON, New Mexico
FRANK PALLONE, Jr., New Jersey CHARLES W. ``CHIP'' PICKERING,
BART GORDON, Tennessee Mississippi
BOBBY L. RUSH, Illinois VITO FOSELLA, New York
ANNA G. ESHOO, California GEORGE RADANOVICH, California
BART STUPAK, Michigan MARY BONO, California
ELIOT L. ENGEL, New York GREG WALDEN, Oregon
GENE GREEN, Texas LEE TERRY, Nebraska
LOIS CAPPS, California MIKE FERGUSON, New Jersey
HILDA L. SOLIS, California JOE BARTON, Texas (ex officio)
JOHN D. DINGELL, Michigan (ex officio)
C O N T E N T S
----------
Page
Hon. Anna G. Eshoo, a Representative in Congress from the State
of California, opening statement............................... 1
Hon. Cliff Stearns, a Representative in Congress from the State
of Florida, opening statement.................................. 2
Hon. Edward J. Markey, a Representative in Congress from the
State of Massachusetts, opening statement...................... 4
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 5
Hon. John D. Dingell, a Representative in Congress from the State
of Michigan, opening statement................................. 7
Prepared statement........................................... 8
Hon. Jane Harman, a Representative in Congress from the State of
California, opening statement.................................. 8
Hon. Lois Capps, a Representative in Congress from the State of
California, opening statement.................................. 9
Hon. Hilda L. Solis, a Representative in Congress from the State
of California, opening statement............................... 10
Hon. Gene Green, a Representative in Congress from the State of
Texas, prepared statement...................................... 11
Witnesses
John B. O'Reilly, Jr., Mayor, City of Dearborn, MI............... 11
Prepared statement........................................... 14
David L. Cohen, Executive Vice President, Comcast Corporation,
Philadelphia, PA............................................... 68
Prepared statement........................................... 70
Gail Torreano, President, AT&T Michigan, Detroit, Michigan....... 98
Prepared statement........................................... 99
Annie Folger, Executive Director, Midpeninsula Community Center,
Palo Alto, CA.................................................. 101
Prepared statement........................................... 103
Submitted Material
Jeff Trudell, director of technology, Wyandotte Public Schools,
letter to Mr. Dingell.......................................... 174
Elaine McClain, letter of January 28, 2008 to Messrs. Dingell and
Markey......................................................... 175
Linda A. Badamo, director of cable TV and communications, Clinton
Township, MI, letter of January 28, 2008 to Mrs. Gail Torreano. 178
City of Boston, MA, letter of January 28, 2008 to Mr. Markey..... 182
Kyle McSlarrow, president and CEO, National Cable &
Telecommunications Association, letter of February 15, 2008 to
Messrs. Markey and Stearns..................................... 185
David L. Cohen, Executive Vice President, Comcast, letter of
February 13, 2008 to Mr. Dingell............................... 188
``Commitment,'' AT&T graphic..................................... 190
PUBLIC, EDUCATIONAL, AND GOVERNMENTAL (PEG) SERVICES IN THE DIGITAL TV
AGE
----------
TUESDAY, JANUARY 29, 2008
House of Representatives,
Subcommittee on Telecommunications
and the Internet,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 1:00 p.m., in
room 2322 of the Rayburn House Office Building, Hon. Edward J.
Markey (chairman) presiding.
Members present: Representatives Markey, Harman, Gonzalez,
Inslee, Rush, Eshoo, Green, Capps, Solis, Dingell (ex officio),
Stearns, Upton, and Barton (ex officio).
Staff present: Amy Levine, Tim Powderly, Mark Seifert,
Colin Crowell, Maureen Flood, Philip Murphy, Neil Fried, and
Garrett Golding.
Mr. Markey. Ladies and gentlemen, welcome to the
Subcommittee on Telecommunications and the Internet. Today we
are going to have a hearing which examines the issues related
to public, educational, and governmental services on cable
systems. I want to begin by welcoming my good friend, Cliff
Stearns, from Florida as the new ranking member of the
Telecommunications Committee. Cliff and I have been friends
since the first day that he came to Congress and came
immediately down to the House gym and began blocking my shots,
and so that has been a--I thought I would make that honest
disclosure up front, Cliff. And I think we are going to have a
great relationship as the years go by.
What I would like to do though is first, because Anna Eshoo
just absolutely has an urgent reason to leave, to recognize her
to make an opening statement first, and then I will recognize
Cliff Stearns and then make my own opening statement. The chair
recognizes the gentlelady from California.
OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Eshoo. Thank you, Mr. Chairman. I really appreciate it
and to the ranking member, Mr. Stearns, for allowing me to just
make a brief opening statement and kind of leap frog over
others. The House Intelligence Committee is beginning a very
important hearing right now, and so as a member I really need
to get there. But let me just say a few words and thank the
witnesses for being here. Certainly to Ms. Folger, Annie
Folger, who is here from Palo Alto, California, which is the
heart of my district, as the Executive Director of the
Midpeninsula Community Media Center. They provide a wonderful
service to our community. The mission of that organization, as
it is for others like hers, is to use television and the
Internet to create and distribute programs that promote and
celebrate individual expression, local achievements, education,
local cultural exchanges, arts appreciation, and civic
engagement. Those are very, very important things in our
communities across our country.
In fact, it is a snapshot of civic life in America. Her
organization and others also provide the most local programming
on television. They cover all the city councils, all the
meetings, all the things that go on in the public square that
the public really needs to be included in in all the areas that
I just mentioned. Now the PEG channels are a vital first class
function for communities across the country, and I think that
they are being threatened by second class treatment on AT&T's
video service. Ms. Folger is going to testify today about
AT&T's U-Verse product, which is new to my congressional
district. And I hope that we can get the kinks out of this,
that it doesn't carry the characteristics that seem to be part
of it now.
Now AT&T recently received a statewide license in
California to provide video service, but unfortunately they are
televising PEG channels in such a cumbersome way that it
threatens access to those channels nationally. There is going
to be a short demonstration that Ms. Folger is going to put on.
I think it will be of great interest to the subcommittee and
will underscore how U-Verse doesn't permit viewers to record
PEG channels on their DVRs, that the picture quality is a
quarter of the quality of a normal channel, and closed
captioning is not provided. I think we have to do much better.
I think that when a state license, a statewide franchisee
license is issued, that there are public obligations to that.
So, Mr. Chairman, I am sure that part of the regular order will
be that we can write letters for the record to our witnesses
and have them respond.
And again, Ms. Folger, thank you for being here. Thank you
to my colleagues for allowing me to move in front of you. I
hope that we can get past these issues, and I am sure the
witnesses will address the points that I am irritated about and
help us to have a comfort level and that it will no longer be
the case. So thank you, Mr. Chairman, and to all my colleagues.
I very much appreciate it.
Mr. Markey. The gentlelady's time has expired, and we
welcome you, Ms. Folger. My wife grew up in Palo Alto, and she
believes that her marriage to me is proof that there is such a
thing as downward social mobility leaving Palo Alto, so we
welcome you. The chair recognizes the ranking member, the
gentleman from Florida, Mr. Stearns.
OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Mr. Stearns. Mr. Chairman, thank you very much, and thank
you for that generous introduction. You and I have been
friends, and we share interest in sports across the board. And
I have been an admirer of yours, and also you and I have
debated many times, and you are very skillful, so I have a
great deal of admiration for you. And I welcome the opportunity
to be the ranking member and also to compliment my predecessor,
Mr. Upton of Michigan, who did an excellent job, and he is
helping me, and I look forward to this transition with his help
and yours, Mr. Chairman, and I am so pleased to be here. And I
would say to the witnesses we appreciate your time. I would say
though to the gentlelady from California that perhaps my take
on this issue is perhaps a little bit different than hers. I
think there is a way to balance out the need for innovation and
let the cable companies have a little bit of an opportunity to
provide innovation and to provide more channels through the
digital rather than the analog spectrum, with also providing
access to the consumers to PEG channels, so I perhaps will give
a different perspective, which I think would be healthy, Mr.
Chairman, in a hearing of this nature.
Mr. Markey. You just have to be careful today when you say
the gentlelady from California, because that is all we have
today. You have to be more specific today.
Mr. Stearns. Okay. Well, I am speaking of Anna Eshoo, of
course, who previously spoke and opened up the hearing. But I
do welcome the gentleladies from California, too. Mr. Chairman,
we now have a marketplace of convergence where labels don't
matter anymore, where there are other--there was one separate
to phone, cable and wireless, and so forth, and now it is all
blurring together, and the convergence is coming. And in order
for this innovation to continue, we have got to allow the
companies to innovate and not put handcuffs on them. Cable
operators may need to convert certain channels to digital
format. This conversion allows cable operators to save capacity
for faste, broadband service and more channels, including more
high definition content, so going digital also enables advanced
features such as video on demand and interactivity.
In fact, each analog PEG channel uses the same space as 3
high definition channels, 10 video on demand channels, 15
standard definition channels or 42 megabits per second
broadband service. So the purpose of this hearing is to examine
the digitization of PEG channels, what that means to the
consumer and the innovation I talked about earlier. Now the
Communications Act allows municipalities to require cable
operators to carry PEG channels. Some cities are concerned that
digitizing PEG content will make it less accessible to
consumers. I understand their concern. Comcast in Michigan
announced plans this past November to offer PEG channels only
in digital format.
As a result of Comcast's change, a subscriber with an
analog television would need a digital cable set top box to
continue receiving the PEG channels. Comcast has offered to
provide such a consumer one set top box per household at no
cost for 1 year. Additional boxes after the first year would
cost $4.20 per month. Cable companies like our television
broadcasters are in the process of converting their
transmission to digital format. Because the cable transition
does not directly implicate the public airwaves or the
availability of spectrum for emergency responders, no
transition deadline has been mandated for cable operators.
Instead, they are making individual decisions on when and how
to transition to digital based on capacity constraints,
consumer demand and the availability of their investment
capital.
Most cable systems today have some subscribers receiving
analog channels and some receiving digital channels; thus, they
are currently simulcasting the local broadcast channels and PEG
channels in both analog format and standard definition digital
format. So my colleagues, so long as cable operators meet their
legal obligations regarding carriage of particular content, we
should allow the free market, not the heavy handed regulation,
to determine how and when to convert to digital. Congress had
been pushing cable operators to carry more content as well as
increased broadband speeds and penetration. Cable operators are
attempting to balance these sometimes competing forces. Cable
providers are in a better position, my colleagues, than
regulators to determine how to maximize service for their
consumers. If they calculate wrong obviously they are going to
lose business. Let them do it, but I believe this hearing is
very important to hold, and I look forward to hearing from our
witnesses. Thank you, Mr. Chairman.
OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MASSACHUSETTS
Mr. Markey. I thank the gentleman. The chair will now
recognize himself for his opening statement. And I will begin
just by saying that we do have a busy agenda ahead for this
year that will address many telecommunications policies topics
on both the legislative and oversight fronts, with our next
significant oversight hearing scheduled for February 13 on the
status of the digital television transition. Just 4 weeks into
the consumer converter box program, the Commerce Department has
almost 4 million requests for coupons worth about $160 million,
so it is off to a brisk start. We are also following very
closely the ongoing auctions at the Federal Communications
Commission of the licenses to the frequencies the broadcasters
will be relinquishing as part of the digital television
transition.
I am eager to see the extent to which the auction actually
results in the introduction of new competitors into the
marketplace in different regions around the country, as well as
the advent of new wireless services, devices, and applications.
Initial reports of lagging interest thus far in the so-called D
block license, a commercial wireless opportunity with a unique
public safety mission, is discouraging. The auction is
obviously not over yet, and it is still possible for a
successful auction of the D block license. However, if the
auction ends and the D block has not met its reserve price, the
subcommittee will actively review the parameters of that
auction, including an assessment of its various conditions, the
reserve price, and the structure of the public safety trust,
and it would be my intention should events at the auction
require it to work closely with FCC Chairman Martin and his
colleagues to develop a plan for reauctioning these frequencies
in a way that will foster new wireless competition and enhance
interoperable public safety communications across the country.
