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A Clear DTV Internet strategy

WKRC-TV, Clear Channel's CBS affiliate in Cincinnati, is offering viewers within reach of its DTV signal the opportunity to receive over-the-air high-speed Internet access, a move the station says will drive DTV-based revenues and help bridge the digital divide.

Leon Brown, COO of Clear Channel Wireless (and also vice president of engineering at Clear Channel-owned WKRC-TV) says the message to the consumer is a simple one: the wait is over. "Consumers don't need to move to get DSL or cable modems."

Subscribers to the service, dubbed Delta V, pay $40 a month, with $15 going to the station. Users need a DTV PC tuner card, a standard UHF/VHF antenna to receive the signal and an Internet Service Provider giving them dial-up access to make requests for content. The request is sent out over the phone line to the Web and the information requested is re-routed to a router at the station. That's encapsulated into IP MPEG and sent to the DTV transmitter. It's then sent out over the air, with the packets each identified for a specific PC so data is only received by the antenna attached to that PC. The connection speed is 256 kb/s, five times faster than traditional dial-up connectivity.

Clear Channel Wireless has already found a number of station groups that are interested in future deployment.

Stuart Beck, president of Granite Broadcasting and head of the Broadcasters Digital Cooperative, says that a number of the cooperative's members, who are actively looking for ways to monetize digital spectrum, are impressed with the potential.

"Of all the business plans we've seen over the last couple of years to develop some revenue out of the digital conversion, this is by far the most compelling," he says.

Beck adds that many of the members of the cooperative have signed letters of intent to move forward on an exclusive basis with Delta V in their respective markets if the product takes off. Those groups include Granite, Benedict, Citadel, Evening Telegram, Fisher, Pappas, Sainte Partners, and stations KCEN-TV Temple, Tex., and WRNN-TV Kingston, N.Y.

To offer the service, stations need a rack of transmission and server equipment that is supplied by Harris. The gear, which costs approximately $200,000, is installed at the transmitter. Beyond that investment, stations must dedicate a portion of their digital spectrum to the service. Up to 1,500 subscribers can be supported by each 1-Mb/s block. WKRC-TV, for example, has turned over four megabits to handle up to 6,000 subs. That still leaves enough to broadcast an 1080i HDTV signal.

"Unlike the other things we've seen, which are businesses looking for a reason to be, this is a business that wants to be done," says Beck. "Why should we cast about looking for stuff when we know there is a significant demand for this kind of service? If you can take care of the technical side you're going to get customers."

One of the keys to the service from a station standpoint is it doesn't require millions of viewers to be fruitful. MikeDeClue, vice president of engineering for Clear Channel Wireless, says that if WKRC-TV can sign up 6,000 subscribers that will mean $1.08 million in additional revenues for the station.

"The first win is we help the station pay for the transition to DTV," adds Brown. "The second win is we help bridge the digital divide. And the third win is we're providing real dollars income to the government through the 5% spectrum fee."

DeClue says the potential customer base is already expanding. For example, local cable operators can offer cable-modem service to analog customers because Clear Channel Wireless has a version that can transmit via cable. And because it is a wireless Internet connection, public service applications like tying police officers into Web databases from their cars for photos of suspects are also possible.

"It seems to me you could fill up on customers quickly," adds Beck. "And politically it makes a whole lot of sense because it gets stations involved in crossing the digital divide. I was really surprised when I looked at the swiss cheese service maps of DSL that broadcasters have a much better coverage area."

Adds Brown: "We recently did a test where we were driving around the city in a van with a PC hooked up to a new generation DTV receiver and an antenna. The guys in the back were surfing at 256 kb/s driving around at 45 mph."

"It can also be used by doctors or architects," adds DeClue. "It can be distributed to what were before arguably impossible situations. The television transmitter is a powerful device, and if you're within range of the DTV transmitter you can have remote Web access."

The $40 price point may sound steep, but Brown says it's typically cheaper than DSL or cable-modem subscriptions. "In all candor, we want to price in such a way that we aren't overly competitive with the phone companies," he says. "We honestly don't want to go into competition with them at this point. And in a way we're qualifying their future customers."

The current emphasis is on the Cincinnati market. The company already has letters of intent or contracts from 100 more stations, with other markets rolling out in late 2002 or early 2003. Brown hopes that other DTV stations in the market will sign on as well.

"We want more than one transmitter in a market," he says. "We can serve more people on the far side of the digital divide. The system also has the ability to manage the consumer load from one station to another so the station can use the whole bitstream for the Super Bowl or go off air for maintenance."