[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
HIGH DEFINITION TELEVISION AND RELATED MATTERS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON TELECOMMUNICATIONS,
TRADE, AND CONSUMER PROTECTION
of the
COMMITTEE ON COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
JULY 25, 2000
__________
Serial No. 106-143
__________
Printed for the use of the Committee on Commerce
U.S. GOVERNMENT PRINTING OFFICE
65-906CC WASHINGTON : 2000
------------------------------
COMMITTEE ON COMMERCE
TOM BLILEY, Virginia, Chairman
W.J. ``BILLY'' TAUZIN, Louisiana JOHN D. DINGELL, Michigan
MICHAEL G. OXLEY, Ohio HENRY A. WAXMAN, California
MICHAEL BILIRAKIS, Florida EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas RALPH M. HALL, Texas
FRED UPTON, Michigan RICK BOUCHER, Virginia
CLIFF STEARNS, Florida EDOLPHUS TOWNS, New York
PAUL E. GILLMOR, Ohio FRANK PALLONE, Jr., New Jersey
Vice Chairman SHERROD BROWN, Ohio
JAMES C. GREENWOOD, Pennsylvania BART GORDON, Tennessee
CHRISTOPHER COX, California PETER DEUTSCH, Florida
NATHAN DEAL, Georgia BOBBY L. RUSH, Illinois
STEVE LARGENT, Oklahoma ANNA G. ESHOO, California
RICHARD BURR, North Carolina RON KLINK, Pennsylvania
BRIAN P. BILBRAY, California BART STUPAK, Michigan
ED WHITFIELD, Kentucky ELIOT L. ENGEL, New York
GREG GANSKE, Iowa TOM SAWYER, Ohio
CHARLIE NORWOOD, Georgia ALBERT R. WYNN, Maryland
TOM A. COBURN, Oklahoma GENE GREEN, Texas
RICK LAZIO, New York KAREN McCARTHY, Missouri
BARBARA CUBIN, Wyoming TED STRICKLAND, Ohio
JAMES E. ROGAN, California DIANA DeGETTE, Colorado
JOHN SHIMKUS, Illinois THOMAS M. BARRETT, Wisconsin
HEATHER WILSON, New Mexico BILL LUTHER, Minnesota
JOHN B. SHADEGG, Arizona LOIS CAPPS, California
CHARLES W. ``CHIP'' PICKERING,
Mississippi
VITO FOSSELLA, New York
ROY BLUNT, Missouri
ED BRYANT, Tennessee
ROBERT L. EHRLICH, Jr., Maryland
James E. Derderian, Chief of Staff
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Telecommunications, Trade, and Consumer Protection
W.J. ``BILLY'' TAUZIN, Louisiana, Chairman
MICHAEL G. OXLEY, Ohio, EDWARD J. MARKEY, Massachusetts
Vice Chairman RICK BOUCHER, Virginia
CLIFF STEARNS, Florida BART GORDON, Tennessee
PAUL E. GILLMOR, Ohio BOBBY L. RUSH, Illinois
CHRISTOPHER COX, California ANNA G. ESHOO, California
NATHAN DEAL, Georgia ELIOT L. ENGEL, New York
STEVE LARGENT, Oklahoma ALBERT R. WYNN, Maryland
BARBARA CUBIN, Wyoming BILL LUTHER, Minnesota
JAMES E. ROGAN, California RON KLINK, Pennsylvania
JOHN SHIMKUS, Illinois TOM SAWYER, Ohio
HEATHER WILSON, New Mexico GENE GREEN, Texas
CHARLES W. ``CHIP'' PICKERING, KAREN McCARTHY, Missouri
Mississippi JOHN D. DINGELL, Michigan,
VITO FOSSELLA, New York (Ex Officio)
ROY BLUNT, Missouri
ROBERT L. EHRLICH, Jr., Maryland
TOM BLILEY, Virginia,
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Testimony of:
Campbell, Tom, Corporate Director, Ken Crane's Home
Entertainment Centers...................................... 40
Chapman, Gary, CEO and President, Lin Television Corporation. 77
Fern, Tim, Vice President, Pace Micro Technology............. 79
Green, Richard R., President and CEO, Cable TV Laboratories.. 67
Hatfield, Dale N., Chief, Office of Engineering and
Technology, Federal Communications Commission, accompanied
by Deborah Lathen, Chief, Cable Services Bureau............ 27
Hyman, Mark, Vice President of Corporate Relations,
accompanied by Nat Ostroff, Vice President of New
Technology, Sinclair Broadcast Group....................... 8
Lewis, Richard M., Senior Vice President, Research and
Technology, Zenith Electronics Corporation................. 43
Miller, Matt, President and CEO, NxtWave Communications...... 61
Miller, Robert T., President, Viacel......................... 75
Rainey, Terence J., President, Association of Imaging and
Sound Technology........................................... 80
Shapiro, Gary, President and CEO, Consumer Electronics
Association................................................ 18
Material submitted for the record by:
Consumer Electronics Retailers Coalition, letter dated August
2, 2000, enclosing material for the record................. 106
Massachusetts Institute of Technology, letter dated July 31,
2000, to Hon. Edward J. Markey............................. 128
Shapiro, Gary, President and CEO, Consumer Electronics
Association, letter dated September 1, 2000, enclosing
material for the record.................................... 131
Sinclair Broadcast Group, Inc.:
Supplemental testimony of................................ 102
Supplemental testimony of................................ 152
Zenith Electronics Corporation, letter dated September 6,
2000, enclosing material for the record.................... 144
(iii)
HIGH DEFINITION TELEVISION AND RELATED MATTERS
----------
TUESDAY, JULY 25, 2000
House of Representatives,
Committee on Commerce,
Subcommittee on Telecommunications,
Trade, and Consumer Protection,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:10 a.m., in
room 2123, Rayburn House Office Building, Hon. W.J. ``Billy''
Tauzin (chairman) presiding.
Members present: Representatives Tauzin, Oxley, Stearns,
Gillmor, Shimkus, Pickering, Fossella, Ehrlich, Markey, Eshoo,
Wynn, Luther, Sawyer, Green, and McCarthy.
Staff present: Mike O'Rielly, majority professional staff;
Cliff Riccio, legislative clerk; and Andy Levin, minority
counsel.
Mr. Tauzin. Good morning. The committee will please come to
order. We would ask our guests to take seats and be
comfortable.
I want to take a moment before we get started this morning
to welcome some students from my home district and my alma
mater, Harvard on the Bayou, Nicholas State University. Would
you please welcome the Free Enterprise students, the winners of
the Free Enterprise Program at Nicholas State University. Would
you please welcome their attendance today?
Welcome to this morning's hearing regarding high definition
television and the myriad of issues surrounding our nationwide
transition to digital. The rollout of HDTV is a very important
issue to this committee, and I am looking forward to today's
discussion. We have a lot of testimony to hear.
We have assembled an amazing panel of 11 very prestigious
witnesses today. My apologies for the shoulder-to-shoulder
situation here, but I learned a long time ago that two panels
don't work on these serious issues. If we put you all together,
we can generally get a good give-and-take.
We are going to hear, of course--also see a number of
technical demonstrations today, and so I am going to keep the
remarks as brief as I can. I am going to ask members to do the
same thing.
In 1996, we generally endorsed the Reagan administration's
plan to allow the television broadcast industry to make a
transition from analog television to digital. We afforded each
incumbent television broadcast licensee an additional channel,
basically 6 megahertz of spectrum that can be used during this
transition.
Despite the flexibility provided in the transition
framework, it now seems quite possible that industry will not
meet the FCC's conversion timetable. Some suggest this can be
attributed to uncertainties over technological standards as
they relate to the transmission of digital signals. The
incompatibility between HDTV sets and cable systems and/or the
overall software problems encountered by the set-top box
manufacturers. Yet others have suggested that some broadcasters
have no ultimate intention of rolling out HDTV but instead are
looking to sell off the bulk, if not all, of their 6 megahertz
of spectrum.
Whatever the reasons for the complications, we are
generally concerned that we will not meet our goal for digital
broadcasting in our top 40 markets, much less markets not so
inclined to receive full digital signals before the year 2006.
As a result, we have assembled this very large, very
qualified panel ranking from broadcasters, television networks,
engineers, cable providers, retailers and producers to help us
get to the bottom of the number of important questions that I
and many members have about the transition to digital
television in the U.S.; namely:
Why rollout across the country appears, at least at this
stage, to be less than uniform; Whether some broadcasters
intend to sell off some of their allotted 6 megahertz of
spectrum for windfall profits, which of course was never
intended by Congress.
Which technological modulation standard for HDTV is
better, the 8-VSB or the COFDM; Whether America's cable systems
and networks are having interoperability problems with HDTV
systems and sets and whether such problems have any substantial
implications for digital must-carry; and, finally, what
retailers across the country are experiencing with respect to
the sale of new television sets and set-top boxes.
With these issues serving as a basic frame of reference
outlining the direction in which I would like the hearing to go
today, I will yield back the balance of my time and look
forward to hearing from this esteemed panel of witnesses and
yield to my friend, Mr. Markey, for an opening statement.
Mr. Markey. Thank you, Mr. Chairman, very much.
This is a historic day. It is the first day we have ever
had a computer testify before our committee. And this
demonstration over here of an HDTV set, the big issue has
always been, could you get it in your living room; and now it
turns out you have to get the antenna in your living room as
well. So we are probably trying to move, but we have made great
progress in 13 years, without question, in this issue area.
I want to thank you all so much for coming here today. This
subcommittee has a long history of working on this issue which
began with the hearing on HDTV in 1987, a hearing with the top
executive in Japan showing us what their technology had already
accomplished and which continued as the technology evolved into
digital television. The evolution of HDTV from a foreign analog
technology into an American digital technology is one which
this subcommittee closely monitored and at times prodded the
Federal Communications Commission and the various industry
participants toward progress.
In addition, it became increasingly clear over time that
the DTV standard-setting endeavor at the FCC was more than
about simply creating prettier pictures, but rather encompassed
a national plan to get the broadcast television industry into
the emerging digital domain in a more robust multimedia way.
The result of that effort is a standard that is highly
versatile. A broadcaster can use it to show one channel or
several channels of video programming at different frame rates,
in interlaced format or in the more commuter-like progressive
format. All broadcasters can use a portion of the bit stream
for enhanced data services.
Today, we return to assess progress in the transition, and
this morning, we will hear allegations that the DTV standard is
flawed. Whether the standard is flawed or not is not a policy
issue, but rather an engineering issue. At this point, there
does not appear to be any consensus among engineers as to the
level of importance to associate with any performance measure
for indoor reception of the current standard.
The policy issue is whether there is significant
justification or benefit to changing course at this moment or
embracing delay in order to more fully explore the issue.
A little over 2 years ago, the subcommittee also held an
oversight hearing on the digital TV issue. We still have the
leftover issues from that last oversight hearing in the
previous Congress. Those issues implementing cable must carry
rules, the lack of sufficient digital programming from content
producers, the lack of progress on promoting a competitive set-
top box marketplace, the public interest obligations of digital
broadcasters, and whether the broadcasters have any obligation
to offer HDTV at all or can simply blast data services to the
public remain as issues for today as well.
In the midst of all this, we are now set to embark upon the
first of a series of very ill-considered, budget-driven
spectrum options of the broadcasters' analog spectrum as
mandated by Congress. According to that directive, the FCC is
supposed to auction off spectrum in the areas now occupied by
Channels 60 to 69. Obviously, stations occupying those channels
have yet to leave and are unlikely to vacate such spectrum any
time soon, at least not unless they are heavily compensated for
leaving.
In addition, we are also scheduled to sell the rest of the
analog spectrum even though there is no longer a soul in the
industry who thinks this transition will be over by the year
2006.
In 1997, during the budget deliberations, I offered an
amendment in this committee based upon the 1962 All-Channel
Receiver Act. That spurred the development of the UHF
television industry to ensure that starting next year, the year
2001, all TV sets in the United States had to be at least
capable of displaying a digital signal. That amendment wasn't
adopted, and as a result, we will continue to talk about the
national need to recapture the analog spectrum at the earliest
possible date and policymakers will be wringing their hands
about the slowness of the transition, even as consumers
continue to purchase analog-only receivers through the year
2006, but remembering that in 1997 it was the industry that
killed the amendment which would have mandated that every
television set, by the year 2001, sold in the United States had
the capacity to receive a digital signal even if it was an
analog set.
So this, ladies and gentlemen, is the moment at which we
have arrived, pretty predictably, given the course of events
over the last 3 or 4 years. And I hope throughout the course of
the day we might be able to find from our witnesses what the
best course is to take from this point on. Thank you.
Mr. Tauzin. Thank the gentleman. The Chair recognizes the
vice chairman of the committee, the coach of the Republican
baseball team this week, Mr. Mike Oxley.
Mr. Oxley. Thank you, Mr. Chairman. The tension builds as
we work toward tomorrow night. We would expect, of course,
everybody within the sound of my voice to be attending that
game and root for whomever you want. We would like to have you
there. And we'd like to have your money for charity.
Mr. Tauzin. Good pitch.
Mr. Oxley. Mr. Chairman, I thank you for calling this
morning's hearing on DTV conversion. I am pleased to see that
the subcommittee is conducting rigorous oversight on spectrum
management practices.
DTV holds enormous potential for American consumers and
American businesses alike. There are a lot of exciting
technologies competing for attention in the marketplace, and
that is how it should be. I reviewed the testimony, which is in
all cases thoughtful and most interesting.
I do find it a little ironic that our broadcaster friends,
while insisting on maximum flexibility for themselves and how
they utilize their additional free spectrum, are demanding
mandates on cable operators and set manufacturers--and, by
extension, their customers--to accelerate the acceptance of
digital television. An all-signal reception mandate for set
manufacturers and simultaneous analog and digital must carry
regulations for cable systems are ideas whose time has not
come, in my opinion.
Those are matters to be settled between industry and
consumers. I am not sure that there is a role for the Federal
Government. My advice is: trust the market.
We all knew perfectly well that the time lines we were
setting for digital conversion were unrealistic when we put
them in place. It was publicly noted at the time by Members on
both sides of the aisle, myself included. As anxious as I am to
see the analog spectrum return and brought to the marketplace,
I don't see any point in kidding ourselves about when it is
going to happen.
Also, with respect to digital must carry, I am looking
forward to a resumption of the Cox-Markey dialog on ``must
carry'' rights and local content undertaken during
consideration of the rural loans bill. While the ``liberal-
left, libertarian-right coalition'' never quite struck the
right balance, all of us have to admit that it is an
interesting discussion, and I look forward to more of it.
I yield back.
Mr. Tauzin. I thank the gentleman.
Further requests for opening statements?
The gentleman from Ohio, Mr. Sawyer.
Mr. Sawyer. Mr. Chairman, honoring your request that we
keep our statements short, just let me say thank you for
calling this hearing. If I were to put our inquiry today into
three succinct arenas, it would come down to how are we doing
so far, are there technological or policy impediments that are
standing in the way of our getting where we are to where we
need to go, and are there actions to be taken in this forum or
some other forum to facilitate this transition? I hope that we
can talk about those topics, among others, today.
I yield back the balance of my time.
Mr. Tauzin. I thank the gentleman.
The gentleman from Illinois, Mr. Shimkus.
Mr. Shimkus. Thank you, Mr. Chairman.
In keeping with the hearing, I will be short, but I did
bring along my expert TV analyst, my son David, who is awaiting
high definition TV for Pokemon. And we look forward to that.
Two other things to note, that Harris Communications
manufactures the 8-level vestigial side band, 8-VSB, in my
district; or--I have portions of the city of Quincy, WGM
Quincy, Illinois, is one of the smallest public--I mean,
broadcasters to be now broadcasting in high definition TV in
Quincy, Illinois. We are excited about that.
And I look forward to the hearing and seeing progress
across the Nation. With that, I yield back my time.
Mr. Tauzin. I thank the gentleman.
Further requests for opening statements? Neither side.
Then the Chair is pleased to welcome our panel. Let me
first make unanimous consent that all members' written
statements be made a part of the record. Without objection, so
ordered.
[Additional statements submitted for the record follow:]
Prepared Statement of Hon. Tom Bliley, Chairman, Committee on Commerce
Mr. Chairman, thank you for calling this hearing today.
Today's hearing is focused on an important subject matter that this
Committee has been following for years. In fact, it troubles me to say
that. It is troubling to be here debating this topic given the enormous
work we have already done here.
At the beginning of this Congress, I hoped that we would not have
to hold a hearing on H-D-T-V. I hoped that the marketplace was going to
decide the fate of this technology. I hoped that consumers would be
given the chance to accept or reject HDTV on their own. I had hoped
that there would be no need of another flashy demonstration of what
``could be.'' Sadly, that did not turn out to be the case.
At this particular time, the picture of HDTV still has some analog
snow. There are disagreements at the FCC and within the industry over
HDTV. Not only do these issues stall the sale of new television sets,
but these internal squabbles prevent digital television from becoming a
reality.
You might say these issues are like the Woodrow Wilson bridge in
Alexandria. The fighting over a new bridge continues until the old
bridge collapses. I say resolve these issues and lets finally see if
the marketplace has any interest in this technology.
I applaud all of the manufacturers, retailers, and broadcasters
striving to get this technology out to consumers. In some respects, all
we hear about are the negatives of digital television. In reality,
digital televisions are selling at a quick pace. I hope that this
continues.
Let me briefly address one outstanding issue. Many parties are
discussing the use of the HDTV spectrum to offer supplemental or
extraneous services. Some broadcasters would rather use the spectrum
which Congress gave to them for free, to offer datacasting and other
wireless-type services. Indeed, it has been proposed that one reason we
are having this debate over which standard to use is because one
standard permits greater ancillary services. I think that these
broadcasters have been watching too many episodes of ``Who Wants to be
a Millionaire.''
Let me be abundantly clear to the broadcasting community: You asked
that Congress provide you with an opportunity to offer HDTV. We did
that. Now some of you are getting cold feet. If you want to offer other
services with the HDTV spectrum, you should pay for it, like you would
in an auction.
In fact, as the FCC considers and reconsiders what to charge such
broadcasters for using the spectrum for other purposes, I recommend
that the value be pegged to the price paid for 3G licenses in Britain.
This is a highly valuable spectrum and its price should match its
value. If some broadcasters are willing to pay this as if they are
traditional wireless companies, so be it. If the FCC sets the value too
low, then the FCC should expect to see a request to appear before this
Committee for a discussion.
Moreover, there has been talk of broadcasters trying to leverage
the timing of their exit from the old analog portion of their licenses
for some financial benefit. This is pure nonsense.
Broadcasters are merely one side of the equation in the transition
to digital television. If we learn that some broadcasters are
withholding digital programming and thus falsely extending the digital
transition, then the Committee should revisit the standard in the
Balanced Budget Act of 1997 or prepare additional penalties for
broadcasters that would not harm consumers.
It would be a mockery of the laws passed by this Congress to allow
the broadcasters to create secondary markets for the spectrum they
should return to the FCC as soon as possible. America's wireless
industry seeks to use this spectrum to offer new services. The wireless
industry should not be held at the mercy of a broadcaster unwilling to
exit the band.
Thank you, Mr. Chairman.
______
Prepared Statement of Hon. Anna G. Eshoo, a Representative in Congress
from the State of California
Thank you Mr. Chairman.
During the administration of President Reagan, the FCC initiated a
plan that would allow the television broadcast industry to make a
transition from analog to digital television.
In 1996, the Telecommunications Act brought this picture into
sharper focus. The Act provided the FCC with guidelines to regulate the
additional spectrum that broadcasters were given for use during the
transition period.
Today, we're working toward a target date of 2006 before the
broadcasters will hopefully have completed the transition to digital
television in certain markets. Not until then will the FCC be able to
reacquire the analog spectrum and assign it to the highest bidders at
an auction to be conducted later this year.
I recite this timeline because even after such a substantial period
of time has been devoted to HDTV, I see now that we are faced with even
tougher issues which must be resolved before we can get this technology
to the public.
We must resolve these issues--but we should do so with the
assistance of the industry. I'm pleased that the Consumer Electronics
Association (CEA) and the National Cable Television Association (NCTA)
have worked together to resolve some difficult matters, and I encourage
all parties to engage in similar efforts with regard to remaining
issues
At the same time, I believe that at least some of the problems in
this arena will be solved as the available technology improves.
One of the larger issues facing us relates to which digital
standard should be used. To that end, we may have to decide whether the
question is resolved by opening the marketplace to competition between
the two standards, or by assessing the ramifications of delay at this
juncture. Moreover, we should consider whether we are creating
unnecessary delay in the technology before it finally reaches the
consumer.
Considering how far along we are in the HDTV process, certainly
some relevant inquiries are (1) ``why are we questioning the applicable
standard after a thorough analysis was already performed?'' (2) ``if we
change standards, how will a two to four year delay effect this
industry,'' and (3) ``what will happen to the investments in digital
programming and equipment that have been made to this point?''
Above all, however, after considering all the facts, let's get it
right. In striving to achieve that goal, I look forward to the
information our panel of witnesses can provide for us.
______
Prepared Statement of Hon. Gene Green, a Representative in Congress
from the State of Texas
Mr. Chairman: I appreciate this opportunity to address some of the
problems dealing with the national rollout of HDTV.
I want to begin by saying I am very concerned the FCC is not
exercising proper oversight during the transition from analog to
digital television.
The FCC sends out press releases touting the number of new stations
broadcasting a digital format, but neglects to mention that almost no
one is watching the new signal.
Digital television, and HDTV in particular, is supposed to provide
viewers with an enhanced quality picture resolution and sound
capability.
However, consumers have been extremely slow in beginning the switch
from their old analog televisions sets to new digital versions.
The FCC has indicated that 2006 is the target date when
broadcasters are supposed to begin returning their analog spectrum for
reallocation.
Mr. Chairman, that target date is not going to be met.
The FCC has pushed our broadcasters to upgrade to a digital format
that now may not be able to penetrate the walls of an average house.
In addition, the FCC appears to be doing little to harmonize the
technology needed to allow the digital broadcast signal access to our
nation's cable systems.
The FCC is allowing almost any issue dealing with HDTV to drift
among competing parties without even attempting to provide guidance.
Mr. Chairman, hundreds of millions of dollars have already been
expended in rolling out digital television throughout the country, but
when are we going to have something to show for our effort.
Our broadcasters did their job and got the digital signal up and
running.
Now the question is can consumers receive it without having to
purchase expensive accessories.
As with all household electronics, consumer acceptance is critical.
I am looking to today's panel for evidence that the technology laid
out by the FCC works and that consumers will be able to receive this
new signal at a reasonable price.
I am sure everyone here today remembers the Betamax VHS debate when
Video Cassette Recorders first came out.
Competition in this instance was beneficial because consumers
decided which technology would become the standard.
There are competing digital formats, but the FCC has chosen to
elevate one format over the others and I want to make sure that the
they did not pick the Betamax equivalent for HDTV.
I would like to hear from today's panel on when they believe
consumers will begin switching over to HDTV in large numbers.
And if anyone can suggest steps the FCC could take to help
streamline this conversion process, I, along with the rest of the
Subcommittee, would be very interested.
Mr. Chairman, we can throw millions of dollars at providing a
digital broadcast signal, but if consumers lack the infrastructure to
receive that signal, then digital is going to vanish into thin air.
Thank you Mr. Chairman and I yield back the balance of my time.
Mr. Tauzin. Second, I ask that all our panel members'
written statements be made a part of the record without
objection. It is so ordered.
I was just remarking to my friend, Mr. Markey, that the one
nice thing about a computer testifying is we can probably keep
the computer within the 5-minute rule. The challenge will be to
keep the rest of our panel within the 5-minute rule.
We have 11 members of the panel. We have some
demonstrations. So you notice the members have been very good
about keeping their opening statements short, staying within
the 5-minute rule. There is a timer device somewhere on the
desk in front of you. It will light up green and then yellow
and red. When red is on, it is time to wrap up; so wrap it up
as quickly as you can.
Let me quickly introduce the panel. Then we will go to
those who will make demonstrations so we can get the
demonstrations done as quickly as possible: Mr. Dale Hatfield,
Chief of the Office of Engineering and Technology of the
Federal Communications Commission, is with us today and is
accompanied by Deborah Lathen, Chief of the Cable Services
Bureau; Mr. Richard Lewis, Senior Vice President of Research
and Technology of Zenith Electronic Corporation; Mark Hyman,
the Vice President of Corporate Relations of Sinclair
Broadcasting; Gary Shapiro, President and CEO of Consumer
Electronics Association; Gary Chapman, CEO and President of LIN
Television Corporation; Richard Green, President and CEO of
Cable TV Laboratories; Matt Miller, who is President and CEO of
NxtWave Communications; Robert Miller, who is President of
Viacel of New York; Tom Campbell, Corporate Director of Ken
Crane's Home Entertainment Centers; Tim Fern, representing Pace
Micro Technology, Director of Engineering of that company; and
Terence Rainey, President of the Association of Imaging and
Sound Technology here in Vienna, Virginia.
We will start with Mr. Mark Hyman, Vice President of
Sinclair Corporation, who I understand has a demonstration for
us. Mr. Hyman is recognized.
STATEMENTS OF MARK HYMAN, VICE PRESIDENT OF CORPORATE
RELATIONS, ACCOMPANIED BY NAT OSTROFF, VICE PRESIDENT OF NEW
TECHNOLOGY, SINCLAIR BROADCAST GROUP; GARY SHAPIRO, PRESIDENT
AND CEO, CONSUMER ELECTRONICS ASSOCIATION; DALE N. HATFIELD,
CHIEF, OFFICE OF ENGINEERING AND TECHNOLOGY, FEDERAL
COMMUNICATIONS COMMISSION, ACCOMPANIED BY DEBORAH LATHEN,
CHIEF, CABLE SERVICES BUREAU; TOM CAMPBELL, CORPORATE DIRECTOR,
KEN CRANE'S HOME ENTERTAINMENT CENTERS; RICHARD M. LEWIS,
SENIOR VICE PRESIDENT, RESEARCH AND TECHNOLOGY, ZENITH
ELECTRONICS CORPORATION; MATT MILLER, PRESIDENT AND CEO,
NxtWAVE COMMUNICATIONS; RICHARD R. GREEN, PRESIDENT AND CEO,
CABLE TV LABORATORIES; ROBERT T. MILLER, PRESIDENT, VIACEL;
GARY CHAPMAN, CEO AND PRESIDENT, LIN TELEVISION CORPORATION;
TIM FERN, VICE PRESIDENT, PACE MICRO TECHNOLOGY; AND TERENCE J.
RAINEY, PRESIDENT, ASSOCIATION OF IMAGING AND SOUND TECHNOLOGY
Mr. Hyman. Thank you, Mr. Chairman.
Do you want the demonstration first?
Mr. Tauzin. Yes.
Mr. Hyman. I would like to call forward Mr. Nat Ostroff,
who will be conducting our actual demonstration.
Mr. Tauzin. Those of you who have demonstrations, it will
not be assessed against your 5 minutes. So we will proceed with
the demonstrations first and then get the testimony in.
Mr. Ostroff. Thank you for the opportunity.
Mr. Tauzin. Please identify yourself for the record.
Mr. Ostroff. My name is Nat Ostroff. I am Vice President of
New Technology at Sinclair Broadcast Group.
We have a short videotape which will be displayed on the
screen in the back, which describes some of the efforts made to
illustrate the differences in reception of the two transmission
technologies that are in debate today. After that, we will have
a short, live demonstration as well.
So, if possible, we could go to the videotape and roll
that, and then we can go to the live demo.