It is an issue that I know that Ms. Harman and other
members of the committee have an intense interest in. Today's
hearing focuses upon public, educational, and governmental
services. Historically the Congress has supported this,
ensuring that a portion of capacity on cable systems be
reserved for such services, and thousands of communities around
the country have used such rights to access cable system
capability to develop and offer television channels for their
local communities. With the backdrop of our recent debate last
night on media ownership, it is important to keep in mind that
these PEG channels represent vital and vibrant voices for
localism and diversity in our national media mix.
PEG channels today offer citizens the chance to view local
government proceedings, local high school plays and sporting
events, educational courses, foreign language programming,
local civil news and information, programming distributed by
Armed Forces, charities and local community groups, and other
fare. The vast majority of this programming would otherwise not
exist on the dial because neither traditional broadcasters nor
cable programmers typically develop programming on such a local
level or open access to community groups to program time and
capacity. As the nation continues to transition to digital
television and the march of technology moves ever forward, it
is important that cable operators, programmers and communities
work together to ensure that consumer welfare is protected.
As we have seen in recent weeks, many cable operators are
moving channels, including PEG channels and CSPAN in a manner
that is drawing consumer complaints. The Congress has a
longstanding policy interest in safeguarding and fostering
diversity and localism, even as we seek to promote more
broadband deployment, greater affordability, and the advent of
other new services and equipment in the marketplace. Today we
have an opportunity to hear from witnesses about what is
happening in the marketplace and obtain suggestions as to how
these important policy objectives can be met with the least
amount of disruption to consumers. So I look forward to hearing
from our witnesses and working with them in the months ahead to
ensure that we do in fact have a good policy on these issues.
And so now the chair will turn, and almost in a Dickensian
way, and only in Congress can this work, because here as well,
here as in Dickens, there is life after death. And so I have
the privilege now of introducing the ranking member of telecom
subcommittee past, Christmas past, Fred Upton, to make his
opening statement. And we welcome you back and hope that we see
you here frequently, Fred.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. I promise you I will be here a lot, and I
appreciate the opportunity to serve now as a mere member of
this powerful and important subcommittee as the former chairman
and ranking member. And, Cliff, you have big shoes to fill. It
is nice to be back. There was a time that in Michigan we had
only cable, and now we have other video competitors such as
AT&T, as well as satellite. And AT&T's service is new and
innovative, and it will take a commitment on both the part of
AT&T and the cities to work together to develop the best PEG
programming that they can. And I certainly count myself as a
supporter of PEG. I am sure AT&T would like to attract
customers to its new service. Consumers want a choice of
providers, and this pushes cable to provide a better product as
well or it will lose its customers to the competition.
And as we have seen, the more competition the better it is
for consumers. That is the competitive environment that many of
us have always imagined for this technology. Certainly there
are going to be growing pains along the way. That isn't
surprising. When you get a new cell phone, for example, or any
other technology product, you are going to have to learn it and
all of its features. I believe the same to be true for the
latest iteration of video service being offered by AT&T, that
there may be a bit of a learning curve, but the potential
benefits are great to the consumers that will use it. In 1996
we amended Title VI of the Communications Act to ensure that
cable technology and the deployment of set top boxes would not
be unduly hampered by local franchise authorities.
The provision plainly states, and I quote, ``No state or
franchising authority may prohibit, condition or restrict the
cable system's use of any type of subscriber equipment or any
transmission technology.'' We adopted that provision for a
reason. We believed that private companies rather than public
officials could best chart technological advancement. Given the
challenges that cable operators face in the current competitive
landscape against other multi-channel video programming
distributors who are already widely offering all digital
services, it hardly seems the time for us to backtrack on our
commitment to provide cable operators with discretion over
their technical development. Local officials, even when well
intentioned, should not be dictating necessarily how much of a
cable system is analog or how much of it is digital.
I understand that there might be some disruption among the
transition period that may be a cause of concern to the PEG
viewers as well as their providers, but I would encourage local
governments and PEG programmers to embrace the digital age and
work cooperatively to minimize any transitional disruption. If
the FCC imposes dual carriage requirements and we want a
broadband provider to provide as much as 100 megabytes per
second speeds to compete, then cable has to carry all of the
PEG channels and something is going to have to give. I have
always believed in regulatory parity. Cable and other
terrestrial carriers are mandated to carry PEG channels while
satellite providers that serve over 30 million households have
no such mandate.
The bottom line is this. Consumers want HD, more HD.
Otherwise, they are going to leave that provider. Our goal is
to try to make sure that competition works as best that it can
so in fact they will have those services if they want them. I
yield back my time to the gentlelady from California.
Ms. Harman [presiding]. I thank the gentleman for yielding
and would note for the record that the gentlewomen from
California have now taken over the committee, which I declare
to be a good start. It is now my pleasure and privilege to
yield to the chairman of the full committee for an opening
statement.
OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Dingell. Madam Chairman, thank you for the recognition.
I commend you and Chairman Markey for holding this very
important hearing. I want to begin by welcoming a number of
friends here today, including my very dear friend, Mayor
O'Reilly of Dearborn, Michigan, and also Ms. Gail Torreano. I
want to thank them and our other witnesses for their time and
efforts in participating in this day's hearings. The committee
today will hear testimony concerning the current treatment of
public, educational and government, or PEG, programming by
video programming providers. Local communities would use PEG
programming to cover town meetings and to air educational
programs and even to cover local high school sports events.
These are very important programming and very important matters
of concerns to the communities. It constitutes a crucial aspect
of political discourse in communities across the United States
and promotes important goals of localism and diversity, and in
many instances, if not in all, in some way or other it is
enshrined in the agreements originally adopted between the
communities and the providers of cable service.
The committee recently learned that some providers are
changing how consumers receive PEG programming. In other cases,
these changes could impose additional costs on consumers or
make it difficult for them to locate PEG programming. In other
instances, changes may prevent consumers from digitally
recording PEG programming. These are matters of grave concern
to the communities, to the listeners, and also to the
committee. I wish to be clear. I am not opposed to any effort
that could address the problem of the underlying cable
operators' obligation to make PEG programming available to
consumers. It matters little to me if such efforts are driven
by technological change, the need for more network capacity or
the desire to compete with new entrants or enter as a new
entrant.
PEG programming deserves first-class treatment, not second-
class billing. That is why the Congress requires cable
operators to provide PEG programming on the most basic tier of
service and why this committee has stated that it should be
available to subscribers at the lowest reasonable rate. I am
pleased that Comcast, which had announced changes detrimental
to the way it delivers PEG services in Michigan, has agreed to
make a good faith effort to work out a settlement with affected
communities. I want to commend them for that. I am optimistic
that these discussions will lead to a result that leaves all
parties better off. And one of the functions of this committee
in hearings of this kind is to find out what are the problems
and how those problems could best be worked out to the
satisfaction of all concerned.
I recognize that all types of communications networks are
being upgraded with the latest technologies. This committee and
I support that. These upgrades often require Congress to
consider how existing policy priorities will be accommodated by
the new networks of the future. This committee has examined
such efforts and such issues closely in the past, and I look
forward to doing so now for PEG services. I want to thank you,
Madam Chairman, and I want to thank the committee for this time
and for their effort and leadership in this matter. I look
forward to the testimony of today's distinguished witnesses. I
have the unanimous consent request that certain matters be
inserted into the record.
First of all, a letter from Mr. Jeff Trudell, Director of
Technology, Wyandotte Public Schools, a letter from Elaine
McClain of Birmingham, Michigan to the committee, a letter from
Linda Badamo, Director of Cable TV and Telecommunications for
Clinton Township, Michigan to Gail Torreano of AT&T.
[The information appears at the conclusion of the hearing.]
Ms. Harman. Without objection.
Mr. Dingell. Thank you, Madam Chairman, for your courtesy
to me.
[The prepared statement of Mr. Dingell follows:]
Statement of Hon. John D. Dingell
Mr. Chairman, thank you for holding this very important
hearing. Let me begin by welcoming several friends here today,
including my dear friend Mayor O'Reilly of Dearborn, Michigan.
Thank you for your time and efforts to participate in today's
hearing.
The Committee will hear testimony today concerning the
current treatment of Public, Educational, and Governmental or
"PEG" programming by video programming providers. Local
communities use PEG programming to cover town meetings and air
educational programs and even to cover local high school sports
events. This programming constitutes a crucial aspect of
political discourse in communities across America and promotes
the important goals of localism and diversity.
The Committee recently learned that some providers are
changing how consumers receive PEG programming. In some cases,
these changes could impose additional costs on consumers or
make it more difficult for them to locate PEG programming. In
other instances, the changes may prevent consumers from
digitally recording PEG programming. These are matters of grave
concern.
Let me be clear--I am opposed to any effort that would
thwart the goals underlying a cable operator's obligation to
make PEG programming available to consumers. It matters little
to me if such efforts are driven by technological change, the
need for more network capacity, or the desire to compete with
new entrants. PEG programming deserves first-class treatment,
not second-class billing. That is why Congress requires cable
operators to provide PEG programming on the most basic tier of
service and why this Committee has stated that it should be
available to subscribers at the "lowest reasonable rate."
I am pleased that Comcast, which had announced changes
detrimental to the way it delivers PEG services in Michigan,
has agreed to make a good faith effort to work out a settlement
with affected communities. I am optimistic that these
discussions will lead to a result that leaves all parties
better off.
I recognize that all types of communications networks are
being upgraded with the latest technologies. These upgrades
often require Congress to consider how existing policy
priorities will be accommodated by the new networks of the
future. This Committee has examined such issues closely in the
past, and I look forward to doing so now for PEG services.
I thank you for this time and look forward to the testimony
of today's distinguished witnesses.
----------
OPENING STATEMENT OF HON. JANE HARMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Harman. Thank you, Mr. Chairman, for your leadership on
this issue and so many other issues on this committee. I love
being back. I also enjoy so much serving on this subcommittee
and would like to welcome Mr. Stearns to the ranking member
position and to say to his predecessor who just left the room
that we all know he has become a world renowned expert on
efficient light bulbs, and for that reason he needs to be
ranking member on the energy subcommittee. But both of you try,
and I appreciate this, to join with the majority on this
committee to fashion responsible, bipartisan legislation. It
makes a difference. This committee is a critically important
committee in Congress, and this issue is a very important issue
too. I yield myself a few minutes to make my opening remarks
and would like to comment about the issue raised by Chairman
Markey, and that is the ongoing auction for the 700 megahertz
space at the FCC.
I want to thank him, he is back, for agreeing to hold
hearings immediately following the conclusion of the auction
and for making certain that this committee is a partner with
the FCC in what happens next. Hopefully this auction will be
successful. I am watching closely the D block portion of it,
because I think the most important reason to do this auction is
to make certain that we finally solve our problem with
interoperable communications in the event of a terrorist attack
or a natural disaster. But nonetheless it is important that
this committee be a player here and that we prevent any change
of rules in mid-course should the bids not come in in regular
fashion and that we help structure with the FCC something else
if the D block of the auction is not successful.
I have written to Chairman Martin about this. I also wrote
a letter to Chairman Markey and Ranking Member Stearns about
this, and just want to close with this point, that this DTV
transition may be the last chance for decades to leverage
private sector interest in spectrum with first responders' need
for a network. It is unfathomable to me that 6 years after 9/
11, in fact almost 7 years after 9/11, we haven't solved this
problem. A big piece of the solution is spectrum, spectrum
built out by the private sector to accommodate a range of needs
that our first responders have and some of which they don't
even know they have. But this is the place to do it, this is
the time to do it. The deadline cannot slip, and as we think
about this DTV transition, which is very important, we must
think first about making our communities safer. So I yield back
the balance of my time, and I yield back the chair to Chairman
Markey. And thank you all for coming.
Mr. Markey. The chair recognizes the gentlelady from
California, Ms. Capps, for her opening statement.
OPENING STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Capps. Thank you, Mr. Chairman. I want to thank you and
also Chairman Dingell. It is because of the two of you, your
leadership, that we are having this hearing today and this
issue comes before this committee. I am going to be brief in my
opening remarks. I have been preceded by two important women
members from California, and there is yet another one to speak,
so I can be one in the line of speakers here. But this hearing
does provide us all an excellent opportunity to examine some
important issues and choices we will have to make in the
transition from analog to digital television. It highlights
also our responsibility to stay true to the principle and
spirit of localism that is currently captured in our
telecommunications laws.
