Let The Marketplace Decide
Craig Birkmaier
October 7, 1999
We have reached a critical point
in the development of the new medium
of digital television.
We are at a fork in the road:
- One path leads to an almost certain marketplace failure
of terrestrial DTV broadcasting
in the U.S.
- The other leads to a new digital frontier
where uncertainty comes with the territory,
but opportunity abounds for those willing to
become the explorers, innovators and investors
in this new medium.
For years, many of us have argued in favor
of a marketplace driven approach
to the development of the new digital frontier.
In the face of uncertainty, there are many
advantages to approaching the problem
of building this new infrastructure
as a phased migration,
understanding that it is impossible
to fully anticipate
how the underlying technology
and it's applications
will evolve.
We already know
that the current generation of 8-VSB receivers
will have a short life expectancy,
including the so-called "second generation"
receivers that will be available for the next 12-18 months.
These devices offer marginal reception performance,
and they do not implement standards for data broadcasting
and interactive services that have yet to be finalized by the ATSC.
Furthermore, the first generation ATSC receivers
do not implement important content management features
that will allow for easy interconnection and
interoperability with other suppliers of digital television services
, including cable and DBS.
DBS services are beginning to deploy true
"second generation" set-top boxes
that offer enhanced levels of functionality
including local hard-disk cacheing, web browsing, and enhanced interactive services;
and they are doing this in a manner that does not render
the first generation set-top boxes
obsolete.
We have little to fear in moving toward a market driven solution;
there is little to be excited about with respect to the value equation
broadcasters and consumer electronics manufacturers
have offered to consumers to date.
A market driven approach
should guide the current choices we face:
- To stay the course and risk the possibility that the full benefits
of DTV broadcasting will not be available to the citizens of the
United States.
- To grant broadcasters the flexibility to develop new
business models that improve the delivery of the services
we have grown to expect from a free-to-air broadcast system,
while developing new services
that will attract new investment,
by consumers, broadcasters
and new industry partners.
The FCC should open a new DTV proceeding,
based on the issues raised by SInclair in their petition,
but with the intent to examine the assumptions
upon which the original decisions were based.
In particular, the ability to support portable and mobile reception
should be considered, as this is the primary differentiation of
terrestrial broadcast services from multi-channel cable, DBS and MMDS
services.
The Commission should rescind provisions of the 5th Report and Order
on Digital Television requiring broadcasters to implement the ATSC
standard; in it's place, the broadcasters should be granted the
ability to choose any appropriate transmission and technical
standards that will allow them to comply with the other provisions of
the 5th Report and Order and subsequent rules set by the Commission.
This should include:
1. Compliance with the existing channel allocations and power levels,
and the levels of interference into 8-VSB and NTSC
broadcasts specified by the FCC;
2. Compliance with the mandate to provide one traditional television
service in the free-and-clear;
3. Compliance with the build-out schedule mandated by the Commission;
4. Compliance with the fee structure set by the commission
for any new revenues derived from subscription services
delivered via this
spectrum.
Broadcasters should be allowed to use any modulation system
that can be deployed based on the exisiting spectrum planning factors;
most likely this will mean either 8-VSB or COFDM transmissions from a
single transmission
facility.
The Commission should establish rules for testing of COFDM
-based single frequency networks to determine appropriate levels of
operation so as to maximize spectrum utilization, while minimizing
interference with existing spectrum users. Broadcasters should be
allowed to deploy Single Frequency Networks under experimental
authority to provide real-world facilities to support the testing and
optimization of new planning factors for channel utilization.
The Commission should develop rules for the establishment of local
and regional spectrum management associations made up of all licensed
users of the electromagnetic spectrum. These associations should be
empowered to develop spectrum management plans under the guidance of
the commission, with the intent to maximize spectral efficiency,
interoperbility, and re-use of existing transmission infrastructures
in each market. These plans should reflect the findings of the market
based tests. This process should be conducted in parallel with the
current deployment schedule, and produce spectrum management plans
within 36 months of the order that creates the spectrum management
associations. These plans should allow for the migration to Single
Frequency Networks and efficient re-packing of the spectrum that will
be returned when the NTSC channels are returned.
The Commission should hold hearings on the impact of removing
ownership caps, which would allow for the creation of national
networks of local broadcasters in markets where sufficient voices
exist to provide programming diversity. These hearing should also
investigate the feasibility of allowing successful bidders to
compensate the holders of NTSC licenses for the "scheduled" return of
these channels in 2006.
It's time to enable broadcasters to manage the transition to digital
television broadcasting so as to develop a terrestrial "wireless"
broadcast infrastructure that will be used by virtually every
citizen, as is the case today for terrestrial radio broadcasts.
Craig Birkmaier
