Digital TV Mandate


August 9, 2002



BOB GARFIELD: We're back with On the Media. I'm Bob Garfield.

BROOKE GLADSTONE: And I'm Brooke Gladstone. This week, in an effort to speed up the nation's transition to digital TV, the FCC ordered television manufacturers to install digital tuners on all sets by 2007. This is guaranteed to push up the price of TVs, prompting howls from manufacturers and consumer groups. The FCC's order stems back to the Balanced Budget Act of 1997 when Congress required all broadcasters to send their signals digitally by 2007. But that only applied in areas where 85 percent of Americans could receive the digital broadcasts. In the ensuing years, one delay has begotten another, and here to comb it all out for us is Michael Fremer, contributing editor of the Stereophile Guide to Home Theater. Michael, welcome to the show.

MICHAEL FREMER: It's great to be back, Brooke.

BROOKE GLADSTONE: Okay, so why and why now?

MICHAEL FREMER:What's happening is there's a lot of pressure for the digital transition to take place to consumers can watch high definition television and digital television in their homes. It's happening much slower than it was supposed to be happening for a variety of reasons. Right now it's only being broadcast over the air. Ninety percent of people get their television from satellite and cable, and so the fact that it's being broadcast over the air does not do most people any good. The cable industry has been very slow to pick up on HDTV and DTV because it takes a lot of band width to broadcast high definition television -- there is not a big incentive economically for them to do it. Meanwhile the FCC that's in charge of most of this has been doing very little because Michael Powell is a laissez-faire kind of Republican -- he wants everybody to work the issues out and let the market take over. Well that's not happening.

BROOKE GLADSTONE:So if Michael Powell is, as you say, laissez-faire, why is he suddenly pressing television manufacturers to upgrade their sets and causing consumers groups to cry that this is unfair to consumers?

MICHAEL FREMER:There's a lot of pressure from Congress to make the transition happen faster because when the analog wave lengths are given back to the government they will auction it off and there'll be about a 20 to 60 billion dollar income for the government. This money will lower the amount of the deficit. Originally it was going to be part of the surplus. Now it's supposed to lower the deficit. And the more they can lower the deficit, the better the politicians will look. So there's a lot of pressure from Congress on Powell -- he has to so something.

BROOKE GLADSTONE: Why do you think Congress's motivation in this case is principally financial.

MICHAEL FREMER: Because they need the revenue.

BROOKE GLADSTONE: Have you been hearing from people on the Hill who have said that?

MICHAEL FREMER:Yes. The people on the committees that are involved in this, that, that saw this as a way for the government to make money now see it as a way for the government to simply lower the deficit. It is definitely to a great degree a financial issue.

BROOKE GLADSTONE:Well is this the best way to transition to digital TV if as you say 90 percent of people get their television from cable and satellite, why don't they just use the must carry rules and get cable systems to pick up the digital signals?

MICHAEL FREMER:That's what Powell was pressured to do by certain groups all along, and he was loathe to do that. The must carry rule of course mandates that cable systems have to carry local channel programming. They have to carry the analog channels. It could have been mandated that they also have to carry the digital channels. There would have been a court case over that, but he should have tried that but that's not in his nature to do that, so there's this bluster now about this terrestrial digital tuner being put in every set. Ninety percent of consumers will be paying for this and not be able to use it!

BROOKE GLADSTONE: You don't think this will speed the transition to digital? What do you think the impact will be?

MICHAEL FREMER:The impact will simply be to bring the price of the sets up. How much that, that's a matter of contention as well. How many people are going to want to put up antennas on their roofs with a rotor so they can get the signal? How many people can actually do that? If you're in a big city apartment, you can't do it. If you're living in a rural area you can't do it. If you're living in a suburban or city area that has a lot of mountains like Los Angeles, San Francisco or Denver, you're not going to be able to pick up the signal anyway! The only way that digital transition is going to really occur is if the cable companies begin providing the service and the satellite companies begin providing the service. Satellite is willing to do it. If Direct TV and Echo Star [sp?] could be allowed to emerge, that will speed the transition, but there are a lot of people on the hill against that!

BROOKE GLADSTONE: But cable systems don't seem to want to do it.

MICHAEL FREMER:Well the cable systems have to wake up, because the cable systems have invested a lot of money in fiber optics and all kinds of other expensive band width-enhancing technologies in order to provide consumers with interactive video and with pay per view. What's happened is that they have not been able to derive the income from that because consumers are buying big screen televisions and seeing how great a picture they can get with DVDs and how good a sound they can get with DVDs, and the cable companies are still offering fuzzy 4 by 3 pictures with bad sound for pay per view!

BROOKE GLADSTONE: So then ultimately they'll get the message and start to offer digital, won't they?

MICHAEL FREMER:That's what we have to hope. We have to hope that they realize that the only way to get this is to offer high definition and charge consumers for it. The people with the deep pockets will pay the money for the better picture and sound once they see it. Most consumers when they see a high definition picture, they go oh, my God! How do I get that?! I want to have that!

BROOKE GLADSTONE:Okay, Michael, this brings me back to the first question I asked you -- if this is a really inefficient way to speed the transition to digital, then why did the FCC take this approach?

MICHAEL FREMER:Powell says: "This is not a market-oriented policy," quote, "this is an industrial policy." I don't buy either one of those! This is a political decision. It is in everyone's interest to have all the sets able to pick up the digital signal. I agree with that. It's a good public policy, just like they put V-chip and other things into sets mandated by the government. But as far as speeding along the digital transition, I don't see this as being anything other than a political move to take the heat off the FCC.

BROOKE GLADSTONE: Well Michael, thank you very much.

MICHAEL FREMER: Oh, it was my pleasure Brooke.

BROOKE GLADSTONE: Michael Fremer is a contributing editor to Stereophile Guide to Home Theater. [MUSIC]