The Video Future According to Richard E. Wiley, Part 2

by Richard E. Wiley, Partner, Wiley, Rein & Fielding
Sunday, March 29, 1998

This technical advance may well come within the next five years or so. In the meantime, broadcasters have indicated that they want to employ interlaced scanning because it is more spectrum-efficient and, as indicated, will facilitate the delivery of HDTV. On the other hand, the computer software industry -- in particular, Microsoft and Compaq -- favor an all-progressively scanned system. They apparently can add video capacity to personal computers for around $ 100 and, if so, should be a force to be reckoned with someday in the receiver marketplace. However, with their current small screen focus, HDTV does not appear to be an important factor for these companies at this point. In any case, they believe progressive scanning at lower line numbers (like 480) is "good enough."

In this regard, it is interesting to note the following vital statistics concerning TV picture resolution. The progressive scan 480 line SDTV format has only about 300,000 displayable picture elements (or 'pixels'), and the 480 interlaced scan version has substantially less. By contrast, the 720 progressive scan, 60 frame format presents some 830,000 displayable pixels; and the 1080 interlaced, 60 field format has a whopping 1,450,000 displayable pixels. While both 720p and 1080i have been labeled as "HDTV" by the Consumer Electronics Manufacturing Association, and the Advanced Television Systems Committee, these statistics demonstrate that the latter has 43% more picture elements than the former and, of course, five times as many as the 480 line SDTV formats.

Unfortunately, the 'religious war' over interlaced and progressive scanning continues unabated as we speak. This is true even though relatively inexpensive decoder and deinterlacer devices are now available which -- for the viewer -- would obviate any difference between the two formats. And it is true even though most experts agree that progressive scanning, already used in all film programming and in flat panel displays, is the wave of the future.

As indicated, the Advisory Committee tried to settle this long-running dispute for now by including within our recommended standard both interlaced and progressive scanning -- in a variety of formats as desired by different industries and without undue cost. In other words, we opted for an inclusive standard. Accordingly, I have to believe that the scanning debate is really less about technology differences and a whole lot more about who ultimately may control the video box into the American home. Needless to say, this is an issue that goes far beyond the Advisory Committee's 'pay grade’

Digital Production

It is interesting to note that both Europe and Asia recently announced plans to follow the U.S. lead in adopting a so-called common imaging format for electronic HDTV production and program exchange of 1,080 scanning lines and 1,920 pixels per line. In my judgment, such a standard makes good technological and business sense. Of particular importance to you, it will put electronic program production on the same quality plane as 35 mm film -- it no longer will be a second class medium. And while HDTV can always be down-converted to a lesser quality standard, the reverse clearly would not optimize quality.

I recognize, of course, that the conversion to digital television will require substantial investment by ITS members in new telecines, video tape machines, and associated post production equipment. In return, production quality and flexibility should be greatly enhanced and, without doubt, so also will be the end product to the television viewer. Moreover, your industry hopefully will be able to find attractive revenue opportunities within the digital environment -- for example, utilizing telecines to transfer film into HD video formats for mass-duplication mastering, archival storage, and other related applications.

Digital Receivers

If digital television service is to be a near-term reality, however, it is essential that new sets be priced within reach of the average American's pocketbook. Undoubtedly, the initial digital HDTV receivers will be expensive. But, as the experience of VCRs, compact discs and other consumer electronic equipment has demonstrated, the price should fall and fall quickly within a vibrantly competitive marketplace. If it does not, the consumer electronics industry likely will find itself severely tested by the millions of PC-TVs that likely will be offered by computer manufacturers in the next few years. At last January's Consumer Electronics Show, a number of leading set manufacturers demonstrated new wide-screen HDTV digital receivers, and also indicated plans to begin actual market sales sometime this fall. So we will soon see.

Must-Carry

If broadcasters do transmit some multiple SDTV programming, the next issue is: what will be cable's 'must-carry' obligations? The Supreme Court has settled on the constitutionality and legality of must-carry -- subject to certain channel limitations, cable must carry local broadcast signals. But does this ruling extend to a requirement to carry, say, four or five SDTV channels? The cable industry has said, 'no way'. But broadcasters argue that compression advances, which has made digital over-the-air service possible, will be even more generous to cable --and, thus, cable carriage of all digital broadcast channels should be required. The FCC has indicated that it will decide the whole digital must-carry issue sometime later this year. Thus, once again, only time will tell in this regard.

Digital Video Regulation

The final DTV issue that I want to discuss relates to regulation: what requirements will the FCC impose on various video providers in the future? Broadcasting is regulated according to a 'public trustee" model (based on spectrum capacity), telephone as a 'common carrier', cable somewhere in between, and computers not at all. Yet, all of these providers may be competing in the video future.

The Administration and the FCC seem intent on examining new public interest requirements on broadcasting in the digital TV context -- a new Commission appointed by the President will make its recommendations in this regard sometime later this year. And the FCC is likely to be very attentive and receptive. Indeed, the past few years would suggest that broadcast content regulation is alive, well and living at the agency.

However, my own view is that the government and the Gore Commission should move with caution when it comes to mandating additional public interest requirements on broadcasters. After all, we are dealing with a new technology and service that still must find its appropriate place in the communications marketplace. And if HDTV turns out to be the principal digital focus of broadcasting (as against multiple SDTV), it still will be primarily a one-channel industry.

Moreover and conversely, under the 1996 Telecommunications Act, cable is on its way to being substantially rate deregulated once again. And Congress also has allowed the telephone industry considerable flexibility to provide in-region video service -- either as a common carrier, a cable operator, a wireless cable provider, or under a new 'open video service" (or "OVS") model in which telcos can carry their own programming so long as they open one-third of available capacity to non-affiliated program providers.

Given this disparity in treatment, and the likely advent of a diverse and fiercely competitive digital video marketplace, I believe that the FCC eventually will be impelled to consider some kind of regulatory parity. However, such a policy change -- which would benefit broadcasting primarily as the most heavily regulated video provider -- seems clearly not in the cards for at least the next few years.

Conclusion

I realize that the views that I have expressed may not be shared by everyone. Such differences of opinion should not be surprising nor discouraging. After all, complex technical and public policy issues -- like those inherent in digital television -- are ones on which reasonable people can reasonably disagree. So let the healthy debate continue.

In the meantime, what perhaps everyone can agree on is that, while a number of vexing market and regulatory issues remain to be resolved, the U.S. video future appears to be robust, diverse and increasingly digital. Thus, my advice is simply this: "stay tuned"!

Dick Wiley
Washington, DC