On The Mark: Cable's HDTV Ambivalence, Format Wars, and Public TV's DTV Funding Crisis

by Mark Schubin
Monday, March 30, 1998

- So, does cable love HDTV or hate it?

- Leo Hindery, president of TCI, told financial analysts in Denver last week that HDTV would enhance cable's benefits relative to satellite broadcasts (which seems strange, because DBS is due to deliver some HDTV this fall, and no one seems to know when cable will get around to it). Hindery's rationale is that cable has more bandwidth available.

Which HDTV? ANY HDTV, according to Hindery, who used the term "indifferent" in referring to cable's position on formats. Sort of contradicting TCI's choice of HD0 for its set-top boxes, he said the set tops could deal with any format (which MAY be true if we define
"dealing with" as simply passing through without decoding).

Nevertheless, Hindery would like to "encourage" everyone to pick a common format. And what would he like that to be? 720p, though it's not clear whether he meant 720p at 24 fps, which will work with the HD0 set-tops, or 720p at 60 fps, which won't. His statement that "We don't think that gobbling bandwidth is the greatest strategy" suggests the former. Hindery said 720p needed about 10 Mbps vs. 1080i's 19 Mbps, meaning cable could offer four 720p programs per cable channel versus only two 1080i.

Hindery's boss, John Malone, said "We want to be as supportive as possible of broadcasters -- but in a cost-effective way." That means, among other things, not putting the same HDTV capability into every cable set-top. Subscribers who want 1080i would probably have to pay extra for their decoders.

- Michael Adams, a Time Warner Cable senior project engineer, indicated that some secret talks have been going on between cable and broadcasters. One idea: Cable gets the MPEG-2 data stream via fiber PRIOR to modulation at 8-VSB, so they don't have to worry about broadcast transmission problems.

- OpenCable standard digital set-tops will begin beta testing maybe by November but production won't begin until maybe the second quarter of 1999.

- According to James Bonan, Sony Consumer AV's vice president of new business development, the primary goal of the work being done by consumer-electronics manufacturers on the IEEE 1394 interface is to allow cable set-tops to get HDTV to appropriate displays. He acknowledged that cable set-top boxes with built-in HDTV processing wouldn't meet cable's desired $300-maximum price.

- That magical $300 price was the main concern at the CTAM conference two weeks ago. They'd like to see it go to $250. No one gave a hoot (there) about HDTV.

- Meanwhile, TCI is getting its own flak. The company is compressing half-resolution video to 2 Mbps (12 simultaneous programs per transponder), and some people (subscribers and producers) don't seem to be liking the result. The idea of dropping to eight programs per transponder, however, sent shudders through TCI because it would mean tremendous restriction of program choice.

- Sony plans to license Sun's Java for digital set-top boxes and is talking to General Instrument about some sort of set-top box deal.

- Sharp's 34-inch HDTV direct-view TV set, HD-1080i set-top-box (to feed an HD-capable display), and DTV-to-"NTSC" downconverter (for a line of TVs with component inputs), to be shown at NAB, are supposedly the ones that will be sold this fall. There will also be at least two other products, according to AV product-planning director Robert Scaglione (one of them probably a projector to go with the 1080i-output set-top). They haven't yet decided whether or not to release price and delivery info at NAB.

They're very excited about the DirecTv HD service (despite its mere 1,280 active pixels per line instead of ATSC's 1,920) both because it would allow a national launch and because it gets around the 8-VSB antenna issue. Jeffrey Sampsell, director of digital video at Sharp Labs said reception tests (of 8-VSB) have been good, but he's not sure receivers will be able to handle "funny bursts." "The question is, do the chips and the software give you what you need" to make pictures. Hmmm. He's asking us?

And, what happens if the consumer sees a lovely satellite picture at the dealer and gets nothing at home? "Obviously," according to Scaglione, "we have to support the consumer and the retailer."

- Remember when NTSC stood for "Never Twice the Same Color"? The OpenDTV Forum has been buzzing with new possibilities for "ATSC." At Sharp's press conference, Sampsell offered one: "Anything That Satisfies Congress."

- Public TV and DTV:
- Marilyn Mohrman-Gillis, policy & legal affairs vice president of the Association of Public Television Stations, told an APTS conference that "it's impossible to imagine a scenario" that would have a public broadcasting money bill pass Congress this year. That's tough, because that's where the bulk of public television's DTV transition money is supposed to come from (they want $600 million over four years).

- Connecticut Public Television surveyed its members about the value of DTV. On a scale of 1 to 10, multicasting came out at 6.5; HDTV came out at 3.

- KOCE (Huntington Beach, CA) is planning a travel and business channel when they get around to multicasting.

- The FCC will offer public stations a speedy DTV application process and will "take your word for it" on much of the application, according to Keith Larson, a high-ranking FCC engineer. - Microsoft provided a DTV demo at the APTS conference that drew people from what had previously been a packed regulatory session.

- What happens if public TV MAKES money from DTV? According to Mohrman-Gillis, those "profits" will simply support the public broadcasting service being provided.

FCC Commissioner Powell was a little stronger: "Commercial interests cannot be allowed to distract you from your mission." He may have been thinking of recent reports that a couple working for the merchandise division of Minnesota Public Radio will take home $4 million between them as a result of the sale of the catalog to a department-store group.

Nevertheless, while agreeing, of the White House proposal to provide $450 million over five years for the public TV transition to DTV, that "we know that's not enough money," Powell cited such creative solutions as a North Dakota public station asking the FCC for permission to simply shove its programming onto a multicast channel of a commercial broadcaster.

