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Stop the downward spiral in digital TV!

About the author
Ali Hossaini is a pioneer of interactive television and electronic media. He manages two television channels in New York City.
American television is entering a digital crisis. Viewers have more choices than ever, but they’re faced with skyrocketing costs. Pay TV operators have sprinkled the country with a hodge-podge of digital technologies, and they dominate distribution. So far consumers have shouldered the bills. But, despite higher revenues, media concerns have shaky prospects. If pay TV-cable and digital broadcast satellite-falters, far-ranging economic and social repercussions will follow. The crux of the problem lies in the new standard for digital broadcast: it isn’t up to the job. The American Government needs to act quickly and decisively to stop the downward spiral.

To start the Government needs to rethink its approach to digital television. The American regulator – the Federal Communications Commission – has published an engineering standard for next generation TV. This standard, known as High Definition Television (HDTV), meets goals set in the 1980s, and it ignores the massive growth of pay TV, the Internet and other players in electronic media. What’s needed is a broader standard, and a broader consensus, for a range of digital products. In the absence of a consensus, the FCC should freeze technology rollouts, just as it did in 1940 and 1949, when it convened the National Television Systems Committee that standardized analogue television.

Some background

Understanding the crisis requires some background. The American digital transition began in 1987, when the FCC began thinking about next generation TV. After several years of testing, HDTV emerged as the most likely candidate to replace the old analogue standard. The Advanced Television System Committee (ATSC), a non-profit trade organisation, began to document the new standards. A legal milestone was passed in late 1996 when the FCC mandated that HDTV standards be used by broadcasters. Specifically, the ruling applied to terrestrial broadcasters; local TV stations were told that HDTV was the best way to improve the quality of sound and picture.

Important players sit on the ATSC. But the HDTV upgrade hasn’t gone well. Industry keeps dragging its feet, and consumers are barely aware of digital options. So the commissioners got serious on August 8 this year. By a three to one vote, they issued a ruling forcing manufacturers to include digital tuners in almost all televisions, and TV-ready computers, by 2007. Set-top boxes provided by pay TV providers might be the next target for HDTV-compatible tuners.

The problem is that HDTV sets currently cost around a thousand dollars. Estimates for implementing the ruling range from negligible (according to the FCC) to $250 a set (according to some industry sources). Digital broadcast facilities, in turn, cost between one and three million dollars, which comes directly from broadcaster budgets. One thing is clear: the upgrade isn’t going to be easy or cheap.

Is the move to HDTV misguided? Even with the rulings, the transition has been less painful than implementing the National Television Service Committee (NTSC), when the FCC shut down interloping stations. The NTSC is highly restrictive, but TV has thrived for decades because it has provided a consistent foundation for business. The FCC hopes the HDTV standard will confer similar benefits on future broadcasters. But do the Commission’s rulings offer a single set of reliable digital standards? Most certainly not. There are now numerous platforms for digital production, transmission and distribution, and HDTV complicates the marketplace even more.

The issue with HDTV lies in its expanse, not its expense. HDTV stands for ‘high-definition television’, and it focuses on creating a dramatically better viewing experience. Improving the delivery of sound and picture might have played well in the 1980s. But today’s consumers expect more from digital media, and cable TV is already in the midst of a vast digital conversion. The HDTV standard is about picture quality, not interactivity. The bottom line is that the ‘D’ in HDTV should stand for digital, but does not.

Digital explosion

Distribution is a key factor missed by the FCC. About 80% of Americans subscribe to cable (or digital satellite), and operators have already spent 15 billion dollars on digital upgrades. In May, the ATSC expressed optimism – but no certainty – that HDTV could interoperate with cable. The need for cable delivery points to another telling fact. The market has already outstripped local broadcasting, and the FCC rulings on HDTV are irrelevant, even detrimental, to existing digital products.

None of this means that the FCC and ATSC are irrelevant. In fact, the market desperately needs standards. Cable operators aim to offer an array of digital services and programming via advanced television. Yet, with the exception of high-speed Internet access, they haven’t seen a return on their digital products because they’re focusing on engineering rather than programming. Two factors are hampering the growth of revenues: competing platforms and incomplete infrastructure. Only the government, supported by trade organisations, has the power to address these issues and give 21st century television a foundation for profits.