I understand that advances in technology allow us to do
more with less space, but I also caution that this should not
come at the expense or cost of our public, educational, and
government channels and local voices. It shouldn't have to come
also at the cost of equality and accessibility of PEG channels
to all of our constituents. Growing the consolidation already
threatens to crowd out local content. This is, I believe, a
perennial threat, and that is why we should be involved, so
that we can speak for some of our local groups who have very
few voices besides ours to represent them. We have to continue
to do what we need to do to ensure that this consolidation
doesn't happen again. And I want to also echo and am thankful
for our colleague Jane Harman, who everytime she has a chance
speaks to the issue of what we need to provide for first
responders. And everytime there is an opportunity to discuss
the spectrum that we should keep that in mind. They also don't
have a lot of powerful voices on their side except for those of
us here who remember 9/11 so clearly the interoperability that
we want to provide for our first responders. So thank you
again, Mr. Markey. I yield back. I am looking forward to the
expert testimony that we are about to hear.
Mr. Markey. The gentlelady's time has expired. The chair
recognizes the gentleman from Texas, Mr. Gonzalez.
Mr. Gonzalez. I waive opening.
Mr. Markey. The chair recognizes the gentlelady from
California, Ms. Solis.
OPENING STATEMENT OF HON. HILDA SOLIS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Solis. Thank you, Mr. Chairman. I just want to applaud
you and the ranking member for having this important hearing.
So much has already been said about the need to continue to
provide this very vital service. PEG channels play a really
important role in communities like mine. We just met with some
of our local cable folks and heard a great deal about the
educational benefits that we see in areas like East Los
Angeles, where not everyone has the luxury of having the
Internet at home and vice versa, so it is a very important part
of what I think our committee can do to help oversee this that
we see that this support is there and that we continue this
very vital service. Thank you, and I yield back.
Mr. Markey. The gentlelady's time has expired. The
gentleman from Texas, Mr. Green.
Mr. Green. Thank you, Mr. Chairman. I would like to have my
full statement placed in the record. And following my
colleagues from California, in our district in Houston there is
a lot of programming on our public, educational, and
governmental services that just wouldn't be available to our
communities without it, and that is why I look forward to the
hearing, and hopefully we will see that continuation if not an
expansion particularly as we head into the all digital effort
that we are doing. And with that, Mr. Chairman, I ask that my
full statement be in the record.
[The prepared statement of Mr. Green follows:]
Statement of Hon. Gene Green
Mr. Chairman, thank you for holding this hearing on the
effects on PEG services as we transition to the age of digital
television.
PEG stations provide an important service to the public -
they provide diversity and keep the public informed of local
news and events with locally produced programming.
That is why Congress in 1984, and again in 1992, defined
and limited what PEG services local franchising authorities
could require and required that PEG channels be carried on the
basic tier along with all local broadcast signals the system
carries.
PEG channels provide local programming that would not
otherwise exist.
At the same time the move to digital television, in
broadcast and by video service providers, has enormous benefits
for the public.
The digital transition in broadcast has freed up spectrum
that will be used to improve public safety communications and
expand broadband offerings for the public.
Similarly, moving to digital platforms on cable and other
video services is a move toward more efficient delivery of
content and provides benefits by increasing capacity for
providers to offer additional programming and improved
broadband speeds for consumers.
In my hometown of Houston, I know at least one of Comcast's
headend facilities is all-digital, and it is by far the most
state of the art facility they have in the area and provides
the most advanced services customers want.
I think the benefits of digital video are undeniable, and I
strongly believe the cable industry needs to move to a digital
platform to stay competitive and to improve services,
especially broadband speeds.
But, like many of my colleagues here today, I also want to
know when the industry moves to digital that cable customers in
Houston aren't going to have to pay more to see the Houston
Community College or the City of Houston's PEG channels.
I would like to hear from Mr. Cohen how Comcast plans to
make that transition while minimizing the impact on customers'
ability to view PEG channels and minimizing the impact on their
pocketbooks.
From our other panel member today representing a video
service provider, I hope to hear more about how the IP based U-
verse service is offering PEG programming, as I know it is
significantly different than cable.
I understand customers can often access PEG programming
from their hometown and from surrounding towns and that it is
offered more like on-demand programming and not included in the
regular program guide.
I would be interested to learn if customers have expressed
opinions one way or the other on this, and I also would like to
hear from Mr. O'Reilly and Ms. Folger about their experience
with this service.
Thank you again Mr. Chairman for holding this hearing, and
I thank the witnesses for being here and look forward to their
testimony.
----------
Mr. Markey. Without objection, it will be included, and
that concludes all statements from members of the subcommittee.
We will turn to our witnesses, and we will begin by hearing
from John B. O'Reilly, Jr., the Mayor of the City of Dearborn
in Michigan. We welcome you, sir. Whenever you are ready,
please begin.
OPENING STATEMENT OF JOHN B. O'REILLY, JR., MAYOR, CITY OF
DEARBORN, MICHIGAN
Mr. O'Reilly. Thank you, Chairman Markey. My message today
is simple, and that is when it comes to PEG, Congress got it
right in 1984, and that is not just because I was working here
at the committee at that time, and they got it right again in
1992, and that is that the local interest of cable, the way it
serves local constituents, is something that brought it to a
level where it was warranted to grant them as a private
enterprise the right to use the easements and rights of ways in
public areas in order to put this forward. So they were given
the status of utilities like gas and electric because it was
important that this brought that local voice, that local
opportunity, and PEG is the example of that local opportunity.
That is what made the compelling argument for extending some of
the privileges that have been offered at cable.
And so when we contrast with other mediums, we have to
remember that that was a unique element of that. And another
thing I want to talk about is that Dearborn and all local
governments welcome broadband competition. We are lucky we have
two wire-to-wire competitors, WOW and Comcast, in our
community, and they are going at it head to head. We have a
wide diversity of satellite dish providers. We have now AT&T
entering the marketplace. We have given over seven licenses to
broadband and bundled carriers along our major rights of way.
We have approved point-to-point communication that has to be
strung up. So we have been out there promoting and accepting a
wide range of different models within the area of competition.
We are not afraid of digital. We shoot in digital, edit in
digital. We show our stuff in digital. Digital is a format we
use and we are happy with and that is on our local cable. We
have a robust local cable operation. We have every voice in the
community represented. We have a lot of special programs, and
that goes back to something unique.
Dearborn has an interesting place in cable legislation
history because in 1984 when Senator Goldwater was promoting S.
66, his version of the cable legislation at that time, he
singled out Dearborn in his remarks on the floor as an example
of the onerous imposition that powerful cities were exercising
over the four cable companies. He didn't have the facts right,
so I am going to take this liberty to represent us well. What
happened is in those days in 1980 and 1981, cable providers
were going out and doing rent a citizen. Prominent citizens
were put as a frontage piece to get the cable contracts. There
were a lot of aggressive promotions offered to get the cable
contracts. It was a wild time.
Dearborn chose a different path. Dearborn established a
blue ribbon commission that appointed technicians, engineers,
educators, lawyers, who went out and researched everything that
was going on in the marketplace at that time, and it brought it
all back to the table and put together an RFP for cable that
was extraordinary, in fact, so extraordinary that no provider
should have been on it. And I agreed with Senator Goldwater at
the time that what it is is a good example of what should not
have been done, but this was a private marketplace, arm's
length. The cable providers had no gun to their head. They
wanted it. They went after it with some concessions. And again
that is what I am pointing out is no one should, save in a
marketplace environment, no one should save someone from their
own bad decision, and I think that is the case, and I make that
case very well for Dearborn.
We asked for everything. In fact, one of the things that
they negotiated out was 24-hour monitoring of school buildings
with infrared cameras. That was in our cable franchise in 1981.
We had an extraordinary array of things that were local
interest that would have served greatly our community, and many
of those things still remain in some message. But the point is
that was arm's length. Now as we move forward, we look at what
has happened. In our contract it is very clear. We have that no
channel location changes can occur unless by mutual agreement.
That is in the contract. That has not been abrogated by either
the 1984 or the 1992 legislation or subsequent 1996
legislation, so that still stands, and that is one of the
things we stand on.
Last year in Michigan, and I think it is happening around,
and this is something that we are asking you to look into,
Michigan legislation moved into the cable regulations with
strong support of some of the parties here, and it seems that
maybe the result didn't make people happy. So beginning in
January of 2007, Michigan had what they believed was a new
regulatory environment. The first contact we had from Comcast
was that we were going to lose the free cable that had been
included in our contract to the three fire stations and other
city buildings in our community. We said okay. We understand it
is a marketplace decision. They were the only ones doing it. We
made no objection because we understood to be competitive they
had to shed some things that needed to be shed.
The next communication we got in 2007 was close all the
local cable TV production studios. There were nine in the State
of Michigan. That is down from one in every community, by the
way. When cable first came in every community was asking for
one. It had gone down to nine statewide. This is not where
cities produce their cable. This is where the local things, our
Rotary Good Company program was there. Our Kiwanis Talk Program
was there, a lot of programming that is locally based by local
public groups was produced there. Those were gone. The city is
now forwarding our equipment on to help produce those programs
to continue it.
Mr. Markey. Mr. O'Reilly, if you could summarize, please.
Mr. O'Reilly. Okay. I am sorry. We made no objection.
Anyway, the last one was that PEG was moved from basic service
into tier of digital. What we are saying--and we went to court,
and you have this, the Eastern District judge, Judge Roberts,
agreed that a federal exemption would apply and decided on our
behalf in terms of a stay, temporary restraining order. But we
just want to say that we think that PEG needs to be in the
basic service tier, that they need to be bundled together. I
don't object to moving to digital, but they should not be
separated. They are part of that commitment. Local must carry
and PEG should be bundled together. Thank you.
[The prepared statement of Mr. O'Reilly follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Markey. Thank you, Mr. Mayor, very much. We appreciate
it. Our next witness is David Cohen, who is the Executive Vice
President of the Comcast Corporation, a frequent visitor before
our committee. We welcome you back. Whenever you are ready,
please begin.
STATEMENT OF DAVID L. COHEN, EXECUTIVE VICE PRESIDENT, COMCAST
CORPORATION, PHILADELPHIA, PA
Mr. Cohen. Mr. Chairman and members of the committee, thank
you for inviting me to testify today, and it is truly always a
pleasure to appear before this committee, and I welcome the
opportunity today to discuss Comcast's plans for carrying PEG
programming in the digital TV age. Let me start by saying that
Comcast and the cable industry have a long history of
supporting PEG programming, and we recognize its value to our
customers and our local government partners similar to the way
that many members talked about it in their opening statements.
It is also important to note that the issues raised by this
hearing are temporary transitional issues. In the relatively
near future it is likely that all cable video services will be
delivered in a digital format, and all of our customers will
need some form of digital equipment. That is already the case
with our major competitors.
During this transitional period, we are working hard to
accommodate consumer demand for more bandwidth intensive
services such as high definition television, video on demand,
and faster broadband speeds. We have wonderful technologies
including signal compression and switched digital video, but we
also need to use our bandwidth more efficiently, and that means
delivering in a digital format channels that previously were
delivered in analog. Given the genesis of this hearing, I want
to say that our recent experience in Michigan is atypical in
two important respects. First, in the vast majority of our
cable systems PEG channels remain in analog, and we have no
plans to change that. In fact, we have voluntarily increased
our PEG carriage in many systems by adding a digital simulcast
to accompany the traditional analog version.
In light of the relatively large number of PEG channels in
certain Michigan communities, however, we need to work out
different arrangements for PEG to help us accommodate consumer
demand for those other services, and that leads me to the
second way in which our Michigan digital initiative differs
from our standard practice. In retrospect, we failed to
communicate adequately our goals and to work cooperatively with
our local partners to produce a win for everyone, for the
consumer, the local government, the PEG community, and for
Comcast. That is not the way we want to do business in Michigan
or in the rest of the country, and I want to apologize for
that. I am pleased to say that we are now engaged in friendly,
and what I am sure ultimately will be fruitful, discussions
with the local governments in Michigan, including Mayor
O'Reilly of Dearborn, who is testifying here with me today.
With this background, let me quickly highlight three key
points about the digital delivery of PEG. One, the delivery of
PEG channels in a digital format is a small part of a much
larger transition from analog to digital television. The
spectrum efficiency of digital technology enables video
providers like Comcast to vastly expand our service offerings.