- And, speaking of commercial interests, Harris and PBS unveiled DTV Express in Washington last week, a large truck that will tour 15 cities over the next year-and-a-half, starting with Las Vegas at NAB. The several-million-dollar project will NOT use taxpayer money, according to PBS president Ervin Duggan. Instead, it has been outfitted by Harris as well as Hewlett-Packard, Lucent, Panasonic, and Philips (among others). Of course, PBS staff DID provide "expertise."

- Is this DTV news, or does it belong in the next section? ATI
Technologies, of Toronto, announced the design of Set-Top Wonder, a single Windows CE box that will handle videogames, Web-surfing, DVD, and other MPEG-2 decoding. We shall see.

Non-DTV News:
- MCI has selected ECI Telecom's Hi-TV for a 9-node coast-to-coast video-over-ATM network. You may remember Israel-based ECI from the exhibit hall at the Chicago Forum. The information provided indicates that ECI (like Synctrix and Video Products Group) is aware of the timing issues that have screwed up ATM video in the past. This is the equipment MCI will use tomorrow to get the Rangers game to Washington.

- The FCC "wireless video" (LMDS) auction that began on February 18 ended on Wednesday (35 days later) after 128 rounds. 864 licenses (out of 986 available) were sold for $578 million ($4 billion had been expected) to 104 bidders. The highest bidder, WNP Communications, of Earlysville, VA, offered $186.9 million for 40 licenses covering 114 million potential viewers in such markets as New York, Los Angeles, Chicago, Philadelphia, Boston, Dallas, and Detroit. They won Atlanta, Houston, Miami, and Minneapolis unopposed. The facilities don't have to be used for video; they can also be used for, among other things, (non-mobile) phone service. No word on DTV/HDTV.

- Charles Poynton (the tall Canadian from the Technology Symposium at the Washington Forum) is preparing a white paper on "Merging Computing with Studio Video." He's interested in any standards or manufacturer definitions anyone can offer for the terms "legal," "valid," "illegal," and "invalid" as relates to color. Contact him at [email protected].

- After being battered by Congress on the subject, the FCC WILL launch an inquiry into free time for political ads. FCC chair William Kennard will, however, be appearing before the House Telecommunications Subcommittee tomorrow, so the subject probably isn't done being hashed out yet.

- The Christian Broadcasting Network got a fine and a retroactive loss of its tax-exempt status (in 1986 and 1987) for contributing to Pat Robertson's presidential campaign. They also now have to have a majority of their board be from outside the network.

- Hughes will introduce "Satellite Surfer" kiosks in airports. Swipe your credit card and you can watch satellite TV or get an Internet connection or do both simultaneously via picture-in-picture.

- Time Warner thinks its Full Service Network debacle in Orlando was due to the cost of technology, so, since that has now been reduced "by factor of 10" since the 1994 test, they might try video-on-demand again later this year or early next year.

- Pity the poor broadcast TV networks who keep losing market share to everything from the Internet to DVD? HAH! Market-share shmarket-shmare: The REVENUES of ABC, CBS, and NBC jumped 10% in the fourth quarter of 1997.

- Who cares about HDTV when there's 3DTV? Chequemate International, one of the marketers of shuttered LCD 3D glasses, is launching a 24-hour, all-3D satellite channel in September, and they're DESPERATELY looking for programming. Contact Chad Harris at 800 245- 6283 or [email protected]. Spanish language stuff is also desirable, because they'll have a Latin American channel, too.

By the way, for those of you who've wondered how Chequemate could claim to convert 2D programming to 3D, I saw it this week, and they don't really. They just introduce an H offset in every other field, so it looks like the whole image has been pushed behind the TV-set bezel. It helps when they show men Spice Girls videos to demonstrate the effect.

FYI, Ike Blonder has been transmitting 3DTV from WEXP (channels 27 & 28) in the New York area (the transmitter's in Hoboken, Monica) since 1989, proposed 3D-HDTV to the FCC in 1988, and received a patent on compatible, single-channel 3D-HDTV in 1996.

- And, forget DVD and Divx. According to The New York Times on Saturday, the world's largest market (China) has adopted Video CD BIG TIME. Chinese factories cranked out 30 million players in 1997 and are expected to do 50 million this year. The bad news? The Portuguese colony of Macao (near Hong Kong), which has no copyright law, is estimated to supply 500,000 pirated movie disks DAILY to China. "Titanic" has been sold on VCD in Shanghai since a month BEFORE the movie opened in the U.S. Top movies go for $2 each (less than the Divx rental fee).

- Speaking of DVD and Divx, Divx president Paul Brindze has been saying that the security of plain-vanilla DVD isn't good enough. Consumer Electronics newsletter sent a shopper along London's electronics row (Tottenham Court Road) and found Panasonic DVD-A300 players modified (by clipping a chip lead) to play any region's DVDs (DVD is supposed to be restricted geographically). Brindze estimated that 25-60% of DVDs purchased in the U.S. have been sent overseas.

The effectiveness of these "region-free" players seems to vary from disk to disk. While Warner disks played fine, Buena Vista's "Tombstone" worked only when front panel buttons were pushed in a certain sequence, and neither Buena Vista's "Scream" nor Universal's "Babe" or "Liar, Liar" would play at all.

- Winning an Oscar used to prolong a film's theatrical release. "L.A. Confidential" will be available on DVD (and VHS) April 14; "As Good As It Gets" will be available on the same two formats May 19.

- The New York Times also reported Saturday that the Justice Department is expected to oppose the sale of the ASkyB (MCI/News Corp.) DBS license to Primestar.

- Last Saturday Times tidbit: SGI will soon report a 23% drop in revenues and a significant quarterly loss.

Joyous NAB to all! And, remember, if the show floor gets you down, there's good beer at the Holy Cow, good lemon butter-cream chocolates at Ethel M, good air at Red Rocks Canyon, and, of course, the Liberace Museum.

TTFN,
Mark Schubin