Digital TV Facts: The Latest

• Google proposes real-time auction for analog TV spectrum

• DirecTV sues Comcast over HDTV quality claims

• Canada will end analog TV broadcasts on August 31, 2011

• Mitsubishi introduces all-1080p line of HDTVs

Samsung today announced a new digital TV chip that is said to offer substantially improved over-the-air reception. The technology behind its S5H1411 chip “boasts a 30 percent higher reception success rate than the company’s previous generation digital TV receiver chip released in 2005,” according to Samsung. That claim echoes the 30 percent improvement in receiver performance cited by another Korean manufacturer, LG Electronics, when it unveiled its sixth-generation DTV chip last December.

With the shutdown of analog TV broadcasts throughout the U.S. scheduled for Feb. 18, 2009, the prospect of increasingly robust digital reception may just save the day. As recently as 2005, Sinclair Broadcasting warned that deficiencies inherent in the digital broadcasting standard approved by the FCC would imperil the future of over-the-air TV. Many viewers who had long been satisfied with the reception available through a basic indoor antenna were disappointed to learn that a rooftop model was necessary to watch digital stations. A significant problem for DTV viewers in urban areas was “multipath” interference.

But multipath no longer is a worry, according to LG and Samsung, whose chipsets will also be available to other digital TV manufacturers. If Americans can get crystal-clear HDTV channels over the air for free, it might—just might—be a game-changer for broadcasters.

Because digital TV uses spectrum more efficiently than analog, each local station could offer five or six channels if it wanted to (at the expense of HD broadcasts, by the way); the additional channels are known as multicasts. Just imagine having 30-plus channels of free TV available in metropolitan areas—better yet, don’t imagine it; just go to Britain, where that scenario is already a reality. People like Andrew D. Cotlar have said that the U.S. should follow Britain’s Freeview model, bringing an expanded selection of cable-style channels to antenna households. Until recently I’ve been a skeptic, given the problems that threatened the viability of digital broadcasting in the U.S.

But if more Americans will be able to count on reliable digital broadcasts, local broadcasters may see a chance to win back some market share from cable and direct-broadcast satellite (DBS) television services.

Several hurdles remain, however. The increasing popularity of HD broadcasts in the U.S. leaves less spectrum available for adding new channels. Digital broadcast penetration in the U.S., while growing, is still nowhere near the level of Britain, where, thanks to the multiplicity of channels, more viewers watch digital TV broadcasts than analog. Antenna viewers in the U.S. will be forced to switch to digital within the next two years, of course. But 85 percent of domestic television households subscribe to cable or satellite systems, which are unlikely to add local multicast channels to their lineups unless the government makes them or, perhaps, broadcasters pay them. (Mandatory cable carriage would probably do more than anything else to promote multicasting, though I am still not really sold on that approach.)

Where does that leaves us? Well, I doubt that broadcasters will offer large numbers of cable-style channels until more viewers are actually capable of receiving them. But as digital TVs and converter boxes equipped with decent tuners find a place in more American households, more multicast channels may reach the airwaves. If broadcast networks would provide additional programming feeds to their affiliates, packed with shows that viewers might actually watch, that could start the ball rolling. (I wouldn’t expect the locals to produce much in the way of new programming, given the costs.) Some of the new channels might even be aimed at mobile TV viewers, given recent advances in ATSC’s potential for mobile reception.

Does large-scale multicasting have any chance of grabbing a meaningful slice of the audience at the expense of pay-TV providers? Perhaps not, at this late date. But if broadcasters can find some way to make multicasts profitable, well—it might just save their hides.

If your local TV station broadcasts programming in high definition, cable companies will be obligated to provide it that way, the FCC reiterated yesterday.

For the cable customer whose wallet has been lightened by the purchase of an expensive HDTV, however, the devil may be in the details:

Although the law prevents a cable operator from materially degrading an HD broadcast signal, the agency is seeking public comment on how to craft an objective test to determine legal compliance. The agency floated one idea of requiring carriage of “all content bits,” along with another of banning cable from treating HD cable programming better than broadcast HD signals.

It’s the latter idea that presents a problem for HD viewers. It would imply that a cable company could actually diminish the quality of local HD broadcast channels—just not any more than it squeezes the signals of HD cable networks (a penny-pinching practice of some cable operators, drawing frequent complaints from HD enthusiasts who pay additional monthly fees for high-def cable packages).

