Digital viewing impasse persists

Tuesday, April 24, 2001 | 11:18 a.m.

SUN STAFF AND WIRE REPORTS

Broadcasters meeting in Las Vegas asked for delays and for the government to intervene against cable operators in the massive switch to digital television, saying consumers aren't yet ready and that they may be forced to pay for cable or satellite service to watch shows they now get using an antenna.

But the industry's top regulator, Federal Communications Commission Chairman Michael Powell, this morning indicated he won't immediately push to extend next year's deadline for stations to have a digital signal to go along with their analog service.

"I think we should be driving for that deadline," Powell said this morning at the National Association of Broadcasters convention in Las Vegas.

However, Powell indicated he may favor extending the 2006 deadline for stations to return their analog channels to the government. It may take several years for consumers to accept digital TV, so stations will be broadcasting in both the digital and analog format for some time.

"It takes a long time to transition consiumers. Ninety-four percent of families have TVs and many have three or four TVs. That's going to cause a long transition. And so I see that deadline maybe getting pushed back," Powell said.

TV station owners say action is needed to ensure that cable systems such as Cox Communications carry digital broadcasts and new TV sets receive digital TV, with new features and better pictures and sound, said Eddie Fritts, president of the National Association of Broadcasters.

The FCC has said it lacks the legal power to force cable companies to carry digital TV when they also carry analog programming. Broadcasters argue that cable companies must add the multiple shows and features digital TV makes possible for the switch to succeed.

"There needs to be minimal government intervention to facilitate the needs of consumers," Fritts said at the group's annual convention Monday. "Today, for instance, if a consumer purchases a new digital TV set, takes it home, plugs into cable, turns it on, they will learn it doesn't pick up free, local broadcast channels."

Fritts and other broadcast industry representatives are backing action at a time when lobbyists and executives predicted government and the FCC will avoid playing a role.

Powell, meeting with Nevada broadcasting executives Monday, said cable operators can't afford to lose local broadcast stations. So he predicts a deal will be struck before the conversion deadline.

"They each can't afford to go the distance. It's all about making a deal," Powell said.

The cost per individual station to convert to a digital signal runs between $10 million to $15 million, said Bob Fisher, president of the Nevada Broadcasters Association.

Lawson Fox, general manager of KTVN, the Reno CBS affiliate, asked Powell if the cable operators could be encouraged to carry both the analog and digital signal.

"It's real doubtful for dual-carriage, but it's possible," Powell said, noting that a government-mandated "must-carry" policy forcing cable operators to carry both signals has always been a difficult debate.

The newly-appointed FCC chairman noted that Congress set an overly-aggressive digital conversion schedule.

"It needs to come at a gradual pace driven by consumers," Powell said. "It's like DSL (digital subscriber line). If you've tried to get it, it's a dismal experience and it leaves you with a sour taste."

Former FCC Chairman Richard Wiley, on a Sunday panel, said the industry must drive the switch, rather than asking government to help. Gary Shapiro, president of the Consumer Electronics Association, said neither the FCC nor Congress will get involved.

Panelist Valerie Schulte, NAB deputy general counsel, said the trade group in the next week will ask the FCC to reconsider a decision that exempted cable systems from carrying digital and analog TV signals during the switch. She said the association is ready to seek a Supreme Court review if needed to resolve the issue.

"Congress had to force (analog) carriage and they're going to have to do it again," she told the audience. "It's going to totally depend on further government action."

Digital TV promises to give viewers better quality sound and pictures known as high-definition TV, or HDTV, and more program choices. It's costly for broadcasters, cable companies and set makers to overhaul equipment to use the new technology.

Adoption of digital TV has stalled amid disagreements among broadcasters, cable operators and set makers over equipment design, copyright protection and terms for carrying multiple digital signals on cable and satellite systems. In addition, most sets cost $2,000 or more, far exceeding prices for analog TVs.

Fritts said cable operators must carry digital broadcasts, TV makers must make all new sets capable of receiving the signals and cable equipment must work with TV sets.

Equipment makers have opposed any government order that will require new sets to receive digital TV signals, and Fritts made his comment a day after the NAB and Consumer Electronics Association announced a joint education effort on digital TV.

CEA's Shapiro said "the time for finger-pointing is over." The NAB will spend $400,000 as "seed money" for the campaign, and local broadcasters, set makers and retailers will raise as much money as is needed for the effort, Fritts said.

"The very future of broadcasting rests on the successful completion of this transition," Fritts said in the opening session. "Our economic playing field has been reversed in the past few months.

"We are up against more competitors than ever before -- satellite, cable, broadband, Internet, the list goes on," he said.

Congressional aides said Congress is unlikely to impose a requirement that cable systems carry both digital and analog TV during the transition.

"New and exciting content is what's going to drive this transition," said Jessica Wallace, counsel to House Energy and Commerce Committee Chairman Billy Tauzin, a Louisiana Republican.

Rep. Rick Boucher, a Virginia Democrat, said on an earlier panel that he supports a requirement that every new set receive digital signals and wants to ensure high-quality programming is available to all consumers, not just those who subscribe to cable or satellite.

"Consumers aren't going to buy the technology unless there's something to watch," said Ben Cline, aide to Representative Robert Goodlatte, a Virginia Republican. "You will have to see some kind of must carry enforcement."

Besides the dispute over whether cable systems will carry digital signals, there is a need for stations themselves to broadcast digital programming in order to make consumers want to buy digital TVs, experts said.

"Somebody has to drive that transition. Broadcasters led the push for high definition (digital) TV and broadcasters have always taken the leadership role in this industry," Powell said.

Station executives say digital sets -- which can cost from $2,500 to $7,000 -- are just too pricey. They want the government to require that all newly manufactured TV sets be capable of receiving a digital signal to help drive down costs and attract buyers.

No, says the consumer electronics industry; such a requirement would just drive up prices for consumers. And they assert that it's not needed anyway since sales of the new TVs are good -- more than 648,000 digital TV integrated sets and monitors were sold to retailers in 2000.

What's needed, they say, are more programs in the new crystal-clear, high-definition format. Otherwise, people won't buy the sets, manufacturers say.

More TV sets or more programs?

"We have a chicken-and-egg problem where everybody is playing chicken," said Blair Levin, a regulatory analyst at Legg Mason in Washington. "I think we have a stalemate right now."

The FCC also is studying whether to mandate that new TVs be capable of receiving digital signals. Today Powell questioned whether the commission has authority to impose such a requirement.

Digital TV systems are typically sold in combinations. Consumers can buy a stand-alone high-definition monitor for several thousand dollars but would then need a separate set-top box, costing about $1000, to receive a digital signal. Some companies sell full TV sets -- where the digital tuner is built in -- as well.

Some businesses also are looking for new, cheaper ways to introduce consumers to digital TV.

AccessDTV, based in Raleigh, N.C., sells a kit for $480 that lets consumers watch digital TV on a computer screen by inserting a special card into their PC and attaching an antenna to their computer. Once that's in place, viewers can watch digital or analog broadcasts and even link the computer to a cable connection.

The system requires computer models that have certain specifications, but "it's a relatively low technical bar," said Doug Leech, chief operating officer for the company. The product also enables consumers to work on their computer while watching digital TV -- a useful feature as "people are spending more and more time on their PCs," he said.

The Sun's Kevin Ferguson,

Bloomberg News and the Associated Press contributed to this report.

archive