Mr. Tauzin. Let's do that. If you will roll the videotape.
[Videotape played.]
Mr. Tauzin. I understand now you will do a live
demonstration.
Mr. Ostroff. Yes.
What you saw in that attempt, to take away from that, is
the fact that the stations that were received, the antenna was
not pointed in the same direction for each station, which
means--at least in that experiment--that any channel changing
would require antenna readjustment.
What I want to show you now----
Mr. Tauzin. I want to stop and ask you something.
The antenna you demonstrated was an indoor set-top box
antenna, as opposed to the large antennas that are normally
found for television outdoors?
Mr. Ostroff. That is correct. I would say, of the 250
million TV sets in use today, 40 percent of them are not
connected to cable or satellite and the vast majority of those
are relying on rabbit ears or loop antennas in the
broadcasters' prime coverage area. So we are dealing with
small, simple antennas to get analog.
Mr. Tauzin. Tell us what you will do in the live
demonstration.
Mr. Ostroff. What we have done--for live demonstration, I
want to show that we can receive a COFDM-based signal from WRC
here in Washington with the bow-tie antenna sitting on the
witness table. And the point being made is, it is not necessary
to point the antenna out the window. As you will find out
today, in 8-VSB, it doesn't need to be critically adjusted. It
was dropped down on the table. I would walk around the room
with it, and we could receive high definition television.
I want to point out it is at a data rate that is higher
than the data rate in ATSC, so there is no attempt or no reason
to reduce the data rate in order to get robustness of reception
with simple indoor antennas.
Mr. Tauzin. Would you do that?
Mr. Ostroff. We are going to actually turn the receiver on
and display what we are receiving off that bow-tie antenna.
The video is on a loop. And, of course, naturally the loop
ends just as we start the demo. It takes about 7 seconds or 8
seconds to restart; it will in just a moment.
Mr. Tauzin. So we understand what we are seeing, this is an
actual broadcast?
Mr. Ostroff. This is an actual broadcast over the air right
now instantaneously being received from WRC in Georgetown with
the bow-tie antenna sitting on the witness table.
Mr. Tauzin. That is the small antenna we are looking at
here.
Mr. Ostroff. That is the small antenna we are looking at.
That could probably be replaced with something even smaller,
but for purposes of the demonstration, you can buy that for
about $1.98 at Radio Shack.
Mr. Tauzin. This is using the COFDM?
Mr. Ostroff. This is using the COFDM modulation system that
is incorporated in the DVB-T standard.
Mr. Tauzin. This is obviously some film, right, being
broadcast?
Mr. Ostroff. That is correct. It is not live from New York.
Mr. Tauzin. But it is a live broadcast from the station of
this film?
Mr. Ostroff. That is correct. It is a live broadcast from
the station in this room.
Mr. Tauzin. This is a real-time, over-the-air broadcast of
this film?
Mr. Ostroff. That is correct. If this was the Super Bowl
and you wanted to watch it in your home and you happened to be
in this location, a bow-tie antenna on the back of your TV set
would get you high definition Super Bowl coverage.
Mr. Tauzin. The point of your demonstration is that such an
antenna could not work effectively using the 8-VSB technology?
Mr. Ostroff. We want to make the point that it may work in
some locations, but it is a question of ease-of-reception
reliability. And under those circumstances the consumer is the
final judge and jury on everything we do; and if the consumer
is dissatisfied with reception on the signal, he is not going
to buy the TV receiver.
Mr. Tauzin. All right. I think it is appropriate now if we
take your 5 minutes of testimony, Mr. Hyman.
Mr. Hyman. Thank you.
Mr. Tauzin. Then we will go to the second demonstration.
Mr. Hyman is recognized for 5 minutes.
Mr. Hyman. Thank you, Mr. Chairman, members of the
committee, fellow panel members. I am pleased to be here to
address an issue we consider very crucial to the future of free
over-the-air television. I am speaking on behalf of the several
hundred TV stations which supported Sinclair's petition for
notice of a proposed rulemaking for a second DTV transmission
system. The petition, I might add, was summarily dismissed by
the FCC.
We are here to request this committee use its resources to
urge the FCC to adopt a second digital television standard,
giving broadcasters the free market choice on how to best serve
their markets. The current U.S. standard is called ATSC, and we
request the adoption of a second standard called DVB. It is our
view the ATSC standard fails in its most fundamental
requirement, to replicate the ease of reception that exists
with today's analog television.
To paraphrase the cover title of the magazine on display in
front of you, we have stepped back 50 years. Broadcasters serve
the American public for free and, therefore, have a strong
interest in making certain we can do just that in the simplest,
most efficient way possible.
Digital TV has all the promise of a newborn child. However,
during its development, no one ever conducted any meaningful,
real-world perception test using indoor antennas in areas where
most Americans live, the urban and suburban environments. It is
now freely admitted by most, knowledgeable, independent
observers that ATSC doesn't work today as most people think it
should. I won't bore you with the history of how we got here
other than to tell you, it was sobering for us to learn that
millions of Americans who now easily receive free television
using simple antennas will not be able to do so in the digital
world due to the ATSC's transmission system.
This system, called 8-VSB, is extremely fragile in the
presence of a naturally occurring phenomenon in the world of
radio waves called ``multipath.'' Multipath occurs when you do
not have direct line of sight between the TV transmitter and
your antenna, and the signal is degraded as it is reflected off
a wide variety of objects including buildings, foliage,
automobiles, and people.
On analog TV, multipath is seen as ghosted images or snow.
While annoying, TV is still watchable. However, in digital you
either receive a picture or you do not. In our industry, we
call the no picture the ``blue screen of death.''
Indeed, former FCC Chairman Newton Minow's admonition that
``television is a vast wasteland'' has new meaning today. A
cell phone company used to run a commercial that said the phone
is no good unless the call goes through. This is how we feel;
our broadcast must get through.
The number of ATSC countries has dropped from five to three
as Argentina and Taiwan announced their decisions to rescind
adoption of the ATSC standard, citing the failure of 8-VSB. In
contrast, 32 countries worldwide, representing 2 billion
people, have adopted a standard using the transmission system
we favor, COFDM. Side-by-side comparisons have demonstrated the
superiority of COFDM over 8-VSB, a fact validated by the
marketplace. Thus far, European countries with a total
population of 68 million have over 800,000 DTV receivers in
consumers' homes in less time that it took this country, 273
million, to acquire less than 34,000.
Given this stark contrast, it is not surprising that
independent observers expect the global adoption of COFDM to
continue. Soon the U.S. will be an island of 8-VSB in a sea of
COFDM.
American isolation on this technology issue is damaging not
only because we have adopted a flawed standard, but also
because of the tremendous economic and trade implications.
Americans will not have DTV equipment that is interoperable
with the worldwide standard, and the U.S. will not be able to
capitalize on the tremendous scales of economy offered by a
global standard. This means Americans may possibly pay the
highest prices in the world for digital television.
We believe the U.S. should be making dust, not eating dust.
When we first raised this issue, our critics denied there
was a problem. Then they admitted there was a problem, but they
had solved it. Then they admitted they had not solved it but
they soon would. Now they tell us the solution may be a few
years away, but we should stay the course and rely on the
subscribing to satellite or cable or installing an expensive,
cumbersome outdoor antenna such as the one on display in the
back of the room.
The chart before you is CEA's answer to the people of
Washington DC. Have an electronics store locate your house on
the map. Find the antenna that matches the color of the area in
which you live, bring it home and install it. You will notice
that most Washingtonians live in a red zone, requiring that
they install a large-size outdoor antenna, just as we display
today.
Another important issue bears mentioning. The FCC's table
of allotments, which assigns corresponding digital channels to
existing analog channels, managed to exclude the Nation's 9,700
TV translators. Translators provide over-the-air television
coverage in terrain-challenged markets, as well as deliver
signals to cable head end, the origin for cable carriage of all
local stations.
The survey summary before you shows that nearly one out of
three American homes is located in an area that is served by
one or more translators. While the ATSC standard provides no
relief for this dilemma, the DVB standard does because it
permits the use of on-channel repeaters, thereby ensuring the
availability of free and local TV service throughout the
Nation.
In closing, at the risk of sounding melodramatic, we
believe the future of free TV rests on what happens with the
DTV standard. Maintaining the status quo will assign to
broadcasters a digital death sentence unable to easily reach
millions of viewers. Such an outcome could end free TV, leaving
television in the hands of the cable and satellite gatekeepers
that are not free and are controlled by too few.
Thank you very much.
[The prepared statement of Mark Hyman follows:]
Prepared Statement of Mark Hyman, Vice President for Corporate
Relations, Sinclair Broadcast Group, Inc.
introduction
We at Sinclair Broadcast Group, Inc. (``Sinclair'') sit before this
Subcommittee today because we want to realize the full promise of
digital service in our communities. To this end, we are committed to
rolling out our digital television service to loyal viewers in our
markets as quickly as possible. Unfortunately, at the moment, this
promise remains unfulfilled. We and other broadcasters have found that
the current DTV technologies and standards in the U.S. have simply not
been conceived or designed well enough for us to provide those services
to the majority of consumers. Despite the critical importance of ease
of reception, the current DTV system was designed around the flawed
concept that TV households would uniformly deploy outdoor rooftop
antennas and thereby enjoy a line-of-sight connection to DTV
transmitters. The American public seems aware of these reception
problems, since only a tiny fraction of consumers are buying DTV
receivers right now. And we at Sinclair don't blame them. It doesn't
make any sense to buy a receiver today that doesn't work and that will
surely be obsolete tomorrow.
Right now, it just doesn't look like the FCC or the industry is
headed towards a solution to this digital dilemma. The equipment
manufacturers blame Hollywood for not producing enough digital
programming, Hollywood blames copyright problems and the cable
industry, and the FCC does not know who to blame and is left with the
status quo. Meanwhile, the law requires Sinclair to spend hundreds of
millions of dollars to set up its digital stations, and the broadcast
industry as a whole to spend billions of dollars in this effort. And,
at the end of the day, because of these technology problems, Sinclair
can't even be sure that it will have a viable business or an
independent means of delivering its digital signal that is not forced
to rely on the cable and satellite gatekeepers.
As a result, Sinclair respectfully requests that this Subcommittee
urge a crucial change in the FCC's DTV policy, one that will address
the ongoing technical problems and enable broadcasters to provide ease
of reception and reliable over-the-air DTV service to American
consumers. Specifically, the FCC should give broadcasters flexibility
with respect to their choice of a DTV transmission standard, a key
technical piece of the DTV system. The FCC should allow broadcasters to
operate using either the current U.S. transmission standard, which we
and others believe does not meet our requirements for ease of reception
in our core coverage areas, or a second transmission standard, DVB-T,
that has been implemented with great success in other countries. This
policy change is fundamental to the future of digital television in the
United States.
who is sinclair?
Sinclair is a publicly traded company with thousands of
shareholders and a multi-billion dollar market capitalization. We are
among the nation's largest group television owners, owning, applying
for, or programming more than sixty commercial television stations.
Given the magnitude of our broadcast interests, we have a huge stake in
the development of DTV. As a matter of fact, we have already invested
millions of dollars to upgrade our facilities and expect to spend a
total of $300 million during the DTV conversion. We are extremely
interested in the key policy issues affecting the transition to digital
television, and we have been extremely active before this Subcommittee
and the FCC on these matters. In particular, we were the first
broadcaster in late 1996 to recognize that the FCC's original DTV Table
of Allotments assigned UHF stations too little DTV power for them to
provide adequate service to their core business areas. We were at the
forefront of an effort that led the FCC to raise the DTV power ceiling
for these UHF licensees, enabling them to be competitive in the digital
environment.1
---------------------------------------------------------------------------
\1\ See Petition for Reconsideration, Sinclair Broadcast Group,
Inc., MM Docket No. 87-268 (June 13, 1997); Memorandum Opinion and
Order on Reconsideration of the Sixth Report and Order, Advanced
Television Systems and Their Impact on the Existing Television
Broadcast Services, 13 FCC Rcd 7418, paras. 58-85 (1998).
---------------------------------------------------------------------------
the dtv transition is stalled
There is a dire need for the technical change that we seek today.
By any measure, the DTV conversion has to this point been a failure.
The Consumer Electronic Association (``CEA'') indicates that fewer than
50,000 DTV receivers capable of receiving DTV service have been sold in
the United States (most of those probably to distributors, retailers,
and broadcasters), a paltry one-twentieth of one percent of U.S. TV
households. At this rate, it will likely be fifteen to twenty years (a
decade or more after the 2006 DTV transition deadline) before U.S.
broadcasters will be able to turn in their analog spectrum and the
federal government will be able to auction off those channels.
While some biased observers point elsewhere, this ongoing failure
results from a key flaw in the current transmission standard for DTV in
the United States, the Advanced Television Systems Committtee
(``ATSC'') standard, which relies on 8-Vestigial Sideband (``8-VSB'')
technology for modulation of the digital signal. The FCC adopted this
standard in 1996 without conducting any field trials of its own.
Deficiencies in the ATSC 8-VSB standard for digital modulation prevent
DTV broadcasters today from providing consumer-expected ease of
reception and reliable over-the-air service to millions of television
households lacking a clear line-of-sight between their TV antennas and
broadcasters' DTV transmitters. For the most part, these are the
millions of households that use the small, simple, inexpensive set-top
antennas so common today, rather than a large rooftop antenna.
Without a direct line-of-sight, a DTV signal traveling to a TV
receiver can be degraded as it is reflected off a wide variety of
structures and objects; such obstacles can be natural or man-made,
stationary or moving, and include walls and furniture within a house,
the exterior of adjacent houses and buildings, lighting and electricity
poles, hills, mountains and other nearby terrain, moving people or
animals, automobiles, aircraft, rain or other precipitation, moving
leaves, and any wind-blown object. These obstacles are clearly common,
and have the potential to affect TV reception in most urban and
suburban areas. While analog multipath reflections typically lead only
to picture ``snow'' and ``ghosting,'' for 8-VSB DTV such reflections
can often mean a complete loss of reception.
During the summer of 1999, we conducted field trials in Baltimore,
open to in-process peer review, which demonstrated severe problems with
ATSC 8-VSB performance under real-world, multipath conditions. Within
our Grade A contour, there was successful reception of our ATSC 8-VSB
signal through small, simple antennas little more than one-third of the
time, but our DVB-T signal was received 100% of the time. Even where
the ATSC 8-VSB signal was successfully received, antennas for the most
part could be moved only slightly before losing reception.2
Clearly, this lack of robustness makes ``channel surfing'' a thing of
the past in the ATSC 8-VSB world.
---------------------------------------------------------------------------
\2\ See ``Comparative Reception Testing of 8-VSB and COFDM in
Baltimore,'' Nat Ostroff, Vice President New Technology, Sinclair
Broadcast Group, and Mark Aitken, Advanced Technology Group, Sinclair
Broadcast Group (September 24, 1999).
---------------------------------------------------------------------------
Since then, there has been an ongoing technical debate on the issue
of ATSC 8-VSB reception, with a number of consumer electronics
manufacturers arguing that improvements in ATSC 8-VSB reception have
been and will continue to be made. Recently, however, this debate
effectively came to a close. The ATSC itself, the expert organization
that recommended and is now charged with governing the DTV standard,
has now confirmed that the existing ATSC 8-VSB standard does not and
will in all likelihood never support ease of reception or reliable
over-the-air service to viewers using small, simple antennas in
broadcasters' core business areas.
First, on June 28, 2000, Robert Graves, the Chairman of ATSC,
conceded that the ATSC isn't satisfied with the performance of ATSC 8-
VSB technology, and he announced that ATSC would begin formal work
towards developing a modified VSB standard.3 Then, in a July
10, 2000 draft of a report on ATSC 8-VSB, the ``Ad Hoc Group to the
ATSC Task Force on RF System Performance'' (``Ad Hoc Group'')--a
special committee formed by the ATSC--indicated that current ATSC 8-VSB
receivers are ``unable to assure robust reception'' under the complex
multipath conditions that are common to urban and suburban
environments.4 With respect to the future development of the
ATSC 8-VSB standard, the Ad Hoc Group found that any real improvements
in ATSC 8-VSB performance under multipath conditions ``are expected to
be of an incremental rather than a revolutionary nature'' and ``will
require new invention and new technological innovation, and the
schedule for these new devices to the consumer marketplace cannot be
reliably predicted at this time.'' Ad Hoc Committee Draft Report at 20.
Finally, the Ad Hoc Group concluded that if and when any solutions to
these multipath problems are discovered, ``the cost of implementing
those solutions may be a significant impediment to market acceptance.''
Id.
---------------------------------------------------------------------------
\3\ ``ATSC Initiates Standards Activity to Explore VSB
Enhancements,'' Advanced Television Systems Committee (June 28, 2000).
\4\ Performance Assessment of the ATSC Transmission System,
Equipment and Future Directions, Report of the VSB Performance Ad Hoc
Group to the ATSC Task Force on RF System Performance, Draft 1.0, at 19
(July 10, 2000).
---------------------------------------------------------------------------
This Subcommittee should bear in mind that these ATSC 8-VSB
reception problems are largely the result of a fundamental flaw in the
concept of the current DTV system. In designing its technology, ATSC
designed a system around a test method developed by ACATS, the advisory
committee that helped develop the U.S. DTV system in the mid-1990's.
Receiver manufacturers adopted a concept for over-the-air consumer DTV
service that was also based on ACATS' test methods. For DTV signal
strength measurements, ACATS wanted line-of-sight DTV reception, and it
used 30-foot rooftop or tower-mounted antennas for its tests. While
this may have been appropriate for that testing, such reception
conditions are clearly not the right model for reception of free over-
the-air broadcast service by today's consumers, millions of whom use
small, simple antennas. Not surprisingly, the current DTV system does
not perform well under actual, real-world multipath conditions.
three alternative approaches for the fcc
With the permanent deficiency of the current ATSC 8-VSB standard
now confirmed, the FCC can choose any of three strategies in its
efforts to revive the DTV transition. First, the FCC can give
broadcasters flexibility with respect to DTV transmission technology;
here, each broadcaster could be granted the option of using either the
existing ATSC 8-VSB standard or a second DTV transmission standard that
has been adopted outside the U.S., with proven, high-quality
performance under multipath conditions. This is the DVB-T standard,
developed and finalized in 1997 by the Digital Video Broadcasting
Project (``DVB''), a global organization consisting of broadcasters,
manufacturers, network operators, and regulatory bodies. (Incidentally,
the transmission system selected by a broadcaster would be invisible to
its viewers, just as in the case of the DTV scanning standard.) Multi-
standard receivers are available today, and adding DVB-T should not be
a limiting factor. Second, in an effort to improve multipath
performance, the FCC can initiate a process to modify the existing ATSC
8-VSB standard in a fully or partially ``backwards-compatible''
fashion. Finally, the FCC can do nothing and hope against hope that the
promises of a small number of consumer electronics and chipset
manufacturers regarding alleged improvements in ATSC 8-VSB receiver
technology--claims now contradicted by the ATSC itself--will prove to
be true.
the only viable strategy--adoption of an optional dtv transmission
standard
We believe that the only viable approach to solving the current DTV
reception problem is to give broadcasters the flexibility to choose
between two transmission options, the ATSC 8-VSB and DVB-T standards.
With such flexibility, broadcasters will be able to select the option
that best suits their business plans and enables them to maximize
service to their local communities. We proposed this approach in a
Petition to the FCC in October 1999, 5 and, in the wake of
that filing (which was dismissed by the FCC without public notice),
companies representing half of all licensed broadcast stations
indicated to us that they also favor this strategy.
---------------------------------------------------------------------------
\5\ See Petition for Expedited Rulemaking, Sinclair Broadcast
Group, Inc., MM Docket No. ------ (October 8, 1999).
---------------------------------------------------------------------------
We do not inherently favor one DTV transmission standard or
another. We do not have a direct financial stake in any of these
technologies. Nothing would please us more than to have a workable ATSC
8-VSB system, now! However, a decision to give broadcasters the
flexibility to use the COFDM-based DVB-T standard would at the very
least provide the American public with a safety net, and would likely
provide a certain, low-risk solution to the current 8-VSB reception
problems.
Why do we believe that a DVB-T system would provide the American
public with the benefits of DTV to which it is entitled? The basis for
our position lies in the design of COFDM technology. Unlike the ATSC 8-
VSB standard, COFDM technology was designed specifically to overcome
the known effects of multipath conditions. The DVB-T standard thereby
permits and has been demonstrated to provide ease of reception and
reliable over-the-air DTV service to viewers using small, simple
antennas in broadcasters' core business areas. And, as shown in
Sinclair's own field trials and in tests in Brazil, it can provide such
high-quality reception while providing HDTV at data rates above 19.4
Mbps (the maximum data rate for ATSC 8-VSB) over U.S.-sized 6 MHz
channels.
Largely for this reason, the DVB-T standard has been adopted around
the world, and has been implemented in several countries with much
greater commercial success than currently enjoyed by ATSC 8-VSB in the
United States. To date, DVB-T has been selected as the DTV modulation
standard in the majority of European nations, including Austria,
Belgium, Croatia, the Czech Republic, Denmark, Finland, France,
Germany, Greece, Hungary, Ireland, Italy, Lithuania, Luxembourg, the
Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain,
Sweden, Switzerland, the Ukraine, and the United Kingdom (``U.K.'').
DVB-T has also been chosen in Australia, India, New Zealand, Singapore
and Turkey. (In Japan, broadcasters will utilize an alternative COFDM-
based DTV standard.) In particular, the U.K.'s DTV service, called
``OnDigital,'' began service in November 1998 within a few days of the
DTV launch in the U.S., and almost eight hundred thousand TV households
in the U.K. are now enjoying reliable, robust DTV reception. In
addition, Brazil recently conducted an exhaustive, head-to-head
laboratory and field trial comparison between ATSC 8-VSB, DVB-T, and
other COFDM-based technologies, using 6 MHz channels, and the Brazilian
government has decided to exclude the ATSC 8-VSB standard from further
consideration. Argentina also announced recently that it will formally
rescind its 1998 adoption of the ATSC standard. Overall, in the near
term, COFDM will be adopted by countries with an aggregate market
potential of almost two billion people. This in itself provides
economies of scale.
Adoption of DVB-T as an optional standard would also permit the use
of ``on-channel DTV retransmitters,'' potentially a critical tool in
preventing the loss of over-the-air TV service in many rural and remote
areas. Today, gaps in broadcasters' signal coverage in these areas,
often caused by rugged terrain, are filled in through the use of TV
translator facilities. During the DTV transition, however, there will
be tremendous congestion in the broadcast TV spectrum, and a
substantial proportion of analog translators will likely have to be
shut down.6 If broadcasters have the option of using the
DVB-T standard, they will be able to use repeaters to receive signals
from their full-power DTV stations and retransmit that programming to
these areas on the same channel. In comparison, it would be almost
pointless to operate these on-channel retransmitters if the FCC
maintains its exclusive reliance on the ATSC 8-VSB standard, because
the retransmitted signals would in most instances lead to effects
similar to multipath conditions in these rural areas and could not be
received by consumers there.7
---------------------------------------------------------------------------
\6\ Roy Stewart, Chief of the Mass Media Bureau, recently stated
that ``[I]t is well established that there is insufficient broadcast
spectrum to accommodate thousands of LPTV stations with full
interference protection without substantially impacting the transition
to digital television, particularly in the rural areas.'' See ``FCC
Questions Low Power TV Broadband Bill,'' Newsbytes (June 15, 2000).
\7\ See, e.g., ``Application of On-channel Boosters to Fill Gaps in
DTV Broadcast Coverage,'' R.W. ``Sam'' Zborowski, ADC
Telecommunications.
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Finally, if broadcasters and consumers alike are given a free
market choice between the two DTV transmission standards, new
competitive forces will be unleashed, greatly benefiting the public
interest. With both standards available, manufacturers of ATSC 8-VSB
and DVB-T chipsets and transmitters will have a strong incentive to
optimize the performance of their chosen system. In fact, even though
DVB-T is not yet permitted in the U.S., we have already seen the
benefits of such competition--it was only after Sinclair and others
brought the issue of poor ATSC 8-VSB performance to the fore and
requested a DVB-T option that manufacturers of ATSC 8-VSB receivers and
chipsets began to make some incremental (albeit insufficient)
improvements to their DTV receivers. In addition, a flexible
transmission standard would actually be consistent with the FCC's
overall approach to DTV technology, as well as its approach to
regulating almost all other communications services, where licensees
have access to a variety of transmission technologies.
arguments against adoption of the dvb-t option should be rejected
Those who argue that the FCC should maintain exclusive reliance on
ATSC 8-VSB have repeatedly made the same basic arguments against the
optional use of DVB-T. These parties claim that (i) such a decision
would increase potential for interference and require substantial
modification of the DTV Table of Allotments, (ii) such a decision would
lead to a multi-year delay of the DTV roll-out, (iii) this decision
would require that an additional modulation standard be incorporated
into DTV receivers, thereby increasing manufacturers' costs and raising
the price of these receivers, and (iv) such a decision would be unfair
to those consumers who have already purchased an ATSC 8-VSB receiver.
While these arguments may be appealing to some, they are meritless. No
one has advanced a legitimate reason against broadcasters having the
option to operate using the DVB-T standard.
First, a flexible transmission policy won't require any
modifications to the DTV Table of Allotments. As a basic matter, we
believe that the FCC should require DVB-T broadcasters to limit their
power levels to the extent necessary to avoid causing greater
interference than what would result from 8-VSB stations' operations at
maximum permitted power levels. This rule would ensure that the DTV
Table could remain unchanged. While this policy might reduce DVB-T
stations' signal coverage, this is no reason to prohibit DVB-T
operations. Such coverage would in all likelihood still be sufficient,
far exceeding the DTV power levels and coverage originally assigned to
UHF stations by the FCC in 1996. In any case, no broadcaster will be
required to operate using the DVB-T standard, and each broadcaster
could simply factor any reduction in coverage into its analysis when
deciding which transmission standard to utilize.
On the second issue, it is the FCC's exclusive reliance on ATSC 8-
VSB that is the real threat of delay for the DTV conversion. The DTV
transition is already down to a snail's pace, and, given the
deficiencies of ATSC 8-VSB reception, most rational consumers should
not even consider purchasing an ATSC 8-VSB receiver at this time. As a
result, sticking with the status quo would likely lead to a decade-plus
delay in the digital transition. In contrast, a decision to give
broadcasters the flexibility to operate using either the ATSC 8-VSB or
the proven DVB-T standard would bring certainty to the DTV roll-out. It
should not take any longer to implement DVB-T than to determine whether
there is a fix for 8-VSB--Sinclair believes that the resolution of any
outstanding technical issues for DVB-T operations could likely be
conducted in less than a year, and that DVB-T set-top boxes could
become rapidly available thereafter.
In addition, we believe that the cost of incorporating an
additional reception mode into DTV receivers would be marginal, and
that the adoption of a flexible DTV transmission policy would therefore
have little effect on the price of DTV receivers. DTV receivers sold
today in the U.S. market are already configured to receive signals with
multiple digital modulation modes--these receivers are typically
designed to receive signals from DBS systems, cable systems, NTSC, and
8-VSB broadcasters. Moreover, there are already more than eight hundred
thousand DVB-T receivers in service today in the U.K. and Europe, and,
given the global economies of scale resulting from such widespread DVB-
T operations, it is likely that the necessary equipment and expertise
are available to incorporate this technology into DTV receivers in the
U.S. at minimal expense. In any case, as the Ad Hoc Group acknowledges,
whatever effect such a policy would have on the price of DTV receivers,
this effect would likely be dwarfed by the price increases associated
with any adaptive equalizer or other receiver-based solution to the
ATSC 8-VSB reception problem.8
---------------------------------------------------------------------------
\8\ As indicated above, the Ad Hoc Group found that the cost of
such receiver-based solutions ``may be a significant impediment to
market acceptance.'' Ad Hoc Group Draft Report at 20.