What government can do

A public–private partnership can maximise the value of digital television. This means going beyond high-definition pictures and taking command of large trends in technology. The first is in distribution. Coaxial cable crosses most US households, but it’s too narrow for many services – it doesn’t carry enough data. So the government and industry should partner to provide ‘last mile’ fibre connections to urban and suburban households. Rural areas can be served by high-bandwidth satellites. In brief, we need to revive our commitment to the Information Superhighway.

The second trend is in production. HDTV may be a digital standard, but it misses the boat on datacasting and interactive programming. Ironically, the FCC is enforcing HDTV, which has no discernible market, and ignoring interactive television (iTV), which is already available through cable operators. In the absence of a standard, cable operators are deploying an array of digital platforms. Programmers and advertisers would like to create iTV programming, but the lack of a coherent market keeps their efforts experimental. Imagine you needed a different TV to watch ABC, NBC and CBS. There would be no national television market, just a cluster of regions, and programmers would never reach economies of scale. To become a mature industry, iTV must be included in the digital mandate.

The government should also recognise the growing role of streaming media and other Internet platforms. Convergence was oversold in the last decade, but it is entering the mainstream. Standardisation would help the market for Internet media mature, and it would prevent disruptions during the next decade, as pay TV providers integrate Internet products into set-top boxes. It would also foster distribution over PCs, mobile devices and other emerging platforms.

Minimally, the FCC should specify baseline standards for streaming media, instant messaging and web browsers across platforms. Some flexibility could be allowed for proprietary features, but it is intolerable that consumers need to maintain streaming clients from Microsoft, Apple and Real. And the situation is just as bad for the producers who spend money to output shows in multiple server formats. Without a stable technology landscape, streaming media will remain unprofitable.

Goodbye terrestrial

Finally, the FCC needs to prepare for a more dramatic action: pulling the plug on local broadcasts. If every US household has a common carrier broadband connection – fibre in cities, satellite in the countryside – there will be no need for local TV towers. This move will free enormous swaths of spectrum, and revenues from licensing frequencies could help finance the fibre network. This does not mean the end of local television. In fact, local stations will thrive because they’ll save money on transmitters and operations. Their licences will entitle them to low (or no) rates on local fibre, and everyone will benefit from the superior performance of ground-based transmission and new wireless products.

How can we start realising the full potential of digital technology? The good news is the ATSC did not close shop in 1996. During the past few years, the committee has suggested standards for the delivery of data and streaming media over broadcast TV. It is currently working on transactional services for iTV. The FCC should put industry on the alert that it plans to mandate these standards for the entire television industry, including cable and satellite operators. Then we need them to go much further. The FCC should mandate a broader set of standards that covers all media and all delivery systems. They also need to recognise that copyright and privacy protection are essential to compliance in a digital world. The Advanced Television Systems Committee needs to become the Advanced Media and Telecommunications Systems Committee.

A complete set of media standards – for television, Internet and IP-based telecommunications – accompanied by a revolution in transmission, will have the same impact as the NTSC in the 1940s. The playing field will level for new entrants, and a focus on consumer products (rather than proprietary standards) will reinvigorate markets. Wireless costs will drop as jockeying for spectrum slows. Communities will add as many local TV stations as they want, and public service stations will stop scrambling for transmission funds. Hospitals could offer ‘home visits’ via two-way iTV, and distance learning might finally become a reality. Needless to say, the AMTSC must have a consensus behind its mandate.

Consensus for the future

The only way to achieve consensus, and get the best engineering, is to repeat history. The NTSC contained stakeholders from every reach of television, and it had a clear mission. The AMTSC needs the same force of purpose. Representatives from corporations, academia, government and public interest groups should stop business until they define their industries through a set of enforceable standards.

For sixty years, television has offered fantastic opportunities. As we expand into the digital realm, we should remember that commercial TV followed fifteen years of experimentation, and the government twice reined in business to enforce the NTSC. In contrast, digital media blasted off in the 1990s with little preparation.

Our current headaches emanate from an exuberant lack of planning, but I argue we’ve done enough experimentation. We know what works. A new standards commission, the AMTSC, would define the contours of a thousand-channel world that combines entertainment, information and communications. With any luck, we can create a new industry – and leave the past behind – by combining our digital dreams into one.


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