When Digital Really Isn't, Sparks Fly

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When Annapolis, Md., resident Michael Lovern spent $8,000 for a high-definition television set and hooked it up to his digital cable set-top box, he was expecting stellar digital picture and sound.

He says he got something else.

"I get it all hooked up, and it's the same crap I was looking at before," he said. "It's just not right."

Lovern blames fuzzy digital-TV advertising by cable companies, which he says don't reveal to consumers that digital signals are converted to analog within the set-top before being displayed — even on a digital TV set.

"I asked all the right questions," he said. "And I'm an expert. If they can get me, then they can get anyone."

Indeed, Lovern isn't exactly the typical consumer. He's president of Trial Management Associates, which he describes as a pro-bono, public interest litigation firm controlling a network of lawyers.

So it's perhaps not surprising that Lovern — not a lawyer himself — has been trying to get Washington to crack down on the cable industry's inaccurate marketing of digital cable.

He further contends that local municipalities and the Federal Communications Commission have ignored fraudulent advertising and marketing in order to protect billions of dollars in regulatory fees collected from cable companies.

"It's why regulators are looking the other way," he said. "There are billions of dollars on the line."

He WORKED THE PHONES

In recent months, Lovern has called just about anyone who will listen in Washington. Lovern said he is working with Federal Trade Commission Secretary Donald Clark to bring a possible case against the industry. Clark's office did not return calls seeking comment.

Lovern also said he recently called Neal Goldberg, a lawyer at the National Cable & Telecommunications Association, to alert him that the NCTA was "telling lies on its Web site." The NCTA declined to comment.

In addition, Lovern said he has made several calls to FCC commissioners, even threatening to sue them personally under the Racketeering Influences and Corrupt Organizations (RICO) statute.

The FCC had no official comment, although at least one eighth-floor staffer confirmed calls from Lovern.

Then, on March 6, Lovern faxed a letter to U.S. Attorney General John Ashcroft charging, among other things, that cities and the FCC are "receiving proceeds from a fraudulent scheme."

A Justice Department spokes-woman said Lovern will receive a response but would not provide details.

Lovern may be getting a chilly reception so far, but his campaign raises a valid, yet complicated, question: "Is the digital picture and sound being advertised by cable operators nationwide really
displayed as digital picture and sound?"

As it turns out — according to several digital TV experts and digital set-top vendors — it's not. At least not technically.

"There's really no such thing as a digital picture and digital sound because we see it in analog," acknowledged Tony Wasilewski, chief scientist at Scientific-Atlanta Inc. "You'll get improved quality. It will be CD-quality sound. But you essentially get equivalent picture and sound."

This is why: In the typical, digitally upgraded cable system, digital bits stream into the set-top box where they are converted back into analog before being output to the TV screen.

Why convert to analog inside a digital box? Because roughly 99 percent of the TVs in households are traditional analog sets, meaning that they wouldn't be able to display signals that arrived as digital ones and zeros.

Also, many models of the 2 million digital TV sets that have been sold in the U.S. only have analog connection ports, said a spokesman at the Consumer Electronics Association.

The reasons are many. Content owners are still trying to figure out ways to keep consumers from making perfect digital copies directly from digital set-tops to DVD burners or digital video recorders.

Meanwhile, the cable industry-backed IEEE-1394 specification — also known as "firewire" — has run into resistance from a rival standard called digital visual interface, or DVI. Backers claim that DVI sports better copy protection.

Cable Television Laboratories Inc.'s new "Point of Deployment-Host Interface License Agreement" (PHILA) prompted the Home Recording Rights Coalition to charge that the agreement gives cable operators and content owners too much leeway in restricting home digital recording. CableLabs has called that "inflammatory and inaccurate."

SOME DIGITAL INPUTS

In any event, all of this uncertainty has prompted many consumer electronics manufacturers to avoid building digital connectors into digital TV sets, especially early models.

But some have. For example, Mitsubishi Electronics has several new models that include IEEE-1394 connectors in the back — Lovern has one of them in his house.

In the cable world, S-A has shipped 10 million of its Explorer 2000 and 2100 series set-top boxes and only about 30,000 of its newer 3100HD series boxes capable of displaying HDTV. But even those newer boxes convert the HDTV signal to analog before sending it to either a digital or analog TV monitor.

Motorola Inc. reports shipping about 20 million digital set-tops, but it declines to break out how many of those are the lower-end DCT-2000 series. "It's a safe assumption that the vast majority of those are the 2000s," a company spokeswoman said.

One analyst last week estimated 80 percent or more of Motorola's set-top shipments were 2000s.

Even digital TV sets capable of receiving pure digital signals still internally convert the signal back to analog in order to display the ones and zeros as something discernable as pictures to the human eye, according to digital TV experts.

Therefore, the digital conversion within the box is "not a lot different than what would happen within the TV itself," said Graham Stubbs, senior director of technical operations at Silicon Wave, which makes digital tuners for set-top boxes.

Of course, an expensive digital TV set might contain better digital conversion components than a low-end digital set-top.

CONFIGURATION ISSUES

"You're not really getting the best picture quality you can get," said Wes Hoffman, CEO of ICTV Inc., an interactive-TV provider that has been trying to convince cable operators to put much of the digital hardware at the headend rather than in the box. "A lot of the image issues are based on the configuration."

In other words, an analog depiction of a digital signal can appear stellar on a digital TV set. But much of that is a function of which digital set-top box a cable operator has made available to subscribers in a particular system — and what kind of outputs reside on the box.

For example, analog outputs range from high-quality "HD component video" models all the way down to the more commonly used "composite video" outputs, which send a much lower-quality signal.

"A component analog output is as close as you can get to being a digital-quality picture," said Graham Williams, vice president of technology at set-top maker Pace Micro Technology Americas. "You might be able to measure the difference with equipment, but the naked eye wouldn't see the difference."

CE retailers often must walk confused consumers through some of these nuances at the point of sale on the showroom floor. But for cable customers looking to purchase a digital TV set, that would require knowing what kind of boxes the various local cable operators have deployed.

"Our sales associates are pretty well trained," said Circuit City spokesman Jim Babb. "I don't know whether our sales associates actually say ACME Cable is good, and Beta Cable is bad, but part of the explanation is to tell the customer that if you have a bad signal going into that TV set, [a digital TV set] is not going to work miracles."

So should cable operators that have launched nationwide ad and marketing campaigns touting "digital picture and sound," rethink their campaigns?

"People want better pictures; they don't care if it's digital or blue," said Char Beales, president of the Cable & Telecommunications Association for Marketing. "The industry needs to get away from industry jargon to market these new services. What consumers want is more choice and better picture quality."

Beales added, though, that the industry has done an "outstanding" job marketing digital cable so far: "The question is how do you keep it going at the current pace." An estimated 18 million customers now have digital cable.

STILL SKEPTICAL

Meanwhile, Lovern said he finds any industry skepticism of his arguments interesting.

"If this is not a big deal," he asks, "then why don't they just tell the consumer that this product is designed for analog TVs?"

Lovern said he'll continue his fight at the federal level, and others noted that the FCC theoretically has the authority to take action.

"The Commission has a reasonable basis to act in areas related to promoting the DTV transition," said Anita Wallgren, counsel in the Washington, D.C., office of Sidley, Austin, Brown & Wood, and a former advisor to ex-FCC Commissioner Susan Ness. But she added that it's "appropriate and best" for industries to work out such issues on their own.

Lovern, of course, disagrees. "Consumers are getting beat up every day," he said. "This is an example of just how screwed up the regulatory system is in the U.S."

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