---------------------------------------------------------------------------
Finally, concern over consumers' prior investment in ATSC 8-VSB
technology is also no reason to maintain exclusive reliance on the ATSC
8-VSB standard. Fundamentally, under a flexible transmission policy,
ATSC 8-VSB service will be able to continue. In any case, not many ATSC
8-VSB receivers are even in the hands of consumers. Currently, there is
no reliable data on exactly how many receivers have been bought by
consumers; surely, many of the receivers that have been sold are in the
distribution chain, and even that number is miniscule. Instead, this
Subcommittee and the FCC should be more concerned about the fate of the
existing ``legacy'' analog television sets, which today total
approximately 240 million nationwide. As time goes on, many households
will want to receive digital programming through their current analog
sets, and, with DVB-T service available, consumers who own analog TV
sets and simple antennas will be able to receive DTV programming by
using a digital-to-analog converter box. If the FCC relies on ATSC 8-
VSB alone, such analog sets will be unable to receive that digital
programming over-the-air unless a large outdoor antenna is also
deployed.
the 8-vsb alternatives--the road to more delay
We believe that the two other approaches to resolving the ATSC 8-
VSB reception problems are fundamentally flawed. First, any effort to
create a new, fully or partially ``backwards-compatible'' version of 8-
VSB that provides better performance under multipath conditions would
likely require a lengthy technical debate, followed by an even longer
standards-setting process. Sinclair believes that such a complex
technical process would take a minimum of three to five years to
complete. It is unreasonable to ask American consumers to wait that
long for the promised benefits of free, over-the-air DTV, when digital
television services are thriving in other countries around the world.
In contrast to this strategy, the implementation of an optional DVB-T
standard would be largely an administrative task, with the most
complicated aspect, the determination of interference criteria, likely
taking little more than six months.
The second of these 8-VSB strategies--simply waiting for consumer
electronics manufacturers to improve their ATSC 8-VSB receivers--is
simply untenable. (Unfortunately, while untenable, this is the FCC's
approach at the moment.) It is true that many equipment and chipset
manufacturers maintain that nothing is wrong with the ATSC 8-VSB
standard and urge the Commission to leave this standard unchanged. As
an initial matter, this support for the ATSC 8-VSB standard is not at
all surprising, given the trail of money winding through these
corporations. One of these companies has a direct, longstanding
intellectual property interest in this standard, another's business is
focused exclusively on the design, manufacture, and sale of ATSC 8-VSB
chipsets, a third has a significant investment in that 8-VSB chipset
manufacturer, and a fourth company has a formal partnership with
DirecTV and therefore benefits if terrestrial DTV fails and satellite
subscribership grows.
In an effort to promote the existing standard, several of these
companies last summer and fall made sweeping claims regarding a
resolution of the ATSC 8-VSB reception problems.9 These
promises have gone unfulfilled, however, and after almost four years of
failure, there isn't any basis for entrusting these parties with the
future of the conversion to digital television by the U.S. broadcast
industry. (While these companies point to the large number of DTV
receiver models and variations they have produced to date, none of
these receivers have been shown to provide adequate off-air reception.)
---------------------------------------------------------------------------
\9\ See ``NxtWave Communications' Breakthrough Chip Makes Mobile
and Indoor Reception of Broadcast Digital Television Possible,''
Business Wire (August 24, 1999); ``New Digital Receiver from Motorola
Enhances 8-VSB Reception, Solves Multipath Problems,'' Business Wire
(August 23, 1999).
---------------------------------------------------------------------------
The ATSC itself has now confirmed that the ATSC 8-VSB standard will
likely never support robust DTV reception under multipath conditions.
As a result, if the FCC chooses to continue its exclusive reliance on
the ATSC 8-VSB standard, broadcast viewers will be forced either to
obtain a line-of-sight to DTV stations' transmitters through a large
rooftop antenna (a rotor antenna if competing stations' transmitters
are at different locations) or to give up free over-the-air service
altogether by subscribing to pay TV service from a cable or satellite
gatekeeper. We believe that such inaction by the FCC will ultimately
mean the end of free over-the-air TV and all of the economic, social,
political, and public safety benefits that come with that service.
Accordingly, we urge this Subcommittee to implore the FCC to take
action that will enable broadcasters to provide a ubiquitous and
interference-free DTV service, unrestricted by the need to go through
the ever-strengthening cable and satellite gatekeepers. Only in this
way can the FCC preserve the viability of free over-the-air TV service.
conclusion
With the ATSC's confirmation that the existing ATSC 8-VSB standard
cannot and will not be able to support ease of reception and reliable
over-the-air service to millions of American consumers, it is time for
the FCC to give broadcasters the flexibility to operate using either
the ATSC 8-VSB standard or the globally proven DVB-T standard. If the
FCC continues its current policy of inaction, this Subcommittee should
strongly urge the FCC to move forward to enable the American public to
realize the full promise of digital television in the twenty-first
century.
Mr. Tauzin. Thank you, Mr. Hyman.
Our second panelist with a demonstration will be Mr. Gary
Shapiro, President and CEO of Consumer Electronics Association.
Mr. Shapiro.
STATEMENT OF GARY SHAPIRO
Mr. Shapiro. Thank you very much, Mr. Chairman. I am going
to turn this over, if you will.
Mr. Chairman, members of the subcommittee, as a trade
association, we represent the consumer technology industry; and
we have 600 members including more than 20 manufacturers of
digital television. I am pleased to introduce a collaborative
demonstration of the extraordinary viewing experience that is
high definition television, or HDTV, which is not something you
just heard about.
We have recreated two DTV environments. The demonstration
features both a living room environment, where the vast
majority of Americans watch TV, and a PC environment to
highlight two points. First, American broadcasters show that
the DTV transmission standard actually does work. As Richard
Lewis of Zenith Electronics will demonstrate, it is capable of
delivering DTV services, including HDTV programming and
ancillary data services reliably over very many different
delivery paths, including over-the-air reception to antennas,
indoor antennas.
Second, the American DTV standard is very flexible. As Matt
Miller of NxtWave Communications will demonstrate, it is
equally adept as a computer-based application, thus fulfilling
DTV's promise to bring about convergence between television and
computing.
The equipment we have arranged here represents a cross-
section of what is now commercially available today in the
United States in almost 1,000 retail outlets across the
country. Without further ado, let me introduce Richard Lewis,
with Zenith Electronics, who will conduct the living room
portion of the examination.
Mr. Tauzin. Mr. Lewis. Mr. Miller will go first?
Mr. Lewis. I am sorry.
Mr. Lewis. Thank you. Members of the subcommittee, before
starting this demonstration, I would like to introduce the
equipment that you will be seeing today and also the setup that
we have here. In the far corner here, we have a fully
integrated HD television. It is a Zenith, by rare coincidence.
It is a top-of-the-line, commercially available DTV product for
the early adopter seeking the best possible viewing
experiences. It is capable of high resolution television.
In the--sort of directly across from me we have an RCA 38-
inch, fully integrated, direct view HDTV. This product is being
introduced to the market this week with retail price of $4,000,
half of what this manufacturer's lowest-price HDTV cost only a
year ago.
And then slightly to the left of that is the set-top box,
the aforementioned DTC 100, which is a device selling for
around $600. It provides consumers with one of the most
affordable means by which to receive DTV, including HDTV. We
are using the set-top box to the feed both the HDTVs, so you
can see the pictures and the sound from them, and we are
feeding them with the silver sensor antenna, which is in the
window behind you, just sitting there.
Our experience is much different than others, we placed it
in the window. It worked. And we are able to get multiple
channels.
So, first, I would like to show you Channel 50, which is
just an NTSC channel, to allow you to kind of benchmark what
that reception is like.
Mr. Tauzin. Let's again, to make sure we understand, this
is a real-time broadcast?
Mr. Lewis. Everything you see will be received from a
television station transmitting in the Washington area.
Mr. Tauzin. It will be received on an antenna that you have
on the window here?
Mr. Lewis. Same antenna as this.
Mr. Tauzin. It is behind the curtain. I am afraid to pull
the curtain. Curtain number 1, number 2. It is behind there and
it looks just like that, I understand.
Mr. Lewis. So what you will see is the rather marginal NTSC
transmission or environment. It is a very harsh environment.
Lots of multipath, lots of interference.
If we could then go to Channel 27. Without moving the
antenna, we moved from Channel 50 analog to Channel 27 digital.
We are now experiencing the HD television experience.
[Video played.]
Mr. Tauzin. This is probably real time. This is real-life
experience.
Mr. Lewis. As we all like to channel surf, I would like now
to move to a different channel, once again, without adjusting
the antenna. We are now on Channel 35, WHD.
Mr. Tauzin. This was without moving this antenna. The
antenna is stationary.
Mr. Lewis. Just stuck in a window.
And moving once again to another channel without moving the
antenna, the simulcast, or this is more of a standard
definition of conversion. And so, as you can see, our
experiences----
Mr. Tauzin. So we understand the demonstration, we moved
through some of the same channels that we saw earlier in the
previous demonstration; and your testimony and demonstration is
that you are doing this with one antenna that is not being
moved around looks exactly like that?
Mr. Lewis. That is right.
Mr. Tauzin. And they were all 8-VSB technologies?
Mr. Lewis. Those were all 8-VSB signals. In fact, we had
been in the room previously; we were receiving five different
stations with very robust signals and a very diverse set of
receivers--the Zenith receiver, the Harris receiver, the
Thompson receiver, the Phillips receiver, all the receivers--
the NxtWave, sorry; I got there eventually--all received all
the channels without any problems.
So I think this is a good testimony to the progress and to
the ease of reception that has been referred to previously.
I would now like to move to Matt Miller to allow you to see
a computer-based application.
Mr. Matt Miller. Good morning, Mr. Chairman and members of
the committee. What we are showing on the PC is again a real-
time reception of the same collection of channels and
essentially the same receiving environment. It is a silver
sensor. It is behind curtain number 1. It does take a degree in
engineering to change the channels because it is software.
However, my degree is in physics so I can't help you there. So
we have tuned to a signal channel, but we can in fact tune all
the channels.
The purpose of this demonstration, however, is to show some
of the progress that is been made on convergence, cost
reduction and flexibility. What is being used inside there is
this video card. This is a device which is going to be produced
by multiple manufacturers. It will be introduced to consumers
later this fall. Our chip is this little jobber here;
everything else is provided by someone else. We have done the
reference design.
This card will retail for less than $300. It will be
available this fall and essentially has on it all the
components for reliable reception and decoding of digital
television, plugs into a garden-variety PC and converts the PC
into basically a high definition television set for less than
$300.
Equally importantly, what we are demonstrating here is
live, reliable, real-time indoor reception into one of these
antennas. A very, very low-cost consumer entry to the pleasures
and interaction capabilities of digital television, and equally
importantly, fulfilling the objectives of digital convergence
on a PC.
What you have now is this PC is connected up to a 19.4
megabit per second wireless broadband link to the broadcaster.
Television is one of the applications, but we have envisioned
numerous other data applications as well, and this card will
then enable that PC to get connected to whatever data the
broadcaster chooses to transmit.
So, in conclusion, we believe that the technology is very
solid. You have seen a variety of demonstrations here from
high-end to low-end to consumer plug-in devices, digital data.
And with those comments, I would like to conclude my
demonstration.
Mr. Tauzin. Thank you.
Mr. Shapiro, does that conclude the demonstration?
Mr. Shapiro. Yes. I have a statement I would like to make.
Mr. Tauzin. Then the gentleman is recognized for 5 minutes.
Mr. Shapiro. Thank you, Mr. Chairman and distinguished
members of the subcommittee. I do very much appreciate the
opportunity to report to you where we are with the national
mission that actually Congressman Markey laid out many years
ago.
It is a national mission to shift to digital television for
many reasons; and I am pleased to report to you that the
transition is actually doing very well. Despite limited
broadcast programming and confusion asserted by some who
advocate delay, consumers are buying DTV products in record
numbers. Indeed, we just announced that in the first 6 months
of this year our industry has sold more DTV products than in
all of 1999. In 1999, we sold over 121,000 DTV products.
Ten percent of all consumer dollars spent on TV is now
believed to be spent on digital TV. And more than two dozen
manufacturers have introduced more than 200 different DTV
products, which are being sold at some 1,000 retail stores
around the country. Receiver prices have plummeted and the
performance and features offered by DTV receivers continue to
improve greatly. There is no doubt that after 10 years of
research and development, our industry, the consumer
electronics industry, has upheld its end of the bargain. We
have made a wide selection of digital television products
available at retail at all sorts of affordable prices. But best
of all, consumers love digital television. When they experience
it, they want it.
But if there is one key to a successful DTV transition it
is a steady supply of high-quality programming. The good news
is that the amount of nonbroadcast TV content is increasing
every day. Virtually every media provider has good news to
report, and some of this is detailed in my written statement. I
will refer you to it, but satellite and cable each have major
success stories. The motion picture industry has gone almost
completely over to digital production for a variety of reasons,
most of which are cost saving, not involving film prints; and
even, indeed, prerecorded media has played a surprising but
critical role in the success of DTV. With more than 7 million
units sold in just a few years, Americans have embraced the
high quality of DVD, digital versatile disc.
Many of these DVD consumers are buying digital television
to get the best possible picture and sound quality. This
validates arguments that Americans want the best in home
theater. They want the better pictures and sound that digital
television can offer.
With DTV drivers, DVD will soon be followed by prerecorded
digital recorders like TiVo and replay, prerecorded HDTV on
video cassettes, Internet HDTV and, of course, high resolution
video games. Indeed, cable, satellite, prerecorded media and
the Internet will all be providing higher quality content.
With respect to over-the-air broadcast content, though, we
are sorry to report that the picture is not as pretty. Despite
leadership from CBS, PBS and several broadcast pioneers, such
as North Carolina's WRIL, Washington's WETA and others, the
broadcast industry is lagging behind in this transition.
This is unfortunate and surprising considering the history
of promises of broadcasters that they would use their loaned
spectrum to provide abundant high-quality content to American
consumers. These promises of abundant programming have not come
to pass. Most of the programming now seen on the digital
channels includes one of the programs you just saw is simply of
converted analog with a quality level far less than HDTV. And
with some notable exceptions the amount of HD programming is
negligible and even less appears to be in development for next
season. It--indeed it looks like we may be going the way of
Europe, which does not have HDTV in their plans and they are
not providing it. It is just simply, basically a little bit
better than analog.
More troubling are recent reports that some broadcasters
are not interested in providing HDTV or digital television at
all. Some are considering new standards in business models
based on providing subscription data services rather than free
over-the-air television. I would submit to you that Sinclair is
not planning for digital television or HDTV. They are planning
for subscription data and other services, and they have not
even begun the implementation phase.
Most disturbing are reports that a handful of broadcasters
want to lease out the public spectrum loaned to them by
Congress for mobile data services. We are seriously concerned
by these developments. We find it unfair and inconceivable that
a small group of broadcasters who receive their spectrum for
free would presume to sell this spectrum capacity for
commercial mobile uses and thus enter into direct competition
with those who paid billions of dollars for their spectrum at
auction.
Sinclair asked to be able to use the European COFDM
standard, which they say is more suitable for indoor reception
and mobile data applications. However, the fact is
manufacturers are not receiving complaints from any consumers
about indoor reception.
It is also to put this question of indoor reception in
perspective. Fewer than 5 percent of consumers currently
receive their primary signal via an indoor antenna. The rest is
an outdoor antenna, cable, satellite, et cetera.
The bottom line is that renewed broadcast wrangling over
business plans and standards has serious consequences for
American consumers in the entire DTV transition. If some
broadcasters offer a new nonbackwards compatible system, many
DTV products in consumers' homes today will be orphaned by the
government and unable to work with the new transmission system.
Consumers who invest in DTV products expect them to work
for a long time. It is difficult to convince consumers to buy
digital television products with built-in tuners if they learn
that broadcasters are seeking to switch their transmission
system in midstream.
Realistically, the addition of a new standard will take 2
to 4 years. Sinclair's claim that we should simply add the
European standard defies credulity. That standard is not even
being used for high definition television, and it uses 8
megahertz of spectrum, a much wider spectrum rather than 6
megahertz. Even if broadcasters somehow agree to add COFDM in
the next several months, we don't know which standard it will
be and how broadcasters can adjust to fit it in the table of
allotments without radically reducing the energy and,
therefore, the coverage. Any further delay will halt DTV's
momentum, penalizing those broadcasters who have invested in
digital equipment, depriving American consumers of a wide array
of broadcast digital services and postponing the timetable for
the return to analog spectrum.
Mr. Chairman, members of the subcommittee, we do commend
you for your commitment to ensuring a smooth, rapid and
consumer friendly transition. Under your oversight, the U.S.
has assumed the position that this subcommittee first aspired
to in its first hearings, that as being the world leader in
digital television. And indeed we are. DTV sets are in the
stores, consumers have embraced the product, many manufacturers
are going 24 hours, 7 days a week, producing them; and a wide
variety of providers are recognizing the potential of DTV
programming. Having come this far, it is clearly not in the
public interest to bring this forward progress to a grinding
halt and engage in yet another standards debate.
Thank you, Mr. Chairman and members of the subcommittee. I
would be pleased to answer any questions.
[The prepared statement of Gary Shapiro follows:]
Prepared Statement of Gary Shapiro, President and CEO, Consumer
Electronics Association
Thank you Mr. Chairman and distinguished Members of the
Subcommittee. I appreciate this opportunity to report to you on the
status of our national mission to shift to digital television.
I am Gary Shapiro, president and CEO of the Consumer Electronics
Association, the association that represents the consumer technology
industry. Our 600 members represent $81 billion dollars in annual
sales, and our products are found in more than 99 percent of American
homes. CEA members invented digital television, and have spent more
than a decade and a billion dollars bringing it from the research labs
to the retail shelves.
I will report on where we are today, the challenges we face, and
the steps that are necessary to complete the transition to DTV.
manufacturers have delivered on dtv
I am pleased to report to you that the transition to digital
television is going well. Despite limited broadcast programming and the
efforts of some who advocate delay, consumers are buying DTV products
in record numbers.
Indeed, in the first six months of this year our industry has sold
more DTV products than in all of 1999. More than two dozen
manufacturers have introduced more than 200 different DTV products,
which are being sold at more than 300 different retail locations around
the country. Availability increases every day as prices come down, more
models are introduced and new retailers begin stocking DTV.
In just over a year, some receiver prices have plummeted by half,
and a variety of set-top boxes in the $600 range have been introduced,
including boxes that incorporate reception for satellite and over-the-
air DTV signals as well as analog signals.
At the same time, the performance and features offered by DTV
receivers continue to improve. This price competition is characteristic
of our industry, and is rapidly making this extraordinary technology
more affordable to Americans at all economic levels.
There is no doubt that, after ten years of research and
development, the consumer electronics industry has upheld its end of
the bargain by making a wide selection of digital television products
available at retail.
consumer interest and satisfaction are high
Best of all, as my co-panelist Tom Campbell and other retailers
will tell you, consumer satisfaction with DTV is very high. When
consumers see the extraordinary sound and video experience offered by
DTV, they want it--and today's analog television never looks the same
again.
Indeed, a recent survey by the National Consumers' League indicated
that DTV owners are overwhelmingly satisfied with the performance of
their DTV products, although they are dissatisfied with the amount of
available broadcast programming.
Consumers are buying DTV even in those markets where broadcast
programming is limited or unavailable. Americans are finding that
digital and high-definition displays enhance the analog TV experience,
and provide the best available display for DVD and other pre-recorded
content.
content is king
If there is one key to a successful DTV transition, it is a steady
supply of high quality program content. This is the first law of our
industry: product sales will only take off when sufficient content is
available to consumers. No matter how remarkable HDTV or any technology
may be, consumers will only buy it if there is something to watch.
One obstacle to greater content availability is the need for the
development of adequate and reasonable standards for DTV copy
protection CEA is committed to working with other parties to ensure
that copyrighted content, when transmitted in digital formats, is
adequately protected against copying in a manner that preserves the
fair use rights of American viewers.
The good news is that the amount of non-broadcast DTV content is
increasing every day, and virtually every media provider has good news
to report. Direct-to-home satellite providers Echostar and DirecTV are
each providing two full time channels of HDTV programming to consumers
nationwide. Congress' recent passage of the Satellite Home Viewer Act
will soon accelerate the number of viewers receiving HDTV via
satellite.
In addition, major cable operators such as Time Warner and
Cablevision are providing their subscribers in select markets with HDTV
programming. This summer cable subscribers in New York can enjoy
Yankees and Mets baseball in HDTV.
And recent technical agreements between the consumer electronics
and cable industries help enable seamless interoperability between DTV
and cable systems, and will make it even easier for cable companies to
provide HDTV to viewers.
Prerecorded media also is an important part of the DTV equation.
DVD sales have exploded, with more than seven million units sold.
Americans have embraced the high quality of DVD, which validates our
view that viewers want and will pay for better pictures and sound. Now
many consumers are using their digital television to take their DVD
experience to the next level--the wide-screen, high-resolution playback
DVDs provide. Similarly, many consumers are exploiting the high-
resolution performance of digital recorders such as those produced by
TIVO and Replay.
Finally, the future will bring broadband Internet to the American
living room and with it yet another conduit for digital television. We
encourage members of this committee to move forward on legislation that
will bring us closer to ubiquitous broadband in the home.
We are pleased with this explosion in non-broadcast DTV
programming. While the broadcasters have an important role to play in
bringing DTV to all Americans, the fact is that 70 percent of U.S.
households receive their primary video signal through cable, and an
additional 12 percent through direct to home satellite. We expect these
trends to continue and increase in the digital world.
loaned spectrum should be used primarily for free, over-the-air
broadcasting
With respect to over the air broadcast content, we are sorry to
report that picture is not as pretty. Despite leadership from CBS, PBS,
and several local broadcast pioneers such as Capitol Broadcasting's
WRAL, the broadcast industry is lagging behind in the DTV transition.
This is unfortunate and surprising, considering the history of this
issue and the numerous public representations that have been made by
the broadcasters.
Let's look at the history of DTV. In 1987, this Subcommittee held
its first hearings on ``advanced'' television. The main concern was
that the United States was falling behind in the global HDTV technology
race and that Americans might become second-class citizens in the
digital television future.
At the same time broadcasters came to Congress and asked for a loan
of billions of dollars in public spectrum so that they could transition
to the digital age. The bargain was that this spectrum would be used
primarily to provide free over-the-air digital television to the
American people.
Congress largely agreed that the broadcasters needed some amount of
loaned spectrum, but many believed that they should receive only the
bandwidth required to transmit one standard definition channel.
The broadcast industry responded that they required the full 6
megahertz (MHz) of spectrum, because 6 MHz was needed to bring American
consumers the holy grail of digital technology: high definition
television, or HDTV.
For example, in 1995 testimony, NBC Chairman Robert Wright promised
Congress that:
``We intend to lead the industry in the introduction of
digital television, and, in particular, motion picture quality,
high definition television. All broadcasters are committed to
doing so. We realize we must provide truly high definition
television service in order to remain competitive.''
Similarly, the National Association of Broadcasters assured the FCC
that ``HDTV programming will be a significant or even dominant element
of the business strategy of most broadcasters.''
ABC, CBS and NBC even supported the imposition of HDTV programming
requirements. Indeed, in January of 1996 when the DTV spectrum loan
agreement appeared to be in jeopardy, the heads of the three networks
sent a letter to President Clinton in which they stated:
``At a time when we as a country are legitimately concerned
about creating information haves and have nots, it makes no
sense to deprive the public of the opportunity to receive for
free the high-quality picture and sound that would otherwise
only be available on a subscription basis . . . As it has since
television was invented, the public should have the opportunity
to receive such high quality transmissions as part of our
country's free, over-the-air service.''
Based on these representations--but not without misgivings--
Congress agreed to loan every broadcaster 6 MHz of spectrum, free of
charge, in order to ensure the survival of free, over the air
television in the digital age.
Congress was assured that, after a rapid transition, broadcasters
would return their analog spectrum for public auction. Based on the
broadcasters' commitments to Congress and American consumers, the
consumer electronics and other industries moved forward to make DTV and
HDTV a reality.
Unfortunately, broadcaster promises of abundant HDTV programming
have not come to pass. Most of the programming now seen on the digital
channels is upconverted analog, with a quality level far less than
HDTV. With some notable exceptions, the amount of HDTV programming is
negligible, and even less appears to be in development for next year.
More troubling are recent reports that a number of broadcasters are
not interested in providing HDTV or digital television at all. Some
state that they are considering new business models primarily based on
providing subscription data services, rather than free over the air
television.
Others claim that, after ten years of development and with DTV sets
already in American homes, they would like to revisit and change the
DTV transmission standard.
Most disturbing, there are reports that a handful of broadcasters
want to lease out the public spectrum loaned to them by Congress for
wireless data applications,
We are seriously concerned by these developments.
Having received their public spectrum, we believe that broadcasters
must keep their end of the bargain. Decisions by a minority of
broadcasters to move away from free over-the-air television are an
abrogation of the agreement with Congress and a denial of public trust.
We especially find it unfair and inconceivable that a small group
of broadcasters who received their spectrum for free would presume to
sell this spectrum's capacity for commercial mobile uses--and thus
enter into direct competition with those who paid billions for their
spectrum at auction.
These broadcasters give a variety of reasons for their newfound
reluctance to move forward. One group led by Sinclair Broadcasting
submitted a petition to the FCC--which the Commission correctly
rejected--asking that they be allowed to use the European COFDM
standard, which they say is more suitable for indoor reception and
mobile data applications.
We do believe that the existing, FCC-approved American transmission
standard is the best choice for the U.S. broadcast environment. The
American standard was chosen by broadcasters after a decade of
competitive analysis and testing because it allows them to replicate
the current coverage radius of analog TV service to fixed receivers;
reduces interference with existing analog or other digital signals, has
a data capacity sufficient for HDTV, and allows for efficient power
use. The standard has been reaffirmed by recent tests, such as those
conducted by CBS and the FCC, as well as the ``real world'' usage by
consumers.
Throughout the DTV process, manufacturers have been making every
effort to recognize and meet broadcaster concerns. However, the fact is
that manufacturers are not receiving complaints from consumers about
indoor reception.
On the contrary, purchasers of early generation DTV products
justifiably expect a high degree of performance, and all indications
are that they are getting it. In the National Consumers' League survey,
four out of five DTV owners report that they are satisfied with their
signal reception.
At the same time, investment in 8-VSB DTV receiver technology is
unprecedented and ongoing. New chipsets and continued innovation by
manufacturers are providing marked improvements in 8-VSB performance in
high-multipath and other difficult reception environments. Just as with
all other consumer electronics products, future generations of DTV
receivers will provide improved features and performance.
It is also important to put the indoor reception issue into
perspective. Fewer than five percent of consumers currently receive
their primary programming via an indoor antenna.
Indeed, reception of today's DTV signal using indoor antennas is
often superior to today's analog reception, since there is no snow or
ghosting with digital signals.
Similarly, CEA is not opposed to spectrum flexibility, or to
broadcasters providing ancillary data services. To the extent that
consumers are interested in purchasing devices that access such
services, our industry looks forward to supplying them. Indeed, the DTV
standard is extensible and can fully accommodate future uses and
services in a way that will be fully backward compatible with existing
equipment.
