Digital TV Finds It Hard to be Free

Broadcasters have spent billions on the technology--but is free over-the-air digital TV a viable alternative to cable and satellite?

FCC chairman Michael Powell's once-in-a-blue-moon halftime appearance on ABC's Monday Night Football was a bid to publicize the commission's new website promoting digital television. But Powell's cameo was also notable for capturing the dilemma of broadcast DTV. The push for digital TV originated with broadcasters as a quest for a marketing edgea way to endow over-the-air offerings with features like multicasting and on-demand programming and thus better compete with cable and satellite. But with the decreasing importance of the networks and their local affiliates, broadcast digital TV remains a multibillion-dollar venture in search of an audience.

Take Monday Night Football. ABC broadcasts the popular show in high-definition. But most of the high-definition viewers caught Powell's appearance on the October 4 broadcast over cable or satellite. A mere four million of the nation's 110 million television sets are equipped with the HDTV tuners that can receive digital broadcasts over the terrestrial airwaves, says Gerry Kaufhold, an analyst who covers converging markets and technologies for In-Stat/MDR in Scottsdale, AZ. Those sets are HDTV models equipped with built-in receivers, or TV sets connected to set-top boxes that are either standalone models capable of tuning in local over-the-air broadcast HDTV, or boxes sold by satellite operators that include an antenna input to pick up local HDTV.

To broadcasters, who Kaufhold estimates have spent $10 billion to build out digital infrastructures that will transmit their programming signals in bits, four million is a puny audience. The tiny number of viewers capable of receiving the sharp sound and crisp picture of broadcasters' swank new digital offerings helps explain why broadcasters are reluctant to abandon their analog programming--and the analog channel over which they broadcast it.

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Critics say the broadcasters' efforts to delay the handover are creating a spectrum logjam that prevents public-safety communications and wireless carriers from acquiring much needed additional bandwidth. Overshadowed in the policy debate and digital TV's slow start is the question of broadcasters' relevance. With 90 percent of households now subscribing to cable or satellite service, many question whether broadcasters still play the essential role that was conferred on them long before shopping for a TV required being able to sift through aspect ratios and nuances of the ATSC standard.

From any point of view, broadcasters have a sweet deal. They are considered trustees of the public airwaves, and so--unlike broadband carriers--they don't pay for the vast amounts of spectrum they use. Nor do they pay for the additional channel, or 6 megahertz of spectrum, that the FCC loaned each station for use while it completes its transition from analog to digital programming.