Second, today's intensely competitive video environment compels
cable operators to offer PEG channels in a digital format. Our
major competitors are already all digital, and they widely tap
that fact in their consumer marketing. The two national DBS
providers offer no local PEG programming whatsoever, and our
telephone competitors generally seek to offer less than we do.
If established cable operators are unduly restrained in our
digital transition it will weaken our competitive posture, and
ironically it will ultimately harm PEG programmers whose
primary distribution is on cable.
Third, I want to clearly state that we are not
discriminating against PEG channels. In most of our cable
systems the vast majority of commercial programming services
are already transmitting exclusively in digital format.
Importantly, even when we digitize PEG channels, those channels
remain part of the basic service tier, which means that no
additional service fee is required to view digitally delivered
PEG channels. And while some customers may need digital
equipment to view these channels, a rapidly growing majority of
our customers already have this digital capability. The bottom
line is that we believe that digital delivery of PEG channels
is fair, it is appropriate, it is pro-consumer, it is key to
our ability to respond to competition, and that it is lawful,
but as I said earlier, and this is the most important
statement, given the strong commitment that we have to PEG
programming and given the strong relationships we enjoy with
our local government partners, Comcast is committed to working
cooperatively with those local partners to ensure efficient PEG
delivery through the digital transition.
Thank you again for the opportunity to testify, and I look
forward to taking your questions.
[The prepared statement of Mr. Cohen follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Markey. Thank you, Mr. Cohen, very much. Our next
witness is Gail Torreano, who is the President of AT&T
Michigan. Welcome.
STATEMENT OF GAIL TORREANO, PRESIDENT, AT&T MICHIGAN, DETROIT,
MI
Ms. Torreano. Thank you very much, Mr. Chairman, and the
other members of the subcommittee for inviting me here today.
AT&T's PEG product is a reflection of our commitment to
consumers as well as our communities. AT&T is very proud of its
PEG product. It is robust, it is innovative, and it is high
quality. AT&T is investing over $5 billion by mid-2008 to
upgrade its telecommunications network and bring fiber closer
to our customers' homes. Over this advanced network, AT&T is
offering a suite of IP-based services, including U-Verse TV. In
fact, AT&T created 1,200 new positions in Michigan in 2007, the
majority of which are union jobs and are supporting this U-
Verse deployment. AT&T's PEG offering, which we rolled out last
summer, reflects the innovative nature of U-Verse TV itself.
It is available at no additional cost with any U-Verse TV
package, and I brought a demonstration that I would like you to
turn to your left so that you can see what it is like.
[Video shown.]
Ms. Torreano. If I may continue.
Mr. Markey. Please.
Ms. Torreano. I am sorry about the low sound. Hopefully you
picked up some of it.
Mr. Markey. We apologize to you for the low sound.
Ms. Torreano. As you can see, the U-Verse PEG product is
different from traditional PEG products offered by incumbent
cable providers, but these benefits clearly--or these
differences clearly benefit our customers in the communities in
which we all live. For instance, a Dearborn resident who owns a
small business in Southgate, Michigan, will be able to watch a
Zoning Commission hearing from his home as he sees what his
neighboring community is doing. And the PEG content is
available on Channel 99 no matter where you are in the United
States watching our product. AT&T has conducted scores of
demonstrations and technical discussions about the PEG product
with various elected officials and other stakeholders. We have
made adjustments to the product in response to the reactions
that we have received from local communities, and we will
continue those ongoing dialogues as we continue to enhance the
product.
For example, AT&T's PEG product will now remember the
customer's last programming selection, making it easier for the
customer to jump to that favorite PEG channel and see that
immediately when they go on the TV. In sum, the very technology
that will allow AT&T to alter the competitive landscape for
video services will likewise issue a new era of community
programming. I appreciate having the opportunity to be here to
share a bit about our product and have the opportunity to
answer your questions. Thank you.
[The prepared statement of Ms. Torreano follows:]
Statement of Gail F. Torreano
My name is Gail Torreano, President of AT&T Michigan. Among
other things, I am responsible for AT&T's community and
government affairs in Michigan. In that role, I am familiar
with the Public, Educational and Governmental (PEG) programming
made available in connection with AT&T's U-verse TV product, as
well as our extensive efforts to incorporate feedback from
communities into our evolving PEG capabilities.
AT&T's approach to PEG programming is driven by a
commitment to carry the programming in any community we serve
that seeks carriage; an insistence that our PEG capabilities
reflect what our customers have come to expect from our
competitors; and a continuing effort to enhance the product as
technology and customer demand evolve. With these principles in
mind, AT&T is proud of the PEG product that it has deployed; it
is robust, distinctive and of high quality.
In this statement, I will outline the basic contours of
AT&T's U-verse TV deployment; describe the particular
characteristics of the PEG capabilities available with U-verse
TV; summarize our beneficial efforts in Michigan and elsewhere
to obtain critical feedback from our local communities
regarding our PEG product; and, in the process, address some of
the concerns that have been raised regarding the unique
characteristics of our PEG service.
AT&T's IP Video Deployment
AT&T is investing over $5 billion by mid-2008 to upgrade
its telecommunications network and bring fiber closer to AT&T
customers' homes. More fiber in the ground, closer to
customers, will make it possible for AT&T to provide a
groundbreaking suite of Internet Protocol (IP)-based services
over its existing network. These services will include
broadband Internet access, IP telephony (VoIP), and AT&T's IP-
based TV (IPTV) service called AT&T U-verse TV.
AT&T's U-verse effort represents the largest rollout of
IPTV technology to date in the world, and the features,
functions and competitive impacts of U-verse TV will prove to
be equally unprecedented. Using a client-server delivery model,
and next-generation compression and modem technology developed
specifically for U-verse, AT&T will deliver hundreds of
television channels (dozens of them in high definition) to
consumers over a largely copper-wire network originally
designed to carry traditional telephony service. The
possibilities presented by this breakthrough achievement are
enormous, and U-verse TV at its current stage of development
has only begun to realize its full potential.
AT&T began its commercial offering of U-verse TV in late
2006. As of the end of 2007, after just one year of service,
AT&T already had signed up 231,000 customers - up from 126,000
customers just three months earlier. As of January 24 of this
year, AT&T had deployed the U-verse technology to 7.9 million
living units. Our target is to be able to make the service
available to 30 million living units in our local service
territory by the end of 2010. In short, U-verse TV is a
competitive game-changer; it brings fresh, innovative IP-based
services to consumers thirsty for choice for their video
services.
The U-verse PEG Experience
AT&T's PEG offering benefits directly from the new
communications and broadband technology that enables the U-
verse suite of services. It operates as an application that
integrates content obtained via a secure IP-based connection,
for example a "stream" of live community video, and delivers
that content to the end user's television via the U-verse set
top box (STB). Most importantly, U-verse unifies the full range
of PEG programming in a given Designated Market Area (DMA) at a
single, easy-to-find location. And, PEG programming is
available - at no additional cost - in connection with any U-
verse TV package.
AT&T has designated Channel 99 as the location on its U-
verse channel guide dedicated exclusively to PEG programming.
The choice of Channel 99 was deliberate, as it is a prime
location. It bridges the local station line up with the
national channel line up, which begins at Channel 100. That is,
customers find PEG programming before reaching the multitude of
national broadcast stations.
At the PEG channel, a customer sees an alphabetical listing
of all the cities with PEG programming available in her DMA.
Once she selects a city from that menu, she can then choose
from a list of programming available for that city. Moreover,
while watching, she can choose to display a navigational bar on
screen to select different PEG programming made available
within that city. This allows a seamless change from one PEG
program to another. Alternatively, she can choose to "hide" the
navigational bar and watch full-screen PEG programming.
AT&T's method for PEG carriage has several inherent
benefits. First, PEG programs are available to much larger
audiences because distribution is not limited to town borders.
Unlike most typical cable customers, U-verse subscribers will
be able to keep track of events in surrounding communities,
where they might work or attend school, or where family members
and friends live. If, for instance, the City of Livonia has
produced premier educational programs, residents in, say, Royal
Oak will be able to enjoy them. Or, a Dearborn resident who
owns a small business in Southgate will be able to watch a
zoning commission hearing in that neighboring community from
the comfort of his home. Second, the new service brings
programming from multiple municipalities in a DMA together in
an easy-to-remember channel location. Among other things, this
ensures a consistent, predictable experience across the U-verse
platform; all U-verse customers will know exactly where to go
for the available PEG programming in their area. Third, AT&T's
PEG product potentially enables cities, at marginal cost, to
provide PEG content over the web because all of the city's PEG
content will be in the digital form widely used for delivery
over the public Internet. Thus, if a city chooses to do so, it
can present digitized PEG content on its municipal web site so
that anyone (anywhere) with access to the public Internet can
view it. Use of this technology will empower cities by enabling
more viewers more flexibly to access their PEG in a manner that
suits their interests and schedules.
Coordination with Communities
AT&T launched its first PEG market in July 2007. As of
today, we have the product operational in 14 cities with over
40 PEG channels. In doing so, we have remained sensitive to the
reactions and observations of our local community partners.
Among other things, AT&T established various demonstration
locations where cities could experience AT&T's PEG product on
the U-verse system and provide their suggestions, reactions and
concerns regarding the product.
In Michigan, in particular, AT&T has gone to great lengths
to involve local communities in the process of enhancing our
PEG capabilities. Our implementation team has conducted
technical meetings with 39 of the 45 communities that have made
requests for carriage of PEG programming and has conducted
similar meetings with numerous other cities that have merely
requested information about PEG. In addition, AT&T has
conducted scores of demonstrations of U-verse TV and the PEG
product with other stakeholders, including legislators, Public
Service Commission and Attorney General staff, and
representatives from various municipalities.
This concerted effort to involve local government and other
officials in the development of our product has born fruit and
been translated into actual modifications to the PEG offering.
Just by way of example, in response to municipal suggestions,
AT&T added a PEG menu tab on the U-verse main menu. In addition
to accessing PEG at Channel 99, an end user can access the PEG
channel from the main Electronic Program Guide menu screen by
selecting "Local Public Education and Government." No other
channel on AT&T's system has this capability. Additionally,
AT&T's PEG product will now remember the customer's last
programming selection, making it even easier for the customer
to jump to her favorite PEG content.
Different is Better
AT&T acknowledges that not all local communities are
comfortable with some of the more original attributes of the U-
verse PEG offering. In particular, some communities have voiced
concerns about the placement of all PEG programming at a single
channel, requiring in some cases an additional step of choosing
among a menu of community programming.
This is a difference as compared to more traditional PEG
products offered by incumbent cable operators, but it is a
difference that clearly benefits our customers and the
communities in which they live. With U-verse, the customer can
access from a single, easy-to-remember channel (or a dedicated
tab on the U-verse main menu) all PEG programming that
communities in the relevant DMA have asked to be carried on
AT&T's system. This is a significant benefit for customers who
live and work in neighboring communities and therefore have an
equal interest in government or school activities in multiple
locations, who wish to keep track of community events where
their family and friends live, or who want simply to monitor
happenings in surrounding communities. Thus, AT&T has expanded
exponentially the PEG viewing choices of its customers and, in
turn, offered local communities and PEG programmers a much
larger audience for their broadcasts.
Moreover, by placing PEG content on a common channel across
AT&T's network, AT&T can better promote Channel 99 nationally
so that customers will know, wherever they live, that they can
find important community information on Channel 99. Indeed,
AT&T has already assembled a comprehensive promotional campaign
to notify AT&T subscribers that PEG content will be found on
Channel 99. AT&T will promote Channel 99 on the air on Buzz
Channel 300 and the Help Channel (Channel 411) on the U-verse
Service; online through the U-connect web site (uverse.att.com/
uconnect) and the U-talk discussion board (utalk.att.com); and
in print through promotional flyers and AT&T U-guide updates.
In sum, the very technology that will allow AT&T to alter
the competitive landscape for video services in general will
likewise usher a new era of community programming.
----------
Mr. Markey. Thank you, Ms. Torreano. And our final witness
is Annie Folger. She is Executive Director of the Midpeninsula
Community Media Center from Palo Alto, California. We welcome
you.
