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September 6, 2000
The Honorable Billy Tauzin, Chairman Subcommittee on Telecommunications, Trade and Consumer Protection
House Commerce Committee
U.S. House of Representatives
Washington, D.C. 20515
Dear Chairman Tauzin:
On behalf of Zenith Electronics Corporation, thank you for the opportunity to testify at the hearing on digital television (DTV) transition held by your Subcommittee in July. Please accept this submission for the hearing record as additional information amplifying some of the points I made at that time, and responding to some of the inaccurate comments made by other witnesses.
When I appeared before your Subcommittee, I made three basic points:
1 . The DTV transition is well underway.
2.The current transmission standard works, and calls for changing it are absolutely unfounded.
3.Any change in the transmission standard at this point would be disastrous for consumers, broadcasters, and consumer electronics manufacturers, and would significantly delay the implementation and provision of DTV services to the public.
Mr. Chairman, most of the witnesses who appeared before your Subcommittee agree with these points. Further, they are frustrated that the debate about the digital television standard continues nearly four years after the DTV standard was unanimously adopted by the Federal Communications Commission (FCC). The DTV standard's ATSC 8-VSB system was chosen through an exhaustive scientific process that evaluated a number of competitors, including COFDM. This analysis included consideration of replication of service areas, power requirements, effects on analog signal reception, and carriage of data. Today, the transition to DTV is well underway with DTV signals covering nearly two-thirds of American households. However, as you pointed out at the hearing, most Americans still have not experienced what was intended to be the driving force of a rapid digital transition -
- high-definition television (HDTV) - and they should have that opportunity.
The DTV Transition is Underway
Consumers who have been exposed to DTV are extremely satisfied with the technology, despite what was alleged by Mr. Mark Hyman on behalf of Sinclair Broadcasting. For example, a survey conducted this summer by the National Consumers League finds that three quarters of DTV owners describe themselves as "very satisfied" with both the picture and the sound quality of their new sets. The single biggest complaint of those surveyed was a lack of digital programming - particularly HDTV (please see attached). I must agree that, with the exception of CBS, PBS and several individual stations, the industry has been very slow to produce digital programming. Encouraging the distribution of such programming would do much to speed DTV's deployment.
Sinclair claims that the DTV transition has stalled, and that sales of DTV products are lackluster. That is not accurate. According to Mr. Gary Shapiro, who testified for the Consumer Electronics Association, more than 121,000 DTV products were sold in 1999, and in the first six months of this year, that number has already been exceeded. Mr. Tom Campbell testified at the hearing that retail sales of HDTV equipment are strong, and Zenith and other manufacturers are endeavoring to meet the growing demand. Americans are impressed by the technology, as you yourself experienced viewing HDTV during the Super Bowl.
Prices of digital televisions continue to drop. While initial costs were high (as is true of any new technology), they are coming down and various market forces will determine the speed at which these prices will continue to fall. As you pointed out in your closing remarks, consumers need to know that the TV set they use today in one market will work tomorrow in another. This gives consumers the confidence needed to make the investment in DTV, which is really an investment in the future of free, over-the-air television. Sadly, the current debate over the transmission standard and the lack of digital programming do not offer reassurances to consumers. Congress and the FCC can provide that confidence by ending the seemingly endless debate over the standard and holding broadcasters to the promises they made in order to receive free spectrum to make the transition to digital television.
The ATSC 8-VSB Standard is Working and No Change is Needed
A. The existing standard is working
Mr. Hyman claims that the existing 8-VSB standard does not achieve its objectives and is unworkable in the United States market; therefore, Sinclair suggests we need to permit both 8-VSB and COFDM standards to be available. There is no basis for Sinclair's call to reopen the existing DTV standard. The standard works well and is already being deployed by 151 television stations whose signals cover 64 percent of American homes.
According to Sinclair, the status quo would "force DTV viewers either to obtain a line-of-sight to stations'transmifters through a large rooftop antenna, or to give up free over-the-air service altogether by subscribing to pay TV service from a cable or satellite gatekeeper." Neither of these options is true. Your Subcommittee witnessed the successful reception of multiple digital broadcast signals using the U.S. 8-VSB standard. You will recall that this live demonstration was conducted using a simple indoor antenna - not the enormous antenna that Sinclair propped up in the rear of the hearing room. Commercially available sets, receivers and remote controls were used to "channel-surf' without re-adjusting the antenna - something opponents had alleged was not possible with the existing standard in an urban environment. In fact, prior to your hearing, Sinclair challenged us that: "if they can show it inside the House hearing room, we will congratulate them on having solved the problem." Needless to say, we're still waiting for Sinclair to deliver on that promise.
