Depending on where you stand, digital television is the greatest thing to come along since color TV, or it's the biggest boondoggle since northern carpetbaggers wreaked havoc in the devastated South after the Civil War.
A recent report by Cahners' In-Stat Group (an independent research group owned by CED's parent company, Cahners Business Information), says "good news is on the horizon for the U.S. digital TV market." Shipments of DTV sets are expected to increase to more than 500,000 units this year. By 2004, as DTV set prices decrease and the U.S. government's mandated cessation of analog transmissions nears, that figure will zoom to nearly 6 million units, representing $9 billion in revenues.
The report goes on to say that HDTV (high-definition TV) displays will dominate in the beginning years, but that SDTV (standard definition TV) digital television sets will overtake the market in 2003 and clearly lead the market in shipping volume by 2004. This will come about, says the report, despite the fact that HDTV sets will generate more overall revenue.
This rosy (and startlingly clear?) digital TV picture is clouded by all sorts of unresolved issues. After the much-ballyhooed giveaway of spectrum to broadcasters so that they could prepare for the HDTV digital transformation legislated for 2006 by the 1996 Telecom Act, broadcasters are having second thoughts on how to use their new space. HDTV seems to be in a persistent holding pattern, and SDTV looks more appealing because it would allow broadcasters to pursue other, more lucrative (and more immediate) revenues from broadcast data services and other non-HDTV digital applications.
More immediate to cable TV interests is the issue of how digital television sets will connect and interoperate with cable TV systems. The ongoing saga of the "digital interface" has been a veritable bone of contention that's been gnawed on by the consumer electronics industry and the cable TV industry for the past couple of years in the NCTA/CEA Joint Engineering Committee. It's been a long, laborious process that's raised the hackles of both sides over and over again.
Yet, the need for digital TV products continues to grow in anticipation of the mandated 2006 digital transformation. Because it takes time to put such products into the consumer pipeline, the 2006 date is practically around the corner. As a result, the FCC has recently decided to put pressure on the two adversarial groups to reach agreement on the few remaining (and most contentious) issues that have plagued the digital interface discussions from the very start.
From the outset, the two industries approached the problem of a digital interface from two very different economic perspectives. The cable TV industry was coming from a closed-loop economic model where companies lease set-tops to their subscribers. These units were configured in a way that reflected the channel and service line-ups of the individual operators. Generally speaking, anything the box could do would eventually be "paid" for over the lifetime of the lease agreement.
The consumer electronics industry sees things much differently. As Walt Ciciora, Ph.D. and columnist for CED once wrote, "The consumer electronics side suffers from incredible economic pressures caused by the fact that the technology of their products is something almost any developing country can adopt and produce in larger quantities than the world can absorb."
David Large, principal at Media Connections Group, put it even more bluntly. "The television people," says Large, "get very antsy over anything that has a dollar bill attached to it. In an industry that has had virtually no profits for years and years, 50 cents is a big deal. And a buck is a really big deal."
Despite these two very different approaches to business, the digital interface discussions have covered a lot of ground over the past few years. Yet there are still some technical issues to be addressed, says Large. "There are standoffs on several issues," say Large. "There is the issue of quality. The cable industry is concerned that these devices don't emit out of their antenna terminals with stuff that would pollute cable's return band. There are already rules that say how much they can send out (through) their antenna terminals in the forward band, but not in the return band.
"A second issue is that we want to make sure those receivers will work in an environment where there are cable modems. Cable modems put out a lot of power, and television sets, unless they're engineered for it, get overloaded by the incidental power they get from cable modems."
But there are also a number of important technical areas where agreements have been reached. What started out as a potential modulation choking point was cleared relatively early in the process. The cable industry uses 64- and 256-QAM, while the broadcast industry uses 8-VSB. Future digital TV sets will include QAM tuners so that the receivers can demodulate digital cable TV signals.
The issue of cable's ancillary signals was put to rest as well. The cable industry has been carrying program guides and content advisories using a protocol called System Information (SI). A different protocol, Program and System Information Protocol (PSIP), is used by broadcasters. While somewhat similar, the two protocols have their differences. CableLabs came to the rescue with its Enhanced System Information proposal that carries most of the same information as PSIP. It includes two-part channel numbering and navigating, and content advisories, using the same table structure as PSIP.
Component analog interfaces have been adopted as well. They include EIA-770.1 (NTSC), 770.2 (digital SDTV), and 770.3 (digital HDTV). In addition, technical specifications for cable system signal levels and frequency channeling plans were also agreed upon.
Two hotly contested issues have also been largely solved. The digital baseband interface, which is used for physically connecting digital TVs, VCRs and set-top boxes, was based on the IEEE 1394 (FireWire) physical layer and the AV/C command language. Essentially, it's the same as the HDNI interface in OpenCable.
While 1394 is not "required" under this specification, Don Dulchinos, vice president for advanced platforms and services at CableLabs, thinks market pressure will compel many, if not most, TV manufacturers to include it on their digital TV sets.
