No one ever expected the broadcast industry's transition from analog to digital technology to be painless. But since the Federal Communications Commission set the rollout schedule and terms in April 1997, numerous hurdles have turned what was supposed to be an orderly process into an expensive, uncertain, drag-out brawl.
Along the way, the goal of preserving free, over-the-air television while facilitating the switch from analog to high-definition television morphed into a broader objective. Some TV stations also want to offer new interactive services that will enable them to compete with cable, satellite companies and wireless-data firms.
In other words, the situation, as often happens in Washington, changed.
Meanwhile, cable operators are still reluctant to carry HDTV programming for fear it will hog capacity and force them to drop other channels (many of which are partly owned by the same operators).
Others threaten to "down-convert" HDTV signals to lower resolution to free up more space while also opposing any must-carry rules that require carrying digital and analog broadcast signals simultaneously.
Consumer-electronics makers and sellers complain limited digital and HDTV content means slow sales of digital-TV receivers-even as DVD players buoy sales of digital-TV monitors for use with home-theater systems.
As the 2002 deadline for commercial TV stations to go digital approaches, questions over digital-TV formats first raised by Sinclair Broadcasting Group Inc. have evolved into an industry-wide debate that could affect the entire rollout schedule.
THEORETICAL DEADLINES
The FCC has required all 1,243 commercial U.S. TV stations to transmit a separate digital stream by May of 2002. They would be required to cease analog operations and return that spectrum by 2006.
Few believe either deadline will stick. As of early November, the National Association of Broadcasters counted only 160 digital TV stations in operation.
Broadcasters don't have to give back their analog spectrum in 2006 unless 85 percent of households have digital-TV receivers, a prospect considered far-fetched at best and cynical budget politics at worst. (Congress worked the prospect of billions of dollars in auction revenue for analog spectrum into budget surplus projections.)
Meanwhile, the FCC plans to auction spectrum housing UHF channels 60 to 69, even though most broadcasters now using those allotments are under no obligation to leave the spectrum until after the digital-TV transition.
Neither Congress nor the FCC has ever officially required broadcasters to transmit in HDTV. But you'd never know it from the rhetoric.
"Let me be abundantly clear to the broadcasting community," said House Commerce Committee Chairman Tom Bliley (R-Va.) at a July 24 hearing. "You asked that Congress provide you with an opportunity to offer HDTV. We did that. Now some of you are getting cold feet.
"If you want to offer other services with the HDTV spectrum, you should pay for it, like you would in an auction."
To be fair, the issue is more complicated than a soundbite about a "$70 billion spectrum giveaway." In reality, the digital-TV transition is expensive and complicated, made worse by a lack of qualified engineers to build new towers in time to meet the FCC's timetable. Broadcasters note that only a handful of construction firms have crews able to build the tall transmission towers often needed for digital service.
"We have a whole generation of station engineers who have never had to build a tower," said Gary Cavell, a partner at the broadcast consulting firm of Cavell, Mertz, and Davis, and the president of the Institute of Electrical and Electronics Engineers'Broadcast Technology Society. "Their grandparents built towers."
The NAB has also reported equipment shortages and local zoning delays, which have delayed stations from going digital.
Even stations that can attach digital equipment onto existing towers, rather than build entirely new ones, are looking at swallowing $5 million to $10 million. For new towers, estimates run as high as $20 million.
"Some stations are just interested in doing the bare minimum right now," said Joseph Davis, president of the Association of Federal Communications Consulting Engineers. "While some of them have been very interested in digital from the beginning, others are saying, 'Just give me what I need to get by, and I'll put it in when I have to.'"
Most of the 160 digital stations are big-market players reaching 65 percent of U.S. households. But while the FCC required the largest broadcasters to go digital first, Cavell said, many station owners are enthusiastic about digital TV and trying hard to comply with deadlines.
Adding to the complexities, a digital-standards fight shows no sign of letting up soon.