• Link: Multichannel News

FCC Commissioner Michael Copps sounds an alarm about the transition to digital TV, scheduled for Feb. 17, 2009:

“I am really worried about this entire transition process,” Copps said at the NAB [that’s National Association of Broadcasters] convention in Las Vegas. The guiding principle, he said, should be “no consumer left behind.”

…With the deadline less than two years away, concerns have been growing that not enough people are aware of the switch-over or what will need to be done to make sure their sets still work.

Copps is right to worry. Viewers need to understand how to prepare for the switch, and broadcasters still have time to help them as they’ve pledged. The task will become easier by next year, when inexpensive converter boxes hit stores and the federal government begins dispensing $40 coupons to help pay for them. Given strong HDTV sales in recent years, maybe the $1.5 billion Congress set aside for consumer subsidies will even be enough to meet the demand. (We still don’t know. Depends on how many people want a converter box for that dusty old analog TV they’ve relegated to the laundry room.)

The FCC must keep a close eye on whether stations will be ready for the deadline—some still aren’t. The Commerce Department’s administration of the coupon program requires diligent oversight from Congress. And NAB President David Rehr is on the right track, looking to the example of the United Kingdom, which has left little to chance in coordinating its own digital transition.

If we really wanted to do this right, the FCC, the NTIA and broadcasters would find a way to actually test the switch in advance (as the British have done). Pick a town, somewhere in America, launch an information campaign, get converter boxes and antennas to the folks who need them, and then shut off analog TV broadcasts entirely and see what happens. Everyone would learn from the experience and be better prepared when the coast-to-coast shutdown arrives in 2009.

• Link: USA Today

LG/Zenith and Harris are teaming up for the latest entry in the mobile TV platform race. Their MPH (for Mobile-Pedestrian-Handheld) technology would allow broadcasters to reach cell phones, laptops, in-car receivers and other mobile devices. As with the A-VSB platform promoted by Samsung, MPH ties into existing digital TV broadcast infrastructure, allowing station owners to reach viewers directly instead of relying on mobile-phone companies. Viewers might even enjoy mobile TV programming for free (and by rights it should be free—it uses public airwaves intended for freely available TV broadcasts).

Can LG and Harris hope to overtake A-VSB, which not only shows promise but has a head start? We shall see, beginning later this month, when MPH makes its debut at the National Association of Broadcasters (NAB) convention in Las Vegas.

Earlier:
• Europe’s mobile TV standard: It won’t be A-VSB
• Will A-VSB starve HDTV?
• Samsung to demo A-VSB mobile TV at CES
• Local channels on mobile TV: Test shows promise

• Link: think d2c

Circuit City will fire 3,400 sales clerks because, in the company’s eyes, the $10- to $11-an-hour employees are overpaid.

Circuit City Stores Inc. could save some money by slashing thousands of store associate jobs, but weaker customer service could turn off shoppers, analysts said Wednesday.

The company plans to hire new workers at lower pay. The cuts begin today, so I guess we can expect lousy service to start immediately.

Will this short-sighted, heartless blunder from the nation’s No. 2 electronics retailer amount to a setback for the digital TV transition? The shutoff of analog TV broadcasting is coming in 2009, but many consumers remain confused about how to receive digital TV or high-definition programming. Inexperienced, low-wage retail employees won’t help matters.

Circuit City CEO Philip Schoonover’s total compensation in fiscal 2006, by the way, was $8.52 million. According to my calculations, that’s about $4096 an hour.

• Links: MarketWatch, Bloomberg

FCC Chairman Kevin Martin is moving forward his surprising proposal to mandate cable carriage for leased multicast channels:

According to FCC aides and published reports, Martin’s plan calls for allowing TV stations to lease surplus digital-TV spectrum to FCC-approved entities — most likely small businesses and nonprofit organizations. Lessees would have mandatory cable-carriage rights.

While the idea of giving even more cable channels to broadcasters has never made much sense to me, any proposal that would increase the diversity of programming in a meaningful way is worth giving a closer look. We won’t really be able to evaluate Martin’s plan until its details are known, but it certainly sounds better than the more straightforward giveaway to broadcasters he tried to ram through before.

Martin has managed to revive the moribund issue of multicast must-carry with a politically astute move that may appeal to Democratic commissioners. Is it an unlikely strategy for a Bush-appointed FCC commissioner? Perhaps not, given that the ostensibly conservative Bush administration, which has expanded government while presiding over fiscal recklessness, has a record of rewarding political friends at the expense of its professed free-market principles. Those friends, in this instance, would include faith-based groups that have long advocated multicast carriage mandates as a means of protecting or expanding religious programming.

