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Reed Hundt and the chilling of HDTV

Fri, 05/31/1996 - 8:00pm
Jeffrey Krauss, High Definition Anticipant and President of Telecommunications and Technology Policy
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By Jeffrey Krauss, high definition anticipant and President of Telecommunications and Technology Policy

He claims he wants to let the marketplace make the decisions. But there's a chicken-and-egg problem. In this case, we'd all be better off by having the FCC, not the marketplace, decide to go ahead with HDTV. Otherwise, we risk losing our lead in this technology to other countries. Remember VCRs?

Testing of the Grand Alliance Digital HDTV system was completed last summer. The test results showed that the HDTV system performed very well. The FCC's Advisory Committee on Advanced Television Service submitted the report of the testing to the FCC, and voted itself out of business. The Advanced Television Systems Committee (ATSC) took up the task of documenting the technical specifications, and that work was largely completed earlier this year. You can download the HDTV specifications from the ATSC's web site, at http://atsc.org.

Also last fall, the FCC announced that it would have three separate proceedings on HDTV, one to look at policy issues, one on technical standards, and one to assign specific TV channels to broadcasters in each city. The first proceeding is well along. It deals with must-carry issues and whether broadcasters must devote some minimum amount of time to transmissions in high definition, as opposed to transmitting multiple standard definition channels. Comments were submitted last November, and reply comments were delayed until January because of the government shutdown.

The FCC was forced to delay its channel assignment proceeding, because the broadcasters got hung up in the Congressional budget debate over auctioning the TV spectrum. (See "Broadcasters must repent," June '95.)

But there was no reason to hold up the technical standards proceeding. The FCC should have started that in January, and it could have adopted HDTV technical standards by September.

The broadcasters got themselves into Congressional trouble last year by saying they wanted to use their new digital channel for multiple standard definition video (SDTV) programs, not necessarily for HDTV. The FCC chairman agreed with them. He thinks that broadcasters should have the freedom to use that 6 MHz channel for any service that the marketplace wants—SDTV, mobile, paging, whatever. Maybe even HDTV. He isn't opposed to HDTV, but he is opposed to having the government require HDTV as a mandatory rule.

Not only that, but he's opposed to the FCC even adopting a technical standard for digital television. Some have argued that Hundt is doing this to protect the Hughes DirecTv DBS service, because DirecTv uses a digital video compression method that does not comply with the ATSC standard. Hundt's former law firm represents Hughes.

Anyway, Hundt is in the minority. Right now he is one of four FCC commissioners. The other three are in favor of HDTV, and are in favor of adopting HDTV standards.

But the FCC chairman is enormously powerful within the agency. He sets the agenda. He decides when issues will be decided, when proposed rules will be adopted, and when to bury an issue if he doesn't quite have the votes. But at three-to-one against him, he doesn't have the votes to bury HDTV.

The chicken-and-egg problem

In general, I like the idea that the marketplace should make decisions, rather than the government. Particularly in cable TV standards, the technology is changing so fast that detailed government technical standards might freeze the technology and stifle innovation. But mandatory standards do bring benefits. They eliminate confusion in the marketplace. They provide consumers with the certainty that the device they buy will work with the service and won't quickly become obsolete.

There is a chicken-and-egg problem with HDTV. Broadcasters won't want to spend the money on HDTV transmitters and programming until consumers have the HDTV receivers to view the programming. And consumers won't want to buy the new TV sets until there is programming to watch. And if consumers don't want to buy, then TV manufacturers don't want to build receivers.

Consumers will be able to buy convertors, boxes that receive digital video broadcasts and display the video on an analog TV set. That's exactly what a DirecTv DSS box is, a digital-to-analog convertor box. But those boxes only receive SDTV, not HDTV. A proliferation of those convertor boxes, to receive digital SDTV broadcasts, could dissuade consumers from buying the more expensive big screen HDTV receivers.

Right now, there is uncertainty in the video marketplace. Will broadcasters do any HDTV broadcasting? FCC adoption of an HDTV standard, coupled with a requirement that at least a few hours a week of broadcasting must be in the HDTV format, will go far toward reducing that uncertainty.

Perhaps this uncertainty might hurt broadcasting, but maybe it's good for cable TV. Maybe cable programmers like HBO can deliver HDTV programming, even if broadcasters do not. Wrong. TV manufacturers won't have enough incentive to start delivery of HDTV receivers if broadcasters opt out. Consumers will be less likely to buy an HDTV receiver if only cable programmers, not broadcasters, are delivering HDTV.

So let's get going, FCC. Adopt the Grand Alliance standard, assign the channels, and let's get started. Bring some certainty to an uncertain market. Otherwise, we'll see foreign companies take the lead away from the U.S. companies that pioneered digital HDTV.

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