To the extent that some broadcasters may have recently changed
their business plan to put more emphasis on mobile or subscription
applications, we ask that they work with manufacturers to utilize the
full capabilities of the U.S. standard to provide those services.
At the same time, we believe that ancillary services should remain
ancillary. Congress' intent was to allow broadcasters to make use of
capacity bits not needed for high definition to provide supplementary
services. This should not be confused with what appear to be plans by
some broadcasters to make data delivery the primary focus of their
services, to the detriment of broadcasting video or HDTV programming.
The bottom line is that this renewed broadcaster wrangling over
business plans and standards has serious consequences for American
consumers and the entire DTV transition.
In fact, broadcasters' lingering debates already are impacting the
ability of consumer electronics manufacturers to deliver DTV to
American viewers.
Based on broadcasters commitments to the DTV standard,
manufacturers have invested billions of dollars in developing compliant
receivers and displays. Now, if some broadcasters opt for a new non-
backwards compatible system, many DTV products in consumers' homes will
be orphaned and unable to work with the new transmission system.
Looking ahead, it is hard for manufacturers to plan and build
products--especially ``integrated'' televisions with built-in tuners--
when some broadcasters are still wavering at this late date over the
system they want to use to transmit programming.
We have heard that the possibility of a change in the standard is
already causing some broadcasters to postpone purchasing DTV equipment.
Broadcasters know that if the system changes, existing transmission
equipment would need to be modified or could become obsolete.
As unfortunate as these consequences may be, the worst aspect of a
change in broadcast systems would be the undermining the public's
confidence in the DTV transition. Consumers who invest in DTV products
justifiably expect them to work for a long time. It will become
difficult to convince consumers to purchase digital television products
with built-in tuners if they learn that broadcasters are seeking to
switch their transmission system in mid-stream.
delay is the greatest threat to the dtv transition
Congress should be concerned about the harmful consequences that
would result from the delay caused by the consideration of a non-
compatible standard such as COFDM.
Even the proponents of alternative standards acknowledge that any
change to the DTV standard would require extensive study and debate of
the numerous engineering issues regarding channel allotments, system
information and receiver design.
Realistically, the development of consensus around a specific
alternative DTV system, its standardization, the FCC rulemaking, and
the necessary amendments to the FCC's table of allotments would take
two to four years. Even this appears conservative, considering that the
process that brought us today's standard took more than a decade to
complete.
Any further delay will halt DTV's momentum, penalizing those
broadcasters who have invested in digital equipment and programming,
depriving American consumers of a wide array of broadcast digital
services and significantly postponing the Congressional timetable for
the return of the analog spectrum.
By contrast, delay would reward a handful of undeserving winners:
The small minority of broadcasters who, having asked for and received
public spectrum, now have no plans for digital television broadcasting,
no digital programming, or no investment in deployment.
conclusion
Mr. Chairman and members of this Subcommittee, CEA commends you for
your decade long commitment to ensuring a smooth, rapid, and consumer-
friendly transition to DTV.
Under your oversight, the U.S. has assumed the position that this
Subcommittee aspired to at that first advanced television hearing in
1987 on world leadership in digital television.
DTV sets are in the stores, and consumers have embraced the
product. A wide variety of providers are recognizing its potential and
producing DTV programming. And CEA remains committed to working with
broadcasters, cable providers and all other interested parties to
ensure the fastest, most consumer-friendly transition to DTV.
Having come this far, it is clearly not in the public interest to
halt our forward progress to engage in yet another standards debate.
Thank you Mr. Chairman. I would be happy to answer any questions
you or the Members of the Subcommittee may have.
Mr. Tauzin. Thank Mr. Shapiro.
Next will be Mr. Dale Hatfield, Chief of the Office of
Engineering and Technology of the FCC, accompanied by Deborah
Lathen, the Chief of Cable Services Bureau. Welcome to you
both.
Mr. Hatfield.
STATEMENT OF DALE N. HATFIELD
Mr. Hatfield. Mr. Chairman, Mr. Markey, and members of the
subcommittee, thank you for the opportunity to appear before
you today. Before I begin, I want to clarify, that the opinions
that I am expressing here are my own and may not necessarily
reflect the views of the Commission itself. I would like to
commend you for holding this important and timely hearing. As
you know, the Commission is currently conducting the first of
its own 2-year periodic review of the DTV system.
The Commission has established an aggressive schedule for
television stations to construct their digital facilities. To
date, the Commission has granted DTV construction permits to
515 stations. There are now 139 stations in the United States
transmitting digital programming. In the top 10 markets, 36 of
the 40 network-affiliated stations are on the air. In markets
11 through 30, 59 of the 79 network-affiliated stations are on
the air.
Given the scope and complexity of the required effort, I
believe that broadcasters have done a good job of starting the
DTV transition process. However, I am concerned that the pace
of the transition is now being threatened. I believe that
broadcasters must make the transition from analog to digital
transmission as quickly as possible for three basic reasons.
First, all segments, and I know of no exceptions--all segments
of the communications industry--cable, DBS, telephony and so
forth--have begun or have made the conversion to digital. If
broadcasters do not make the transition promptly, they risk
falling behind their competitors.
Second, the overall technical advantages of converting from
analog to digital are overwhelming in terms of the number and
richness of the services that can be delivered.
Third, the public interest demands that spectrum be used
more efficiently. Let me elaborate briefly on the third point.
As head of the Office of Engineering and Technology, I see
firsthand the problem of increasing demand for the precious
radio spectrum. As an engineer, I know that with modern digital
techniques you can do much more with a 6-megahertz channel than
send a single channel of analog television. Therefore, a
successful digital transition will free up valuable spectrum
for other uses.
As you know, the current uncertainty over the choice of a
transmission standard threatens that transition. In February,
the Commission denied the Sinclair Broadcast Group's request
that we modify our rules to allow COFDM in addition to the
current ATSC 8-VSB standard. Sinclair had raised questions
regarding the adequacy of 8-VSB reception with simple indoor
antennas under complex multipath conditions.
In denying Sinclair's petition, the Commission noted that
it believed that what Sinclair had highlighted was a
shortcoming of early DTV receivers, rather than, A, any basic
flaw in the ATSC standard or, B, an indication that replication
of existing analog service is unachievable with the 8-VSB
standard.
The Commission also noted that receiver manufacturers and
their chip suppliers were aware of the problem and were
aggressively taking steps to resolve the multipath problems
that Sinclair had raised. We are continuing to look at this
issue in our periodic review to ensure that adequate progress
is being made by receiver manufacturers and others, and we are
undertaking our own field tests to further assure ourselves of
such progress.
I am concerned that one of the motivations for
consideration of a different standard appears to be a purported
advantage of COFDM in providing new portable and mobile
services, rather than any advance of COFDM in providing
improved or enhanced television broadcast service.
I believe this raises fundamental issues regarding the
intent of Congress and the Commission's rules in providing
broadcasters with a free second channel for DTV operations. And
I want to emphasize that I did not oppose efforts to reconfirm
that 8-VSB operates as designed to replicate NTSC, today's
standard coverage; indeed, I welcome efforts to develop
information to improve that technology. However, these efforts
should be limited to performance attributes that are relevant
to broadcasting and are consistent with the goals established
by the Commission for DTV.
More specifically, any such efforts must be premised upon,
one, the requirement that no changes be made to the DTV table
of allotments--this is essential, absolutely essential, to
avoid years of unacceptable delay--and, two, must be premised
upon adherence to the Commission's service replication and
minimum interference goals. These are necessary to ensure that
the American public will not be deprived of free over-the-air
television service.
I should add that the FCC Chairman Kennard expressed
similar sentiments in a letter he sent to the NAB and to MSTV
yesterday; and with your permission, I would like to have that
letter be part of the record.
Mr. Tauzin. Without objection, it is. And try to wrap up.
Mr. Hatfield. Let me close by emphasizing that I personally
remain very bullish on the long-term future of HDTV. I am
convinced that HDTV fundamentally changes the nature of the
viewing experience and will be very successful in the
marketplace. And, of course, DTV, as you have heard and seen
demonstrated today, can do even more.
There are simply too many potential benefits to be had from
the introduction of digital television not to move forward as
quickly as possible. At the Commission, we stand ready to do
our part in helping to ensure that outcome.
Thank you very much for the opportunity to appear today. I
would be pleased, of course, to answer any questions that you
may have.
[The prepared statement of Dale N. Hatfield follows:]
Prepared Statement of Dale N. Hatfield, Chief, Office of Engineering
and Technology, Federal Communications Commission
Mr. Chairman and Members of the Subcommittee, thank you for the
opportunity to appear before you today to discuss digital television
(DTV). Before I begin, I do want to clarify that any opinions I express
today are my own, and may not necessarily reflect the views of the
Commission.
I would like to commend you, Mr. Chairman and other members of the
Subcommittee, for holding this hearing on this important topic. This
hearing is indeed very timely and consistent with the Commission's own
ongoing review of the progress of the DTV conversion process.
In the proceedings establishing the DTV transition, the Commission
stated that it would conduct a review every two years to ``ensure that
the introduction of digital television'' serves the public interest.
The Commission has commenced its first periodic review of DTV with the
adoption of a Notice of Proposed Rule Making in March of this year.
This Notice addresses a number of issues that we believe require
resolution to ensure that progress with the DTV conversion continues
and potential sources of delay are eliminated.
DTV Build-Out Status
I would like to begin with a brief overview of where we are in the
rollout of DTV. As you know, the Commission has established an
aggressive schedule for television stations to construct their DTV
facilities. All network-affiliated DTV stations (i.e., ABC, CBS, NBC
and Fox stations) in the top ten television markets were to be
constructed by May 1, 1999 and all network-affiliated DTV stations in
the top 30 TV markets were to be constructed by November 1, 1999. All
remaining commercial DTV stations are to be constructed by May 1, 2002,
and all non-commercial DTV stations are to be constructed by May 1,
2003.
Given the breadth and complexity of the efforts needed for the
building of a DTV station, these requirements are clearly ambitious.
Yet, the broadcast industry has done an admirable job of embarking upon
this challenge.
The FCC has granted permits to 515 stations for the construction of
DTV facilities. There are now 139 stations in the United States
transmitting digital programming (108 licensed and 31 operating under
Special Temporary Authority or experimental authority). In the top ten
TV markets, 36 of the 40 network-affiliated stations are on the air (33
with full facilities). In markets 11-30, 59 of the 79 network-
affiliated stations are on-the-air.1
---------------------------------------------------------------------------
\1\ A complete summary of the specific DTV stations that are on-
the-air is attached as an Appendix to this statement.
---------------------------------------------------------------------------
In fact, much of the delay in construction to date has been the
result of matters generally beyond broadcasters' control--such as
obtaining local zoning approval, completing international coordination
requirements, facing delays in obtaining equipment, finding adequate
transmitter sites and encountering difficulties in scheduling
construction personnel. Delays have also resulted from broadcaster
petitions to change their DTV channel.
Nevertheless, despite these obstacles, broadcasters have done a
good job of starting the DTV transition process. However, I am
concerned that this good initial progress is now being threatened at a
critical time when more needs to be done and the pace of the transition
needs to accelerate.
Why the Digital Transition Needs to Take Place Quickly
Let me begin with why I believe it is in the best interests of
broadcasters to make this transition happen as quickly as possible. I
am convinced that broadcasters must make the transition from analog to
digital transmission quickly for three basic reasons.
First, all other segments of the telecommunications industry--
commercial wireless service providers, such as cellular and PCS; wired
services, such as DSL and cable television systems; direct broadcast
satellites; mutichannel multipoint distribution systems; and, others--
have made, or are in the process of making, the conversion to digital.
I know of no significant exceptions.
Given that cable, satellite and other video competitors have
already made the transition to digital, broadcast television cannot
afford to be left behind. I believe that broadcasters, out of self-
preservation and in order to serve the viewing public for which they
have received licenses, must quickly make this transition in order to
remain competitive.
These other services are either direct competitors with over-the-
air broadcasting or indirect competitors in the sense that they
represent alternative means of delivering entertainment and other
content to end users. Over-the-air broadcasting must make the
conversion from analog to digital transmission in order to remain
competitive in the long run. And, as we all recognize, in Internet time
the long run is not necessarily all that long. In short, it is my
belief that the broadcast industry must make the conversion to digital
for both ``offensive'' and ``defensive'' reasons.
Second, from a technological perspective, the overall advantages of
converting from analog to digital transmission are now overwhelming.
The advantages of using digital techniques for representing, storing,
processing and transmitting signals are clear. These include:
the greater robustness of digital signals;
the ability to detect and correct transmission errors when
they do occur;
the ease with which digital signals can be encrypted;
the facility with which the signals can be manipulated or
processed using modern computer techniques and, especially, the
associated ability to take advantage of the greater computing
power and falling costs associated with Moore's Law; and,
the ease with which different types of signals or services can
be multiplexed or provided on a common transmission facility.
Third, the broadcast industry must make the conversion from analog
to digital because the public interest demands that spectrum be used
more efficiently. I would like to expound briefly on this point.
I head the Office of Engineering and Technology (OET) at the
Commission. OET has a number of responsibilities, one of the most
fundamental being to handle spectrum allocation matters within the
Commission. From that perspective, I see first-hand the problem of
increasing demand for a scarce national resource, the radio spectrum.
This increasing demand, which is particularly intense in the range from
roughly 300 MHz to 3,000 MHz, is propelled by a number of developments.
As members of this Subcommittee know, these developments include not
only the rapid growth in traditional, voice, commercial mobile radio
services, but also intense interest in providing advanced data
communications services, including Internet access, to a host of
portable end user devices.
A successful transition of television broadcasting from analog to
digital will free up spectrum for other uses as determined by the
marketplace. We need that to happen sooner rather than later. As an
engineer, I know that you can do much more with a 6 MHz channel than
today's analog standard definition television. We must act accordingly.
We must find ways to speed the build-out of DTV or at least keep it on
track. The benefits to the American consumer of new and improved
digital broadcast services and the consequent freeing up of spectrum
for other services are just too great.
I would like to further emphasize my strongly held belief that, in
making the transition to DTV, we must not do anything that would
jeopardize the continuation of free, over-the-air television for the
American public. Fortunately, technological developments--including
better digital compression and modulation techniques--have given us the
luxury of having our cake and eating it too. With digital technology,
we can continue to have traditional broadcast services as well as
exciting new broadcaster-provided services--including High Definition
Television, multiple streams of Standard Definition Television, or some
combination of these along with other new services such as datacasting.
And we can do all of this while freeing up spectrum for other valuable
uses, including increased local loop competition.
DTV Transmission Standard
It is my understanding that broadcasters are now undertaking a
review of the DTV transmission standard. This review includes looking
at COFDM (Coded Orthogonal Frequency Division Multiplex) technology as
a possible alternative to the 8-VSB (Vestigial Side Band) standard for
its reputed benefits for new service applications, including mobile and
data transmission operations.
In the DTV rulemaking process, the Commission agreed with the
overwhelming consensus of the broadcast industry that the new DTV
channels should provide for replication of existing analog television
service so that broadcasters have the ability to reach the audiences
that they now serve with a free, over-the-air video service and that
viewers continue to have access to the stations that they can now
receive. Another objective of the DTV transition process has been to
minimize interference to both the existing analog and new digital
television services. The Commission's Advisory Committee on Advanced
Television Service, a group selected to represent the interests of
broadcasters and others in this matter, chose the 8-VSB system as the
modulation method that would best allow achievement of these goals.
This choice was made after a long and thorough process of laboratory
and field testing and subsequent evaluation that found 8-VSB superior
to other modulation technologies, including COFDM.
I believe that a mid-course change to introduce a new modulation
technology at this late date could lead to lengthy and unacceptable
delays in the DTV transition process and could undermine the service
replication and interference goals on which the DTV transition is
based. Notwithstanding the arguments and claims of the COFDM proponents
that allowing optional use of COFDM could be accomplished quickly, any
changes to the DTV transmission standard that would necessitate
revisions to the DTV Table of Allotments could result in years of delay
in the DTV transition process. Such a delay would, at best, be
unfortunate for broadcasters and the viewing public, and could lead to
uncertainty that might jeopardize the ultimate success of the
transition.
As you know, in February the Commission denied the Sinclair
Broadcasting Group's request that that we modify our rules to allow
broadcasters to transmit DTV signals using COFDM modulation in addition
to the current Advanced Television System Committee (ATSC) 8-VSB
modulation standard. Sinclair had raised questions regarding the
adequacy of 8-VSB reception with simple indoor antennas in a station's
core business area under complex multipath conditions. The Commission
noted that it believed that what Sinclair had highlighted was a
shortcoming of early DTV receiver implementation, rather than any basic
flaw in the ATSC standard or an indication that replication of existing
analog service is unachievable with the 8-VSB standard. The Commission
also noted that receiver manufacturers and their chip-suppliers were
aware of the problem and were aggressively taking steps to resolve the
multipath handling problems that Sinclair had raised.
In taking the action, the Commission encouraged parties to provide
additional information on the topic in the context of the agency's
formal periodic review of the progress of the analog-to-digital
conversion. We will use that mechanism to monitor the progress being
made by receiver manufacturers and others to improve indoor DTV
reception under the existing standard. Using the resources of our own
Laboratory in Columbia, Maryland, we are undertaking our own field
tests to further assure ourselves of such progress. We are also
encouraged that the ATSC DTV Task Force has recently committed to look
at the issues related to transmission and reception of DTV and to make
any appropriate recommendations. Hopefully, taken together, these
government and industry actions will resolve any lingering concerns
regarding the choice of the modulation technique and will allow the
conversion to move forward with confidence.
I am also concerned that one of the primary motivations behind this
review of the DTV standard by some members of the broadcast industry
appears to be a purported advantage of COFDM to provide portable and
mobile services--rather than any ability of COFDM to provide improved
or enhanced television broadcast service. I believe that this raises
fundamental issues regarding the intent of Congress and the
Commission's rules providing broadcasters with a free second channel
for DTV operations.
Consistent with the direction of Congress, the Commission gave each
broadcaster temporary use of an extra six megahertz of spectrum for the
DTV transition and it is intended that stations use this resource
principally for television broadcasting. Section 336(b)(2) of the
Communications Act, 47 U.S.C. 336(b)(2), directed the Commission to
permit flexible use of the digital licenses but to ``limit the
broadcasting of ancillary or supplementary services . . . so as to
avoid derogation of any advanced television services, including high
definition television broadcasts . . .'' It is the mandate of Congress
and the desire of the American people that the principal service of
broadcast television remain the provision of free video programming to
television viewers, and broadcasters need to plan for the digital
transition in accordance with this purpose. To the extent that some
broadcasters may desire to enter the market for the provision of mobile
services, they can do so by acquiring licenses in the newly reallocated
spectrum at 700 MHz or some other spectrum that is allocated for mobile
services.
Any efforts by broadcasters to reallocate their spectrum to new
mobile data services at the expense of free, over-the-air television
raises serious questions as to whether broadcasters would be operating
in a manner consistent with the purpose for which Congress made
available to them a second digital license for free. As you know,
Congress amended Section 309(j) of the Communications Act in 1997 to
require that new licenses be awarded by competitive bidding. One of the
few exceptions to this auction requirement was the initial licensing of
DTV stations to be used by broadcasters to replicate their existing
analog television service. If a principal purpose of this spectrum now
becomes mobile data services, it is unclear whether this exception to
competitive bidding should continue to be applied to such operations.
I do not oppose efforts to reconfirm that 8-VSB operates as
designed to replicate NTSC. Nor do I oppose efforts to improve the 8-
VSB standard to permit reception even where NTSC service is not
available today. However, these efforts should be focused on
performance attributes that are relevant to digital television
broadcasting and are consistent with the goals established by the
Congress and the Commission for DTV. In particular, any efforts by the
broadcast industry should ensure that no changes would be required to
the DTV Table of Allotments. In addition, they should adhere to our
service replication and minimum interference goals to ensure that the
American public will not be deprived of free, over-the-air television
service.
DTV Provides Broadcasters with New Opportunities
I believe that DTV provides broadcasters with a tremendous
opportunity to enhance and revitalize their core business of television
broadcasting, as well as to offer the public new and exciting
``datacasting'' services on an ancillary basis.
While I applaud broadcasters' initial efforts to build DTV
facilities, with few exceptions, broadcasters, in my opinion, have not
provided the compelling programming content needed to stimulate
consumer demand for DTV. Most digital programming available to date has
been merely up-converted, existing analog programming. Consumers have
not yet been provided with the tremendous capabilities of DTV.
Nonetheless, I remain very bullish on the long-term future of HDTV.
Since the first demonstrations I saw many years ago, I have been
convinced that HDTV fundamentally changes the nature of the viewing
experience and that it will ultimately be very successful in the
marketplace.
And DTV can do even more.
The multiple programming capability of DTV can allow broadcasters
to offer their viewers more programming choices. With DTV, broadcasters
can provide their viewers with ``customized'' camera angles so they can
watch a sporting event from a particular point of view or follow a
favorite player. The ancillary data capabilities of DTV can also be
used to provide program-related information to further enhance the
viewing experience.
I am also very optimistic about the future of datacasting and DTV.
I base this on the advantages of the traditional broadcast architecture
coupled with the advantages produced by the conversion from analog to
digital transmission. Broadcasts' strength, from an architectural
standpoint, lies in the ability of television stations, both
individually and collectively, to distribute popular content that large
numbers of people want to receive simultaneously (for example, the
Super Bowl) or have available simultaneously for viewing at will (for
example, stock quotes). High power broadcast stations providing
coverage over thousands of square miles represent an extremely
efficient way of delivering such content. Said another way, it is a
very efficient architecture for one-to-many communications.
There are simply too many potential benefits to be had from the
introduction of DTV not to move forward as quickly as possible.
Conclusion
Given the extraordinary benefits that can be realized with DTV,
government and the involved industries need to recommit to ensure a
successful and rapid DTV transition. In my opinion, the bigger that
opportunity, the faster the transition should occur.
Perhaps The Field of Dreams adage of ``build it and they will
come'' is also appropriate for DTV with a slight modification--``build
it and show the wonderful capabilities of DTV and they will come.''
Thank you very much for the opportunity to testify before you
today. I would be pleased to answer any questions you may have.
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Mr. Tauzin. Thank you, Mr. Hatfield.
We will next turn to Mr. Tom Campbell, the Corporate
Director of Ken Crane's Home Entertainment Centers in Rancho
Palos Verdes in--pronounce that for me.
Mr. Campbell. Rancho Palos Verdes.
Mr. Tauzin. [continuing] California.
Mr. Campbell.
STATEMENT OF TOM CAMPBELL
Mr. Campbell. Mr. Chairman, thank you so much. I want to
say thank you for holding this hearing and to the entire
committee here for examining this important issue, the
transition to digital television.
I would like to also thank you for inviting me here today.
If I may just add for a moment, I was very touched by seeing
the students from Louisiana that are here. This is our future,
the consumer. That is what I am here to really address.
Mr. Tauzin. Better than that, they are the winners of a
Free Enterprise Program.
Mr. Campbell. And also to your son, Mr. Shimkus, who wanted
to watch Pokemon on HDTV. That is what we do. We recovered the
very first HDTV on August 6th, 1998. The consumers were
enthralled, just blown away by the quality of the picture and
the performance.
I would like to mention I have been involved in consumer
electronics retailing for more than 25 years. Currently, I
serve as Corporate Director for Ken Crane's Home Entertainment
Centers. We are a 51-year-young company. Our founder is--I
better not say his age--but he still goes to the office every
day, and he meets and greets our customers many times.
And we first started carrying HDTV in August, 2 years ago.
We had three sets on the floor. And Mr. Crane talks to our
customers. He was amazed at how excited they were about it. So
what we started doing was to carry more and more HDTV. And as
part of my testimony here you will see the percentages that
have skyrocketed up to now over 60 percent of our big screen
sales are HDTV.
And I want to mention that Sinclair mentioned, ``The
consumer,'' I believe, said, ``dictates what we do; we must
keep the consumer satisfied.'' Well, in all honesty, I am the
one that talks to the consumer. They come to our stores to
purchase this product. I can tell you, in my opinion, DTV and
HDTV meet and exceed their expectations.
We have sold close to 3,000 sets so far in 2 years. That is
3,000 sets for eight stores in Los Angeles or Orange County.
That is just us alone. Those are phenomenal numbers. Set-top
boxes, I believe the first year was around 30 boxes. This year
we are up to a total of 400 and some set-top boxes. So we are
seeing, even with the lack of some programming, a real interest
in over-the-air.
I have a HDTV in my home, and I have to surf the channels
to find out who is on the air. The latest is Mexico XETV
Channel 6 that I receive in my home from Tijuana with a
crystal-clear picture with an indoor antenna. I would like to
invite any of you who come out to California, please come by my
house. You can see it for yourself. It is very exciting.
Now, granted, some people do need an outdoor antenna, some
us an indoor antenna or rabbit ears. I will tell you right now,
our customer is very, very excited about this product. During
the past 2 years we have sold more than 2,000 digital
television sets. It constitutes two-thirds of our big-screen
sales.
Now the pricing is down to 1,000--I sound like a commercial
here; I am sorry. We are down to $1,999 for an HDTV-ready set.
The set-top decoder that receives on-the-air signals, as well
as direct TV, $649. So that means you can purchase a total HDTV
solution today at Ken Crane's for just over $2,600. That is a
notable decrease from prices a year ago of $7,000.
Overall, consumer interest in digital televisions led to a
marked increase in store traffic force. Those consumers who are
buying DTV products are highly satisfied. Less than 1 percent
of the DTV products we have sold have been returned. And one
was because his wife demanded a fur coat; if he got the HD, she
got a fur coat. He said no and brought it back. True story.
We are very excited about HDTV. It represents a huge
quantum leap in the quality of home entertainment for
Americans. Trust me when I say, when they see it, they love it.
Mr. Bill Ott, who lives in Palos Verdes, my neighbor, came into
my house, saw my HDTV; he said, ``I want it right now,'' went
down to the store, purchased one; and right now, with an indoor
antenna, he is watching HDTV.
We have nine signals in Los Angeles, three in San Diego. I
live in a high area; I get San Diego as well. So I have a total
of 11--no--yeah, 11 channels; do my math here--that I can
watch.
Now, for consumer electronic retailers, confidence is the
key to our success. If we sell our customers products that
don't meet their satisfaction because of poor performance, or
fall short of their expectations, we are not going to be in
business very long. It is obvious from our sales success that
consumer confidence in digital and HDTV is very high.
Mr. Chairman, I am not a digital engineer. I can't provide
you with the technical argument favoring current or any other
standard. But I can speak with authority about consumer
expectations. Right now, from my personal experience, DTV
products exceed consumer expectations.
But the DTV customers are not going to be happy if someone
suddenly changes the rules. They are going to be very upset if
they learn their new DTV set is not going to work anymore, that
it won't work with all the local broadcast stations because
some of the stations are being changed to a broadcast system
their set won't receive.
I support the current format for two reasons--three,
actually. It works, it already has solid performance and
proving as manufacturers do make improvements in every
generation of equipment, it has been established--implemented,
rather--in TV stations and consumer homes across the country.
We should not disenfranchise consumers by changing rules on
them midstream. I really urge us to stay the course.
Thank you very much, Mr. Chairman. If there are any
questions, I will be happy to answer.