STATEMENT OF ANNIE FOLGER, EXECUTIVE DIRECTOR, MIDPENINSULA
COMMUNITY MEDIA CENTER, PALO ALTO, CA
Ms. Folger. Thank you. Good afternoon. I actually run a
non-profit PEG access organization serving Palo Alto and five
surrounding jurisdictions. I represent the Alliance for
Community Media and over 3,000 PEG access centers that operate
5,000 local community channels. On behalf of our members,
community television producers and viewers, we thank Chairmen
Dingell and Markey and the members of this subcommittee for
inviting the Alliance to speak with you today. Alliance members
are here from California, Illinois, Indiana, Kentucky,
Michigan, New York, Ohio, Virginia, and Washington, D.C. PEG
access owes its existence to the visionaries in Congress who
protected the franchise process to create a platform for local
communication. In Palo Alto, for example, we carry
Representative Eshoo's town meetings live on our channels,
answering the e-mails of constituents who cannot attend.
But in the past 2 years there has been a major push to
undermine local cable franchising. The FCC has overruled
Congress, assigning itself powers that Congress meant for local
communities. Industry-backed legislation in 17 states has
further harmed public access. Thirty years of community
investment in PEG has been turned on its head. We welcome
competition but not at the expense of PEG access obligations.
Representative Markey noted the dangers of this de-regulatory
fervor in an address a year ago in Memphis, when he said we
will not let telecommunications companies or the FCC chill PEG
access television. At this point, we would like to start our
video showing how long it takes to load a PEG channel on U-
Verse at a typical home in Cupertino, California. First, the
customer flips through the commercial channels, then he loads a
PEG channel.
The challenge for PEG is not digital technology. Many PEG
centers have already moved into digital technology for
production and transmission. The challenge is preserving PEG
signal quality, function, channel placement and funding. Let me
give you an example. AT&T's PEG platform consigns PEG channels
alone to a format that is inferior to commercial channels in
virtually every way that matters to a viewer. For example,
AT&T's PEG product cannot closed caption the educational
programming that our hearing impaired students rely on. Most
DeAnza Community College programming is closed captioned, as
California law requires. AT&T, however, will not pass through
the closed captioning DeAnza provides. This means that our
disabled students cannot be served as the law and common
decency demand.
But the lack of closed captioning is just one of the
several shortcomings of AT&T's PEG product. PEG channels in U-
Verse cannot be recorded on DVR, take from 45 to 90 seconds to
load, are harder to find, have no second audio program for
Spanish language or other translations, and only 25 as much
resolution as other channels, have a smaller picture, stutter
when used for sports, dance or motion, and have no last channel
or favorites capability on the remote. If AT&T's PEG product is
so cutting edge, why aren't other basic commercial programmers
on AT&T's system seeking the same treatment? Let us look at the
broader picture. The threats currently faced by PEG in Palo
Alto are being played out across the country, but the problems
go far beyond those presented by AT&T's PEG product.
Phone and cable companies may tell you that they are taking
care of PEG access, but the reality can fall short of that. PEG
funding in Ohio, Missouri, Florida, and Wisconsin will end in
less than 5 years. Comcast closed PEG facilities in 9
communities in northern Indiana and 12 in Michigan. Salina,
Kansas is losing more than $130,000 this year as a result of
operators' interpretation of new state laws. As more of our
media is consolidated, outsourced, regionalized, and controlled
by people far away from our home towns, the local commitment of
our PEG channels becomes all the more important. Whether it is
in an urban neighborhood or a small town, we need local media
resources like PEG access. To ensure PEG's future, Congress
must act to strengthen laws protecting PEG access.
We look to our leaders in Congress to preserve the ability
of local communities to express their unique interest, to know
their neighbors, to stay informed. Let industry and the FCC
know that efforts to imperil PEG will not be tolerated or
allowed to stand. We ask you to reinvest in our local
communities for which PEG access is the only and last remaining
local television by making sure that community programming
grows and thrives in the future. Thank you for your time. I
look forward to your questions.
[The prepared statement of Ms. Folger follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Markey. Thank you, Ms. Folger, very much. And I ask
unanimous consent to enter into the record a letter from the
City of Boston on these issues as well. Without objection, so
ordered.
[The information appears at the conclusion of the hearing.]
Mr. Markey. The chair will now recognize himself for a
round of questions. Mr. Cohen, as the digital TV transition
unfolds and cable systems are upgraded to full digital
capacity, many channels may be shifted to digital tiers, some
before others. Today we are discussing PEG channels. Up in
Massachusetts, many consumers are upset that CSPAN 2 is being
moved. What is the criteria which Comcast uses to determine
which channels to transition and when?
Mr. Cohen. The chairman is correct. And as I noted in my
testimony and my oral statement, this is really not just a PEG
issue. Part of our digital transition, which I think is
different than the broadcast digital transition that Congress
has tended to focus on is our long-term program ultimately to
transition our plants, and I am talking cable now, to a fully
digital platform. There is no science to answer the question
that you have raised. It is more a matter of art. As we look at
bandwidth and as we look at the packages of channels that we
are offering, we try and make judgments and assessments based
on overall customer demand, and we are trying to migrate
channels that may have lesser customer demand in order to add
high definition channels and other services that have greater
customer demand.
In CSPAN's case let us remember we have CSPAN, we have
CSPAN 2, we have CSPAN 3, which was launched exclusively as a
digital channel. So CSPAN, prime CSPAN, we have not migrated to
digital anywhere. CSPAN 2 has been one of the several dozen
channels, analog channels, that we have begun the process of
migrating to digital. When we do that, we try and put in place
affordable plans for our customers to gain access to those
channels. We added a new digital tier called digital starter or
enhanced cable or basic digital in all of our markets as we
began this migration so that there would be an affordable
digital option for the customers who still wanted to receive
access to those channels.
Mr. Markey. Can I ask, Mr. Cohen, when CSPAN 2 is being
moved, are they being moved and agreeing to it, or are they
being moved and being resistant to it?
Mr. Cohen. Well, our affiliation agreement with CSPAN gives
us the right to move CSPAN, CSPAN 2, and CSPAN 3 to digital,
and it gives us, as I said, CSPAN 3----
Mr. Markey. And have they agreed to that? Are they happy
with it? In other words, there are a lot of things. You know,
you agree that certain things will happen, but then when
someone invokes it as a contract and here CSPAN 2 is just being
moved from its neighbor, CSPAN 1, and CSPAN 2 tends to cover
the Senate more, so I am doing this obviously more
dispassionate, but a lot of my constituents seem to enjoy
watching the Senate proceedings. And so it seems to me that the
cable industry used to tout that CSPAN 2 was going to join
CSPAN 1, and now as it is put in a different category. I guess
the question is from CSPAN, are they just going agreeably, or
are they at least internally questioning the wisdom of the
decision?
Mr. Cohen. I think every content provider would like to
have their channel carried on a tier of service that had the
broadest possible distribution, so if you were to ask CSPAN
where would they prefer to have CSPAN 2 carried, they would
tell you as an analog channel.
Mr. Markey. You are saying that CSPAN agreed to it as part
of their carriage agreement with the cable operator?
Mr. Cohen. That is correct.
Mr. Markey. That the cable operators could put it wherever
they wanted to put it.
Mr. Cohen. That is correct. And let me just say there is
always a win here, so when CSPAN launched CSPAN 3, a lot of
cable providers, by the way, including Comcast, did not launch
it ubiquitously across their digital plant, so as we have been
migrating CSPAN 2, we have always simultaneously launched CSPAN
3.
Mr. Markey. I have to--only because my time is going to run
out and I want to ask Ms. Torreano a quick question because I
am concerned about the fact that closed captioning is not easy
to selectively turn on and off by consumers. It strikes me that
technologists ought to be able to solve this limitation
regarding closed captioning. Would you please comment on how
closed captioning can be addressed?
Ms. Torreano. Yes. First of all, if the city or the PEG
provider provides us with programming with captioning, we can
carry that. At this point in time, we cannot close that. It is
open captioning. It is one of the issues that we have talked to
communities about. Clearly you have heard it from your
constituents. I have talked to numerous cities in Michigan, and
I have heard the same thing. What we are in the process of
doing is we are having dialogue, and this is one of the issues
that we have heard and in fact we think right now we are in the
process of taking those issues back. We have taken them back.
That is not the only issue that communities have communicated
to us, but that is one. And you are right, we can't do it right
now.
Mr. Markey. Obviously, we are very concerned about that
issue in the committee. We are proud of building it into the
Americans with Disabilities Act in 1990 out of this committee
and part of the 1996 Telecom Act. It is something we are all
collectively very proud of. Ms. Folger, quickly, do you have a
comment on that issue?
Ms. Folger. Closed captioning is very important to our
disability community, and we feel that if AT&T can offer it on
all their other channels they should be able to offer it on
ours as well. We don't want sub-quality standards.
Mr. Markey. I thank you. We are mandating that all TV sets
be able to carry closed captioning. The television
manufacturers are fighting, but we mandated that it happen, and
we work with all of the content industries as well, and we kind
of created a whole new industry, you know. Guys could be at
bars watching the game and trying to meet new people at the
same time, and who knew what we were going to be doing with
that and immigrants able to kind of turn it on so their
children could see what it was in English even as the people
are talking. And there are millions of Americans, new
Americans, who do that as well. So this is very important.
Closed captioning can't be left behind. The chair's time has
expired. I recognize the gentleman from Florida, Mr. Stearns.
Mr. Stearns. Mr. Chairman, I wonder if I could delay my
turn and just ask the opportunity to have my predecessor, Mr.
Upton, who has to leave for an important meeting, if he could
take his 5 minutes now.
Mr. Markey. Without objection.
Mr. Upton. I thank my friend from Florida for being
accommodating. I do have a couple questions. First of all, I
want to say based on the testimony that I heard it sounds to
me, it sounds like we might be able to see an agreement reached
between the parties. And I am very glad to hear that, and I
can't resist, though you weren't prepared to talk about the Big
Ten Network as it relates to the schools, I hope that it
follows that same pattern and that ultimately we will get an
agreement on the Big Ten Network. But we will save that for
another hour but in knowing that you weren't prepared to talk
about that. The question that I do have, though, is primarily
to Mr. O'Reilly. Mr. Mayor, welcome before the committee.
I am interested to know exactly what are the franchise fees
today that you are receiving from a variety of different
providers in Dearborn? What is the franchise fee? Do you know
off the top what it would be for--3 percent?
Mr. O'Reilly. It is about 5 percent.
Mr. Upton. So is it 3 plus 3 for the PEG channels, is that
how--it is 5 percent of the channel?
Mr. O'Reilly. It is not separate for PEG channels, but what
we had is a bifurcated system when the law was passed. It was
grandfathered in at 5 percent franchise fee. And so that
generates about $700,000.
Mr. Upton. And that is from Comcast, is that right?
Mr. O'Reilly. Right.
Mr. Upton. And is it the same figure for AT&T?
Mr. O'Reilly. We don't have that kind of agreement with
AT&T but with WOW we have, okay, and WOW is 5 plus 1.
Mr. Upton. WOW?
Mr. O'Reilly. Yes, WOW. Another cable provider, Wire to
Wire.
Mr. Upton. That is right. I heard you say that. So are you
working with AT&T then to get a franchise?
Mr. O'Reilly. Well, that is an issue because the way that
the state law PA-480 was provided there does not appear to be
mechanism for that.
Mr. Upton. As we looked at a national franchise bill in the
last Congress, 2006, I believe we had a 6 percent for everyone,
is that right, 5 plus 1, so we had 6 percent for everyone. So
if that national law was in AT&T, everyone would be at 6
percent. What is the number of customers that you have for
Comcast and WOW?
Mr. O'Reilly. About 15,000 for Comcast and 7,500 for WOW
right now.
Mr. Upton. And do you know what the number is for AT&T?
Mr. O'Reilly. I think they are just beginning the service,
so I would have to defer to Ms. Torreano, because we don't have
that number. We have no way of knowing it right now.
Mr. Upton. Gail, do you know about what----
Ms. Torreano. The state law calls for up to 5 and up to 2,
5 for the franchise fee, 2 for the PEG fee. I don't know
specifically about Dearborn, but we have applied in Dearborn as
well as 106 other communities in southeast Michigan, and we are
serving parts of 107. So it would----
Mr. Upton. Do you have a back of the envelope number?
