Who Wants DTV?

Abstract

The United States will have an all-digital terrestrial television broadcast system at some point in the first half of the 21st century. The key question is not whether this transition will take place, but rather how soon it will occur. Some progress has been made. As of September 2002, 38 of 40 broadcast stations in the top ten U.S. markets were on the air with a digital signal, and the two others, WNBC-DT and WABC-DT in New York, were on the air but their antennas were on the roof of World Trade Center One (FCC, 2002b). Large-market television stations have spent millions of dollars since 1997 purchase and install new digital television (DTV) transmitters, antennas, and in some cases new broadcast towers. Broadcasters, of necessity, are becoming the first adopters of DTV technology and they have paid premium rates for the hardware needed retransmit a network DTV signal (Dupagne & Seel, 1998). Given this level of industry investment in DTV, it is highly unlikely that FCC commissioners will throw up their hands at this point and say, to heck with this expensive technology, let's go back tried-and-true analog broadcasting. The good news is that as of September 2002, 552 U.S. television stations were on the air with a DTV signal. The bad news is that 843 commercial stations petitioned the FCC for an extension of the May 1,2002 deadline construct their DTV facilities (FCC, 2002b). While most stations in the top thirty markets (113 of 119 were on the air with DTV in May 2002) have adequate profit margins easily finance new transmitters and towers, the fixed costs of the transition are much more difficult manage for small market broadcasters. Almost all the stations requesting a conversion time extension from the FCC were in smaller markets. Public non-commercial broadcasters have until May 1, 2003 transmit DTV signals, but funding the conversion may be even more difficult for them due their reliance on public contributions for operational expenses. The Federal Communications Commission defined the transition time frame in 1997, then it took a laissez-faire approach DTV rulemaking, expecting the broadcasting industry meet the outlined deadlines. It was not until the spring of 2002, when the Commission realized how many stations planned ask for deadline extensions, that FCC Chairman Michael Powell began take action (FCC, 2002a). With the threat of regulatory action hanging over their heads, national content providers have agreed provide more DTV programming, and terrestrial and satellite broadcasters, along with cable companies, have agreed pass this DTV programming through their customers, (Kerschbaumer, 2002b). Ironically, the one group that was expected reap the most direct economic benefits--the consumer electronics industry--has dragged its feet. Sony, Zenith, and Panasonic were among the companies that appeared ready reap a windfall as consumers replaced their analog sets with widescreen HDTV models. However, the electronics companies have balked at the FCC's mandate include digital tuners in television sets by 2006, claiming the tuners are not necessary and would add $250 the price of each TV set (Harmon, 2002). Without such a digital tuner, HDTV sets would not receive over-the-air broadcasts. This would violate one of the FCC's original service goals make the service ubiquitous. Although approximately three-quarters of U.S. households receive television programming from a cable or satellite provider, that leaves millions of homes still relying solely on over-the-air access. Yet a recent survey of DTV sets in the marketplace has revealed that few models have an integrated digital tuner, and that those sets were typically the most expensive available (Seel & Dupagne, 2002). The electronics industry's estimated cost of $250 per receiver tuner should not be uncritically accepted because the Consumer Electronic Association has sought stress the high end of the cost range. …