"There is a (consumer electronics) standard out, EIA 775, which is 1394 as a connector to a digital television," explains Dulchinos. "Now, as with any standard, you don't necessarily have to build it. But in our view, since our member companies are already putting 1394 outputs on their set-tops, it makes sense for the (TV) manufacturers to build according to that standard."
The issue of signal security was another point of contention between the two industries. While broadcasters rarely, if ever, had to deal with such matters, for cable TV operators, it's a matter of economic survival if they want to offer premium programming and transactional services like video-on-demand.
As a result, the National Renewable Security System (NRSS) standard was amended by adding capabilities for such programming and services. It's now called EIA-679A. The NRSS standard describes two physically different interfaces—Part A (ISO-7816 smart card) and Part B (PCMCIA card). The PCMCIA physical specification was chosen by OpenCable, where it is known as the Point of Deployment (POD) interface.
The 1394 and POD interfaces are also linked to one of two unresolved issues still facing the two industries—i.e., copy protection. Nearly five years ago, movie studios realized they had a problem with the advent of digital television. As result, they formed the Copy Protection Technical Working Group (CPTWG) to oversee the various interfaces that might carry programming content to digital TV sets. In order to prevent unauthorized copying of digital programming, they determined that programming crossing such interfaces had to be encrypted.
According to CPTWG, for the consumer electronics industry and the cable TV industry, this included the interfaces between digital TVs and such devices as set-tops and digital VCRs, as well as the interface for the replaceable security module.
CPTWG requested proposals for copy protection to be used on the 1394 interface. What evolved became known as the "5C" copy protection system, which originated from five companies—Hitachi, Intel, Matsushita, Sony and Toshiba. For digital interface purposes, the 5C scheme seemed logical, says Dulchinos. "In the course of picking the 1394 standard," says Dulchinos, "we were talking to the Hollywood studios. They reminded us that we shouldn't forget about copy protection. So, we settled on the 5C copy protection system to be implemented on 1394.
"It had Hollywood's acknowledgement that it was a viable solution. They stopped well short of saying it was their standard or that they officially endorsed it. But they said, if we did it, it would probably take care of their concerns. At the same time, the (television) manufacturers we had been talking to (e.g., Sony, Mitsubishi) said it would work for them. So, that's what we settled on."
But there's a bug in the copy protection ointment. The 5C technology is a proprietary system owned by the five companies that developed it. Jeffrey Krauss, president of Telecommunications and Technology Policy and also a CED columnist, has characterized the five "as four VCR manufacturers and a computer company." This distinction may figure into the current impasse.
That's because the five companies have agreed to license the 5C technology only as long as it is used against copying premium cable programming, pay-per-view movies, etc. But they won't allow it to be used against broadcast TV programs or Internet transmissions (both of which can easily transmit copyrighted video). The movie studios have rejected that exception.
This ongoing dispute on licensing terms for copy protection was one of two major issues that finally spurred the FCC into action. In mid-April, the commission "reluctantly" issued a Notice of Proposed Rulemaking (NPRM). It said that any further delay in resolving the issue "could begin to have deleterious effects on the implementation of DTV and on the deployment of products and services that will benefit the American public."
The NPRM also deals with another exceptionally thorny issue, one the cable industry has been burned on before. Essentially, the FCC is asking for a definition of a "cable-ready" receiver.
Krauss says that on the cable side, there is general agreement on most elements of the definition. A cable-ready TV should tune all cable channels, demodulate both QAM and VSB signals, and decode the MPEG picture formats defined in broadcast and digital cable standards. The 1394 and POD interfaces are also crucial factors in a cable-ready definition.
The consumer electronics industry has a much "simpler" idea of what can be labeled as a cable-ready device, says Krauss. "They have agreed that if you connect a digital television to a set-top box, then it will be the 1394 bus. But the dispute comes in when you have a TV set where you can connect a cable to it and it can receive digital programming and it has a POD slot, but it can't connect to the set-top box because it doesn't have a 1394 connector. Can you call that TV set 'cable ready?"
The digital interface negotiations have been anything but easy. The looming 2006 digital conversion deadline is on the horizon. Consumer electronics manufacturers, broadcasters, cable TV operators and now the FCC are beginning to twitch in anticipation of the pending deadline.
The FCC's recent NPRM was very frank, noting that if the interested parties reach a consensus before the Commission takes action, it may well become unnecessary for the Commission to adopt rules.
At this crucial juncture, Large says a persistent problem may come back to haunt the cable industry, if it's not rectified very soon. "One of the major problems of the joint engineering committee has been drastic under-representation on part of the operators," says Large. "It's a huge issue.
"Another problem is the way the committee is set up. Votes are done on a company basis based on attendance. Unfortunately, it means that votes are being taken and standards are being set where cable doesn't even have a veto. So, if they can get more TV set manufacturers there than cable guys, they can just make the standard anything they want."
Sounds like it's time for operators to stand up and be counted, before the FCC uses its NPRM to level the playing field, regardless of who gets mowed down in the process.