[The prepared statement of Tom Campbell follows:]
Prepared Statement of Tom Campbell, Corporate Director, Ken Crane's
Home Entertainment Centers
Chairman Tauzin, I'd like to thank you for holding this hearing to
examine the important issues regarding the transition to digital
television. And, of course, I want to thank you and the other members
of the subcommittee for inviting me here today.
Mr. Chairman, I have been involved in consumer electronics
retailing for more than twenty-five years. Currently, I serve as
corporate director for Ken Crane's Home Entertainment Centers. Ken
Crane's is a fifty-one year-old company with eight stores serving
southern California, including Los Angeles and Orange County. We are
known nationally and internationally for introducing new, cutting-edge
technologies to consumers. Our stores carry high end, mid and entry-
level products and range from custom design all the way to a warehouse
clearance center.
I have been involved with digital television for many years. In
1998, as director of and prior to the sale of Dow Stereo/Video of San
Diego, California, I had the personal honor of introducing and selling
to consumers the first high definition television monitor with a
separate set-top box. Press worldwide covered this significant event.
The first set was sold to Kathy and Ed Davis. Mr. Davis, employed by
the U.S. Navy, bought the set on the spot after seeing HDTV for the
first time. We also sold the first integrated set in November of 1998.
At each of the events launching these products, we attracted more than
5,000 people. We soon sold out our entire inventory of HDTV products
even though there were no digital broadcasts in the market at that
time! I am proud and honored to say that we were recognized in the
congressional record for our leadership in successfully launching HDTV
to the public.
During the past two years, Ken Crane's has sold more than 2,900
digital television sets. DTV products now constitute almost two-thirds
of our current big screen sales. Many consumers are buying HD display
units to enjoy the phenomenal, high-quality picture that comes when the
display is combined with their DVD player. Others are purchasing these
displays to watch improved analog TV and in anticipation of receiving
high definition signals via over-the-air broadcast, cable and
satellite.
We sell DTV displays beginning at under $1,999 and a set top box
decoder for just $649 meaning a consumer can purchase a total HDTV
solution today for slightly more than $2,600. This is a notable
decrease from prices just a year ago of more than $7,000. Overall,
consumer interest in digital television has led to a marked increase in
store traffic. And those consumers who are buying DTV products are
highly satisfied with their purchase. Less than one percent of the DTV
products we have sold have been returned.
Our experience is not unique. Consumer electronics retailers across
the United States are reporting the same consumer excitement over DTV.
In the Washington, DC area for example, Myer-Emco reports that two out
of every three of their large screen television sales are DTV sets. We
hear similar reports from chains like Now Stereo and Video with
locations throughout the Southern United States and Ultimate
Electronics Stores in the Midwest.
Clearly, consumers are excited about digital television. And they
should be. DTV represents a huge leap in the quality of home
entertainment for Americans. It is a product that exceeds consumer
expectations. Trust me when I say, ``When they see it, they love it''
and want it now!
For consumer electronics retailers, consumer confidence is the key
to our business. If we sell our customers products that do not meet
their satisfaction because of poor performance or fall short of their
expectations, we won't be in business very long. It is obvious from our
sales success that consumer confidence in digital and HDTV is high.
That is why I am concerned about the efforts of some who seek to
change the existing DTV broadcast system. The current broadcast
standard was adopted largely so that consumers can be confident that
the new DTV products they purchase will always be capable of receiving
the same local broadcast stations they enjoyed with their analog set.
I'm not a digital engineer, Mr. Chairman, so I can't provide you
with a technical argument favoring the current standard versus any
other. But I can speak with authority about consumer expectations.
Right now, from my personal experience, DTV products exceed consumer
expectations. But our DTV customers will not be happy if someone
suddenly changes the rules. They will understandably be upset if they
learn that their new DTV set is not going to work any more or that it
won't work with all of the broadcast stations in their local area
because some stations have changed to a broadcast system their set
won't receive.
In my opinion, this kind of scenario would definitely undercut
consumer confidence, resulting in a major setback in consumer
acceptance of digital television and a potential major backlash from
early adopters who already have purchased DTV sets.
Mr. Chairman and members of the committee, as a retailer I support
the existing, approved American standard. Why? 1) It works; 2) Its
already solid performance is improving as manufacturers make
improvements in every new generation of equipment; 3) It has been
established and is implemented in TV stations and consumer homes across
the country; and 4) We should not disenfranchise consumers by changing
the rules on them mid-stream.
In my experience dealing directly with consumers, digital
television not only meets, but exceeds consumer expectations. As prices
continue to come down, more and more consumers are making the
transition from their old analog TV to a new digital television set.
And, of course, they are eagerly awaiting more programming and HDTV
from local stations, satellite and cable. I ask you today to help
consumers and retailers continue the transition to DTV. Let's not
derail the transition and deny consumers this wonderful new technology.
Thank you again for allowing me to appear before you today. I'll be
happy to answer any questions.
Mr. Tauzin. Thank you very much.
Next we will have Mr. Richard Lewis, Senior Vice President,
Research and Technology, for Zenith Electronics Corporation in
Glenview, Illinois.
STATEMENT OF RICHARD M. LEWIS
Mr. Lewis. Thank you, Mr. Chairman. Briefly, Zenith has an
80-year history and experience building receivers for American
consumers. We have participated in the DTV standard-setting
process since its inception in 1987. I would like to make just
three brief points. One, the transition is underway. We have
strong sales and we are out of stock on our integrated receiver
on a regular basis. We are expanding our product line. We are
moving beyond HDTV compatible sets into lower cost and direct
view sets. These, from Zenith's perspective, are not the signs
of a transition in trouble.
Second, any call for a change in the modulation system is
unfounded and without merit. Arguments to the contrary failed
to examine all aspects of the issue. Coverage, that being from
a transmitter, how much of the area will receive a signal,
interference both into analog and digital transmission, and
then, of course, reception issues. Lately much of the talk has
been about reception, but the other 2 issues are extremely
important also, and part of the reason that DSB was selected.
In fact, these criteria were the main focus of a multiyear
scientifically rigorous and peer review process to obtain a
system optimized for the American market. Other systems, such
as COFDM have been engineered for a different network
architecture. In the U.K., for instance, in London, there are
fewer channels with national content versus many channels with
local content. London, for instance, would have 6, 8 megahertz
physical channels versus 10 or 12 channels, physical channels
in a New York or a Chicago.
So switching to COFDM would also be a choice between fewer
channels or millions of lost viewers according to recent
studies by Jules Cohen, showing the impact of COFDM on
interference levels and using the FCC modeling.
Also in the U.K., multiple main transition towers are used
versus a single main tower with broad coverage as we use in the
United States. The recent NAB filing for the biannual review
comments points to the difficulty in adding towers and antenna
structures with local zoning issues.
It is these criteria that have made the U.S. broadcast
industry a success and make 8-VSB the superior and the only
viable transmission service to provide the replication of
services, that being those who can get analog reception today
to also get digital reception while still allowing each
broadcaster an additional channel during the transition.
Third, and moving to reception, receivers are working today
as evidenced by the recent CBS study showing that virtually 100
percent reception in the Philadelphia market where their test
was conducted. Previous issues with multipath interference,
especially, have been related to rushed implementation and not
any limitations in the standard. This should be important to
note also that COFDM does not work in every location and every
situation just as your cell phone does not work in every
location. VSB can and will have multipath interfere performance
equal to COFDM and, in some cases, better.
So in closing, I would like to point out that any change in
the transmission standard at this point would be disastrous for
consumers, broadcasters and consumer electronics manufacturers.
A new standard will significantly delay the implementation and
provision of DTV services to the public and jeopardize the
return to the analog spectrum by 2006 as mandated by Congress.
Mr. Chairman, thank you for the opportunity to speak. I
would be happy to take any questions. I also ask that the
aforementioned CBS Report is entered into the report.
[The prepared statement of Richard M. Lewis follows:]
Prepared Statement of Richard M. Lewis, Senior Vice President, Research
and Technology, Zenith Electronics Corporation
Mr. Chairman, my name is Richard M. Lewis, and I am Senior Vice
President for Research and Technology for Zenith Electronics
Corporation, a long-time leader in consumer electronics and digital
high-definition television (HDTV). I appreciate the opportunity to
appear before you today to discuss the nation's transition to digital
television (DTV) technology, an issue in which Zenith has a long-
standing and continuing interest.
By way of background, Zenith was a founding member of the FCC
Advisory Committee on Advanced Television Services in 1987 when we
launched our research and development program for high-definition
television (HDTV). Zenith proposed one of the original 23 HDTV systems
in 1988, and created the first HDTV research consortium in 1989. In
1990, the FCC mandated that the HDTV standard would be based on the
``simulcast'' approach proposed by Zenith, and one year later we at
Zenith completed our initial development work on the vestigial sideband
(VSB) digital transmission system. Zenith joined the Digital HDTV Grand
Alliance in 1993, in combination with other manufacturers to jointly
develop a best-of-the-best digital television system for America, and
in 1994, the Grand Alliance chose Zenith's VSB technology as its
broadcast and cable transmission system. In 1995, the Advisory
Committee recommended the Grand Alliance system to the FCC, and in
1996, the Commission adopted the digital television broadcast standard
based on the Grand Alliance system, which includes Zenith's VSB
technology. Since then, our company has worked aggressively to help
launch HDTV. So, Mr. Chairman, Zenith has a long involvement and
expertise regarding the digital television issue.
There are four main points that I wish to make to you today:
1. Nearly four years after the 8-VSB system was approved, the DTV
transition is well underway. Consumers, broadcasters and
manufacturers have already made significant investments in 8-
VSB. Digital TV sales to consumers are growing and customer
satisfaction levels are high.
2. Calls for changing the 8-VSB system are absolutely unfounded. The 8-
VSB system provides superior coverage of existing analog
National Television Systems Committee (NTSC) service areas,
presents less interference potential, and utilizes the spectrum
efficiently. The FCC made the right choice in selecting this
standard, Congress did the right thing in setting a schedule to
transition to DTV, and we should stay the course.
3. Early DTV receivers encountered some multipath interference and
indoor reception difficulties. However, these problems were
associated with some first-generation receivers, not with the
standard, and I am happy to tell you today that these
limitations are being remedied.
4. Any change in the transmission standard at this point would be
disastrous for consumers, broadcasters, and consumer
electronics manufacturers. A new standard will significantly
delay the implementation and provision of DTV services to the
public, and jeopardize the return of the analog spectrum by
2006, as mandated by Congress.
Please permit me to amplify on these points.
the digital conversion is well underway
The conversion to DTV is progressing and most broadcasters are
working to convert to digital broadcasting, pursuant to the schedule
set out by Congress and the FCC. The National Association of
Broadcasters reports that 147 television stations are currently
broadcasting digitally using the 8-VSB standard, covering almost two-
thirds of the nation's television households.1 CBS is
broadcasting 12 prime-time hours a week in high definition, while ABC,
Fox, NBC and PBS are all offering digital television programming. Cable
and direct broadcast satellite program providers such as HBO and
Showtime also are initiating new digital programming, including high
definition.
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\1\ These include stations in New York, Los Angeles, Boston,
Philadelphia and Washington, D.C.
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Zenith is concerned, however, that the current lack of high-
definition programming and other compelling applications will hinder
the rapid rollout of digital television. An analysis by the Consumer
Electronics Association (CEA) of the potential growth of DTV receiver
sales, assuming various levels of HDTV programming content, underscores
the need for broadcasters to step up their programming efforts to help
spur receiver sales.2
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\2\ According to CEA, if broadcasters choose the ``fast lane'' to
DTV and demonstrate 100 percent compliance with the FCC's rollout
schedule while providing a high percentage of digitally-originated
content to consumers, DTV product penetration could reach 50 percent by
2006. If broadcasters take a ``middle of the road'' approach and
experience continued station conversion delays while providing
consumers with a high percentage of up-converted analog content, DTV
product penetration will be no more than 30 percent by 2006. Finally,
if broadcasters choose the ``off ramp'' on the road to DTV--
characterized by non-HDTV business models and delays related to
reopening the DTV standard--DTV product penetration will only be 15
percent by 2006.
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The real success of the DTV transition rests with consumers, and
here the news is good. According to CEA, more than 200,000 digital
television products have been sold to date, and the number of DTV
products sold in 2000 is expected to be more than triple that sold in
1999. Retailers report that consumers are enthusiastic about the
improved video and audio quality that DTV delivers, and consumer
satisfaction is high among the early purchasers of digital receivers. A
recent survey conducted by the National Consumers League shows about
three-fourths of DTV owners describe themselves as ``very satisfied''
with both the picture and the sound quality of their new sets. DTV
picture quality received a striking 96 percent overall consumer
satisfaction rating. Consumer excitement is certain to build, as more
DTV programming becomes available.
These facts indicate that the DTV transition is well underway and
the momentum is growing.
there is no basis for reopening the dtv standard
Despite the progress that has been made to date, a few parties are
pursuing an agenda that would delay and disrupt the timely delivery of
DTV to the public. These entities are urging that the DTV standard be
modified to permit the inclusion of a COFDM-based modulation scheme.
This request, proposed by broadcasters seeking to delay investments in
digital and high-definition television, is based primarily on one
aspect of the 8-VSB system: its capability to provide adequate over-
the-air service using simple indoor antennas in a comparatively small
number of urban areas that are subject to strong multipath
interference. It is true that some early generation DTV receivers fell
short of expectations with regard to reception in strong multipath
environments. However, this shortcoming was due to the state of
technology in some early receivers that were rushed to the marketplace
to jumpstart the DTV transition, not to any intrinsic deficiency in the
8-VSB modulation system. I am happy to report to you today that Zenith
and other manufacturers have been working diligently to resolve these
difficulties, and they are well on their way to being corrected.
It is important to remind ourselves that the 8-VSB transmission
standard was chosen over a decade through an open, scientifically
rigorous and peer-reviewed process. Extensive laboratory and field
testing of various competing systems was conducted before the 8-VSB
system was selected, and the analysis included studies of the relative
merits of 8-VSB and COFDM. The FCC's exhaustive record on digital
television fully documents both the industry's and the FCC's unanimous
conclusions to adopt the 8-VSB standard.
Why was the 8-VSB standard chosen? This standard was selected
principally because of its ability to replicate the signal coverage of
existing NTSC service areas, because it minimizes interference with
other signals, and because of its high data-rate capacity.
Since the beginning of DTV, a top priority has been insuring that a
DTV station's service area is generally equal to or better than its
NTSC service area, thereby allowing digital broadcasting to reach the
maximum number of viewers possible. This is a critical factor for the
success of the transition. The 8-VSB system was selected in large part
because of its superior signal coverage. Indeed, use of COFDM would
result in a significant loss of suburban and rural viewers who live on
the fringe of a station's NTSC service area.
The conclusion that 8-VSB is superior for purposes of NTSC service
replication is well documented by studies conducted at literally
thousands of field test sites.3 In a well-documented
scientific study, CBS recently conducted extensive DTV reception tests
at 128 outdoor and 42 indoor sites within the coverage area of KYW-DT
in Philadelphia, Pennsylvania, and concluded that ``it is evident that
the current ATSC system is replicating the NTSC reception coverages for
both indoor and outdoor reception.'' 4 Using second and
third generation 8-VSB receivers from Zenith, Motorola and NxtWave, CBS
found that these receivers could produce a perfect DTV picture 94
percent of the time using indoor antennas when even a marginal NTSC
picture was available.5 With outdoor antennas, the receivers
produced a high-quality DTV picture 99 percent of the time when even a
marginal analog picture was viewable.6 Noting that the tests
demonstrated ``a continuous level of improvement'' in VSB receiver
technology, the CBS study concludes, ``8-VSB remains a viable system
for providing DTV service and replication of the broadcasters' service
area.'' 7
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\3\ See OET Report at page 14.
\4\ KYW-DT DTV Field Test Report, Walter Sidas, P.E., CBS
Engineering, March 28, 2000.
\5\ Id.
\6\ Id.
\7\ Id.
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A highly experienced and well qualified professional consulting
engineer, Jules Cohen, has recently conducted an analysis of real-world
parameters comparing ATSC/8-VSB and DVB/COFDM systems in a 6 MHz
channel for New York City, a heavily populated area in terms of TV
viewers and TV transmitting facilities. This report is attached to my
testimony as an appendix.8
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\8\ Jules Cohen has more than five decades of experience as a
professional consulting engineer in the field of broadcasting. Mr.
Cohen has represented the Association for Maximum Service Television
(MSTV) in Advanced Television Systems Committee (ATSC) Subcommittees
and Technology Groups, served on ATSC's Executive Committee and co-
chaired a number of ATSC Technology Groups. Mr. Cohen's clients have
included all five of the major television networks, the National
Association of Broadcasters, MSTV, the Electronics Industries
Association, major broadcast group owners and individual radio and
television stations. The depth of Mr. Cohen's knowledge and expertise
is further detailed in his professional background statement attached
as an appendix to this testimony.
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The study ``shows a clear preference for the use of 8-VSB rather
than COFDM from an allotment viewpoint'' and concludes that:
With identical effective radiated power and antenna height
above average terrain, use of COFDM provides less coverage and
results in more interference to other stations than 8-VSB. If
the COFDM effective radiated power is increased to overcome the
reduction of service from that provided by use of 8-VSB,
interference is further aggravated, particularly to the analog
stations continuing to operate at their assigned power levels.
Consequently, either fewer stations can be accommodated using a
specified number of channels, or service areas must be reduced
substantially.9
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\9\ Engineering Statement, Channel Allotment Considerations
Comparing the Use of 8-VSB or COFDM, Jules Cohen, P.E., June 9, 2000 at
p. 2 (emphasis added).
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Using the FCC's own computer calculation technique, coverage
calculations for three New York City DTV stations (WNBC-DT, WABC-DT and
WPIX-DT) show that COFDM, operating at the same power level as 8-VSB,
would result in an average of 656,000 fewer viewers for each of the
stations. This result is, of course, contrary to the goal of bringing
the benefits of DTV to all Americans, and fails one of the principal
objectives of the DTV transition plan.
The 8-VSB system allows broadcasters to replicate their entire NTSC
coverage area from a single transmitter site at three-and-a-half times
less power than COFDM requires. Increasing COFDM's transmitting power
to obtain coverage comparable to that provided by 8-VSB (in order to
match existing NTSC service areas) would result in increased
interference to existing NTSC services and other DTV services. It would
also force broadcasters to incur significantly higher costs for more
powerful transmitters and additional electric power.10
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\10\ See DTV Report on COFDM and 8-VSB Performance, FCC/OET 99-2
(dated Sept. 30, 1999) (the ``OET Report'').
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An important advantage of the 8-VSB standard is its ability to
minimize co-channel and adjacent channel interference to broadcasters'
analog and digital signals. By contrast, a COFDM signal using the same
power level as 8-VSB would not only provide less coverage but cause
substantial interference with other NTSC and DTV stations. If COFDM
power levels were increased to overcome the reduction of service from
that provided by use of 8-VSB, the interference problem would only be
exacerbated. Therefore, allowing broadcasters to use COFDM transmission
would require the creation and adoption of a new DTV Table of
Allotments, a formidable task considering the long and arduous process
that the FCC went through to finalize the current DTV Table of
Allotments. It is highly unlikely that a digital channel assignment
plan could be adopted that would accommodate all U.S. broadcasters.
As the Cohen study demonstrates, interference calculations for the
same three New York City DTV stations reveal that their use of COFDM
would have a significant impact on existing analog and new DTV stations
in the Northeast, resulting in the loss of almost 10 million viewers.
For example, 1.9 million fewer viewers would be served by the three New
York DTV stations using COFDM rather than the FCC-mandated VSB
standard. The number of viewers lost for other digital television
stations due to COFDM interference would be about 7 million.
Significantly, the effect of interference caused by COFDM would
adversely affect analog TV reception for 986,000 to 1.1 million New
York viewers depending on transmission power level.11
---------------------------------------------------------------------------
\11\ Id. at Figures 2-7.
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But 8-VSB has other advantages compared to COFDM, which is
optimized for network architectures used in Europe. COFDM may make
sense for a place like the United Kingdom where only six channels
providing nationwide video content (not HDTV, by the way) are broadcast
using multiple transmitters. By contrast, our television broadcast
model in the United States is built around localized content
transmitted by many stations (a dozen or so in major metropolitan
markets) primarily from single transmitters reaching a wide coverage
area. The fact is COFDM makes many trade-offs in terms of coverage
area, interference and data rate to achieve its transmission
properties, while VSB is optimized for the United States and other
countries with similar broadcast models.
In addition to offering broadcasters a greater coverage area,
superior interference protection for existing NTSC and new DTV
services, and lower costs, the 8-VSB system also provides greater
immunity to impulse noise interference (which is essential for VHF
transmissions). The 8-VSB system also delivers a higher data-rate
capacity than COFDM, an advantage that is important not only for HDTV
transmissions but datacasting services as well. The FCC has stated that
the 8-VSB system's data rate advantage over COFDM could impact the
ability of broadcasters to provide HDTV programming.12
---------------------------------------------------------------------------
\12\ OET Report at page 27.
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Finally, while it is clear that 8-VSB meets the performance goals
for which it was designed and selected--service area replication,
interference rejection, and maximum data rate--I would note that VSB
technology has the flexibility for future enhancements. Recently, some
in the broadcast industry have focused attention on the potential
portable and mobile applications of DTV technology. If broadcasters and
consumers desire such options in the future--options that were not
contemplated when the DTV standard was developed and adopted--VSB
transmissions can be augmented by employing a mixed data mode of two or
more simultaneous transmissions of varying data rates and robustness.
Any such extensions to the standard, however, should be pursued in
parallel with ongoing 8-VSB receiver improvements so as not to hinder
the transition to free over-the-air digital television. In fact, the
Advanced Television Systems Committee is pursuing this parallel path
approach in establishing a formal standards activity related to
possible VSB enhancements to meet emerging broadcaster needs, an effort
that Zenith is supporting.
significant progress is being made to improve indoor reception
Zenith and other manufacturers acknowledge the inadequate multipath
reception performance of some first-generation DTV receivers. These
problems are the result of a shortcoming in the first generation of
digital receivers, not a flaw in the 8-VSB standard.13 Since
the introduction of this first generation of receivers, Zenith and
other manufacturers have taken aggressive steps to improve indoor
reception. Zenith recently demonstrated its third- and fourth-
generation demodulator chips, which show dramatic improvement in
multipath performance for VSB receivers.
---------------------------------------------------------------------------
\13\ The OET Report concludes that multipath reception problems
identified in early DTV receiver designs are solvable with improved
adaptive equalizer performance and that a well-designed 8-VSB receiver
should be able to provide satisfactory reception where strong multipath
conditions exist. OET Report at page 24.
---------------------------------------------------------------------------
The need for such improvements is typical whenever a complex new
technology is implemented for the first time. It took decades for
improved NTSC receiver designs to be refined and perfected, whereas DTV
receiver refinements are being accomplished in just a few short years.
Indeed, Zenith is confident that new generations of chips and receivers
will continue to improve indoor reception, and other manufacturers of
DTV receivers and chips are making similar progress. A chart detailing
the evolution of 8-VSB receiver performance is attached as an appendix
to my testimony. This ``technology roadmap'' illustrates that
significant enhancements are being made in each new generation of
receivers (already vastly exceeding the multipath performance of analog
receivers), and that the issue of indoor reception will soon be limited
to only a handful of multipath environments with very poor NTSC
reception.14
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\14\ Broadcasters need to do their part as well. Reception is
affected adversely when broadcasters transmit signals at less than
their full-authorized power, from antennas that are less than their
full-authorized height, or with incorrect technical parameters (which
can cause ``jitter'' and other problems).
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changing the standard will disrupt and delay the digital transition
The FCC has stated that a single transmission standard will ensure
that broadcasters, equipment manufacturers and the public have
sufficient confidence and certainty to promote the introduction of DTV
service.15 The DTV standard has been in place for almost
four years and the transition to DTV is well underway. Any attempt to
change the DTV transmission standard now would result in a multi-year
effort, requiring at least the development of a complete COFDM
standard, the achievement of an industry consensus on that standard,
and extensive laboratory and field testing. This would take years.
---------------------------------------------------------------------------
\15\ Fourth Report and Order, 11 FCC Rcd at 17787-17791 (1996).
---------------------------------------------------------------------------
Moreover, the FCC has also noted that allowing more than one
standard might result in compatibility problems that could cause
consumers and licensees to postpone purchasing DTV equipment, thereby
leading to significant delay in the implementation and provision of DTV
services to the public. Even the main proponent of multiple standards
recognizes this delay potential. According to Sinclair Broadcasting,
multiple standards ``would not only create chaos but would so fragment
the market so that no serious business could invest in the tooling to
produce multiple standard receivers into such a market.'' 16
This delay in deployment is not consistent with Congress' intent in
having a rapid rollout of DTV services.
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\16\ Nat Ostroff, Vice President, Sinclair Broadcasting Group and
Chairman, ALTV Engineering Committee, A White Paper: Facing the Final
``Sign Off,'' Why We Need a Digital Standard (formerly available at
17 Moreover, COFDM's power
requirements for equal coverage and associated interference problems
would require, as I mentioned earlier, the DTV Table of Allotments to
be re-analyzed and revised, with little assurance that every existing
broadcaster could be loaned a second channel for the DTV transition.
---------------------------------------------------------------------------
\17\ OET Report at page 24.
---------------------------------------------------------------------------
Considering a change in the standard also threatens to freeze the
development and deployment of DTV technology by causing uncertainty for
manufacturers who must invest tens of millions of dollars in product
development and who must be confident that they are designing to a
standard that will guarantee a national purchasing base. Few
manufacturers, chip designers or information providers would continue
to produce digital television products while a new, non-compatible
standard was being considered because of the considerable risks
associated with this uncertainty.
The mere possibility of a change in the standard already is causing
some broadcasters to postpone purchasing DTV equipment for fear that
such equipment would be incompatible. Moreover, if the standard were to
change, existing DTV transmitters and receivers would need to be
modified or could become obsolete, involving serious cost implications.
The confusion fostered by a potential change in the transmission
standard is causing consumers to postpone their decisions to purchase
DTV receivers, because they do not want to invest in what might soon be
an obsolete technology, or because they believe different technologies
could soon be available.18 Moreover, a change in the
standard would harm those consumers who already have purchased DTV
equipment expecting that their sets would have the capability to
receive all existing over-the-air channels, be transportable to other
broadcast markets without diminished or complete loss of functionality,
and receive over-the-air broadcasts for many years to come.
---------------------------------------------------------------------------
\18\ See Fourth Report and Order, 11 FCC Rcd at 17788.
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The lengthy delay inherent in a changed DTV transmission standard
would do much more than forestall the introduction of new innovations
and services to the public. It would be incompatible also with a key
consideration of Congress in awarding additional spectrum to
broadcasters--namely, the ability to auction spectrum recovered at the
end of the DTV transition. Although the spectrum will not be recovered
until broadcasters vacate it at the end of the transition, Congress has
mandated that auctions for that spectrum commence this year so that the
money raised can be deposited in the nation's treasury. If the end date
of the transition is extended (as would be required by a change in the
standard), it could detrimentally impact the Federal budget by lowering
the value of the spectrum to be auctioned, because bidders would face
extreme uncertainty as to when they may be able to utilize the spectrum
for their own purposes.
stay the course
The 8-VSB standard is achieving the principal goals for which it
was selected: superior signal coverage to replicate existing service
areas, a high bit-rate capacity, and interference rejection. DTV
receivers are improving significantly in their capability to handle
multipath interference under the standard. This year, the FCC
reaffirmed the 8-VSB standard by rejecting a petition seeking to add a
European modulation scheme to the U.S. standard.