Although some early-generation DTV receivers being rushed to market encountered reception problems in unique urban areas subject to strong multipath interference, those shortcomings stemmed from the first-generation receivers and not any deficiency in the standard. As both our demonstration and the testimony of several witnesses made clear, early multipath reception issues have been addressed and manufacturers continue to improve the technology with each new generation of equipment.
B.Loss of viewers
Mr. Hyman also testified that COFDM is designed to overcome the known effects of multipath conditions, and that the 8-VSB standard fails in its most fundamental requirement - to replicate the ease of reception that exists with today's analog television. In fact, among the greatest strengths of the 8-VSB standard is its service area replication. Mr. Dale Hatfield of the FCC pointed out at the hearing that use of a COFDM signal would reduce signal coverage and greatly increase broadcast interference, thereby disrupting the digital signal for millions of viewers. Such increased interference would necessitate reducing the power level of COFDM broadcasts, further cutting signal coverage.
My testimony referred to a study by Mr. Jules Cohen, a highly experienced expert with more than five decades of experience as a professional consulting engineer in the field of broadcasting. His analysis, which employed the government's own computer calculation technique, demonstrates potential viewership loss in New York City. Mr. Cohen correctly observes that use of COFDM provides less coverage and results in more interference to other stations than 8-VSB, a point that Mr. Hatfield made several times during the hearing. (To paraphrase Mr. Hatfield, use of COFDM involves trading off the possibility of improved performance in multipath environments for the loss of viewers that certainly would result from the COFDM modulation scheme.)
Even Mr. Hyman acknowledged at the hearing that a shift to COFDM might reduce a station's signal coverage. I need not remind you that viewer area replication was at the heart of Congress' and the FCC's policy determinations and was a prominent reason for the selection of the current 8-VSB standard. Changing to the COFDM standard will undo that decision and result in the loss of many viewers in existing service areas. Mr. Cohen's study of three New York DTV stations found that 1.9 million fewer viewers would be served using COFDM rather than the FCC-mandated 8-VSB standard. The number of viewers lost for other DTV stations due to COFDM interference would be about 7 million. Significantly, the effect of interference caused by COFDM would adversely affect analog TV reception for 986,000 to 1.1 million New York viewers depending on the transmission power level (please see Cohen study attached to my testimony at the hearing).
A specific concern of Mr. Hatfield bears repetition: introduction of COFDM will lead to loss of coverage at the edge of existing service areas and also within some buildings and other hard-to-reach places. Current coverage would not be replicated by COFDM, because in order to avoid interference the power level must be reduced.
C. Use of repeaters with various standards
In his testimony, Mr. Hyman accurately described the function provided by repeaters -
namely, that they provide over-the-air television coverage in terrain-challenged markets as well as deliver signals to cable headends, the origin for cable carriage of local stations. However, he then asserted that the ATSC 8-VSB standard and repeater usage are incompatible, while the COFDM standard meets this need. Once again, Mr. Hyman is incorrect.
Because repeater use is relatively widespread in the United States, particularly in portions of the South and West, the Advanced Television Technology Center (ATTC) recently conducted analyses in both West Virginia and Utah. These studies document the successful utilization of on-channel repeaters for 8-VSB, concluding that the 8-VSB modulation technique provides sufficient performance margins to allow for practical introduction of on-channel repeaters. (Additional information may be found on the ATTC website at www.attc-org.)
D. Summary
In short, COFDM technology does not offer a feasible means of meeting one of the primary goals of a national digital standard - replication of the existing analog coverage area. The current 8-VSB standard works and works well, without the loss of viewers that would occur with the use of COFDM and which would certainly threaten the DTV transition. The 8-VSB standard also works well with repeaters, particularly in terrain-challenged environments.
Reopening the Standard Would Harm Various Parties and Cause Years of Delay
A.Reopening the standard harms consumers, broadcasters and manufacturers
As noted above, consumers need certainty that their investment will yield a return. Consumers seek the ability to view and enjoy DTV, with all its impressive characteristics. They need to know that the set they purchase today will be usable in the future at various locations.
Similarly, broadcasters must make significant investments to transition to DTV. They need to know the standard to which they must adhere as they purchase equipment and configure their systems to transmit DTV. Multiple standards are confusing and yield inconsistency. They do not encourage broadcasters to make the investments necessary for this transition.
