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Stations to digital TV date: Drop dead!

Part 1 of a series, published in Current, Nov. 5, 2001
By Dan Odenwald

With just six months to put their digital TV stations on the air, commercial broadcasters are poised to blow their deadline in a big way. So far, just 172 of approximately 1,250 commercial stations are operating DTV signals.

Into the bitstream: DTV & public televisionEighteen months from now, many public stations are likewise sure to miss their deadline. Just 38 have launched digital services thus far, out of about 350.

But missing the dates may not matter, according to broadcasters who attended Iowa Public Television's annual DTV Symposium last month. In fact, they say, failure to convert by the deadlines--May 2002 for commercial and May 2003 for public--is just a reality of a slowed, yet still promising, digital conversion.

"Will most stations make the deadline? Not a chance," says Bill Hayes, Iowa PTV's director of engineering. "Will missing the deadline be the end of broadcasting as we know it? Not necessarily."

Hayes, who spent part of his career in commercial broadcasting, says few broadcasters believe the conversion deadline will hold. And the rest of the FCC's transition timetable will collapse as well. No one thinks stations will be forced to give back their analog channels on schedule in 2006, he says.

"We're seeing the promise of DTV along with its warts," says Dan Miller, director of programming at Iowa PTV. "If we didn't think it had such extraordinary promise, we wouldn't be working so hard at it."

The DTV Symposium, now in its seventh year, brings together an odd mix of both DTV evangelists and skeptics, Miller says. While it's clear the realities of DTV's technology and economics have changed since 1996, so has the thinking about the rollout itself.

The digital transition timetable as originally envisioned by Congress and industry leaders is a complete flop, station execs agree. If the country's commercial broadcasters tried to meet its deadline for launch of their digital signals, more than 50 stations would have to convert <I>every<I> week to make it.

And FCC Chairman Michael Powell calls the 2006 date for return of analog spectrum an artifact from the Clinton-Gingrich balanced budget deal.

In the DTV switchover, neither the chicken nor the egg is arriving on time. Consumers have failed to adopt the new technology because sets are too expensive, and there isn't enough DTV programming to warrant purchasing one, says Phillip Swann, publisher of TVPredictions.com.

Consumers' confusion over the technology compounds the problem, says Bo Brock, a researcher with Magid Media Futures. Most Americans don't understand what DTV is. Industry concerns about pricing and consumer indifference have stalled the rollout. Ask your neighbor about DTV, he says, and you'll likely get an answer about digital cable.

Consequently, DTV receivers aren't selling. Roughly 250 million analog TV sets sit in American homes today, says David Liroff, v.p. of technology at WGBH and keynoter at the Iowa symposium. This year, consumers will purchase 25 million analog sets and only about 150,000 DTV sets. And that includes sales to both homes <I>and<I> dealers.

Across the Atlantic, over-the-air digital TV is also evolving slowly, according to press accounts. Even though the British and Europeans are introducing over-the-air DTV more quickly than here, most viewers are receiving their digital signals through cable or satellite.

Pleas for relief

Broadcasters are pressing the FCC to prepare for the missed deadlines. Lobbied heavily by the National Association of Broadcasters, the FCC is likely to institute a simple checklist waiver that excuses stations for missing the date. Stations can apply for two six-month waivers from the FCC's Mass Media Bureau. A third request must go before the commission itself.

The FCC says it will accept applications for delay based on the paucity of tower construction crews, zoning problems, the slow FAA approval process and shortages of transmission equipment. The commission will not grant waivers because of "economic hardship."

The NAB is also pressing the commission to lift deadlines for commercial stations to boost their digital signals to full power (May 2002) and to equal the reach of their present analog broadcast areas (December 2004). With few DTV viewers, many broadcasters say premature high-power broadcasting is a waste of money and want to put it off as long as possible. The FCC has yet to act on these requests.

Until now, towers and transmitters have had top priority in the conversion, but broadcasters may be misdirecting their energies, Liroff suggests. Cable and direct broadcast satellite operators will take DTV into most homes. By 2006, Liroff predicts, fewer than 10 percent of homes will rely on over-the-air broadcasting for their TV reception.

