Congress may mandate digital TV offerings

Congress has set Dec. 31, 2006, as a target date for broadcasters to switch from the analog system to digital delivery, a move that is supposed to offer consumers more programming choices and higher-quality sound and pictures. But that deadline could be pushed back if fewer than 85 percent of U.S. households have digital TVs at that time, something that looks highly unlikely as long as broadcasters and TV manufacturers refuse to let go of the dominant analog market.

Republican and Democratic members at a House Commerce Telecommunications Subcommittee hearing Thursday agreed that, as the subcommittee's ranking Democrat Ed Markey put it, "we are not remotely close to meeting the transition target of 2006."

High-definition supporter Billy Tauzin, R-La., chairman of the full committee, said the possibility of the spectrum give-back going past 2006 "is thwarting the certain and swift transition to digital." He said he is open to "imposing a 'hard' deadline of 2006 to reinvigorate everyone to work together to bring about the transition," as long as consumers would have access to digital receivers, TVs and set-top boxes "at reasonable and declining costs."

In what was the latest of a series of hearings on the digital transition, broadcasters said in their defense that only 185 of 1,600 U.S. TV stations currently transmit a digital signal. They maintained that more stations will convert and high-definition programming will increase when more TV sets are sold.

But TV manufacturers said consumers need more programming to justify the high cost of digital TVs. The retail cost of those TVs, they said, can't come down significantly until production costs drop from higher consumer interest, which can only be fueled by broadcasters.

This chicken-and-egg debate led Tauzin to say in frustration "that proverbial egg is going to be broken over the heads of consumers."

At issue Thursday was to what extent Congress and the Federal Communications Commission need to become involved in the digital TV transition. John Dingell, the ranking Democrat of the full committee, said "this is not the kind of issue government decides best," but there were so many issues raised concerning the transition that Tauzin and others suggested government may have no choice.

Driving Congress to act isn't just a desire to provide consumers with prettier pictures. The Budget Act of 1997 targeted analog broadcast spectrum for re-auction, and Markey said the ongoing plans for a multiyear tax cut will make even more urgent the need for federal revenues.

Napster the sequel?
One of the key concerns for broadcasters is the unsettled debate about securing copyrights via digital devices. Tauzin and Rep. Anna Eshoo, D-Cal., said that if broadcasters fear their high-quality movies and other entertainment will be pirated, they may only place second-tier programming on their digital TV broadcasts, giving consumers less reason to purchase digital TV sets.

"We need to get our hands around the delicate issue of providing digital copyright protection while preserving long-standing consumer expectations about taping in the privacy of their homes for noncommercial, personal purposes," said Tauzin.

Rep. Rick Boucher, D-Va., who has been heavily involved in the debate over digital downloading, pointed out that the crystal-clear images of digital TV can be copy-protected while allowing personal copying for cable and satellite customers thanks to a set-top box.

For the 15 percent of homes that receive only over-the-air TV, however, "there's no way to apply a blocking technique."

Several other thorny issues must be resolved before the broadcast spectrum can be returned to the government.

• Digital reception can be spotty, particularly with indoor antennas. The FCC is seeking comment on whether it should mandate a reception standard, but the consensus of the subcommittee was that market competition would solve that problem.

• Interoperability with cable systems has not advanced as fast as Congress and the FCC had hoped. With 85 percent of U.S. homes receiving TV broadcasts from cable or satellite, this issue will remain of interest to the federal government.

• Broadcasters say they need their digital stations carried on all relevant cable systems along with their analog stations, even when they're broadcasting the same content. Cable systems argue that they'll be forced to remove cable channels popular with consumers. In January, the FCC refused to make a final ruling on the subject and decided to postpone imposing digital TV carriage rules on cable. Rep. Cliff Stearns, R-Fla., and others on the subcommittee said they'd be watching that issue closely.

Tauzin said that the digital TV transition is critical to Congress' desire to accelerate the release of broadband in the United States. Digital TV "is going to be the introductory offering of broadband to a vast majority of citizens," he said, referring to the experiments many broadcasters are running with that transmit digital streams with their broadcast signals.