There have been many twists and turns in the past decade along the path that is supposed to be carrying us into the brave new world of digital television. We have become accustomed to delays and sudden appearances of deal-stopper issues that were not envisioned when the framework of the DTV transition was conceived.
Everyone knows that there are multiple digital transitions happening, and everyone knows that the broadcasting transition to DTV is seriously behind schedule. But it doesn't matter because everyone knows that that silly 2006 deadline is not real.
What's real is a high-stakes battle for control of markets that are being transformed by digital technology — the opportunity to profit from a new generations of devices that speak the universal language of bits via an intricate web of increasingly interconnected public and private networks.
Figure 1. The digital transition is off to a slow start, but may be moving in the correct direction, as shown by the Consumer Electronics Association’s projection that DTV sales will increase significantly between 2002 and 2006.
What's real is the desire to protect that which is currently controlled, and the ability to influence regulation and legislation to extend control over markets in transition.
Any rational assessment of where the transition to digital television stands today could only conclude that it is totally out of control. There are success stories to be sure, but there are also roadblocks to market growth everywhere.
The CE industry is profiting from the HDTV experience, not to mention DVD and DBS. Broadcasters are not.
DBS is driving the evolution of subscription digital-TV platforms; cable is responding to minimize subscriber losses. HDTV is emerging as a premium niche market for both.
The PC is becoming a multi-function “Swiss Knife,” a digital media hub. It is being portrayed as the “gateway drug” to hardcore media piracy. Consumers have become the biggest threat to the future success of Big Media; they are not to be trusted.
2004 may look a lot like “1984”
We sit near the midpoint of the government-mandated DTV transition, yet broadcasters do not appear concerned that their foray into digital has stalled.
Althought the CEA is projecting a sizable increase in DTV sales by 2006 (see Figure 1), the number of homes able to receive terrestrial DTV broadcasts right now is still too small to be statistically significant. Three-fourths of broadcasters missed the May 1, 2002, deadline to begin operating their DTV channels. At this writing, fewer than 700 stations are on the air; more than half of these are operating under temporary authority at a small fraction of their authorized power levels. And DTV interference into NTSC and public-safety radio bands is a growing concern as more stations begin DTV broadcasts.
FCC Chairman Powell used his bully pulpit to move things along a bit last year, but the year ended with many issues still log-jammed. Meanwhile, the FCC agenda for the new year is packed with high-profile issues like a digital-cable tuner standard and digital carriage of DTV broadcasts, media ownership caps and the Broadcast Flag (more about that later).
On the positive side of the ledger, the amount of enhanced- and high-definition programming available has grown substantially. CBS is delivering virtually all primetime dramas and sitcoms in HDTV. And the other major networks are offering an increased number of HDTV and EDTV programs. And there are multiple premium HDTV services entering cable and DBS lineups.
So why, given the realities of getting the transition moving, would Viacom, which owns CBS, file a warning in response to an FCC inquiry about the proposed Broadcast Flag?
Viacom said, “If a Broadcast Flag is not implemented and enforced by summer 2003, [CBS] will not provide any programming in high definition for the 2003-2004 television season.” The comments continued: “Viacom believes that DTV sales and broadband subscriptions have reached the ‘tipping point’ at which it can no longer afford to expose its content to piracy. A Broadcast Flag regime is needed now to protect the value of our important assets or we must withhold our quality HD digital content.”
Viacom was certainly not alone in its concerns about implementation of a technology solution that would respond to a redistribution-control descriptor, the bits in a digital terrestrial broadcast bitstream that are being called the Broadcast Flag. But these comments were joined by more than 5000 comments filed in the FCC inquiry, a very high percentage of which came from private citizens who are increasingly taking advantage of the ability to file FCC comments electronically.
The comments of citizen Mark Ellis provide an interesting counterpoint to the position taken by the big media companies: “TV is, and will remain, ephemeral trash, rarely worth the storage space or cataloguing effort that its unauthorized capture entails. Even if every kid in America gets Internet access to sitcom episodes and butchered movies, the visual quality of these important works of art will be limited for years to come by bandwidth rather than by source quality. The effort required to control access to this material seems disproportionate to the value of the programs, leading one to conclude that the proponents of the Broadcast Flag scheme are primarily concerned with something other than digital broadcasting.”
According to citizen Bryan W. Taylor: “A better question for comment would be, ‘To what extent would the presence of a digital broadcast copy-protection scheme and the lack of guaranteed fair-use functionality delay or prevent the DTV transition?’ Will the resulting dynamic threaten the viability of digital television? Why would anyone pay more to switch to a TV medium with less capability?”
Could broadcasters be left holding the “ephemeral trash” bag while big media companies like Viacom rely upon cable and DBS to deliver uncut, uncensored HDTV versions of their programs to paying customers?
At the moment, it appears that big media may have the political leverage to persuade the FCC and Congress to get into the business of regulating virtually all digital media appliances. Compliance with the Broadcast Flag is an important step in gaining the kind of Big Brother control over the flow of information and entertainment portrayed in the Orwellian visions of “1984.”
Fortunately, those visions have not yet come to pass. But two presidential election cycles ago — in 1994 — an equally distressing vision took form. The vision is wrapped up in sweeping changes to the Telecommunications Act of 1934 — changes intended to stimulate competition.
There was the administration vision of Information Superhighways that would transform the way people lived and worked. And there was the vision of a newly elected Congress controlled by Republicans for the first time in decades; a vision of broad deregulation of the telecommunications industries.
The politicians and the special interests worked together to write the new legislation. The result was the Telecommunications Act of 1996.
It was supposed to create competition in the telephony markets and stimulate the deployment of a new broadband, digital-communications infrastructure. It was supposed to open up the cable market to CE industry competition for set-top boxes. It was supposed to facilitate a rapid transition from analog to digital television broadcasting, freeing up underused spectrum resources for more productive market-driven applications.
It didn't do any of these things. But it did help pay for the 1996 election campaign.
More logs for the fire
As always, there will be plenty of technical issues to keep things interesting while the politicians and the lobbyists hammer out the next deal in this seemingly never-ending story. But media ownership and control will generate most of the heat and most of the money that the politicians will need for the 2004 campaign. And broadcasters can take a little comfort in knowing that most of that money will be spent buying TV ads.
Craig Birkmaier is a technology consultant at Pcube Labs, and hosts and moderates the OpenDTV Forum.
Send questions and comments to:cbirkmaier@primediabusiness.com
