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DTV more than a theory?

The digital television era has arrived.

Or haven't you noticed?

It's true that the majority of the country's 1,700 TV stations won't have to transmit a digital signal for another two years and, at the earliest, won't be required to return their analog spectrum to Uncle Sam until 2006.

And it's true that virtually no one has ever seen a high-definition broadcast.

And it's true that more than a few broadcasters believe the industry standard may not work.

But there are believers, too. Consider that the hottest names in television and at this year's National Association of Broadcasters convention include Internet entrepreneurs and cutting-edge companies that either didn't exist a couple of years ago, or wouldn't have been caught dead at a broadcasting convention. Names like America Online, iBlast and Geocast Network Systems.

What's more, TV stations are well ahead of their government-mandated schedule for going digital. Two weeks ago KMTV(TV) Omaha became the latest outlet to transmit a digital signal. Now, stations in 48 markets are transmitting in digital, even though the government requires only the Big Four network affiliates in the top 30 markets to offer digital signals. With the addition of KMTV(TV), digital signals now can reach 62% of U.S. TV households.

Even those who are supportive recognize the growing number of problems:

  • Whether the current standard created by the Advanced Television Standards Committee will work with indoor reception and with the wireless portable devices being designed for broadcasters'surplus digital spectrum.

  • Lack of a clear business model for recouping the $4 million to $5 million per station necessary to build DTV transmission facilities.
  • Lingering delays in bringing digital sets that work with cable service to market, most importantly with copy protection safeguards adequate to quell Hollywood's reluctance to let high-definition movies be broadcast.
  • Skepticism hindering stations'abilities to raise cash for digital tower and facilities construction.
  • Continuing debate over broadcasters'right to demand cable carriage of digital signals during the transition from analog.

A recent NAB poll shows 70% of station owners favoring a delay in the rollout schedule. In a January survey by Broadcasting & Cable, 78% of the respondents also favored a delay.

FCC Chairman Bill Kennard says he is simply baffled by that attitude.

"Why in god's name would you want to delay the transition?" he asks. "Industries that compete against broadcasting are charging ahead and starting to deploy digital products-the satellite and cable industries are there. I don't want, on my watch, to leave the broadcast industry in the digital Dark Ages."

The questions surrounding DTV have many broadcasters wondering whether the industry is ready to jump into the digital age. Multiplying their anxiety is the government's plan to begin the first auction of returned spectrum in June. The FCC will put up for bid spectrum used for TV channels 60-69, and the winners are expected to be some of the country's largest telecommunications firms. The rest of the returned spectrum is slated to be auctioned beginning 2002.

By law, the 85-plus stations now operating on the 700 MHz band where channels 60-69 are located won't be required to vacate until digital penetration has reached 85%, and no sooner than 2006. But Kennard is strongly encouraging stations to accept early buyouts from the winners to make room for new services like wireless Internet.

The agency's eagerness has some industry players questioning whether the agency is losing its commitment to free, over-the-air television in favor of new cutting-edge services.

Yet, spectrum is big business. "Massive stake holders will buy this spectrum at auction, so when 2006 rolls around, the political pressure to evict broadcasters is going to be enormous," says David Donovan, lobbyist for the Association of Local Television Stations. "Paid cellular or paid data services may accord a higher price in the marketplace than advertiser-based free TV. But how do you square that with federal policy to make sure free television service is available for everyone?"