Changing the standard would lead to delay in deployment of digital
television, impose costs on consumers, delay consumer purchases of DTV
equipment, lead to viewers losing their signals, and delay the recovery
of the spectrum allocated for the transition (with resulting loss of
revenues to be deposited in the Treasury).
Broadcasters in general and manufacturers are working to ensure
that the digital television deployment continues without disruption and
complies with the timeline set by Congress. Congress needs to ensure
that broadcasters continue their progress toward meeting these goals
and meeting the demands by consumers for more digital programming.
Accordingly, there is no reason to reconsider the transmission
standard. To do otherwise would needlessly disrupt the transition and
delay the availability of digital television to American viewers.
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Mr. Tauzin. Without objection. It is so ordered.
Mr. Tauzin. We will now recognize Mr. Matt Miller,
president and CEO of NxtWave Communications in Langhorne,
Pennsylvania. Mr. Miller.
STATEMENT OF MATT MILLER
Mr. Matt Miller. Good morning, Mr. Chairman and
distinguished members of this committee. I am Matt Miller. I am
the president and CEO of NxtWave Communications. Thank you for
this opportunity to address the technical issues and challenges
facing digital television.
NxtWave's primary business is designing and selling the
chips for digital TV sets that decode the digital signals. Our
first chip, the NXT 2000, decodes both the digital cable
transmissions, QAM and the digital over-the-air transmissions,
8-VSB. In my written testimony, I have included data that show
the improved performance of our second generation chip, the NXT
2002, which will be available by the end of this year. This
chip is designed for indoor as well as outdoor over-the-air
reception, and it also decodes digital cable signals. We are
also introducing a COFDM chip for the European DVB markets. So
from a technical perspective, we understand in great depth the
pros and cons of both the COFDM and the VSB standards being
discussed in this country.
I am happy to have had the opportunity to show you our
indoor reception here in this room this morning using our first
generation product. We think it is very good. And our second
generation chip is going to be even better. In our industry, we
typically leapfrog ourselves once a year. PCs, modems,
microprocessors, VSBD modulators. It is important to understand
that the demonstration you saw earlier was based on a standard
which was established in 1996, which took nearly 10 years to
development and a chip that NxtWave began working on 2\1/2\
years ago. That chip will be in consumer products this year,
2000. That is how long it takes to create a standard and
initiate production.
So what I want to emphasize today is with our testimony and
with our deployment, rollout time is the enemy. The standards
we have works and any radical change we introduce will simply
bring in unacceptable delay. We have heard much testimony here,
a consumer market is emerging. There are many signals on air.
DTV broadcast signals already reach 60 percent of American
households. Manufacturers have introduced more than 100
different DTV products from fully integrated HDTV receivers and
high resolution monitors and digital set top boxes. Prices for
consumer equipment have decreased by up to 50 percent this year
and will continue to fall. And critical agreements have been
reached between cable and consumer electronics industry paving
the way toward seamless operability between broadcast DTV and
cable systems.
The current standard works. Staying with the current
standard allows the U.S. to meet its digital service
expectations years ahead of any alternative path to deployment.
After a decade of thorough and technically rigorous research,
the FCC chose 8-VSB modulation because of its superior power
efficiency, large coverage area, resistance to noise and
interference present in the U.S. broadcast environment.
Concerns regarding its capabilities are misguided and do
not warrant reopening the decade-long standard setting process.
Earlier this year, the Commission unanimously rejected a
petition to permit the use of a second noncompatible DTV
transmission standard. The FCC correctly found that indoor
reception difficulties to date reflected deficiencies in early
generation DTV receiver technology, not the standard itself.
This is a critical distinction. Recent field tests conducted by
CBS, the FCC and others have shown that these technical issues
have been largely resolved. The natural evolution of technology
and chip development in a hotly competitive market will resolve
any remaining reception issues. Already, manufacturers have
introduced new technology; it improves DTV receivers, indoor
reception performance to exceed that of analog TV, and
improvements will continue.
To revisit the standard at this late stage is not only
unnecessary, it would introduce a minimum of 2 years of delay
to develop, test, debate, negotiate review and approve an
alternative standard, then design the chips and build the
products for the marketplace.
The standard can accommodate future consumer needs and
service innovations. It was designed to enable broadcasters to
introduce the highest quality over-the-air broadcast digital
television, but the standard was designed to be flexible. It
can accommodate multiple channels of standard definition
television, enhance digital interactive services and ancillary
data casting services without causing loss of analog services
to consumers during the analog digital transition.
To the extent that the broadcasters' needs change and they
wish to provide portable and/or mobile applications and are
permitted to do so, the DTV standard can be modified to
accommodate these services in a compatible way. These
capabilities have not been fully developed and exploited, not
because the technology can't provide them, but because only
recently were the applications suggested.
More high definition television programming is needed to
accelerate this transition. Most of the programming transmitted
on the digital channel is just up-converted from analog. As a
result the digital picture isn't any better than the original
analog. The consumer experience has been far less compelling
and attractive than it could be. The dearth of free over-the-
air HDTV programming is perhaps the greatest threat to the DTV
transition. It threatens to damper consumer interest and
investment in DTV, slow DTV equipment and penetration, and
delay the reclamation of broadcasters analog spectrum.
Some may think I am biased in favor of the current
standard. I am, because I understand its capabilities and what
they can mean for bringing new and better services to the
American public in both urban and rural areas. I also have a
bias for action. I want to ensure that the U.S. remains the
world leader in the industry we created and have nurtured for
over a half a century. Pausing now for years while we debate
the intricacies of this or that standard is fiddling while Rome
burns. The standard is fine. It does the job and will
accommodate future requirements. Let's get on with it. Thank
you, Mr. Chairman. I would be pleased to answer any question
you or other members of the subcommittee may have.
[The prepared statement of Matt Miller follows:]
Prepared Statement of Matt Miller, Chairman and Chief Executive
Officer, NxtWave Communications
Good Morning, Chairman Tauzin and distinguished Members of the
Subcommittee. I am Matt Miller, President and CEO of NxtWave
Communications. Thank you for this opportunity to address the technical
issues and challenges facing the digital television industry.
NxtWave Communications, Inc.
NxtWave originated as a spin-off from the Sarnoff Corporation in
1996. We exist for a single reason: to create chips that enable the
best possible reception of digital television signals. Our first chip,
the NXT2000, decodes both digital cable (QAM) signals and digital over-
the-air broadcast (ATSC) signals. We also are introducing a COFDM chip
for the European DVB markets, so from a technical perspective we
understand in great depth the standards issues being discussed in this
country.
Change is Never Easy
We are at the beginning of a new era in television broadcasting--
the conversion from analog to digital. This transition brings with it
enormous opportunities for better and new services for America's
consumers. Broadcasters, programmers, equipment manufacturers,
advertisers, and many others will share in creating and providing these
services.
But change is never easy. When one heads in a new direction of this
magnitude, there always are questions, debates, and sometimes
disagreements.
A Single Standard for DTV is Essential
First, let's be very honest about one thing: both DVB, which is
based in COFDM technology, and ATSC, which is based in VSB technology,
are fully suitable standards for excellent over-the-air reception. Each
has different strengths and weaknesses, and engineers can and do argue
about which is better for what applications.
To bring the benefits of digital technology to the American public,
however, I submit that first and foremost, the most important aspect is
to have a single standard that works everywhere. The same TV set that
works in Louisiana should work in Massachusetts, and it should receive
every digital broadcast station.
In the United States, our digital standard was developed by a
united effort. In 1997, after a decade of thorough technical research,
design, and prototypes the FCC adopted the DTV standard unanimously
recommended by industry. The industry chose 8-VSB modulation after
considering all alternatives because of its superior power efficiency,
reach to the extremities of our large service areas including rural
areas, resistance to the noise and interference present in the U.S.
broadcast environment, and its ability to fit in with existing analog
signals without impairing their reception during the transition period.
Earlier this year, the Federal Communications Commission correctly
reaffirmed its decision by unanimously rejecting a petition to consider
adding a European standard based on COFDM technology as an alternative.
Time is the Enemy, Not the Standard
The current DTV standard is the best path to a quick transition to
digital broadcasting. The 8-VSB DTV standard allows the U.S. to meet
its digital television service requirements sooner and at lower cost
than other alternatives. Considering changes to the standard without
compelling technical reasons will confuse the marketplace, delay the
transition, and prevent timely recovery of the analog spectrum.
The risk and cost of delay greatly exceed the risk and cost of
continuing to deploy the DTV standard that we have. The fact is that it
will take at least two to four years to develop, test, debate,
negotiate, review and approve any alternative broadcast standard. Then,
either interference studies with analog and the current 8-VSB signals
would have to be conducted and a completely new Table of Channel
Allotments constructed, or digital broadcast service areas would have
to be made smaller than the analog service areas to prevent destructive
interference. This would impair reception especially by rural consumers
who could be left without digital reception and all the new services
enabled by digital technology.
Those advocating an alternative standard ignore the reality of the
lengthy deliberative process necessary to adopt a standard and the
technical complexity of having analog NTSC, digital 8-VSB, and digital
COFDM signals all having to share the limited number of channels. With
just two standards it took two years to figure out acceptable
allotments so that consumers would not lose over-the-air service.
Specifically, the most recent comparative tests between the U.S.
DTV standard and that of Europe confirmed previous findings that a
significant (3-5 dB) difference exists with regard to the signal
strength needed to receive the signal. This increase in power needed
for COFDM to equal VSB coverage would create additional interference
not heretofore contemplated unless either (1) broadcasters agree to
keep their maximum peak powers at previous levels, in which case
signals to suburban and rural areas will fall off before the stations'
NTSC signals; or (2) stations are required to tolerate the increased
interference from other stations, which also would impair reception.
Neither of these scenarios augurs well for a rapid and successful
transition to digital television.
So, what would be the benefit of two digital standards, or of
replacing one with another? If a standard was inadequate to enable
reception, that would be one thing. But the best engineers have
conclusively determined that the VSB standard is different from COFDM
in a critical area: it is fully capable of delivering superior
reception at greater distance. Thus the selection of VSB for the U.S.,
where our service areas are extremely large and where we value bringing
all communications services to distant rural areas. Indeed, we
currently use VHF channels 2-13 in particular to cover rural areas, and
VSB has clear advantages due to the noise and other interference on
these channels. Rural areas tend to rely more on over-the-air TV
signals because typically they have less coverage by cable.
The VSB standard also minimizes interference with the analog NTSC
signals that remain during the transition period. It was a fundamental
precept that the new digital signals not interfere with existing analog
signals during the transition so that consumers would not be harmed.
Concerns About Reception Are Misplaced
In 1998, NxtWave's engineers understood that reception of ATSC-
compliant signals was not meeting its theoretical limits. We analyzed
the reasons for this, specifically analyzing whether something
intrinsic to the standard itself was the cause, or whether there were
basic problems with implementing the standard in transmitters and
receivers. We concluded that the standard itself is sound and fully
capable of delivering the service intended.
NxtWave's analysis of the first receiver designs and decoder chips
concluded that they did not deal adequately with actual over-the-air
signal reception in some situations, including certain multipath
environments. But equally as important, NxtWave's analysis found that
reception IS enabled by the DTV standard; receiver implementation, not
the standard itself, required improvement. Our conclusion was, and
continues to be, that the ATSC DTV Standard provides a robust signal
that is readily viewable with appropriate decoding and has specific
advantages for the U.S. market.
Beginning in 1998, NxtWave devoted significant resources to
developing better demodulation chip designs to meet what it perceived
would be consumer demand for better over-the-air reception than
provided by early consumer equipment implementations. Our first chip,
the NXT2000 announced in August 1999, exceeded the performance of
previous ones in the market. Based upon experience with our first chip,
we are finishing our design improvements for our second chip, which is
scheduled to be available by the end of the year. Like other chipmakers
in this very competitive field, we are racing to produce future
generations of chips in order to ensure that consumers achieve flawless
reception that replicates the theoretical coverage of the standard.
Changed Service Demands Also Can Be Accommodated Without Impairing the
Standard
Recently I have participated in meetings at the ATSC to address the
capabilities and reception issues associated with the DTV standard. In
addition, I have had numerous discussions with all sectors of the
affected industries, including broadcasters. From this, I have
concluded that some broadcasters are seriously considering business
models that contain new services, such as datacasting, intended to
reach portable, and even mobile, receivers. NxtWave is fully prepared
to work with interested parties and devote its substantial expertise to
enabling these applications by using the most efficient methods that
are backward compatible with the current DTV standard if broadcasters
intend and are permitted and act to provide such services.
When the ATSC standard was adopted in 1996, broadcasters
unanimously supported it and expressed no desire to implement a multi-
tiered service. Instead, a fixed standard that maximizes data rate was
chosen.
More recently, broadcasters appear to be focusing more on data for
portable and even mobile uses, at the expense of transmitting full high
definition programming. The DTV standard can support flexible insertion
of encoded auxiliary data packets to be received with-portable devices
without disrupting the existing installed base of consumer receivers.
NxtWave engineers have developed a two-tiered ATSC-compliant extension
that multiplexes robust data packets with standard packets so that
there is no effect on existing transmitters and receivers. A two-tiered
service is possible with reception at signal levels well below those
attainable with the DVB-T standard, for example. We gave more detail on
this in our comments submitted to the FCC in their DTV biennial review
proceeding.\1\
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\1\ See Comments of NxtWave Communications in MM Docket No. 00-39
(May 17, 2000).
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NxtWave is a technology enabler. The DTV standard was not designed
for some of the applications now being envisaged--not because doing so
was impossible, but rather, at the time broadcasters and other
stakeholders were not interested in such applications. At that time,
the consensus was to emphasize maximum capacity (data rate) and
efficient coverage. If such services are permissible and broadcasters
want to provide them, the current standard is capable of supporting
them.
Improved Performance is Reality
To be honest, DTV reception today works in places where my
cellphone fails and analog TV reception is far from ideal, including
this room. But there remains substantial headroom for future
improvements to the standard even yet.
Our NXT2000 high-speed demodulator chip was introduced in August
1999 for Digital Television (DTV) broadcast and cable receivers. It
enables reliable reception of DTV broadcast of digital signals
compliant with the standard. Digital signals on cable systems also can
be demodulated using the same chip, thereby enabling compatibility. The
NXT2000 uses advanced equalization, synchronization, and error
correction techniques newly designed in 1998.
Our second-generation demodulator chip will be available in the
fourth quarter of 2000. This chip will significantly advance reception
capabilities in severely distorted, time-varying propagation
conditions. These performance improvements, due to advances in channel
equalization, will improve indoor and portable reception even more.
Studying reception of the multiple broadcast signals that became
available with the roll-out of digital signals starting in November
1998 has greatly facilitated analyses of reception conditions.\2\
---------------------------------------------------------------------------
\2\ The NXT2000 was developed prior to the availability of off-air
DTV signals.
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Figure 1 demonstrates our improved performance and compares our
performance to COFDM chips. It includes performance curves for four
systems: the current generation ATSC-professional unit, the NxtWave
second-generation chip, and both the 2K and the 8K COFDM modes
compliant with the European DVB-T standard.
[GRAPHIC] [TIFF OMITTED] T5906.020
Figure 1: These curves show the Carrier-to-Noise Ratio (``CNR'')
required to reach Threshold of Visibility (``TOV'') four
systems with a single echo at +1 usec. DVB-T and ATSC data is
from Brazil laboratory measurements. NxtWave second-generation
chip data is obtained using sampled RF data that is passed into
a computer model of the chip.
Figure 1 also demonstrates that the ATSC system operates with low
signal levels at which COFDM reception fails.
[GRAPHIC] [TIFF OMITTED] T5906.021
Figure 2: These curves show performance of four systems when a single
echo at +4 usec suffers a doppler frequency offset. DVB-T and ATSC data
is from Brazil laboratory measurements. NxtWave second-generation chip
data is obtained using sampled RF data that is passed into a computer
model of the chip.
The NxtWave second-generation chip also will out-perform the
current generation ATSC receiver in all relevant aspects. The results
depicted in these two figures above demonstrate that the NxtWave
second-generation chip will enable ATSC-compliant reception by portable
devices such as laptops and hand-held communicators.
To accomplish the superior 8-VSB performance in Figures 1 and 2 and
maintain cost-effective chip implementation, NxtWave engineers
collected and analyzed numerous data records from over-the-air DTV
broadcasts. The chip architecture and hardware implementation of the
NXT2000 are modified in the NxtWave second-generation chip for
substantially improved indoor reception. NxtWave engineers also have
developed, and continue to develop, advanced architectures and
algorithms that will be economically feasible. This trend is analogous
to the 5-year-old, 300-baud modem that has evolved into today's 56-
kilobaud standard, as predicted by Moore's Law. NxtWave's future
generations of demodulators will use more sophisticated and accurate
signal processing solutions. This will provide consumers with nearly-
unbreakable ATSC reception, while maintaining full backward
compatibility with all existing digital receivers.
Our results have been validated repeatedly in the field. Recent
field tests conducted independently by CBS (reported in ``DTV Reception
Field Tests,'' National Association of Broadcasters, Las Vegas, NV,
April 12, 2000) used the NXT2000 and other current generation
demodulators. These tests conclude that the current generation of DTV
receivers already replicate viewable analog NTSC coverage. Moreover,
since the demodulator chip is only one component of a highly-integrated
system, albeit a key component, improvements in other system areas such
as the RF tuner, together with a competitive industry fueled by the
potential of an emerging market, guarantee that future generation
receivers will provide the consumer with exceptional ATSC-compliant
reception.
Conclusion
Some may conclude that I am biased in favor of the current
standard. I am, because I understand its superior capabilities and what
they can mean for bringing
new and better services to the American public in both urban and rural
areas. I head up a broadband communications company that makes products
that support the ATSC DTV Standard. But in fact, we also make products
that support the alternative DVB COFDM standard. NxtWave is a company
of communications scientists. We build products compliant with the
standards of the countries in which we work.
I am biased, but not for one standard or another. Rather, my bias
is simply to ensure that the U.S. remains the world leader in the
industry we created and have nurtured for over half a century. Pausing
now for years while we debate the intricacies of this or that standard
is equivalent to ``fiddling while Rome burns.'' Our DTV standard is
fine, it does the job, and it will accommodate future requirements.
Let's get on with it.
Thank you, Mr. Chairman. I would be pleased to answer any questions
you or other members of the Subcommittee may have.
Mr. Tauzin. Thank you Mr. Miller.
Next we are pleased to welcome Mr. Richard Green of Cable
TV Laboratories in Louisville, Colorado.
STATEMENT OF RICHARD R. GREEN
Mr. Green. Thank you, Mr. Chairman, members of the
subcommittee. My name is Richard Green. I am president and CEO
of Cable TV Labs. Thank you for providing me with this
opportunity to comment on the cable industry's role in
facilitating inner operability and the transition to DTV.
Thirteen years ago I had the privilege of testifying before
this committee on the subject of HDTV. I was, at that time, and
still remain today, an enthusiastic advocate of digital
television technology. Although it has taken longer than any of
us anticipated, I believe that we are on the right course and
are making effective progress toward a successful induction of
a compelling digital and high definition service to the
American people.
I believe that the cable industry deserves more recognition
than it gets for its leadership role in implementing DTV. Cable
conditions have been working on the transition to digital
television since 1988. Today the largest multichannel digital
video facility in the world is owned and operated by a cable
company, AT&T Broadband. On the programming side, HBO is
already providing more HDTV programming in any given week than
all the broadcast networks combined. Cable operators are
upgrading to digital transmission and are offering an increased
range of new services. At present, over 7 million homes
subscribe to digital cable, a number that is expected to reach
10 million by the end of the year. Set top boxes being
developed this year will marry digital programming, high speed
data and Internet content for display on both analog and
digital TV receivers.
At Cable Labs, the most important effort that we have ever
undertaken is the transition to digital television. For
example, our open cable project seeks to develop a new
generation of digital set top boxes that are interoperable and
offer a new range of services to the consumer. Open cable is
also being used to develop specifications to meet many of the
FCC's navigation device requirements. A goal of this effort is
to keep the time required to develop new equipment to a
minimum. We do this by working with equipment designers and
manufacturers to cooperatively prepare specifications and
reduced risk in development time. It is an open community
process bringing together more than 400 companies to prepare
and approve the various specifications.
The FCC has asked the affected industries to help reduce
the technical barriers to the delivery of digital and high
definition television. It has offered companies a chance to
develop marketplace solutions rather than have to comply with
government and post standards for digital TV. The cable
industry is committed to help resolve compatibility problems
that exist between cable distribution systems and television
receivers, and to do so within the framework of inner industry
solutions.
Toward this end, the National Cable Television Association
and the Consumer Electronics Association reached agreement on
February 22 of this year. This agreement allows future digital
television sets to be connected directly to cable systems. The
agreement details the technical specifications that will enable
consumers to receive DTV programming and services over the
capable system.
On May 24th, CEA and NCTA further announced they had
reached an agreement on labeling information that will aid
consumers in their purchase of new digital television
equipment. Consumers will benefit from this agreement because
they will know exactly what to look for when they purchase a
new digital television receiver. No longer will ambiguous terms
like ``cable ready'' cause consumer confusion. The two
industries have agreed to continue their labeling discussion
and hope to reach agreement on labels for other equipment,
including digital set top boxes that will work with interactive
DTV receivers.
We look forward to continuing with CEA and other industry
groups, including the consumer electronics retailers, to ensure
that consumers have a wide range of clearly labeled equipment
from which to choose. We also continue to believe that these
interindustry agreements are preferable to the imposition of
government requirements in what is a dynamic and fast-changing
market. I thank you, Mr. Chairman. I will stand ready to answer
questions.
[The prepared statement of Richard R. Green follows:]
Prepared Statement of Richard R. Green, President and CEO, Cable
Television Laboratories, Inc.
introduction
Mr. Chairman, Mr. Markey, members of the subcommittee, my name is
Richard R. Green and I am President and CEO of Cable Television
Laboratories, Inc. (CableLabs), which is located in Louisville,
Colorado. CableLabs is a research and development consortium supported
by cable companies operating in North America and helps chart the
industry's course in matters of technology.1 It has played
an active role in cable's deployment of digital television (DTV),
setting standards for cable modems, and ensuring the availability of
interoperable set-top boxes at retail stores. Thank you for providing
me with this opportunity to comment on the cable industry's role in
facilitating interoperability and the transition to DTV.
---------------------------------------------------------------------------
\1\ CableLabs was founded 12 years ago to ensure the proper
development of technological initiatives for the cable television
industry. CableLabs represents more than 90 percent of the cable
customers in the United States and 85 percent of customers in Canada.
---------------------------------------------------------------------------
Mr. Chairman, you may remember that fourteen years ago I had the
privilege of testifying before this committee on the same subject that
we are considering today. In 1986, I helped conduct a demonstration of
the transmission of High Definition Television (HDTV) from Ottawa,
Canada, to Washington D.C. That occasion was the first international
exchange of digital high definition programs. You may also remember
that I was at that time--and still remain today--an advocate of digital
television technology. Although it has taken longer than any of us
anticipated, I believe that we are on the right course and are making
effective progress toward a successful introduction of compelling
digital and HDTV service to the American people.
I believe that the technical and economic problems associated with
the introduction of DTV are no different than what we have seen in the
past with similar technologies and that the problems are being solved.
The progress is not as rapid as we had hoped, but I would like to
discuss the work that is being done in this important area.
You may recall that in the case of the introduction of color
television, acceptance was slow. The penetration of color receivers
took about 8 to 10 years to reach significant levels. So it is not
unusual to find that new technologies often take considerable time to
reach meaningful economic penetration. Also, the issue of DTV is more
complex than the transition to color. We should remember that when
color television was introduced, the technical issues could be solved
by negotiations among a few participants. The major stakeholders were
broadcasters and TV manufacturers. Indeed, color television was largely
the product of a single company, RCA. During the introduction of color,
issues of production, transmission, and the manufacturing of TV sets
could be resolved within one company. Today, there are many
stakeholders. Multiple industries are affected by the developments in
DTV--not just broadcasters and TV manufacturers. The cable, satellite,
computer, content development, and consumer electronics industries all
have important stakes in the introduction of digital television and
HDTV.
cable has played a leadership role in the transition to digital tv
The most important effort that we have ever undertaken at CableLabs
is the transition to digital television. Indeed, I believe that the
cable industry deserves more recognition than it gets for its
leadership role in implementing DTV.
Cable companies have been working on the transition to digital
television since 1988. The industry published what I believe was the
first specification for digital video compression equipment for
consumers' homes nine years ago in March 1991. Cable companies have
been offering digital video service for the last five years. General
Instrument (now part of Motorola) first developed the digital
compression technology that is at the heart of the broadcast ATSC
standard for the cable industry. It was General Instrument's proposal
that made digital HDTV feasible. Similarly, the largest multi-channel
digital video facility in the world is owned and operated by a cable
company, AT&T Broadband. On the programming side, HBO is already
providing more HDTV programming in any given week than all the
broadcast networks combined. Showtime, Madison Square Garden, A&E, and
Discovery are also producing high definition programming. So, as an
industry, cable has been at this a long time and can boast a track
record of success in developing and deploying digital video technology.
It is also clear that digital television is a technology that the
cable industry takes very seriously and continues to deploy as quickly
as possible. Cable operators are upgrading to digital and offering an
increasing range of new services. At present, over 7 million homes
subscribe to digital cable--a number that is expected to reach 10
million by the end of this year. Set-top boxes being deployed this year
will marry digital programming, high-speed data, and Internet content
for display on both analog and digital TV receivers. And customer
satisfaction is high: a survey released by the Cable and
Telecommunications Association for Marketing (CTAM) showed that 95
percent of customers polled expressed their satisfaction with cable's
upgraded digital service.
cablelabs projects
Let me say a word about the three major CableLabs projects
currently underway. The current portfolio of research and development
projects at CableLabs includes the OpenCable initiative and development
of cable modem and PacketCable specifications. CableLabs is also
involved with home networking specifications, which I will not address
here.
CableLabs Certified Cable Modems/DOCSIS
The CableLabs' Certified TM Cable Modems
project, formerly known as Data Over Cable Service Interface
Specification or DOCSIS, defines interface requirements for cable
modems. The certified cable modem project provides cable modem
equipment suppliers with a method for attaining cable industry
acknowledgment of DOCSIS compliance. The process results in high-speed
modems being certified for retail sale. The DOCSIS project is four
years old, and the DOCSIS specification is an international ITU
standard. Currently there are over 50 manufacturers of modems, and a
competitive retail market for the sale of these modems is emerging in
the U.S. and overseas. We hope that the cable modem process will serve
as a model for the certification of digital set-top boxes which are
made commercially available at retail stores.
PacketCable
PacketCable TM is a project aimed at identifying,
qualifying, and supporting Internet-based voice and video products over
cable systems. These products will represent new classes of services,
including telephone calls and videoconferencing over cable networks and
the Internet, utilizing cable-based packet communication networks.
OpenCable
Our OpenCable project seeks to develop a new generation of digital
set-top boxes that are interoperable and offer a new range of services
to consumers. OpenCable is also being used to develop specifications to
meet many of the FCC's ``navigation device'' requirements. A goal of
this effort is to keep the time required to develop new equipment to a
minimum. We do this by working with equipment designers and
manufacturers to cooperatively prepare specifications that reduce risk
and development time. It is an open community process bringing together
more than 400 companies to prepare and approve the various
specifications.
The OpenCable process applies to a family of consumer devices.