The must-carry regime, I still maintain, is fundamentally broken. If must-carry privileges are extended under the theory of promoting media access, we can expect broadcasters to ultimately demand carriage rights for their own multicast programming as they increasingly face financial peril in years to come.

The FCC’s expansion of low-power television (LPTV) service, beginning in the 1980s, was supposed to promote minority ownership and community programming. (The FCC has never granted blanket must-carry rights to LPTV.) LPTV has never quite lived up to its promise, however, given minimal minority ownership, low viewership and a lack of ownership caps. Home to religious programming, infomercials and even some genuine community-produced programming, LPTV is now an afterthought in the digital TV transition. Its future looks less than promising.

Would prospects for leased multicast channels be any brighter? With cable carriage, perhaps. If Martin’s plan includes strong safeguards to ensure true programming diversity, I might actually favor it. Of course, antenna-equipped viewers who have purchased HDTVs might not appreciate the squeeze on high-definition signals (due to finite bandwidth) that might be necessitated by multicast expansion.

• Link: Multichannel News

Digital TV transition assistance, in the form of government-provided $40 coupons, will be available to every American household beginning in 2008. The federal subsidy will reduce the cost to U.S. consumers who purchase a set-top converter box, which will allow conventional analog TVs to continue receiving over-the-air broadcasts following the transition to digital television. Analog broadcasts cease after Feb. 17, 2009.

Today’s announcement from the National Telecommunications and Information Administration (NTIA) is much in keeping with its earlier proposals, with one significant exception: Households that subscribe to cable or satellite TV service will also be eligible for the coupon program in its $990 million initial phase. If demand for coupons exhausts first-phase funding, the NTIA will allocate an additional $510 million to the program, but subsidies for phase two will be limited to over-the-air households. The federal funding won’t cover every existing antenna-equipped analog TV set, according to some estimates, though many traditional TVs have already been replaced with high-definition models equipped with built-in digital tuners. But once the government money is spent, consumers will be on their own—so it might pay to apply early.

Cable or satellite subscribers will not generally need a box of this type, however, except for use with a “spare” television set that is not connected to the pay-TV service.

Coupon program essentials:

• Households must request coupons from NTIA between January 1, 2008 and March 31, 2009.

• Consumer coupon requests will be taken via a toll-free customer support center, a Web site, fax, and through the mail.

• Upon request, a maximum of up to two coupons will be sent to households via the United States Postal Service and will expire three months after they are mailed.

Details are available in this NTIA fact sheet [pdf]. And you can expect further updates on the converter box coupon program, of course, right here at Digital TV Facts.

Whether you want your local TV channels in dowdy old Price Is Right-style analog or crispy, newfangled, hi-def digital form, your cable company can probably help you out. These days local stations are simulcast in analog and digital to many customers of the largest cable operators, including Comcast and Time Warner Cable.

Several big cable companies plan to keep analog tiers, even after the switch to digital broadcasts on Feb. 17, 2009. Here’s what’s alarming, though: We still don’t know whether cable companies will be permitted to deliver local stations in analog form after the cutoff date.

• Link: Multichannel News

Local stations, aware of the increasing value of their HDTV programming, are withholding their HD signals from cable systems in some markets. Phillip Swann thinks the FCC should step in to settle such disputes between stations and cable or satellite companies:

If it doesn’t, high-def set sales will begin to decline and the nation’s plan to switch to Digital TV signals on February 17, 2009 could be imperiled.

Give me a break. The federal government’s job is not to sell high-priced TV sets. Moreover, in focusing on HD signals, he’s missing the point. There isn’t one little thing that’s broken about local carriage disputes. The whole system is broken.

Television station owners are free to demand payments (or other consideration) for carriage of their analog programming, under a set of rules known as retransmission consent. An ownership group with sufficient leverage will want such payments, and demand for high-definition programming increases their leverage. As I’ve long noted, the rules most directly protect stations, not viewers.

But let’s step back from the present disputes and ask a more fundamental question: Why should owning a broadcast tower be the key to controlling prime channel slots on a local cable system? Please don’t say, “Because we’ve always done it that way”—I’m not interested in lazy answers, thank you. The original intent, you’ll recall, was to promote local programming. Local television programming was supposed to be essential to the functioning of a vibrant democracy, informing the citizenry, all that kind of stuff, back in the day. (It was, I’m totally serious!) Decades ago, when subscription television was in its infancy, few sources of locally produced content were available, and producing it was expensive. Protecting the privileged role of the stations that license the public airwaves made a kind of sense.