Ms. Torreano. More than likely it would be, I would think,
5 and 2 or 5 and 1--5 and 1.
Mr. Upton. But in terms of the number of customers.
Ms. Torreano. I don't have a breakdown by city. No, I do
not. We have about 230,000 that we are serving nationally at
this point in time.
Mr. Upton. And obviously, Mr. O'Reilly, with satellite you
don't get any fee, is that right?
Mr. O'Reilly. Correct. They don't use the public right-of-
way.
Mr. Upton. So the point that I just want to make is that
all consumers, and I am no different than anybody else, we want
HD content. Once you have HD you don't want to go back to
something else. And as you all negotiate with Comcast and
others as it relates to the quality of service in Dearborn,
what you have to worry about is if for some reason Comcast, you
steer people away from Comcast because they don't have that--
they don't offer the HD, that consumer is going to pick
somebody else. They are going to go to satellite. They are
going to go to AT&T where you have no agreement, and so you
will then lose all of that money from that consumer every
single month.
Mr. O'Reilly. I am a Comcast customer, and I have bundled
service, so my modem, my telephone service, and my television
service are all bundled with Comcast. You are right. And that
is not what we are trying to do. We are trying to maintain the
basic tier of service in its integrity. Where they put it, and
that is why our contract says negotiated, where they put it is
where we want to go because we think it is important to our
customers, particularly the customers, the 13.5 percent who are
where they need to get a converter in order to access, that
group is a heavy user of local cable as we understand it. Again
the Nielsen ratings are very difficult. We have talked about
that in terms of getting real numbers. But we know that there
is a sharp--and we use it as a tool. When our sirens go off, at
the same time our sirens go off there is a message that is
carried so that people can go and see what is that about, what
do I have to do. We do a lot of public safety. In fact, it is
so important all of our programming is now put on our web site
also, so we are trying to be really current, but we do not want
the cable companies to be harmed in any way. We just say that
this is one of the last things negotiated in the original
contracts that we think is important enough that we need to
make sure it is maintained.
Mr. Upton. Last question, just a yes, no. Gail, do you all
offer the Big Ten Network?
Ms. Torreano. Yes.
Mr. Upton. Okay. Yield back my time.
Ms. Solis [presiding]. Thank you. I would like to recognize
the chairman of the Energy and Commerce Committee, the
gentleman from Michigan, Mr. Dingell.
Mr. Dingell. Madam Chairman, thank you for your courtesy to
me. This question to Mr. O'Reilly and Ms. Folger, do PEG
channels and PEG programming provide valuable service to the
communities and to the consumers, yes or no?
Ms. Folger. Yes.
Mr. Dingell. Mr. O'Reilly.
Mr. O'Reilly. Yes.
Mr. Dingell. Are there any other entities in your community
outside of PEG programmers that consistently offer this type of
community oriented programs that are offered here, yes or no?
Mr. O'Reilly. No, with the exception of local broadcasts.
Mr. Dingell. Ms. Folger.
Ms. Folger. I didn't understand.
Mr. Dingell. Does anybody else offer the kind of service
that you get out of PEG channels?
Ms. Folger. No.
Mr. Dingell. Now, Mr. Cohen, I understand that in the
community of Grand Rapids Comcast offers with four channels,
that it owns the basic service traditional local broadcast
signals and PEG services. These channels are Comcast
information, Comcast local, Comcast marketplace, and Comcast
review. In the events that led to this hearing, I understand
that Comcast chose to cease to provide PEG programming in an
add-on format rather than moving your own channels to the
digital tier. I am confused. In the latest statutory
requirements relative to these matters why did you move PEG
channels and not the other channels into the digital tier
rather than terminating analog PEG programming?
Mr. Cohen. Mr. Chairman, I am not familiar with the Grand
Rapids situation. I will look into it and get back to you. I
can tell you that elsewhere, and I am sure, the case in
Michigan, that we have migrated or even terminated some of our
own local programming, which, by the way, comes with its own
controversy, because that local programming is like PEG
programming and does provide local content, but the fact that
they are our channels does not protect them from digital
migration, digitization or even complete closing down, and I
will get back to you on the details in Grand Rapids.
Mr. Dingell. Now, Ms. Torreano, I note that AT&T has filed
a request on behalf of U-Verse for a waiver of the FCC's
emergency alert system requirements, our national and regional
public safety alert system by which consumers are warned of
imminent harm. Is that true?
Ms. Torreano. Yes.
Mr. Dingell. Now I am curious. Why did AT&T launch a
service that did not provide the required alert, and is there a
reason for that?
Ms. Torreano. The alerts are viewed on all of the national
programming, and we are in the process--the technical experts
are in the process, making it available throughout the entire
lineup.
Mr. Dingell. It is my understanding that when an event like
Katrina or 9/11 comes along, this kind of national alert or
local alert is extremely important. Now national alerts are
important, but if it is going to happen in your backyard and it
is not big enough to attract the attention of national
networks, it could be that a fellow's got a problem. There
might be an airplane dropping in his backyard causing no small
unhappiness, or it might be that there is a small tornado
headed towards him, and he isn't going to get the family to the
basement in time.
Ms. Torreano. And I would agree with you, and we would
agree with you that our communities are important, and that is
why our technical experts are working on it to resolve this
just as quickly as we can.
Mr. Dingell. You are working on it?
Ms. Torreano. Yes.
Mr. Dingell. Thank you. Now, Ms. Torreano, again we have
heard from many who are concerned about the manner in which
AT&T provides PEG programming. I believe that there will be in
the course of this hearing some comment on that. In my
district, each broadcast station has its own channel, while the
PEG channels for the entire state of Michigan are grouped
together on channel 99. I understand that if one of my
constituents is looking for a PEG program she must then use a
drop-down menu to find her community, and after finding her
community the consumer must use another drop-down menu to find
the particular PEG channel she was looking for. I understand
that my constituents cannot set a DVR or TIVO to record the PEG
programming on AT&T's U-Verse service, but they can record
broadcast channels using a DVR or a TIVO. Is that true?
Ms. Torreano. To your last question, you cannot--our DVR
will not record the pay channel programming. You can use a TIVO
or a DVR of your own to record it. Again that is one of the
issues that communities have communicated to us, and we--our
communities are partners. They are our customers. You have on
one hand the mass customer, and we have had an extremely good
response from our customers. They are satisfied with the PEG
product. We don't have any complaints. On the other hand, our
communities are important to us. We live in our communities. We
work in our communities. And we understand. I am a parent. I
understand the importance of PEG. I used to every morning when
there was snow on the ground turn on my TV to determine if my
kids had school.
I have to tell you that I never knew where the PEG channel
was. I knew it was under 30, but I never knew which one. We
believe that by offering it on the channel 99, we believe that
is something that people remember, and we have had good
feedback. As the DVR function, we have taken that back. There
are a number of issues, as I talked about before, the EAS, that
we have taken back and that we are looking at. Our communities
are important to us. I am working with them all the time. We
don't want them dissatisfied. We do understand the importance
of PEG. We want them to be satisfied as well.
Mr. Dingell. Well, I am over my time, but I would simply
make this observation. First of all, I know you and respect
you. You are a very, very valuable citizen and community leader
back home and have great affection on my part. I am very
concerned about PEG because in this changeover that is
occurring we are going to have a lot of problems in seeing to
it that the community service that we need for our people
continues. And I am very much concerned about the situation
also with regard to Comcast, and I want to thank Mr. Cohen for
his cooperation in working towards bringing these situations to
a conclusion. But when PEG was first instituted, it was put in
place by the communities with the agencies that they were
licensing, and the idea was that that would be a community
service which would make it desirable to have that particular
entity provide that particular service to the community, and
that was one of the licensing considerations that went into the
licensing of the original cable people who got into these
communities.
I hate to see it be dissipated because things were
happening which were going to remove it. I also have a strong
concern about the difficulty that we could confront if all of a
sudden we were to find that the emergency notices, which are so
important to our people in the event of major difficulty, all
of a sudden vanished from the airwaves and all of a sudden
somebody flies away like Dorothy in her house into the land of
Oz. I don't think anybody would particularly like that because
we had a tornado that was not mentioned on the national news
service. So I hope that we will be able to continue working
with you and with Comcast and with others, and we can establish
in the mind of all that PEG is very important, emergency
services is very important, and that we will have the
cooperation of all concerned. Thank you for your presence
today.
Ms. Solis. The next member on our committee that will be
recognized, the former chair of our committee, now in the
minority, Mr. Barton from Texas, 5 minutes.
Mr. Barton. Thank you for reminding me that I am now in the
minority.
Ms. Solis. I thought I was being polite.
Mr. Barton. Well, no, you were. Mr. Dingell and I are
playing hopscotch as we go before the three subcommittees today
that are in operation. So I got to refocus from the FDA and
SCHIP to PEG. Let me start with you, Mr. Cohen. Next year in
March of 2009, the whole country is going to go digital in
terms of television broadcast, isn't that correct?
Mr. Cohen. Actually I think it is February but close
enough. Close enough for government work, as they say.
Mr. Barton. Mr. Dingell and I are the two people that came
up with the date.
Mr. Cohen. That is right.
Mr. Barton. You would think I would remember the date. I
know it is after the Super Bowl.
Mr. Cohen. That is right. That is right. I remember those
discussions.
Mr. Barton. So in advance of that my understanding is in
Michigan, I don't know if it was the entire state or just the
City of Dearborn that Mr. O'Reilly is the mayor of, Comcast
decided to take its public, education, and governmental
channels, or its PEG channels, off of analog and put them into
the digital format. Is that correct?
Mr. Cohen. Let us say the answer is yes, but I want to just
make a real fine point here, which is there are two different
ways you can deliver a channel in digital format. One is to
migrate it to a digital tier, which means that you would charge
a customer more money to get that service level. The second is
you can simply digitize the channel but leave it as part of the
basic tier, and it is the second option that we unveiled in
Michigan. That is we did not move it to a different tier of
service. We proposed the change. We proposed in maybe a more
ham-handed way than we would like to change the method of
delivery while leaving it as a part of the same tier.
Mr. Barton. Okay. Now when you did that how many customers
would be affected by that proposed change?
Mr. Cohen. That is a very good question. We have about 1.3
million customers in the State of Michigan. Let us say all but
about 60 percent of them are already digital customers so they
would have zero impact from this. About 450 customers--400,000
to 450,000 customers--are not currently digital customers. That
is the group of customers that would have been affected by this
change. Those customers fall into two groups. One is our really
limited basic customers that lowest tiers spending $10 to $15 a
month for basic broadcast channels, PEG, et cetera, and for
that group of people the best option probably would have been
the option that we made available, which is that we would
provide them with a free set top box. They could continue
paying $12 to $15 a month. We would give them a free set top
box for a year, and after that we would have charged them
something up to $4.20 a month. No decision was made as to
whether that is the amount we would have charged.
Mr. Barton. When you announced this proposed change to the
customer base, not the governmental base, which is important, I
understand, but at the pure retail customer level, how many
complaints did you get about this proposed change?
Mr. Cohen. Relatively--I mean we certainly heard some
pushback, relatively little consternation from the pure
customer base.
Mr. Barton. So, Mayor, is it your city that filed the
lawsuit?
Mr. O'Reilly. Yes, it is.
Mr. Barton. Now I would assume that you are in addition to
being the Mayor you are also a customer.
Mr. O'Reilly. Yes, I am.
Mr. Barton. You could be if you wanted to be. It may be a
satellite.
Mr. O'Reilly. I have lots of choices, but I have chosen
Comcast up to this point.
Mr. Barton. All right. So did the City of Dearborn decide
to go to court based on voter complaints to you and the other
council men and women or just based on your personal--
Mr. O'Reilly. Based on complaints that arose from the
community in several different sectors. We have very robust
local programming. As the entities themselves became aware,
they and their followers, you know, supporters, contacted us
about it.
Mr. Barton. What was their principal beef to--
Mr. O'Reilly. It was the idea that they had to get a
converter box to get it when many of them were basic here, and
as Mr. Cohen just pointed out, and I want to make this clear,
the two major tiers that were impacted are those who were
getting just must carry, some ESPN, I think. So it was very
basic. It was $12 a month for that tier. The next tier that was
really impacted that he mentioned was the tier that was
channels 1 through 99 in our system, which meant it covered a
lot of product but it was non-digital. It was analog, but it
was the most programming you get on analog.