Although the initial focus was on advanced digital set-tops, we expect
this functionality to migrate quickly to television receivers and other
consumer electronic devices such as DVDs and DVCRs, with the set-top
functionality ``integrated'' into the equipment. In fact, one exhibitor
at the 1999 Western Show demonstrated a personal computer that used an
OpenCable-compliant POD (Point Of Deployment security card) to access
cable services for display on the PC screen.
The OpenCable team has worked very hard to take the experience of
the DOCSIS effort and apply it in the design of the OpenCable process.
It is not an exact fit--the set-top environment is more complex and has
a set of security and legacy equipment issues that were not problems
for DOCSIS. But we certainly believe that the some key aspects of the
DOCSIS process are directly relevant:
Our commitment to an open, collaborative, inter-industry
process.
Inclusion of vendors as specification authors and true
partners.
Providing a neutral venue for development work.
Providing a feedback loop between equipment development and
refinement of specifications.
Building a strong consensus within the cable industry on
cable's technical needs.
As such, CableLabs has a process that offers a win-win future to
the other industries involved in developing digital television. It is
my hope that the cable, computer, broadcast, and consumer electronic
industries--as well as content providers--will continue to support this
effort, recognizing that the current convergence of technology leads to
a convergence of economic self-interest. We will make digital
television easy-to-use for the customer. We have addressed and will
implement systems to protect the copyright of content providers.
Through this infrastructure, we will be able to provide easily
accessible digital television and the compelling content that customers
desire.
status report on the development of digital tv
The FCC has asked the affected industries to help reduce the
technical barriers to the delivery of digital and HDTV television. It
has offered companies a chance to develop marketplace solutions rather
than have to comply with government-imposed standards for digital TV.
The cable industry is committed to help resolve compatibility problems
that exist between cable distribution systems and television
receivers--and to do so within the framework of voluntary, negotiated
solutions.
The Need for Copyright Protection
If a first-run digital program can be immediately recorded and
replicated in perfect copies or webcast (without payment to the
copyright holders), developers are not going to release their product
for distribution. At CableLabs, we are working to provide a
technological framework that can be supported by a legal environment in
which producers and the content community can be reasonably assured
that their products will not be stolen. This is not to say that
customers do not have a right to record material for their own use.
Indeed, home recording is fundamental to customer satisfaction.
However, we need to provide the technical tools that will allow legal
duplication and use while preventing pirate duplication and
distribution.
1394 Interface: Background
In the past, home video equipment has been connected to television
sets using channel 3 or 4. Many existing set-top boxes and video
recorders work that way, but these devices are all analog. The new
generation of home equipment is, of course, digital. So we must have an
equivalent interconnection for TV sets in the digital age. In other
words, in the digital world, a DVD player or a digital set-top box
should connect to a digital TV set via a digital plug. This is the only
way to preserve the original quality of the material.
A consensus among industries has singled out the IEEE 1394
interface as the method of choice for connecting digital equipment to
the TV set. The cable industry has supported that choice and has
specified 1394 connectors in the current purchase orders for our own
digital set-tops. Also, we have included in our OpenCable specification
an additional requirement that the cable 1394 connectors include
digital copy protection technology called 5C. We have done this in
order to preclude pirating of the pristine digital pictures. However,
we cannot require this technology on equipment we do not own.
Therefore, we have tried to persuade the consumer manufacturers to
include the 1394 connector with 5C on digital television receivers.
Many manufacturers have indicated that they will build to our
specification; others may choose to build sets without this technology.
We believe that the latter choice is a mistake since it will lead to
customer confusion about interoperability between cable services and
television sets. It also will produce TV sets that may not connect to
all digital video home equipment in the future. However, as I discuss
below, the cable industry has reached a compromise with manufacturers
on this issue.
Inter-Industry Agreement on Interoperability, February 22, 2000
The National Cable Television Association (NCTA) and Consumer
Electronics Association (CEA) reached voluntary agreements on February
22, 2000, that will allow future consumer digital television sets to be
connected directly to digital cable systems (see attached letter from
Robert Sachs and Gary Shapiro to FCC Chairman William Kennard). The
agreements detailed the technical specifications that will enable
consumers to receive DTV programming and services over cable systems.
As Robert Sachs, President of NCTA, noted:
This is good news for cable customers contemplating a
purchase of a digital television receiver. The cable and
consumer electronics industries now have specifications that
ensure that signals transmitted on cable will be easily viewed
on digital sets. This voluntary solution makes unnecessary
government involvement in setting compatibility standards for
the dynamic digital TV marketplace.
Similarly, Gary Shapiro, President and CEO of CEA, stated:
While our industries celebrate today's announcement, the true
winner is the American consumer. With these agreements, many
more consumers will soon be able to access the wonders of
digital television through cable. This is yet another giant
step forward in the transition to DTV. Indeed, all parties with
a true interest in the success of DTV should celebrate today.
The agreements detail the technical requirements that permit the
direct connection of digital television receivers to cable television
systems, specifying the signal levels and quality as well as video
formats. They also provide for the carriage of data which support on-
screen guide functions in digital receivers. With roughly two-thirds of
U.S. households receiving television programming via cable, the
February 22 agreements mark an important milestone in the transition to
digital television.
Inter-Industry Agreement on Labeling, May 24, 2000
On May 24, CEA and NCTA announced that they had reached agreement
on labeling information that will aid consumers in their purchase of
new digital television equipment (see attached letter from Robert Sachs
and Gary Shapiro to William Kennard). The CEA-NCTA agreement
establishes the labeling that is to be used to inform consumers about
the capability of various digital television sets to receive digital
and interactive TV services. The May 24 agreement does not require
every digital TV set to include a 1394/5C connector allowing reception
of the full range of cable interactive services. However, all sets will
be packaged with consumer information describing the features and
functions of television sets with and without the 1394/5C connector.
The descriptive information will appear in consumer electronics product
manuals and brochures.
Under the May 24 agreement, all digital sets will be capable of
receiving both analog and digital programming from a digital cable
system. In addition, digital TV sets with full interactive capabilities
will be labeled ``Digital TV-Cable Interactive.'' Digital sets that
lack these capabilities will be labeled ``Digital TV-Cable Connect.''
Sets labeled ``Digital TV-Cable Connect''--those without the 1394/5C
connector--will be capable of receiving analog basic, digital basic,
and digital premium cable programming from any cable system that offers
digital service. ``Digital TV-Cable Interactive'' sets (those with the
1394/5C connector), in conjunction with a digital set-top box, will be
able to receive those services and other programming--including impulse
pay-per-view, video-on-demand, enhanced program guides, and data
enhanced television services.
In announcing the agreement with CEA, Robert Sachs noted:
We're pleased to take this further step in the transition to
digital television. Consumers will benefit from this agreement
because they will know exactly what to look for when they
purchase a new digital TV receiver. No longer will ambiguous
terms like ``cable ready'' cause consumers confusion.
CEA's Gary Shapiro agreed:
With this agreement, we have now passed one more milestone on
the road to DTV. As our industry brings new DTV products into
the marketplace based on this agreement, consumers will have
full access to the spectacular picture, sound, and interactive
features of digital television via their digital cable system.
CEA and NCTA have agreed to continue their ``labeling'' discussions
and hope to reach agreement on labels for other equipment, including
digital set-top boxes that will work with the ``Digital TV-Cable
Interactive'' DTV sets.
We look forward to continuing our work with the CEA and other
industry groups (such as consumer electronics retailers) to ensure that
consumers have a wide range of clearly labeled equipment from which to
choose. We also continue to believe that these inter-industry
agreements are preferable to the imposition of governmental
requirements in what is a dynamic and fast-changing market.
conclusion
In dealing with the complex give-and-take issues that characterize
digital television, no one side can have it all. None of the industries
involved can afford to come up empty-handed on an issue as vital as the
digital future. However, with continued cooperation and compromise from
all parties, industry should be able to find negotiated solutions which
obviate the need for federal regulatory intervention. In particular,
the cable industry will continue to work hard to resolve questions
arising from its labeling and interoperability agreements with consumer
electronics equipment manufacturers and retailers as all sides press
forward to bring new digital services and technologies to market.
[GRAPHIC] [TIFF OMITTED] T5906.022
[GRAPHIC] [TIFF OMITTED] T5906.023
Mr. Tauzin. Thank you very much, Mr. Green.
Now we are pleased to welcome Mr. Robert Miller, New York,
New York, the president of Viacel. I understand Viacel is a
data network.
STATEMENT OF ROBERT T. MILLER
Mr. Robert Miller. Mr. Chairman and members of the
subcommittee, Viacel Corporation is a data broadcaster. Viacel
believes that DVBT COFDM is a revolutionary broadcast
technology that will allow the rebirth of over-the-air
broadcast television. Poor television reception gave rise to
both the cable and satellite industries. Today, up to 85
percent of viewers define television as cable or satellite.
8-VSB modulation perpetuates the failing NTSC system. 8-VSB
is even retrograde. It denies mobile television reception that
we enjoy today. Congress should mandate mobile reception
capability. COFDM supports mobile television reception in the
buses of Singapore and the high speed trains of Europe. The
taxicabs and subways of New York City could receive HDTV today
using the powerful tools of the revolutionary COFDM DVBT
standard. I know of no New Yorker who even tries to receive
broadcast television. Multipath scrambles both NTSC and 8-VSB.
Until Viacel tested COFDM, we could not get anything to work in
the real world of New York City.
However, our COFDM tests results were wildly beyond our
expectations. COFDM worked better specifically in those very
locations where everything else had failed, including my cell
phone. In the shadow of the Empire State Building where 200,000
watt transmitters blast unreceivable 8-VSB HDTV down on New
Yorkers from 1100 feet, we tested COFDM. We, however, were
broadcasting 22 miles out on Long Island from a 240-foot
antenna with 1 percent of the power used by the 8-VSB stations.
There was no line of sight. In fact, our first day of test we
were driving on Park Avenue, 5th Avenue and Lexington Avenue in
midtown Manhattan with 50-story buildings on either side of the
street at right angles to and blocking any direct signaling
from the transmitting tower. We were also moving at 40 miles an
hour. We used simple bow tie and monopole antennas from Radio
Shack. They both worked.
When you think of data casters, you may think of e-mail and
stock quotes. In fact, HDTV is data and in the digital world,
all broadcasters are data casters. On that day in New York when
we first tested COFDM, we data cast a movie that filled a 15-
inch screen on a laptop with full color and CD quality sound
using Internet protocol.
All of Manhattan could have been watching HDTV on that
channel at the same time with COFDM and simple indoor antennas.
Few people can watch free over-the-air television in Manhattan
today. With COFDM, they could watch all 30 stations that
broadcast there now in taxicabs, subways and offices and at
home.
8-VSB proponents are quick to write off the inner cities. I
live in New York and I want HDTV. 8-VSB proponents tell us city
slickers, poor and rich alike, that we will just have to be
happy paying the cable and satellite companies for our free
advertiser-supported TV. No free HDTV over the air for us. How
can we simply write off the cities by continuing with this
defective 8-VSB modulation standard? There is a fixed rate VSB
right now and it is called COFDM. When, off the record, most
engineers Viacel has dealt with see 8-VSB as a peculiar
American political disease that has nothing to do with the
underlying technology and everything to do with powerful and
foreign special interest. Congress correctly specified that a
signal equal to the current NTSC signal must be broadcast free.
And that the extra spectrum can and should be used for data
services.
HDTV is a seductive product. The market will demand it.
Congress should allow COFDM. The competition between COFDM and
8-VSB would spur the rollout of HDTV like nothing that Congress
could mandate. The passion in this room should tell us that.
By the way Viacel's business plan is a free data casting
service including a free receiver, in the same spirit as a
current free over the air broadcasting. What an amazing
revolutionary concept. COFDM actually allows you to simply and
reliably receive an over the air TV signal. Maybe it is hard
for some to grasp that concept since we have lived with faulty
reception for so long.
There are a lot of canards being put out against COFDM.
Congress should look past them and make sure that the tests now
being conducted in Washington by MSTV comparing COFDM and 8-VSB
continue, are fair and that the results are fully aired. The
people do not want a modulation standard, they want great TV.
Thank you.
[The prepared statement of Robert T. Miller follows:]
Prepared Statement of Robert Miller, President, Viacel Corporation
Mr. Chairman and members of the Subcommittee, my name is Bob Miller
and I am the President of Viacel Corporation.
Viacel Corp. is a data-broadcaster. Viacel believes that DVB-T
COFDM is a revolutionary broadcast technology that will allow the
rebirth of over the air broadcast television.
Poor television reception gave rise to both the cable and satellite
industries. Today up to 85% of viewers define television as cable or
satellite.
8-VSB modulation perpetuates that failing NTSC system. 8-VSB is
even retrograde, it denies mobile television reception that we enjoy
now. Congress should mandate mobile reception capability. COFDM
supports mobile television reception in the buses of Singapore and the
high speed trains of Europe. The taxicabs and subways of New York City
could receive HDTV today using the powerful tools of the revolutionary
COFDM DVB-T Standard.
I know of no New Yorker who even tries to receive broadcast
television. Multipath scrambles both NTSC and 8-VSB. Until Viacel
tested COFDM we could not get anything to work in the real world of New
York City.
However, our COFDM tests results were wildly beyond our
expectations. COFDM worked better specifically in those very locations
where everything else had failed, including my cell phone. In the
shadow of the Empire State Building where 200,000 watt transmitters
blast unreceivable 8-VSB HDTV down on New Yorkers from 1100 ft. we
tested COFDM.
We, however, were broadcasting 22 miles out on Long Island from a
240 ft. antenna, with 1% of the power used by the 8-VSB stations.
There was no line of sight. In fact on our first day of test we
were driving on Park Ave., Fifth Ave., and Lexington Ave. in Midtown
Manhattan with fifty story buildings on either side of the street at
right angles to and blocking any direct signal from the transmitting
tower. We were also moving at up to 40 mph. We used simple bow tie and
monopole antennas from Radio Shack. They both worked.
When you think of data-casters you may think of e-mail and stock
quotes. In fact HDTV is data and in the digital world all broadcasters
are data casters. And on that day in New York when we first tested
COFDM we data-cast a movie that filled a 15 inch screen on a laptop
with full color and CD quality sound using IP (Internet Protocol). All
of Manhattan could have been watching HDTV on that channel at the same
time with COFDM and simple indoor antennas. Few people can watch free
over the air television in Manhattan today. With COFDM they could watch
all thirty stations that broadcast there now, in taxicabs, subways,
offices and at home.
8-VSB proponents are quick to write off the inner cities. I live in
New York and I want HDTV. 8-VSB proponents tell us city slickers, poor
and rich alike, that we will just have to be happy paying the cable and
satellite companies for our free advertiser supported TV. No free HDTV
over the air for us. How can we possibly write off the cities by
continuing with this defective 8-VSB modulation standard? There is a
fix for 8-VSB right now and it is called COFDM.
When off the record, most engineers Viacel has dealt with see 8-VSB
as a peculiar American political disease that has nothing to do with
the underlying technology and everything to do with powerful and
foreign special interest.
Congress correctly specified that a signal equal to the current
NTSC signal must be broadcast free and that the extra spectrum can and
should be used for other data services. HDTV is a seductive product,
the market will demand it. Congress should allow COFDM. The competition
between COFDM and 8-VSB will spur the rollout of HDTV like nothing that
Congress could mandate. The passion in this room should tell us that.
By the way, Viacel's business plan is a free data-casting service
including a free receiver, in the same spirit as current free over the
air broadcasting.
What an amazing and revolutionary concept! COFDM actually allows
you to simply and reliably receive an over the air TV signal. Maybe it
is just to hard for some to grasp that concept since we have lived with
faulty reception for so long.
There are a lot of canards being put out against COFDM. Congress
should look past them and make sure that the tests now being conducted
in Washington by MSTV comparing COFDM and 8-VSB continue, are fair and
that the results are fully aired.
The American people do not want a modulation standard, they want
great TV.
Thank you.
Mr. Tauzin. Thank you, Mr. Miller.
Next we will have Mr. Gary Chapman. CEO and president on
LIN Television Corporation.
Mr. Chapman.
STATEMENT OF GARY CHAPMAN
Mr. Chapman. Thank you, Mr. Chairman. If you and I were to
go to a consumer electronics store here in Washington and we
wanted to buy a digital television set, you think it would be
easy. We just walk in, tell them what you want, take it home,
hook it up. Hook it up, right? Wrong. What you would find is
the following: Most digital sets don't get digital signals off
air without a set top box at additional cost. When you try to
hook it up, our set to cable, it probably would not work. Even
if it did work with cable, it still wouldn't receive the five
digital broadcast stations already on-the-air because local
cable doesn't carry those signals in Washington, DC.
My point is there are huge obstacles that lie in the path
of consumer acceptance of DTV. Unless the FCC moves forward
quickly to resolve these issues, the public will be denied
access to DTV. The FCC should do the following three things
right now to resolve this consumer problem: First, adapt new
carry and retransmission consent rules to digital service.
Second, require interoperability of DTV with cable and devices
like VCR's. And last, create minimum performance levels for
digital television sets.
Broadcasters are working hard on the transition to digital.
Nearly 150 stations broadcast digital signals, reaching two-
thirds of Americans. Broadcasters are ahead of the schedule in
rolling out DTV service. We estimate some $750 million has
already been spent by the first wave of stations. My own
company already invested $22 million on transmission equipment
alone. We will need another $30 million to complete that part
of the job. Then we need to spend more money to convert news
gathering, studio, master control, and editing equipment. The
fact is, broadcasters are doing their part. More stations go
on-the-air every day. More digital programming is being
produced and provided to consumers.
Unfortunately, our partners in this enterprise are falling
short. We don't have sets that will receive digital signals or
cable systems that both carry our signal and allow consumers to
watch them. We also don't have an FCC that is implementing
Congressional mandates. Our millions are being spent for
naught.
Now, just think of those small market stations like the one
in Quincy, Tom Oakley, that facing a 2002 deadline to complete
their DTV buildout. Think of how they are almost mortgaging
their future to go digital. They deserve to have certainty that
their signals will at least reach their viewers.
Now, let me address an ongoing issue that our industry can
and is doing something about. I am chairing a special broadcast
industry-wide committee, spending millions of dollars to
conduct critical tests to understand and to correct what many
perceive to be the disappointing performance of DTV
transmission system. These nonpartisan scientific tests will
determine whether the current 8-VSB technology will work well
enough or if improvements are needed. They will also look at
the viability of COFDM for the American broadcasting.
Our goal is to expedite the transition, not to disrupt it
or to change the DTV table of allocations. We are simply
committed to getting these answers as soon as possible. We want
to make sure that the service that we provide the public is
technically superior, consumer friendly. We will have the
answers to this test at the end of the year.
One more word about going digital. Broadcasters are looking
at ways to provide enhanced services to benefit the public.
When Congress approved going forward with DTV and in the 1996
Telecom Act, it created strict rules for such activity. Any
such service must be secondary to our main job of providing
free over-the-air television to consumers. Any revenues from
such service must be shared with Uncle Sam. Those remain the
watchwords of our industry as we investigate new possibilities.
There are four things that I would like to you to take away
today, four important elements. These are the hurdles we must
overcome. First, the satisfaction with DTV transmission
performance, broadcasters are tackling this problem in figuring
out how to solve it. The other three obstacles we can do
nothing about: cable interoperability, TV set performance and
cable carriage. The FCC and our industry partners must step up
to the plate. My company, our industry are betting millions of
dollars and our future. We are committed to this success. I
urge Congress and our DTV players to join us. Thank you.
Mr. Tauzin. Thank you very much, Mr. Chapman.
Next will be Mr. Tim Fern, vice president of the Pace Micro
Technology. Tim Fern is the director of engineering for the
company located in Boca Raton, Florida.
Mr. Fern.
STATEMENT OF TIM FERN
Mr. Fern. Thank you, Mr. Chairman. Good morning. This
morning I would like to say a few words about Pace Micro
Technology and our experience that enables us to speak here
today. A little bit about digital television in the U.K.
Mr. Tauzin. I am sorry, our mike systems only work if you
get real close to them.
Mr. Fern. Our perspective on the performance issues
recording COFDM and multipath and the practical implications
from a set top box or manufacturer technology providers
perspective.
Okay. So a little bit about Pace. Pace is the largest
dedicated set top box manufacturer in the world. We have
supplied digital television boxes in the U.K. to the operator--
On Digital--from the start of their service in November, 1998.
There has been very high consumer and customer satisfaction
with that product. On Digital recently described our technology
as exceeding requirements in all respects and accepted without
qualifications. I think it is important to note here that
that's not the statement of the company that still has concerns
over the operation of the technology, and there have been some
concerns mentioned about things like impulse noise. That
statement describes that.
We are experienced in all platforms, satellite and cable
and supply to the U.S. market. We currently have contracts to
supply Time Warner Cable, Comcast and BellSouth entertainment.
So about digital television in the U.K., it is a huge success.
It uses a 2 K version of COFDM. This is mandated by the DVB. It
is now, as we sit here today, in over 750,000 homes across the
United Kingdom. They are forecasting it will be in a million
homes by Christmas. In terms of penetration of TV households,
that means to match that success because your launch date was
pretty similar, you should already have 5 million digital
televisions installed in the United States.
So now, the other thing about television in the U.K. Is
that it is not high definition, but there is a number of
technological advances going on in television that the
committee should be aware of. The difficulty you have when you
see big screens is that you see a lot of fuzziness and you see
the line structure of the 5-2-5 line system. Those problems can
now be dealt with by electronics within the set top box and
within the display device. So we forecast that the viewers in
Europe will be watching very high quality images, you can't use
the expression ``high definition,'' but very high quality
images on big screens without the disadvantage of having to
send so much data. So they can just send maybe 3 or 4 megabits
per second rather than the 19.6 megabits per second.
With our experience in the U.K., we believe that we could
have a COFDM-based product for the United States market in
about 9 months time. And I think the transmissions could be on-
the-air in that time too.
The United Kingdom, I think, leads the world in digital
television. We have over 20 percent of our TV households now
connected to digital in some form. We have also got a very
successful digital satellite and digital cable operators there.
So we are heading toward a very early switchoff of analog
transmissions some time in this decade, I should imagine.
In the process of inputting this technology into
households, we are also bringing the worldwide Web and e-mail
into every home in Britain. There will be seamless delivery
with broadcast content and Internet originated content arriving
on the TV screen.
Okay. Pace perspective on the performance. We are very
enthusiastic of all technology. I am not going to go into
debate on the details, but we have been looking at the OET
study. I think the difficulty with the OET study is it doesn't
apportion any weight to the particular technical arguments. We
think that the 8-VSB has problems of huge significance in
operations of multipath, and this far outweighs any of the
problems that are listed in that report. Don't accept anecdotal
evidence on the reception performance of this. Scientific study
will reveal the COFDM is dramatically superior.
So if you stick with 8-VSB, I think you will become an
island of VSB. I think we have heard that expression before.
The rest of the world is clearly moving toward COFDM and
America is clinging on to a sadly flawed standard.
Sorry. Just allow me to conclude just a few seconds. So we
know that COFDM works and there is very high consumer
satisfaction. CSB problems will not easily be solved. These
have been worked on for many years. There is an opportunity in
the U.S. to change. This is a one-time opportunity. This is a
very long-term decision you are taking here. This technology
will be with you maybe 50 years. If it continues and the
problems cannot be solved, I think the political damage is
quite clear. Thank you, Mr. Chairman.
Mr. Tauzin. Thank you, Mr. Fern.
Finally, Mr. Terence Rainey, president of the Association
of Imaging and Sound Technology here in Vienna, Virginia.
Mr. Rainey.
STATEMENT OF TERENCE J. RAINEY
Mr. Rainey. Mr. Chairman, distinguished members of the
subcommittee, thank you for the opportunity to contribute to
today's discussion. I am the President of ITS, the Association
of Imaging Technology and Sound. We are the trade association
of the professional community of businesses providing post
production services and pictures and sound to the television
and film industry. Our companies take over after the director
yells cut. We transfer film to videotape for television
viewing, edit the picture and sound of TV sound and commercials
and create visual effects for visual and television.
Companies in the post production industry are small
businesses ranging in size from just a few employees to over
400. Companies typically are privately held small businesses
with the annual revenues in the area of $2- to $10 million. The
full service and special facilities total about 38,000
employees in the U.S. with a payroll of about $2.5 billion. We
create high paying, skilled jobs commanding high levels of
compensation. These companies comprise an industry of about $5
million in annual domestic revenue.
The FCC, in approving 36 different picture formats for
digital television versus the 1 picture format for the legacy
NTSC format, has created significant complications for the
post-production industry. The major television networks have
chosen three different standards. The post-production industry
must now be able to work at all the different standards. All
but two of the digital picture formats, the two standards
definition formats require that a post-production facility
replace its existing equipment with equipment capable of
producing high definition.
The broadcasters expressed desire for additional spectrum
was to allow them to serve the public interest in broadcasting
high definition television. And for the last television season,
CBS was the only network to broadcast a high definition prime
time television schedule. The CBS prime time high definition
programming was partially underwritten by Mitsubishi for that
season. The other networks are select high definition
programming. For example, ABC Monday night football, which was
partially underwritten by Panasonic, and the Jay Leno Show on
NBC.
For the coming television season, the only major
broadcaster that has expressed any intent to broadcast prime
time high definition programming is CBS. However, even as
recently as last week, CBS appears to be unwilling to pay
increased licensing fees to non CBS-owned production companies
for delivery of high definition programming. As a result,
members of the post-production industry are reporting to me
that production companies are canceling their orders for
producing their television shows intended to be broadcast in
high definition for the coming television season. This is a
step in the wrong direction. The post-production industry is
faced with making an additional significant capital investment
in high definition equipment.
Most of the incremental cost in producing high definition
programming is incurred in the post-production process. Our
members are making this investment based upon the mandated
schedule for transition to digital television and the
broadcaster's expressed intent to broadcast high definition
programming. Many post-production companies will not survive or
will suffer severe financial hardship if their substantial
investments in digital post-production equipment were to lay
fallow while new high definition programming becomes available
to the American people.
You have heard some concerns regarding the approved digital
television transmission standards today. We are urging to you
step back from this issue and review the state of affairs as
they exist. Broadcasters have the ability today to broadcast
high definition programming to millions of Americans. The post
industry stands ready to support full programming schedules for
high definition content. But if there is no production of high
definition television programming to transmit over these
systems, an entire industry could be in peril.
America has historically benefited from a strong technical
framework supporting its dominance in the creation of
entertainment content for the world. The lack of commitment to
digital and high definition programming is contributing to the
financial decline of the U.S. post-production industry that has
been the foundation of the television industry for many, many
years. Thank you, Mr. Chairman.
[The prepared statement of Terrence J. Rainey follows:]
Prepared Statement of Terrence J. Rainey, President, ITS
Mr. Chairman, distinguished members of the panel, thank you for the
opportunity to contribute to today's discussion. I am Terry Rainey,
president of ITS.
ITS is the trade association of the professional community of
businesses providing creative and technical services in pictures and
sound to the television and film industry. The postproduction processes
are: 1. Video, Audio & Film Transformation; 2. Video, Audio & Film
Manipulation; 3. Video, Audio & Film Finishing and Preparation of
Video, Audio & Film for a Distribution System; and 4. Postproduction
Video, Audio & Film Creation
Companies in the Production and Post Production Industry range in
size from just a few employees to over 400. Companies typically are
privately held small businesses with annual revenues of $2 to $10
million. The full-service and specialty facilities total about 38,000
employees with a payroll (including benefits & taxes) of about $2.4
billion dollars. The postproduction industry creates high paying,
skilled jobs commanding high levels of compensation. These companies
comprise an industry of about $5 billion dollars in annual domestic
revenue.