The U.S. standard, known as 8-VSB (vestigal sideband), stems from more than a decade of work by the Advanced Television Systems Committee. But last year, big station owner Sinclair began touting COFDM (coded orthogonal frequency-division multiplexing), which is used in Europe. After demonstrations suggested COFDM has fewer reception problems than 8-VSB, some broadcasters agreed.
But broadcasters who have already spent millions on 8-VSB equipment would have to buy new COFDM equipment if they were to switch. And digital TV sets equipped for 8-VSB signals would need new equipment.
Also, the Byzantine table of digital-TV channel assignments was designed for 8-VSB, so a switch to COFDM could create interference problems and force a full reallocation of channels-an expensive, time-consuming and potentially disruptive prospect.
IT'S ABOUT DATA
The fight over 8-VSB and COFDM is about more than reception. After all, most broadcasters admit the second- and third-generation antennas will be better than the first-generation wares tested by Sinclair.
The 8-VSB standard, which was in development before Internet, paging, and mobile phone use exploded, is best for pushing signals out to as many fixed antennas as possible.
COFDM works better for mobile services, including data, digital radio, and other interactive applications.
"If I was looking for a way to develop a secondary revenue source, I'd go with the second standard rather than the first," said Fritz Mezzure, chairman of communications study at State University of New York, Oswego, and author of
Broadcasting, Cable, the
Internet and Beyond
.
"8-VSB is a very solid technology for television, but COFDM is just better in a mobile environment," said Bob Rini, managing partner at the Washington law firm of Rini, Coran, and Lancellotta and a member of the Broadcaster's Digital Co-Op, a coalition of TV stations that want the FCC to allow stations to choose between 8-VSB and COFDM. He said broadcasters could solve interference problems by reducing signal power. "It's really a system-architecture issue," he said. "If you have to power down, you power down."
Signals might not travel as far, but Rini said it should be up to stations to weigh the pros and cons of potential audience loss. And as for people who already bought digital TV sets equipped for 8-VSB?
"If it means adding more cost to the set than so be it," he said. "When you're an early adopter, you take a risk."
Such sentiments don't sit well with the consumer-electronics industry, which has struggled to corral broadcasters and cable companies into positions that would drive sales of existing digital-TV sets.
Consternation over digital TV comes at a bad time for CE retailers already grappling with a volatile economy. But even as bellwethers Circuit City Stores Inc. and Best Buy Co. Inc. reduced earnings estimates because of slower overall sales, the Consumer Electronics Association reported sales of digital-TV displays in the first nine months hit 368,947, nearly seven times the number of displays sold during the same period in 1999.
Most of those purchases didn't include receiver units needed to get over-the-air digital signals, suggesting most sales are to upgrade DVD home theater systems.
The CEA said dealers have ordered only 25,855 set-top receiver units from manufacturers since January 2000.
"Because there's so little HDTV content, the ability of retailers to demo the technology is woefully inadequate," said Kevin Miller, editorial director at etown.com, a consumer-electronics Web site that reviews CE products and offers price comparisons. "There's nothing to look at right now."
The standards fight doesn't help. "All of a sudden, consumers are afraid to go out and buy a tuner because they are afraid it will be obsolete," Miller said.
The consumer-electronics camp contends many of the problems that first vexed the transition are smoothing out, including once-contentious fights with cable operators over digital-TV labeling.
But no matter how many issues get resolved, HDTV always festers below the surface.
"I think the cable companies are looking at their customers on HDTV," said CEA President Gary Shapiro. "But what they do today isn't necessarily what they'll do in the future.
"There is certainly disagreement over cable's obligation to carry HDTV, but since broadcasters aren't doing anything, it doesn't matter much."
Pressure may soon build. Shapiro predicted that devices capable of playing prerecorded HDTV content could be available within two years. Within five years, HDTV content could be available via broadband connections on the Internet.
"The Internet is going to do to cable what cable did to broadcasters," he said. "I think cable has been complacent on HDTV and the Internet. At the same time, we underestimated the importance of DVD."
When it comes to the digital-TV transition and all of its complications, no one really knows what new services, standards, or business plans will prevail. But one thing seems certain: Whoever figures out what consumers want will reap benefits.