Mr. Barton. But the big complaint is that while they got
one set top box free they didn't get three set top boxes.
Mr. O'Reilly. It is not really--well, no, it is also not
for free. January 15 was a trigger date for them to switch it
to digital, and the notice came out in January that in February
the price of those two tiers went up by about $3 per, which
basically covered the cost of the box. So you can call it a
free box, but you can also say most of those customers saw an
increase of $3. A customer tier in between those two saw one
penny. It went from $31.49 to $31.50.
Mr. Barton. So they are complaining that they are getting
rope-a-doped.
Mr. O'Reilly. Right. Exactly. They are saying we are being
told we are getting a free box but our costs are going up $3,
and it is happening coincidental with the change.
Mr. Barton. If we could get this problem worked out this
year it would go away next year, wouldn't it?
Mr. O'Reilly. Next year they would have to pay for the box,
for all the boxes.
Mr. Barton. Next year the whole country goes digital.
Mr. O'Reilly. Well, they could get a box through the coupon
program where they would have to get a box through here, but if
they got the box through here it would be $4.20 a box, so they
would have that incurred cost for the same product they had
been getting now. Our thing is we have a contract. Our contract
is enforceable. It requires mutual agreement on this, so that
is our position.
Mr. Barton. Well, this is fascinating.
Ms. Solis. You are a little over.
Mr. Barton. I haven't even got started yet, but my time is
expired. Madam Chairwoman, let me ask, is this a solvable
problem at the local level, or does it take the full weight and
power of the Congress to fix this problem?
Mr. Cohen. I think the answer is this is a solvable problem
at the local level. Mr. Chairman, you were not here for my
testimony, but as you know this isn't the way we like to do
business, and I said we tried. We weren't quite a total bull in
the china shop here. We tried. In retrospect we are not happy
with our performance. I apologized in my testimony, and we are
in friendly negotiations now with the cities in Michigan,
including Mayor O'Reilly, and I am highly confident that there
will be an agreement.
Ms. Solis. All will soon be forgiven.
Mr. Barton. Does it happen to be that Dearborn is
represented by John Dingell?
Mr. O'Reilly. It helps.
Mr. Barton. It does help.
Mr. O'Reilly. Let me say, Congressman, on your answer the
fact is that without regard to Comcast, I think that this
committee needs to look at what the states are doing. Michigan
recently passed PA-480. The district court of the Eastern
District did a great job of analyzing this, and they believed
that portions of that are pre-empted federally by the Cable
Act. I think that warrants examination on its own.
Mr. Barton. Well, anything Chairman Dingell wants to look
at warrants examination. Just like when I was chairman anything
I wanted to look at. I understand the chair----
Ms. Solis. That is correct, but now the chair will move on
to our next member of Congress, Mr. Gonzalez from Texas, for 5
minutes.
Mr. Gonzalez. Thank you very much.
Ms. Solis. I am sorry, 8 minutes.
Mr. Gonzalez. Even better. I am sure we say we are not
going to use it, then we go 12 minutes, but anyway. But I think
the former chairman of the full committee brings a good point.
Is this really solvable at a certain level? Is it going to be
federal, state or local? But the real question comes down to is
this a technological challenge, or is it really a business
decision, and that is what we really need to get a handle on. I
don't want to confuse the DTV conversion. That really does not
have a whole lot to do with this, maybe from a business aspect,
but technologically it doesn't. What we are talking about here
in essence is having that cable wire going straight to your
television like my television that may not be the latest,
whatever, being able to go to and paying the minimum amount to
my cable company and that PEG is going to be part of it.
And I think, Mr. O'Reilly, that you probably have the basic
answer, and that simply would be to bundle PEG with must carry,
because most people would venture to guess that anyone who is
obligated under must carry is probably not going to move one of
those must carry channels anywhere else where it would result
in what Mr. Dingell pointed out in regards to PEG. Don't do
anything to make it more expensive or add cost or difficulty in
locating. That is what we are trying to do here, and my fear is
that we get really more complicated than necessary. So the
question comes down to is it a technological problem or one
that is more a business decision? And I will start with Mr.
O'Reilly.
Mr. O'Reilly. Very good. Thank you, Congressman. I think it
is really just a business decision that that can be negotiated
and be worked out. Again, that is going to depend on the
willingness. And the matter of the analog versus digital, I
don't understand that. That is the business decision part, but
it is certainly doable, and there is no question it can be
done.
Mr. Gonzalez. Mr. Cohen.
Mr. Cohen. I have already said that I think that private
party negotiations are the best way to resolve this issue. I
won't take a lot of your time in doing this. I would really
caution the committee into imposing additional carriage
mandates on cable operators as a part of this digital
transition. If anything, I think Congress should be looking at
reducing carriage mandates, not increasing them, and if you
want to focus on consumer-related issues, we are not new
players to this table. There are many members of this
committee, some of them sitting in this room today, who weighed
in on this issue when it was before the FCC, but the number one
cost driver in our digital transition is the FCC's decision
taking away our right to deploy low cost, low end set top
boxes. By denying that waiver, the FCC imposed about a billion
dollar tax on the American consumer as a result of this digital
transition.
If there is anything from a public policy perspective that
warrants congressional attention, it would be ensuring that we
can deliver digital equipment to customers' home at the lowest
possible cost.
Mr. Gonzalez. And I couldn't agree with you more, and I
don't want to get dragged into that particular aspect of this
debate, because I don't think it is necessary to address the
issue at hand. And I want to stay focused, because obviously,
and this is a lesson to everyone, and that is probably don't
roll out anything new in a member's district who happens to be
so senior in Congress and happens to be the chair of Energy and
Commerce, but other than that we will move on. Ms. Torreano, is
it a technological challenge that can be solved or is it really
just more of a--for you it may be technology.
Ms. Torreano. We have technology challenges. It is a
different technology that we are using. We are providing IPTV,
TV over the Internet. We are a new entrant. We are providing
choice to customers. We think that is a good thing. It is a
process, it is evolving. And in our situation, sir, I would
compare us and take us back a bit to the wireless industry, and
the wireless industry came out with a new technology. Obviously
over the years it has improved. I think things are moving much
quicker in today's world than they were back then, and things
are going to evolve quicker, but it is technology. But on the
other hand we are listening. We care about our communities. We
care about our customers. And we are going to continue to
listen and work with them to see what we can do to get over
these technological hurdles.
Mr. Gonzalez. You have to believe in the basic principle
because this committee believes in it, and I think Congress
does as far as the importance of PEG, and again no additional
cost, no greater difficulty in locating, and then the last I
neglected to point out was an inferior product, which I think
Ms. Folger had pointed out. And I think you really need to keep
track of that. Now the other thing is from a technological
point of view can you do it, and I think we are willing to
listen to reason, but at some point though is there some
advantage that is given to you because of the technological
restrictions or inabilities that places you at an advantage to
someone else like cable?
I think Mr. Cohen was pointing out that that could be
something that we face, and we have to be very, very cognizant
of that possibility. Ms. Folger, in your opinion, is this a
technological challenge or is it something that is just really
a business decision that can be worked out?
Ms. Folger. I definitely think AT&T has made a business
decision. They decided not to build a fatter pipe to the home.
The last mile is copper wire. Somebody said it is like sipping
an ocean through a straw. They substitute software to squeeze
PEG through as a video stream. Now Verizon on the other hand
made the business decision to build fiber straight to the home.
They don't have that problem. There is a company in Sacramento
called Sure West. They, like AT&T, use the IPTV technology, but
unlike AT&T, PEG channels keep their same original numbers,
channel numbers, and they are delivered as full video channels.
Mr. Gonzalez. And I think it is important to try to
understand that technology, because I surely don't, the Verizon
approach to it and the buildout of the fiber optic as opposed
to what maybe AT& T is doing, and that bears some closer
scrutiny. I am just saying at this point in time, I think it is
really a business decision that can be worked out and such. And
I guess the last observation is something that we were touching
on is we think in terms of going federal and franchising, in
Texas we have a Texas franchising law, and I am not sure how
that impacts the obligations or abilities of AT&T when they are
not dealing directly with the municipality. Believe me, we have
already had that bloody fight, but I am still a supporter for
the federal franchise regime, and I hope that we are able to do
it next go round. At this point, I have 47 seconds, and I will
yield back the balance of my time. Thank you.
Ms. Solis. Thank you. The ranking member, Mr. Stearns from
Florida, is recognized for 5 minutes.
Mr. Stearns. Thank you, Madam. Mr. Cohen, in your opinion,
forgetting the lawsuit from the Mayor here, does the federal
and state law allow you to do this? I understand that they
allow--well, in your opinion does the federal and state law
allow you to make these decisions you made?
Mr. Cohen. I will answer your questions, but I just want to
confirm again that we are not relying on our legal rights in
our negotiations with the municipalities. The answer is
obviously we do believe that both the federal and the state law
allowed us to take the actions that we took.
Mr. Stearns. And is it true that within the public access
laws that you can calibrate your decisions so that they are
cost effective?
Mr. Cohen. I am not sure I understand that question. I
think the answer is yes.
Mr. Stearns. Yes, following the argument that both the
federal and state laws allow you to do this, it also allows you
to get re-compensated for your decision to innovate?
Mr. Cohen. That is correct.
Mr. Stearns. So is there any other state where Comcast is
operating that you intend to do the same thing?
Mr. Cohen. As I said in my testimony, our typical practice
is to negotiate this out with the affected LFAs, and we have
done that successfully in a number of places. I will give just
one example, which is my hometown of Philadelphia. We
negotiated with Philadelphia and were able to--there were four
analog PEG channels in Philadelphia, and we were able to
negotiate a return of three of those analog PEG channels. They
kept one, and we gave them four digital PEG channels, so they
went up one PEG channel, but four were digital, one was analog.
Mr. Stearns. So you are saying in Philadelphia you are
actually able to accomplish what you have not accomplished in
Dearborn through negotiations?
Mr. Cohen. But in fairness to Dearborn, that is not their
fault.
Mr. Stearns. No, I understand. I understand.
Mr. Cohen. I am going to say that and--
Mr. Stearns. You are telling me what is controversial here
you have already worked out in Philadelphia.
Mr. Cohen. And we have worked it out in Philadelphia and in
other jurisdictions, and I am confident given the good faith
that exists between Comcast and our local partners in Michigan,
including Dearborn, that we will be able to work something out
that is a win for our customers----
Mr. Stearns. No, I understand. You don't have to give me
the--I understand what you are saying. Let us just talk about
what you are going to do once you do this. I mean when you talk
to Dearborn or Philadelphia, the capacity that you are going to
recover by carrying the PEG channel exclusively in digital
format, why don't you just outline all the advantages for the
consumer, because I think if the consumer had to decide
notwithstanding that Ms. Folger and others have said the
quality of the PEG channel on the analog is weak, I assume that
the PEG channel would be better, and there would probably be
more enhancement for the digitized PEG channel once the
transition occurs, so that in the end the quality of the
resolution would be better, closed captioned.
Mr. Cohen. We believe that ultimately the win here is a
pro-consumer win, because we think the PEG channels would be a
higher quality viewing experience, and more importantly, we
will be able to add other services that are extremely popular
with consumers really as referenced in your opening statement.
More high definition television, more video on demand, more
high definition video on demand, faster speeds for our high
speed data, and additional services for our Comcast digital
voice product, all of which require additional bandwidth.
Mr. Stearns. As I said in my statement, if you did away
with 1 PEG channel, you will get replaced with 3 high
definition channels, 10 video on demand channels, 15 standard
definition channels, 42 megabits per second of broadband
service. Incredible. So maybe the argument has to be also from
the standpoint that, sure, it is a little inconvenient. You may
have to pay four more dollars or free for a while, but you are
going to get so much more. Ms. Folger, wouldn't you be happier
with a PEG channel that is high resolution, has closed caption,
and at the same time you get for the same price perhaps three
high definition additional channels?
Ms. Folger. Exactly. We are asking for comparable quality.
Mr. Stearns. Yeah. So I think your argument would come down
to why should the consumer have to pay more money.
Ms. Folger. Right.
Mr. Stearns. And actually probably, Mr. Cohen, when you
make this transition, you might do what AT&T did is assign 1
channel for the PEG so that me and others don't have to scroll
through the whole bloody 99 channels to find it.