Finally, manufacturers are making significant investments in designing integrated circuits and DTV sets according to the existing standard. Adding an additional standard will necessitate reconfiguration and further research and development, adding costs to the final product and resulting in postponed availability of DTV equipment. As I indicated in my response to Congressman Stearns' inquiry, it is not economically feasible to manufacture sets that have both 8-VSB and COFDM capabilities.
B. A changed standard will produce delay
At the hearing, Sinclair indicated that implementation of the COFDM standard would likely take little more than six months. This is patently untrue. Reopening the existing standard would cause years of delay in the digital transition. Mr. Matt Miller estimated in his testimony on behalf of NxtWave Communications that revisiting the DTV standard would introduce a minimum of two to four years of delay. An extensive and lengthy series of tests would have to be performed to gauge compatibility and interference issues. Modifying the standard would also force the FCC to reopen the DTV Table of Allotments for revision, a process that would take years to complete.
Sinclair asserted at the hearing that use of COFDM would not require modification to the Table of Allotments; but Sinclair has never explained how this could possibly be true, especially in view of the fact that use of a COFDM signal would require reduced power levels. indeed, there is no question that changing to COFDM would necessitate the loss of millions of viewers or a radical alteration of the Table, thereby producing extensive delays in the DTV transition and denying the American public the experience of HDTV even longer. In his testimony, Mr. Hatfield agreed, stating adamantly that avoiding any change to the Table is "absolutely essential to avoid years of unacceptable delay." In fact, the consequences of changing the Table could be even more dire. In his letter introduced into the hearing record, FCC Chairman William Kennard warned that the delay attendant with changing the Table "could lead to uncertainty that might jeopardize the ultimate success of the transition,"
Sinclair now claims that a dual digital broadcast standard will bring certainty to the DTV roll-
out. However, Mr. Nat Ostroff (who conducted the videotaped COFDM demonstration at the hearing on behalf of Sinclair) has stated that "multiple standards would not only create chaos but would so fragment the market so that no serious business could invest in the tooling to produce multiple standard receivers into such a market." (1996 White Paper on U.S. Digital Broadcast Standard). His statement was correct.
Mr. Tim Fern of Pace Micro Technology testified that his company could have a COFDM-
based product on the market within nine months. But what Mr. Fern did not consider is that stations could not be broadcasting a COFDM signal in that amount of time even if Congress were to mandate the use of the technology immediately. The testing alone would take years and once that was completed, the manufacturing and installation of the broadcast equipment would add still more time.
Finally, a delay will only further push back the date when the Federal Government recovers the billions of dollars worth of loaned spectrum which it intends to auction.
Additional Issues
A. Mobile applications are ancillary, not primary
Mr. Chairman, in your concluding remarks you referred repeatedly to the "deal" that was struck at the time of the enactment of the DTV transition provisions. The "deal" was that broadcasters were to receive a loan of spectrum, in return for which they would provide digital television services to the public and thereupon return the analog spectrum to the Federal Government. We agree with you and urge you to hold broadcasters to the "deal".
Complaints from those who oppose the existing digital standard may well derive from their sudden fascination with mobile applications. This new emphasis stems from evolving business plans that involve the sale of subscription data services rather than living up to the promises which they made to Congress to provide free over-the-air digital broadcasting -
particularly HDTV - in exchange for spectrum loans. Indeed, Mr. Hatfield stated his concern that "one of the motivations for consideration of a different standard appears to be a purported advantage of COFDM in providing new portable and mobile services rather than any advantage of COFDM in providing improved or enhanced television broadcast service."
Mobile applications are not necessary to meet Congress' objectives to provide free over-the-air broadcasting in a digital mode. The current standard was selected in part because of its "headroom" that will allow for additional applications. As Mr. Matt Miller testified, the current standard is flexible and will accommodate multiple channels of standard definition television and/or ancillary services without loss of analog service during the transition. But if we are to meet the original goal of providing digital television to American consumers, the development of new applications must be pursued on a parallel path and not because some broadcasters now have a different business plan. To do otherwise would halt the entire DTV transition.
The FCC has permitted broadcasters to examine other ancillary services as allowed by statute, but never at the expense of the primary goal of implementing HDTV in a timely fashion. While the law provides (as you well know) that this service must be ancillary to DTV service, FCC officials have repeatedly warned that some broadcasters have lost sight of the goal and are veering away from their core business of providing television to citizens free of charge. Indeed, dozens of stations across the nation have already agreed to lease a part of their free spectrum for ancillary services. Some stations are making these arrangements without having met their deadlines in regard to digital broadcasting.