Today, however, you and I and the neighbors can all produce and distribute content—a very fine place to do that is the internet, incidentally—with a minimal investment. If we want local content on cable and satellite systems, why not set aside a certain number of channel slots and let broadcasters compete with citizens, public access providers, local newspapers and others for those channels.

If what people are worried about is network programming, I don’t understand their concern. If the producers of network programming have a valuable product, cable and satellite systems (and, of course, their customers) will pay for it. Network programming doesn’t have to be distributed through an antiquated system of local affiliates—in fact, major networks are already distributing their shows directly to viewers through the internet and other platforms.

If you don’t want to pay for the programming on local channels, then yank that cable out from the back of your set and dust off your old antenna. News flash: HD programming is available for free, right over the air! If we’re going to continue devoting very valuable broadcast spectrum to local television stations, somebody should probably watch the actual broadcasts. If we stop forcing subscription TV services to carry local stations, broadcasters might even offer more and better programming on the additional channels granted to them through the switch to digital television. Across the Atlantic, free digital TV is already giving British pay-TV services a run for their money.

• Link: TV Predictions

Public TV stations are urging Congress to mandate digital carriage on satellite TV services for all their programming—including HD productions and multicasts.

The Association of Public Television Stations (APTS) scored a multicast victory in 2005, securing additional channel slots on major cable systems. But deals with DirecTV and EchoStar’s Dish Network remain out of reach, according to the association.

• Link: press release

With The Big Switch just two years away, old-school analog cable customers remain the forgotten stepchildren of the digital TV transition. On the morning of Feb. 18, 2009, cable households that haven’t switched to digital cable might—just might—find that their local stations have vanished. If you read the smoke signals from the FCC, however, the issue has not gone unnoticed.

The issue, which has attracted surprisingly little attention, is this: Under the 2005 digital TV transition law, cable companies will not be authorized to downconvert local channels before sending the signal to the customer’s home.

The FCC, through a series of policy decisions, is encouraging cable companies to also make the move to an all-digital future. That’s one solution: Get rid of analog cable, and you get rid of any problem facing analog cable subscribers in 2009.

Federal regulators have not banned analog cable by any means. But the FCC’s approach to a looming, highly contentious regulatory issue—new requirements for cable boxes—is pushing cable operators to speed their own digital transition.

Cable companies face a July 1 deadline to stop distributing “integrated” digital cable boxes. Instead of the old box, customers would receive a CableCARD, a credit-card sized thingy that snaps into certain digital TVs or digital cable boxes, handling access and security functions. Cable companies have resisted the change for years, for a variety of reasons, but especially because the new, CableCARD-equipped boxes are substantially more expensive than the old boxes that have built-in security functions.

After years of delay, the FCC has firmed its stance on the cable-box mandate, which was intended to create an open market for those devices. Cable companies large and small have applied for waivers, but large firms, especially, face an uphill battle. In recent FCC decisions, however, regulators have shown they are willing to relax the rules somewhat to allow a faster transition to all-digital service.

Last month, the FCC cited broadcasting’s digital transition when it granted a conditional waiver to BendBroadband. Allowing the cable company to continue distributing integrated cable boxes

would have a direct and immediate impact on its migration to an all-digital network prior to the end of analog, over-the-air broadcasts by full-power television stations on February 17, 2009. That migration, in turn, would enable [BendBroadband] to ensure that its cable subscribers will be able to view digital broadcast signals after the end of the DTV transition. It also may enable BendBroadband to provide additional HD content, which may facilitate the DTV transition by creating greater incentives for its subscribers to acquire digital television sets.

A cable-box waiver application from Comcast, however, was denied. But an amended request might be looked upon more favorably, the FCC opinion suggested, if it included “a commitment to go all-digital by a date-certain such as February 2009 or sooner, when broadcasters will cease their analog operations.” A footnote cited a trade magazine report in which a Comcast executive last year suggested that the company may keep 20 or 30 analog channels online “for another decade.”

Congress, if it revisits DTV transition issues, may yet come to the aid of standard cable subscribers. Perhaps the FCC has not exhausted its regulatory playbook, either. Chairman Kevin Martin may still insist that, under a 1992 law, cable companies must provide “viewable” broadcast signals to their customers—including those who haven’t yet jumped on the digital bandwagon.

• Links: FCC orders: Bend [pdf], Comcast [pdf]; Multichannel News