Broadcasters' Digital Blather and Blunders

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What if the digital-television transition doesn't happen? Or what if it's as successful as the AM Stereo transition?

It's no longer a question of whether America's analog-TV stations can meet the 2006 transition deadline. That failure is almost a "given."

But what if some — or many — TV stations simply don't convert to digital? Smaller-market broadcasters are stepping up their claims that they simply cannot afford to pump out DTV signals.

There's no economic justification to do so, they say. And they're backing up their words with paperwork that asks the FCC to extend the timetable beyond next week's deadline.

Well over half of U.S. TV stations are seeking such an extension. FCC chairman Michael Powell was fully aware of the resistance movement when — in his best car-salesman mode — he inveighed broadcasters to give not just DTV, but high-definition TV, a spin by this autumn.

Many TV-station execs I met at the National Association of Broadcasters convention are not buying it — literally. They listen politely, but talk privately of ignoring the FCC's digital-TV timetable as best they can. Vendors feel the new parsimony: They aren't selling DTV production and transmission equipment.

Stations are installing the minimum required transmitter configuration to meet current FCC deadlines. But they are not adding expensive studio-transmitter link (STL) and encoding devices that would truly put them into the DTV business.

Even the alleged inter-industry harmony façade is breaking down. When TV-set manufacturers brag about the millions of DTV devices that are being sold, broadcasters snap back that those devices don't mean anything to stations and networks if the hardware is used just to play DVDs.

DISCOURAGING WORDS

You might expect a grumpy curmudgeon to use terms like "frustration," "malaise" and "dismay" to describe the mood at the recent NAB convention.

But even I was amazed to hear insiders talk about "despair," "confusion" and "revolt."

As lobbyists and network executives publicly extolled Powell's aggressive DTV initiative, there were plenty of sub rosa
signals about the looming digital delays.

Experts cannot even agree on what might happen to broadcasters who ignore the DTV imperative.

Commissioner Kevin Martin — in response to my questioning — talked vaguely about the FCC "taking stronger enforcement actions."

Some observers specifically suggested fines or license forfeiture. It turns out, though, the DTV transition rules do not spell out penalties for a station that fails to convert to digital. Although there's a widely held belief that failure to run a DTV station means loss of the company's analog license, it seems that the FCC can merely initiate an investigation into "repeated and willful violation" of the DTV transition rule.

The commission might have to investigate hundreds of licensees. By the time those actions — and the subsequent court appeals — conclude, broadcasters will have bought even more time for their digital transition.

For small-market broadcasters who don't want to transmit a DTV channel in the first place, loss of the digital license wouldn't even be a stiff penalty. They didn't want it in the first place.

Given the looming ownership consolidation — thanks to other recent regulatory actions — those small-market broadcasters probably won't even be around come renewal time. The radical DTV rejection could be part of a smoky exit strategy.

BIG MARKETS BOBBLE

Of course, DTV's fate won't be decided by small-market stations — or even by smaller outlets in large markets, which also complain of the transition's economic burdens. Its fate lies in the hands of the big stations in the top 30 markets, where half of the nation's population lives.

And it was oh-so-obvious at the NAB convention that big-market stations are bobbling their DTV plans. Some group owners are digging in their heels and quietly fomenting ways to keep their analog bandwidth forever, while ramping up digital TV spectrum projects at their own pace.

That's not what the government — with its pipe dreams of pumping billions of dollars from auctioning the analog-TV spectrum — had in mind.

"Forever" may be longer than even the hardiest TV station owner can hold on to analog frequencies. But the combined chaos of small market rebellion and big market rejection deepens the digital dilemma at this late stage of the transition process.

For multichannel operators, the DTV malaise comes at a critical moment. While speaking at NAB sessions, broadcast lobbyists took every opportunity to denounce the cable industry's alleged lack of interoperability and its stance on digital must-carry.

But more than ever, those stances look like an attempt to shift the blame from broadcasters' own foot-dragging.

The DTV dither also gives cable operators time to develop better digital agendas of their own — strategies that go beyond the "more channels" strategy that dominates today's VOD mindset.

An array of data and interactive options are looming. Ventures could be well on their way to reality by the time the broadcast DTV dilemma reaches any type of resolution.

Viva la resolution!

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