Again, you are right to urge adherence to the "deal" and ensure that other services remain ancillary to the primary objective of providing free over-the-air digital broadcasting.
B.International issues
From Mr. Hyman's testimony, one might infer that countries are abandoning the 8-VSB transmission standard in droves. He warned that soon "the U.S. will be an island of 8-VSB in a sea of COFDM." What were the bases for this allegation? Among other indicators, Mr. Hyman asserted that the Brazilian government "has decided to exclude the ATSC 8-VSB standard from further consideration." Also, he claimed that Argentina and Taiwan have announced recently that they will rescind their adoption of the ATSC standard. Mr. Chairman, these statements are absolutely untrue.
Within Brazil, largely in response to the uncertainty generated in the United States by broadcasting entities reluctant to make the transition to DTV, some have suggested that the ATSC standard should not be chosen for utilization in Brazil. ANATEL, the Brazilian equivalent of our FCC, is currently studying this issue, and is taking into account both technological as well as economic conditions. The ATSC/8-VSB standard continues to be under active consideration in Brazil. What's more, in both Argentina and Taiwan the ATSC standard remains the law today.
Officials in other countries are watching the DTV process in our own country. The uncertainty about the standard fomented in the United States by parties reluctant to make the investment in DTV or those with new and evolving business plans causes these officials to revisit their decisions, because of trade and other implications that could result from a changed U.S. standard.
Far from being an island of 8-VSB, the United States at present is the world leader in DTV. Our continued adherence to the standard - and a strong reaffirmation of the standard by American policymakers -- will signal to other countries that DTV's future is secure, because this standard guarantees service area replication and a low level of interference with other signals. In addition, equipment built in accordance with this standard is being deployed and enjoyed today by the American public. The real-world picture is very optimistic, contrary to Mr. Hyman's ominous and misleading warnings.
How to Guarantee Further Progress
Mr. Chairman, you solicited suggestions about how to meet the policy objective defined by the Congress and the FCC and sought by consumers, namely that DTV be made available to the American public in a timely manner.
The digital transition is succeeding but impediments remain to its ultimate success. As was demonstrated at your Subcommittee's hearing, the 8-VSB standard works and works well even in an urban environment. However, the uncertainty fostered by the ongoing and unnecessary debate about the digital standard is harming and delaying the transition. The most important step that could be taken now by Congress would be to reaffirm the existing standard and end the debate right now.
Broadcasters also need encouragement to provide HDTV programming. Consumers have made significant investments in the digital transition yet find themselves with little digital or HDTV programming to watch on their DTV sets. Broadcasters must be reminded of their obligations and the expectations behind the loan of the spectrum to them free of charge.
The FCC also can continue to play a vital role in the rollout of digital television. You questioned FCC Cable Bureau Chief Deborah Lathen about both compatibility and carriage issues involved with digital must-carry, and about interoperability standards. She replied that these matters were being reviewed by the FCC and the FCC was monitoring what was happening in the marketplace with regard to some of them. However, several witnesses stated that the failure to resolve these matters produces uncertainty and delays digital programming. I respectfully suggest to you that the FCC must aggressively encourage the resolution of outstanding cable interoperability and copy protection issues (and, if necessary, be prepared to resolve the issues itself), and promptly complete its open rulemaking proceeding concerning DTV must-carry. Rapid and aggressive action by the FCC on these issues will accelerate the DTV transition.
Manufacturers need to redouble their efforts to respond to the increasing demand for DTV equipment. Mr. Campbell indicated that two-thirds of big-screen television sets sold in his stores today are DTV sets, and the public is clamoring for more. Zenith and other manufacturers must fill this need. Further, it is essential that manufacturers continue to improve and refine their technologies so as to provide an even better product to consumers. Armed with marketplace certainty that comes with having a sole government-mandated standard, manufacturers will do their part in accelerating the DTV transition through continued investments in DTV technology and products.
Conclusion
The 8-VSB system, as you saw, does work, but it must be given a fair chance to work for the average American. To allow ulterior motives and emerging business plans to sow the seeds of uncertainty and therefore undermine the DTV transition would be an injustice to consumers and violate the agreement America's broadcasters made with Congress, the FCC and consumers. We need to stay the course.
At Zenith we join the vast majority in urging you to see this transition to its conclusion so as to give the American public the chance to enjoy DTV's benefits. We reiterate our intention to continue every effort to achieve that goal.
Sincerely,
Richard M. Lewis
Senior Vice President
Research & Technology
Attachment
cc:Members, Subcommittee on Telecommunications,
Trade and Consumer Protection,
House Commerce Committee
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