And the FCC is not inclined to require cable systems to carry broadcasters' digital channels. Last winter, the commission said it's unwilling to force cable operators to carry both analog and digital signals during the transition. Then, after the nations' conversion is done, the FCC favors requiring cable to carry only the "primary video" stream of each station.

As for the DBS audience--now 10 percent of homes--there's also no must-carry protection for broadcasters' DTV channels.

Threat to multicasting

The "primary video" ruling could deal a deathblow to public TV's plans to launch a multicast service of educational channels, says the Association of Public Television Stations (APTS). A station with plans for separate streams of kidvid and adult learning courses, among others, would have to choose which of these streams to designate as "primary video."

Broadcasters' lobbyists cannot rely on must-carry, Liroff says. Instead, they "must convince" cable operators to retransmit their signals.

NAB's television board said last week it will compromise on its demand for dual carriage if cable operators agree to carry all of a station's digital channel, including multicast and data services, says Dennis Wharton, NAB spokesman. The association's TV board also said it will re-examine its dual-carriage request if manufacturers build analog sets with DTV tuners and if cable introduces set-top boxes that feed DTV channels into analog TV sets. The cable industry has yet to respond to the proposal.

NAB's shift in strategy follows this summer's shift in public TV's thinking. In a letter to FCC Chairman Powell, APTS revised its request for a must-carry rule. As long as viewers receive public TV through a digital channel converted to analog by digital cable boxes, APTS would not seek dual carriage on those systems.

From the beginning, cable systems have argued they don't have the capacity to carry both analog and digital services, according to the National Cable Television Association, cable's trade association. In October, NCTA told the FCC that dual carriage would force cable operators to drop channels and prevent them from adding more video-on-demand services.

Swann blames DTV's slow adoption on marketing that's focused on the technology, rather than how it improves consumers' lives. "Consumers are not seeing this as a slam dunk," he says. DTV is promoted for its interactive elements when viewers want HDTV and hundreds of channels, he says. DBS succeeded because of its vast channel options, not interactivity, he adds.

Sam Matheny, who oversees the digital service of WRAL, a DTV-pioneering CBS affiliate in Raleigh, N.C., argues that broadcasters have yet to find DTV's "killer application." At this point, Matheny says, the business model of DTV is simply "to stay in business."

"Show me the money," says Ed Piette, g.m. at KSTP, the ABC affiliate in the Twin Cities. His station went digital in November 1999, a year after Twin Cities PTV launched Minnesota's first DTV service. To launch its signal, KSTP spent $1.5 million--money it has yet to earn back. "We don't want to pour our money down a black hole," he says. "We learned that lesson with the Internet."

With equally bleak revenue prospects, public TV faces a daunting $1.8 billion transition price tag. To date, the system has raised about $750 million from state governments, corporations, foundations and individuals, according to APTS.

Though Congress mandated the conversion, it has contributed just $20 million in earmarked DTV money and $56 million for equipment through the Public Telecommunications Facilities Program over the last two years.

Recognizing concerns about the digital conversion, the FCC created a DTV Task Force last month to speed it up. Mass Media Bureau associate chief Rick Chessen will lead the group. Powell says the task force will help the FCC "re-examine the assumptions on which the commission based its DTV policies" and update them.

Capitol Hill also wants to revive the stalled transition. Last month, House Commerce Committee Chairman Billy Tauzin (R-La.) met with industry leaders to discuss issues relating to cable carriage, digital copyright standards, interoperability between cable and DTV sets, and broadcasters' request that analog TV sets come equipped with DTV tuners.

Joining the rescue mission, NAB is teaming with the Consumer Electronics Association, the manufacturers' trade group, to launch a DTV public relations blitz. The campaign, "It's Like Being There," will promote HDTV and the interactive elements of the new technology, according to NAB.

"We know the transition is tied to set sales," says Kelly Williams, an NAB engineer who attended the DTV Symposium. The trade groups will produce commercials for DTV to be aired on analog channels. Slated to begin in January, the campaign will test ads in four test markets: Houston, Indianapolis, Portland and Washington, D.C. It will tout the fact that the nation's 210 digital signals reach 70 percent of American homes.

 
 
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Related stories: Current Briefing on DTV.
Outside link: website of Iowa PTV's DTV symposium.

Web page posted Dec. 5, 2001
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