Mr. Cohen. We probably won't go to that particular choice
in communities where we have multiple PEG channels but what we
will do is we will group the PEG channels, together so that
they will be easier for people to find and to be able to gain
access to them.
Mr. Stearns. Thank you, Madam Chair.
Ms. Solis. Yes. We will recognize now Mr. Rush from
Illinois for 5 minutes.
Mr. Rush. Thank you, Madam Chairperson. Let me just ask
both Ms. Torreano and Mr. Cohen, PEG is sometimes portrayed as
a burdensome requirement. Does PEG offer advantages to both of
your companies, and what are those advantages, and what are
some of the disadvantages? In other words, is there a profit
advantage or advantage that would be defined monetarily for the
offering of these PEG channels to your companies? Ms. Torreano,
why don't you start.
Ms. Torreano. I think that the consumer, our customer, your
constituents, want PEG channels. I mentioned before that I as a
mom, I watch PEG channels, so, yes, I think that there is a
business reason to provide it. They are part of our
communities. It is information that our customers want, and it
is something that I think they have become used to for
different reasons, and different people have different reasons.
So, yes, I think it is an important part, and we in our
offering, U-Verse offering, we think it is important. In fact,
our PEG offering is a little bit different than the traditional
cable PEG TV, because what you get is if you live in the
southeast Michigan area near Detroit, we are serving
approximately 107 communities or parts of 107 communities, and
what you will be able to do is you will be able to see PEG
programs from every one of those communities. I think that is
an advantage to a customer, because no longer are our worlds
confined to one city. It is much bigger than that. As a Detroit
resident, you may have a child who goes to school in Dearborn,
so you get a broader perspective.
Mr. Rush. Does the average PEG viewer, do they transition
into becoming more loyal to your--and purchase other products
from your company, is that what you are saying?
Ms. Torreano. What I am saying is that it is a different
product. I don't know that--it is too early to tell. We are in
our infancy. We are just beginning this product, but I think
that our customers will find that it is a robust product, it is
an innovative product, and it is a game changer. And the PEG
product is different. It is really greater in that you get to
get information and watch programming from other communities
other than just the one that you live in.
Mr. Rush. Mr. Cohen, would you answer the question? You
have a little bit more experience in this area.
Mr. Cohen. As I have said before today, cable in general
and Comcast in particular believes in PEG programming. We
believe in the value that PEG programming brings to the
community. There have been a couple of questions asked about
the local nature of programming that appears in PEG channels,
and its unique or almost unique status, not necessarily vis-a-
vis AT&T or Verizon but against our satellite competitors. That
local content is a competitive differentiator for us, and we
think it is a valuable competitive asset.
Mr. Rush. Ms. Torreano, in Chicago we have the Chicago
Access Network television, or CAN TV, and there are a lot of
elderly and other religious people who are in my district,
church going people who like to watch church services on
television and other programs similar to those on the cable
stations. Would they have as easy access to CAN TV under the U-
Verse, or would it be more difficult?
Ms. Torreano. I believe it is easier. Everything you go to
channel 99 and channel 99 then when you press okay it takes you
to another menu in which you can watch any of the PEG
programming in the Chicago area. And if, in fact, CAN is the
program that you watched previously, when you turn it back on,
we now have the ability for the program, the CAN programming
will come right up, so that it will be right there for you.
Mr. Rush. What is the quality of the video for the CAN TV
and PEG programming, has the quality of the video been
compromised on U-Verse, or does it remain as it presently
exists under the current system? I understand that there are
some problems in terms of the quality of the video, that the
quality is less vibrant, and that the quality has been
compromised tremendously. Is that true?
Ms. Torreano. I don't believe so. We have had others have
said that it is, but I think our PEG programming, the quality
of it is comparable to PEG programming that you see on the
cable network, but that is an issue, again that our communities
have expressed to us. Me in particular, I am talking to our
communities on a weekly basis, and so, yes, I have heard that.
Mr. Rush. Ms. Folger, I only have a few--thank you, Mr.
Chairman. I yield back the balance of my time.
Mr. Markey. I apologize to the gentleman, but you are 6
minutes right now, and I think the roll call is going to be
going up pretty quickly, but if we want we can come back and
have a lightning round of 2 minutes if you would like. The
chair recognizes the gentlelady from California, Ms. Solis.
Ms. Solis. Thank you, Mr. Chairman. My question is directed
to Ms. Folger. I wanted to get to some comments that you made
regarding PEG channels and some of the, I guess, challenges
that you see that viewers are facing. You mentioned Spanish
language access and closed captioning services. Can you
elaborate a little bit more for me on that?
Ms. Folger. I can. AT&T offers to put open caption on the
picture all the time. It will not pass through the closed
captioning capability, so what this is going to mean for
someone who is not needing the closed captioning feature, part
of the picture is going to be obscured throughout the entire
program. I don't know if you have ever seen closed captioning
but there is a banner that goes across the screen, so for
someone who wants to watch it without the banner there is no
getting rid of the banner. On the other hand, the hearing
impaired people who need to be able to read that also do not
have the ability to flip that on and off as they normally do
when they are taking a course, for example, on our community
college channel. And so what they have to do is sacrifice, to
be able to read the material. In addition to that, because of
the vastly reduced resolution of the picture by 75 percent, a
lot of teachers use Power Point presentations as their lectures
and when you reduce the quality that much and you try to read
the print on a Power Point presentation on a small TV screen,
it is nearly impossible to read, so it has a number of problems
that will be to the detriment of our community.
Ms. Solis. You mentioned Spanish language as well.
Ms. Folger. The second SAP, second channel feature is not
activated at all with channel 99, so, for example, in Los
Angeles. where they offer Spanish translation for the city
council meetings that would not be available on any of the
council meetings and there are many people in this country who
rely on that translation for their information about local
government.
Ms. Solis. And then my next question would be to Ms.
Torreano from AT&T. Why can't AT&T provide second language or
closed captioning?
Ms. Torreano. We can provide second language channels if in
fact the community provides that to us.
Ms. Solis. How do you know if they want them or not, what
kind of effort is made to know that there is an interest?
Ms. Torreano. Well, actually I can't speak specifically for
California, but in Michigan we are meeting with each and every
one of our communities. That is part of the process that we
have. When they are interested in providing PEG programming, we
sit down and discuss all the technical aspects that are
required of providing us the programming, so we spend
considerable time with every single community to make sure that
they in fact understand the needs.
Ms. Solis. But why would AT&T make such a decision for Los
Angeles? That is just incredible to me where 40 and 50 percent
of the population speaks other than English, and the primary
dominant language is Spanish, so what are you basing that
information on, and who is making that decision?
Ms. Torreano. If I understand your question correctly, if
Los Angeles provides us with a program in any language other
than English, we will carry that.
Ms. Solis. So the city then has to provide that support?
Ms. Torreano. Whatever the city will provide us, we will
carry.
Ms. Solis. Okay. I will end my questioning there, and I
know we will come back for another round.
Mr. Markey. Well, you have a minute left to go if you have
any other questions.
Ms. Solis. Mr. Cohen, yes, I also want to thank the Mayor
for coming. It sounds like you all can work things out at least
in this situation. I have some reservations about how that is
going to work out given what I have heard from my colleagues
and the impact of federal legislation that currently provides
this committee with that jurisdiction to oversee that things
are being handled correctly or at least fairly. Not correctly,
fairly. So I would just like to hear your comments. I know, Mr.
Cohen, you said that you don't think it is wise for us to get
involved. Maybe you could just elaborate a little bit on that.
Mr. Cohen. Well, I had mentioned previously, I think the
current legislative and regulatory structure creates an
appropriate balance that enables cable providers to negotiate
PEG programming and commitments with their LFAs, and I think
the balance, it has been explored in this hearing very well, on
the one hand we may need more bandwidth and our local--first of
all, as I said, this is a transitional issue. In a few years,
this is going to become irrelevant because everyone is going to
have digital equipment. I think the local governments
understand that chasing customers away from cable, which is the
primary deliverer of PEG programming, is not in anyone's
interest. And we have numerous occasions where we have been
able to work out these agreements with local governments where
we have needed to do so. As I said several times, I am highly
confident that the negotiations we are having now will be
productive in the State of Michigan.
Mr. Markey. The gentlelady's time has expired. There are
two roll calls on the House floor. We have approximately 10
minutes left to go to make the roll call, so the way I usually
end these hearing is I ask each one of the witnesses to give us
the 1 minute that they want us to remember. I apologize to the
members because the roll call has gone off. Give us the 1
minute you want us to remember about this issue which clearly
deals with the digital transition, and we move forward not
losing what we have always had back in the home communities. So
we will begin with you, Ms. Folger. One minute.
Ms. Folger. Thank you. There are several things I would
like to say to this commission--committee, I am sorry. First of
all, we are asking that no harm be done to PEG access. We know
that you understand the value of what we have to offer. The
biggest challenges to use because we are the only outlet for
local communities, schools, churches, non-profits, local
governments, and ordinary people, ordinary people need to be
able to find us, to see us, and to use us. If we are buried on
channel 99 and it takes a minute and a half to find us, nobody
is going to be flipping around and finding us. That is harm. If
this happens, we are sunk. And what do we want to make this
right? We feel that these problems are a result of bad law. The
way to correct it is good law. Close some of these loopholes
that are allowing these things to happen. I believe that PEG
channels are the poster children of localism, so fix the
problems, please.
Mr. Markey. We agree with you, too, and I think every guy
who is here and every woman who sees a guy with a clicker in
his hand knows that that guy can watch the news, a sporting
event, and a movie simultaneously clicking back and forth, and
no guy is waiting a minute and 30 seconds for any station to
come on. So that has to get fixed. Ms. Torreano.
Ms. Torreano. Thank you very much. I would just say, first
of all, again thank you for inviting me here. We are a new
entrant. We are giving your constituents a choice, and when
there is choice that is always a good thing, because that means
that the consumer, your constituents, are really in the
driver's seat. This is evolving. It is a process. It is not an
event, and we expect the process to continue and to continue to
improve. It is a robust product. It is an innovative product.
It differentiates us, and we do believe and act on it. Our
communities are important. That is where we live, too, and that
is where our customers are. And we are going to continue the
dialogue and continue to evolve our product, and thank you
again.
Mr. Markey. Thank you, Ms. Torreano. Mr. Cohen.
Mr. Cohen. Beyond custom that will turn time back to the
chair, three statements. One, PEG programming is valuable and
important. Two, the digital transition is complicated and may
require change, but in the end it will be very good for
consumers. And, number 3, Comcast and the cable industry pledge
to this committee to commit to work with our LFAs to protect
the essence of PEG through the digital transition.
Mr. Markey. Thank you, Mr. Cohen. Mr. O'Reilly.
Mr. O'Reilly. Thank you, Mr. Chairman. The existence of
basic service tier is not limited to rate regulated communities
but is an obligation of every video provider utilizing public
property for the delivery of its services. The PEG channels
must appear on the basic service tier or the same level of
service as that of commercial broadcast carriers or channels.
PEG programming must be delivered with the same visual and
audio quality and technical functionality, including closed
captioning provided for commercial broadcast channels, and that
a single tier of service may not be technically divided such
that the subscriber must employ additional equipment to view
all the programming on that tier. In addition, I am sorry that
Congressman Upton didn't go, because if he moved to Dearborn he
would have a choice for a Big Ten channel because with
competition, while Comcast in our community doesn't carry the
Big Ten channel, WOW does, so that is why we are for
competition in market.
Mr. Markey. Thank you, Mr. O'Reilly. So I think anyone who
heard this hearing knows that there is widespread support for
PEG channels on the Telecommunications Subcommittee. We want
the consumer to be king. We understand that there is a digital
transition that is going on in industry, but we want to ensure
that as flexible as you have to be in doing that that
ultimately the PEG experience that consumers are used to not
only continues to exist but is expanded and improved upon. We
want more channels. We want better programming. We want broader
band. We want more local access, more diversity. That is what
the consumer expects as part of this revolution. We are going
to work with the industry and with the local communities in
order to ensure that that is the result of this incredible
revolution.
We thank all of you for participating. This hearing is
adjourned.
[Whereupon, at 2:58 p.m., the Subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]