FCC Throws Its Weight Behind DTV

Feds say new TV sets must be equipped to offer digital signals by 2007, but consumer groups are crying foul.

Stephen Chiger, Medill News Service

WASHINGTON, D.C.-- Federal regulators brought the crisp sound and super-sharp images of next-generation television one step closer to consumers on Thursday.

Attempting to speed the sluggish transition to digital television, the Federal Communications Commission mandated by a 3-to-1 vote that new TV sets be equipped to pluck digital signals from the air by 2007.

"This action will take these electronic appliances from being HDTV-ready to HDTV reality," says Michael Powell, FCC chair, referring to high-definition television, the highest-profile form of digital TV.

DTV is perhaps the flagship of next generation entertainment, promising DVD-like picture and sound quality, extra channels, and even interactive content. DTV is distinct from digital cable, a widely available transmission method that doesn't improve quality overall.

Dueling Statistics

Representatives of the consumer electronics industry have opposed the FCC's plan, arguing that mandated upgrades are unnecessary and will cost consumers as much as an extra $315 per set. "The FCC has just imposed a multi-billion dollar annual TV tax on American consumers," says Consumer Electronics Association President and Chief Executive Officer Gary Shapiro.

But the FCC disputes these claims, citing other estimates. The National Association of Broadcasters suggests the price will be as low as $7 per set wholesale.

Under the FCC's timetable, large-screen sets will be the first required to include digital tuners, a computer chip that allows them to receive digital broadcasts. Eventually nearly all new TVs will have to include the chips: By 2007, all televisions with 13-inch screens and greater must have the chips, the new rules say.

Citing the phase-in period, regulators dismissed the manufacturers' pricing concerns, arguing that costs would drop as the new technology is mass produced. "I believe that the five-year phase-in approach adopted by the commission today will mitigate such concerns and drive down the costs of digital television equipment more quickly," says Commissioner Kathleen Abernathy.

Blame Game

Over-the-air broadcasters have been battling electronics makers over who is to blame for the slow rollout of DTV. TV stations don't want to spend the money for digital transmission equipment until they're sure viewers can watch it, while manufacturers say there's little demand for high-price digital TVs in the absence of high-quality programming.

The CEA protests that only 13 percent of U.S. households receive their primary signals over the air, the rest coming mostly from cable and satellite, which are already capable of carrying digital signals. It argues that the costs will be imposed on all consumers, hitting elderly and low-income families the hardest. "You're really socking it to that population," says spokesperson Jenny Miller.

But NAB calls the CEA's numbers "wildly incorrect," arguing that many homes that use cable or satellite reception also have a set that uses over-the-air reception. Almost one third of the 260 million sets in the United States receive some transmissions over the air, says spokesperson Dennis Wharton.

The broadcasters applauded the decision. "We think the FCC took a monumental step to moving the digital transition forward," says Edward Fritts, NAB president and chief executive.

The CEA says it may challenge the decision in court, arguing that the FCC is acting outside of its jurisdiction.

Still Far Off?

There's a long way to go before digital TV's extra-sharp quality reaches the average living room.

Five years ago, Congress mandated that broadcasters switch to fully digital signals by the end of 2006, provided that the technology has 85 percent market penetration by then. It's hard to say how far along the industry is toward that goal, primarily because the commission hasn't yet defined the exact meaning of the 85 percent "finish line", says W. Kenneth Ferree, the FCC's media bureau chief.

Still, there's broad consensus that the DTV transition has at best crept along.

In May, the great majority of the country's 1240 full-power commercial television stations missed their deadline to begin digital transmissions. According to the NAB, 455 stations are now broadcasting digitally, many of them in the top 30 markets. Meanwhile, the CEA says that less than 3 percent of U.S. households have DTV capable products.

Concerned with the pace, Congress has begun threatening legislation to promote the transition. House Energy and Commerce Committee Chair W.J. "Billy" Tauzin (R-Louisiana) and Senate Commerce, Science, and Transportation Chair Ernest Hollings (D-South Carolina) have both begun drafting bills on the issue that would each be much broader than the FCC's decision.

Potential Problems

Even with Thursday's FCC vote, other snags to an all-DTV world remain, particularly with cable television, which delivers programming to about 70 percent of consumers. Commissioner Kevin Martin dissented with the opinion for this reason, arguing that addressing digital over-the-air tuners alone "confers a real benefit only on the relatively small percentage of consumers who do not rely on cable or satellite for broadcast reception."

Many cable operators have been slow to offer digital content to local markets, in part because piracy concerns are keeping the entertainment industry from developing new content. The FCC has just taken its first formal steps toward discussing the issue.

A former FCC commissioner says such hurdles will inevitably slow the arrival of DTV.

"We've reached the year 2002. We're nowhere close to 85 percent penetration," says Harold Furchtgott-Roth, now a visiting fellow at the American Enterprise Institute.

Will the government make the DTV deadline? "I think there's no chance," he says.