The FCC in approving 36 different picture formats for digital
television versus the 1 picture format for the legacy NTSC format has
created significant complications for the post production industry. The
major television networks have chosen three different standards. The
post production industry must now be able to work at all the different
standards.
All but 2 of the digital picture formats (the two standard
definition picture formats) require that a post production facility
replace its existing equipment with equipment capable of producing high
definition.
The Broadcaster's expressed desire for additional spectrum was to
allow them to serve the public interest in broadcasting high definition
television.
For the 1999/2000 television season, CBS was the only network to
broadcast a high definition prime time television schedule. The CBS
primetime high definition programming was underwritten by Mitsubishi
for the season. The other networks had select high definition
programming, for example ABC Monday night football was underwritten by
Panasonic.
For the 2000/2001 television season, the only major broadcaster
that has expressed any intent to broadcast high definition programming
is CBS. However, even as recently as last week, CBS appears to be
unwilling to pay increased licensing fees to non CBS owned production
companies for delivery of high definition programming. As a result,
members of the post production industry are reporting to me that
production companies are canceling their orders for producing their
television shows intended to be broadcast in high definition for the
2000/2001 television season.
The postproduction industry is faced with making an additional
significant capital investment in high definition equipment. Most of
the incremental cost in producing high definition programming is
incurred in the postproduction process. Our members are making this
investment based upon the FCC mandated schedule for transition to
digital television and the broadcaster's expressed intent to broadcast
high definition programming. Many post production companies will not
survive or would suffer severe financial hardship if their substantial
investments in digital post production equipment were to lay fallow
while no new high definition programming becomes available to the
American people.
There are concerns regarding the approved digital television
transmission standards that broadcasters were intricately involved in
developing. We urge you to step back from this issue and review the
state of affairs as they exist today. Broadcasters have the ability
today to broadcast high definition programming to millions of
Americans. The post industry stands ready to support full programming
schedules of high definition content. If there is no production of high
definition television programming to transmit over these systems an
entire industry could be in peril.
America has historically benefited from a strong technological
framework supporting its dominance in the creation of entertainment
content for the world. The lack of commitment to digital and high
definition programming is contributing to the financial decline of the
U.S. post production industry that has been the foundation of the
television industry for many, many years.
The postproduction industry is retooling its technical
infrastructure to accommodate transmission of digital television per
the FCC mandated implementation. Most, if not all, of the analog
equipment that has been in use will have to be phased out, and new
digital equipment phased in, in less than 5 years. Our members'
facilities must support all of the formats to perform their services.
The digital equipment to retool our facilities is significantly more
expensive than the previous generation of postproduction equipment,
with the capital investment for the typical small facility estimated to
be in the millions of dollars. To maintain the technological lead and
be competitive, U.S. companies will spend millions of dollars upgrading
equipment. With the state of digital and HDTV demand, postproduction
companies are not guaranteed a return on their investment.
The industry has continually invested in technology and process and
as a result has greatly enhanced the quality of television programming
for all Americans. Throughout this process, the postproduction industry
has invested hundreds of millions of dollars in building the technical
infrastructure that is necessary to support the creation of television
programming for the United States legacy NTSC format. The NTSC format
stipulates one display format utilizing an interlaced picture with 525
lines of resolution (525i). The NTSC's 525i format is not listed in the
new digital ATSC standard (ATSC Doc. A/53 table 3).
The FCC's digital television standard specifies the approved
transmission formats and does not mandate the production formats to be
used by the postproduction industry. However due to the encoding
parameters required for sound and visual images under the FCC's digital
television standard, the postproduction industry's current technical
infrastructures (built to support the NTSC standard) can only produce
standard definition pictures that can satisfy two of the 36 digital
formats approved by the FCC. This means that as a result of the FCC
mandate requiring the transition to digital television, the
postproduction industry will have to completely replace its existing
technical infrastructure to support the new digital television
standards.
It should be noted that a network's adoption of a transmission
format should not imply that they have changed their delivery
requirements for their current television production to comply with
their approved formats. The current network standards vary from an
interlaced high definition image (CBS and NBC) to Fox's adoption of a
digital standard definition image. The complexities created for the
postproduction process in having to support all of these standards has
exponentially increased the cost and complexity of their transition to
digital television. Unlike individual broadcasters or networks, the
post production industry can not choose one preferred format, but must
stand ready to serve the program creation industry with a full range of
digital choices. Because of this uncertainty and diversity of choice,
the post production industry must bear the burden of significant costs
in this transition, even though the market for these services has yet
to fully develop.
The road to digital broadcasting was paved with broadcasters'
insistence that they needed additional spectrum for High Definition
broadcasting. The broadcaster's expressed desire and intent to
broadcast high definition programming created the environment for the
FCC to be the ``early adopters'' in high definition television
broadcasting and the motivation to change what was an otherwise proven
and working model for standard definition programming. Broadcasters are
trying to balance their desire to protect their spectrum with the
expressed intent to provide high definition programming with the
business reality that the advertising revenues associated with high
definition programming are effectively the same as for standard
definition programming. Given this business dilemma, there is no
business motivation for the broadcasters to require high definition
television programming which only increases their postproduction costs
and provides them with no immediate incremental revenue.
In order to justify the significant capital outlay required to
build a digital infrastructure, the postproduction industry anticipated
providing additional value by producing high definition entertainment
programming for which they would be able to charge incremental fees
over the existing rates for their standard definition services. The
incremental value that was to have supported the postproduction
industry's capital investment in high definition digital television
infrastructure is greatly diluted to the extent that a broadcaster only
anticipates broadcasting a digital standard definition picture.
Based upon current indications from the networks, absent any
competitive pressure from cable and satellite companies, the
broadcasters appear to have little motivation or intent to pursue high
definition programming. Notwithstanding the uncertainty regarding the
broadcasters intentions, the postproduction industry has to invest
hundreds of millions of dollars in rebuilding its technical
infrastructure to support the government's digital television system.
The postproduction industry continues to support the transition to
digital television. As an industry that has consistently embarked on
independent research and development to improve the technical quality
of television programming, the FCC's transition to high definition
television was anxiously awaited.
We believe that we can play a fundamental role in facilitating the
transition and creating the value statement that will motivate both
producers and consumers of television programming to ultimately adopt a
digital high definition standard. However, we are an industry made up
of predominately privately owned small businesses with limited
financial resources. Unfortunately, the postproduction industry does
not enjoy the financial benefits of the free spectrum that the FCC was
in a position to bestow on the nation's broadcasters.
ITS conducted an online survey on expected costs of DTV
implementation. Following are the compiled results of the DTV Survey.
Anticipated DTV Expenses
In the next 12 months: $1,073,971
In the next 36 months: $3,192,188
Replacement Equipment overall: $2,006,579
In the next 12 months: $615,321
In the next 36 months: $1,961,429
Expansion Equipment overall: $1,344,737
In the next 12 months: $765,917
In the next 36 months: $2,243,333
Anticipated gross revenues from digital post services overall:
$5,542,857
In the next 12 months: $2,825,000
In the next 36 months: $8,064,583
These figures are imposing to an industry whose members face
enormous capital investment expenses. Remember that the average revenue
of an ITS member is about $7 million per year.
By no means are we assured as in the feature film ``Field of
Dreams'', that if we ``build it, they will come''. We are hopeful that
with these incentives our industry will be able to create cost-
effective solutions to the complex challenge of implementing the most
sweeping change to television in our history. We are poised to usher in
the digital information age, but we cannot do it alone. It is up to all
of us--broadcasters, and manufacturers, to build it, so they will come,
and be thrilled by the new television.
Mr. Tauzin. Thank you very much. The Chair recognizes
himself and the members in order. First of all, I would hoped
that we would not have an engineering dual this morning and I
think we had one as we looked at 8-VSB and COFDM
demonstrations. But I heard some things and I want to make sure
I heard them right. Did I hear correctly, Mr. Hatfield, that
the demonstrations were correct in indicating that the 8-VSB
standard does have problems when it comes to multipath issues?
But your argument is that they can be cured; is that correct?
Mr. Hatfield. Are you talking about the demonstrations
here?
Mr. Tauzin. Yes.
Mr. Hatfield. I think we all must be careful about
demonstrations that are of one-up anecdotal sort of things,
because there are lots of tradeoffs.
Mr. Tauzin. Without getting into all that, are there
multipath problems with the 8-VSB technology?
Mr. Hatfield. For in-building reception, there has been
some concerns raised.
Mr. Tauzin. Like, for example, in New York, as Mr. Miller
said. Those are real problems.
Mr. Hatfield. What I have got to say though is that there
are tradeoffs here. That, for example, if I recall some of the
original tests here in Washington, some of the problems in some
locations were caused by multipath, some of the reception
problems were caused by lack of adequate signal. The one system
has some alleged benefits in multipath, the other has some
alleged benefits in terms of weak signals. So you choose one--
--
Mr. Tauzin. You get a tradeoff. Second, is there a problem
with the mobile reception with 8-VSB?
Mr. Hatfield. Mobile reception goes back to the original--
forgive me for being an engineer.
Mr. Tauzin. Try to be a layman here. What I am trying to do
is try to understand from a standpoint of a consumer who is
going to enter this world, buy a set, buy a mobile set or set
in his home. Are there problems with mobile reception if I
wanted to receive data and television signals in a mobile
environment?
Mr. Hatfield. But let me say, when you ask an architect to
design an office building versus a parking garage, you get
different things.
Mr. Tauzin. I understand that. Can you just answer the
question?
Mr. Hatfield. The original commission proceeding never
focused on mobile reception.
Mr. Tauzin. You were never asked to do that. Mr. Hatfield,
I am not being critical of the Commission, please. I know there
are other days I do that ad nauseam. You know that. What I am
trying to do is just understand it from a layman's point of
view. Does the 8-VSB standard pose problems with mobile
reception or not?
Would someone else try?
Mr. Hatfield. Well, what I am saying is my overall feelings
as an engineer that the COFDM system probably has some
advantages in a mobile environment.
Mr. Tauzin. But can 8-VSB be brought up to the same
capabilities? Mr. Miller, you want to try?
Mr. Matt Miller. I will try to answer and attempt at plain
English. Neither of these television systems was fundamentally
designed to accommodate mobile transmission. When you talk
about mobile reception, there is a real discussion about what
do you mean by ``mobile.'' So that aside, the capabilities of
both systems are, in the end, comparable for the providing
mobile reception. The COFDM system has moved a little bit
further down that path because they have done the work. But
there is no fundamental difference in the laws of physics
underlying the two transmissions.
Mr. Tauzin. Physically, the 8-VSB standard could be
improved to the point where it could be as fully capable as
COFDM?
Mr. Matt Miller. Yes.
Mr. Tauzin. Mr. Hyman raised another issue that nobody
talked about. That was the translator issue. Many homes in
America who receive their television through a cable system who
has had a supply through a transmitter or receive it directly.
Mr. Hyman has said there are going to be some problems here.
Are there?
Mr. Lewis. No.
Mr. Tauzin. Answer first, then I will give you a chance.
Mr. Lewis. I would refer you to the ATTC submission to the
biannual review again where they documented on channel
repeaters for 8-VSB being used in Utah. There is a public
broadcasting co-op there that has a need for this type of
activity. So I would like to just say that it is a demonstrated
proven fact that you can use on channel repeaters.
Mr. Tauzin. So you are saying it will work. Mr. Hyman says
it won't. Why won't it work, Mr. Hyman?
Mr. Hyman. Well, I am not an engineer, so I can't get into
the all the engineering specifics, but we know that on channel
repeaters with 8-VSB can be used in extremely isolated
instances where the actual receiver and the transmitter are
separated, so there isn't the back channel, the backflow, if
you will, of the signal which creates the same multipath
environment that kills 8-VSB today.
Mr. Tauzin. We are not going to get an engineering answer.
Let me do this. Let me ask you this: Obviously, there are an
awful lot of Americans who rely upon translators and repeaters
in this country, particularly out west. I understand that huge
percentages, for example, 35 percent in Texas, much higher
percentages as you go out west. We need some clarity on that
point. If you can submit for the record.
My time has expired and I am not going to be able to get
into what I really want to get into next, which is this blame
game going on with people saying there is not enough
programming for you guys who build sets and build the equipment
and you guys on the broadcast side saying we aren't going to
produce any more programming that we are producing until you
guys make sure it gets to the consumer through the cable
systems and through adequate delivery systems.
So we have a little blame game going on. And we have got a
situation where if the numbers are right, Mr. Fern's numbers
are right, Mr. Hyman's numbers are right, we are 4.75 million
consumers short of where we ought to be in terms of moving this
process along. If that is true, then what I will want you to do
is help us understand why we are behind and what we can do to
speed the process up. But my time has expired, the Chair will
yield to the gentleman from Ohio, Mr. Sawyer.
Mr. Sawyer. Thank you, Mr. Chairman. Mr. Campbell, let me
recall an offer that you made. In a couple of weeks there are
about 15,000 people coming to southern California from all over
the United States. Could we have your address and phone number
so we can stop by? You prefer not to do that?
Mr. Campbell. I defer, please.
Mr. Sawyer. I just thought it was an opportunity that you
couldn't pass up. Let me get--I do want to ask you, Mr.
Campbell and Mr. Lewis and Mr. Miller, you seem to have some
visible discomfort at one point during Mr. Fern's testimony.
Could I ask you to comment on what he was saying?
Mr. Campbell. I am sorry, whose testimony sir?
Mr. Sawyer. Mr. Fern from Pace. I think it was regarding
comparative lines of quality.
Mr. Campbell. This is the first time I have testified and
this is very unique, because I am hearing certain things and to
be very--it wasn't discomfort, it was listening to a situation,
we are not talking about HD pictures. I deal with the consumer.
I know they get excited when they see a three-dimensional
picture. Another thing, in cars they aren't watching a 16-by-9
high resolution picture. If anything, it was listening to what
he was saying and I hear him and apply what we are doing in
this country.
Mr. Sawyer. All three of you seemed to have a comparable
reaction.
Mr. Matt Miller. One level of discomfort is I would really
like to sell him some COFDM chips so I want to be sure he is
successful in the U.K., but the second issue--my expertise
really is in the transmission area but I have been involved in
cable broadcasting satellite. I was right at the birth of
digital satellite and digital cable. The model for the U.K. is
so vastly different from what it is here. I find it very
difficult to wrestle with the comparisons that are being made.
It is a pay TV environment. The boxes are essentially being
given away as part of the service. It is more analogous to the
U.S. satellite environment where, in fact, digital has been
hugely successful, picked a perfectly good transmission
standard, gave customers something they couldn't get any other
way, and they lined up to buy it.
So saying that the differences in success of digital
television over the air in the U.K. Versus what is happening
here is a result of some alleged technical transmission issue
is simply not relevant to the discussion. That is the cause of
my discomfort.
Mr. Sawyer. That clarifies. That fits in.
Mr. Fern.
Mr. Fern. Thank you for the opportunity to reply. Yes, I am
well aware the model is significantly different in the U.K.,
but I think the goal here is to switch off analog transmissions
at the earlier possible date.
On the COFDM issue, we would maintain there is a very
significant difference between the performance in a multipath
environment. I would just like to give you one short statement
here. It can even be affected, ATSC, VSB can be affected by
people walking around the room. At the moment, you have to tell
your children to be quiet when you are watching TV, now you
have tell them to be still in order that you can watch it.
Mr. Matt Miller. That is just factually untrue. You saw the
demonstration here. We have done billions of demos. We have had
marching armies at NAB and CES. Ask the sales guy. It is just
factually wrong. And that is a source of discomfort.
Mr. Tauzin. You stirred up a nest now.
Mr. Sawyer. Some of the witnesses have commented on
comparative systems in Argentina and in Europe. Some use 8-VSB
and the others COFDM. Do any of those countries carry both?
Mr. Lewis. No, because to have a multitude of standards is
to have no standard. The consumers need the security and the
comfort of a known standard that people are designing to. I
can't afford to design television sets to COFDM.
Mr. Sawyer. I understand your point. Mr. Hyman is
disagreeing. Let me also ask you to comment on your
disagreement with Mr. Hatfield on the question of mobility
before I run out of time.
Mr. Hyman. First, I appreciate Mr. Lewis, whose company
Zenith holds the pattern on 8-VSB, would like to have exclusive
reliance on it as would Mr. Miller, whose company NxtWave is
a----
Mr. Sawyer. That is fine. Okay.
Mr. Hyman. So I can appreciate why they want to have
exclusive reliance. We have suggested and asked for a second
standard that would be agnostic to the consumer, just like we
have 18 different scanning formats within digital television
today. We want to stimulate this rollout as quickly as
possible. And Mr. Fern's points are well made, that they are
doing it abroad in other countries. And I think it is
imperative we not dictate specifically how consumers watch it
as long as they get it and they watch it. We see a success
story that we are not doing so well in this country.
As far as the mobility issue, I have got a simple analog TV
today; you can call this portable, you can call this
pedestrian. If my children get in the back of the minivan and
drive around with this, this is mobile. I can watch it today. I
can watch it in this room. I don't have the problems, the
significant problems that they have. I would love to see them
take their antenna out of the windowsill and place it on the
witness table as we did. In my house, my wife tells me where
the TV goes. If I told her it has to go there, that spot,
because we have to run a cable to that window or hang something
outside the window, it is not going to happen. She wants to put
the TV wherever she does. We saw an antenna that we can put
anywhere in this room and it works. I would like to see the
same thing done and then see if we get the same type of
reception.
Mr. Tauzin. The gentleman's time has expired. If anyone
wants to respond quickly, please. I have to get as many
members----
Mr. Shapiro. A multiple standard would not only create
chaos but would so fragment the market that no serious
manufacturer can invest and produce multiple standard receivers
in such a market. That is by a Nat Ostroff of Sinclair, by the
way, who said that. I would also point out that Sinclair has a
very clear interest in analog and delaying. They are a
significant owner 32 percent of a company, publicly traded
company called Acrodyne. Recent press releases as the debate
rages on the industry is beginning to experience resurgence in
the purchase of analog equipment. The delay to the conversion
from analog to digital has given us the opportunity to
reposition the company from a niche to mainstream supplier of
transition equipment. This is a company bent on delay of----
Mr. Sawyer. Thank you for your latitude.
Mr. Tauzin. The Chair recognizes the gentleman from
Illinois, Mr. Shimkus.
Mr. Shimkus. Thank you, Mr. Chairman. I hope not to get too
controversial either. This question is for Mr. Hatfield and Mr.
Lewis and Mr. Hyman. Which standard is better for reaching
rural areas? I represent rural Illinois, 19 counties stretching
300 miles. Obviously I have been involved in this local
broadcast debate for a long time. And my major concern is my
local broadcasters being allowed to give the clear signal for
public safety and all those other things that they do so well.
So we will start with Mr. Hatfield.
Mr. Hatfield. Thank you. In fact, I would also like at the
same time to respond to Mr. Fern's comment that OET did
overweighted multipath. And of course, what we were concerned
about was the exactly what you said, there is a tradeoff here.
There is a tradeoff here. And the 8-VSB modulation is generally
regarded as providing additional coverage. So you trade perhaps
better in building coverage or multipath performance, but you
lose the coverage at the outside areas. That is what we were
concerned about in our report and talked about in our report.
Mr. Shimkus. Mr. Lewis.
Mr. Hyman. One of the beauties of a COFDM-based system is
the issue regarding single frequency networks, the issue we
talked about with translators. Think of it as kind of a
cellular phone system we have today with a lot of towers. There
are 84 translators that serve the State of Illinois, 1.45
million people live in areas that are served by translators. 8-
VSB cannot work in that system, and therefore some number of
those people, 1 out of 3 homes in Illinois, is potentially
affected by the lack of service provided by 8-VSB in the
translator scenario.
So COFDM clearly provides an opportunity for us to not only
reach what we refer to as the core business areas, the urban
and suburban areas where harshest, but also in the rural areas
where we can reach out and touch our viewers using a variety of
systems, such as translators and on channel repeaters that 8-
VSB can not do.
Mr. Shimkus. Let me go back. Mr. Hatfield, in your
statement and in a previous response you talked about I think--
someone mentioned weak signal. That was what you were referring
to?
Mr. Hatfield. Yes, that is exactly right.
Mr. Shimkus. So Mr. Lewis, can you talk about the
implication of a possible weak signal with COFDM?
Mr. Lewis. Yes. Being somewhat familiar with Illinois, I am
aware of your situation. I am assuming that when you are
talking about coverage, that you want to have local content and
not national content or State content throughout.
Mr. Shimkus. I want the consumers to have a choice, but I
want to make sure that the local broadcast signal for all the
public service things that they do is received.
Mr. Lewis. I was just trying to point out with the single
frequency network you need to have consistent programming. So
you can rule that out as an option of COFDM. And then second,
again, translators are quite possible. They are being used. But
the main issue here is that with coverage, VSB has superior
coverage. It has a 5 DB signal-to-noise ratio advantage over
COFDM. And that was picked in order to allow us to have the
greatest coverage from a single antenna, and therefore would be
better served in your great State of Illinois.
Mr. Shimkus. I want to move on. Thank you very much. To Mr.
Hyman, Mr. Shapiro states in his testimony that some
broadcasters want to lease out their public spectrum loaned to
them by Congress for wireless data applications. Does Sinclair
have any intention of providing ancillary services in the
future?
Mr. Hyman. Congressman, I know there has been a lot of
interest in this as of late. I can tell you right up front,
Sinclair has not sold, leased, given away or otherwise promised
a single bit of our digital spectrum to anyone other than the
viewers of our markets to deliver digital television. Having
said that, I would be ashamed and embarrassed as a businessman
if I didn't examine all the potential possibilities and how I
could better serve my markets. I have got community ID and
public service commitments, and I have a lot of close ties to
the communities in which I serve. If I can deliver services in
the future that better serve my communities, then it is
something that I certainly need to consider as a businessman.
Mr. Shimkus. Thank you. Mr. Shapiro, I have a copy of the
March DTV guide here which--March 2000, which one of the quotes
by Glen Rogers talks about--and we have heard this testimony
also today--my digital TV business now is very strong. HDTV is
leading the increases I have had this year in my projection TV
business. In fact, I can't get enough. I am oversold. This is
the first time in a long time I have had so many deposits for
products that I can't deliver. It is a nice article.
My question is to Mr. Shapiro, is the electronics industry
ready to supply the country with DTV products in time for the
2006 transition? And then obviously, from rural America's
perspective, will the poor in rural areas be left behind?
Mr. Shapiro. The answer to the first question is yes, we
are supplying the products and we are ready for 2006. From the
very beginning of this debate years back, we agreed with
members of the subcommittee who said it is an unrealistic
deadline. We projected 30 percent penetration then. In terms of
the poor, absolutely not. I think the fact is the prices in the
consumer electronics industry continue to come down radically
every year as they are with digital television. And the way to
keep them up is to have the uncertainty. We are put in a box
right now. What you have heard today on this panel from
broadcasters is you are not supplying enough sets out there to
get a signal. But we want to change the signal, so the sets you
sell will be outdated.
So we can't have it both ways. We are prepared and
consumers will buy sets that receive signals, provided there is
no uncertainty about the standard. In the interim however,
there is a tremendous consumer thirst and desire to buy HDTV
from a variety of sources. If the broadcasters continue to
delay, they will get left behind to alternative media. And that
is the situation we are in now. Manufacturers are going full
bore, prices will continue to come down, and that is the way
that all Americans will be able to receive digital television.
But not necessarily from broadcast.
Mr. Shimkus. Thank you, Mr. Chairman.
Mr. Tauzin. The Chair raises the gentleman from New York,
Mr. Fossella.
Mr. Fossella. Thank you, Mr. Chairman. I have a question
for Mr. Hyman. It can be followed up with Mr. Hatfield and Mr.
Miller. It has been alleged, Mr. Hyman, that rollout of the
COFDM in the New York market would interfere with analog
signals and experience serious interference with some signals
and would not be as effective as the other digital signal with
the large position of New York. Are you aware of these
allegations?
Mr. Hyman. I am, Congressman. Would you like me to address
those?
Mr. Fossella. Sure.
Mr. Hyman. Sinclair's petition we submitted last year
stipulated that if COFDM were adopted, that broadcasters would
not be permitted to create any more interference when operating
with COFDM, that they would be permitted today using 8-VSB. And
there are a number of ways that that can be achieved through
beam tilting, directional antennas and so forth. What I find
fascinating of the study that Zenith had accomplished was they
used laboratory data from the Brazil tests and applied it to
two stations that are not on the air in New York in order to
come up with in scenario of increased interference, whereas
there is real world data from Brazil tests they could have
used, and there are stations actually on the air. There are
three stations right now in Washington that are configured to
operate with COFDM under temporary authority: WRC, WUSA, WETA
as well as WBFF in Baltimore and elsewhere.
So far despite all these myths of increased interference,
we have yet to see any evidence of any increased interference.
As a broadcaster, I don't want any more interference. That
damages my business. So I would adopt any technological means
necessary if that were the case.
In closing, the FCC's own report they issued last September
stated that an adoption of COFDM would create less than 1
percent of additional interference to today's NTSC channels.
Those aren't my words, those are the FCC's.
Mr. Fossella. So you are saying it has alleged that
millions will all get proper signals and others who will
receive analog won't get interference, if you had your way.
Mr. Hyman. If the FCC adopted our petition or something
like that today, we stipulate that broadcasters cannot create
any additional interference. So the answer is yes they would
not be affected.
Mr. Fossella. Mr. Hatfield.
Mr. Hatfield. I have a different view of that. In--when you
say you would not cause any more additional interference, what
that means is that you may have to reduce the power levels,
which means the signal is weaker out at the coverage area. So
the threat of losing millions or a substantial number of people
is very real. Here it goes back to this tradeoff that I keep
coming back to that, you know, you can't get something for
nothing here. What you gain on one side you lose on the other.
If you gain on multipath, what you are going to do is pull back
on the coverage. That is what we are concerned about.
In the chairman's letter today, that is what he is talking
about. We are concerned that by introducing this new technology
you would lose coverage at the edge of the coverage area and
also within some buildings and other hard to reach places as
well.
Mr. Fossella. So under the existing technology areas that
are currently covered would not be covered in your opinion if
we shift to the COFDM.
Mr. Hatfield. That is the concern we have. The sort of
technical term that we use is replication of coverage. You
would not be able to replicate the current coverage that you
get with NTSC because to avoid the interference, you would have
to reduce the power level.
Mr. Fossella. Mr. Miller, you care to comment on this at
all?
Mr. Matt Miller. Sure. Again, trying not to get into
dueling engineers here, but the laws of physics really do apply
to all. I think that is what Mr. Hatfield is referring to.
Ultimately, the ability to receive a signal is related only to
the spectrum you allocate to it and the amount of energy you
put in the channel. The issues that related to the 10-year
transition in this country, which is really different from what
it is in the rest of the world--we already have a very, very
large installed base of current analog TV transmissions that
will have to remain on air and coexist with a large population
of digital transmissions. The standard that we have got was
selected principally by balancing the need to replicate
coverage, which means you have got to get energy out at the
edge of the signal in the digital environment and not interfere
with the existing analog transmissions.
When you go on air with independent or isolated
circumstances where the power in the digital signal is
ratcheted down to avoid interference, first off, you are not
dealing with a totally populated environment; and second, you
are not discussing adequately the loss of reception at the edge
of coverage. And this goes back to the question from the
Congressman from Illinois, and to some of the issues that have
been addressed by Mr. Hatfield. The objective here was to
guarantee that anybody currently getting a TV signal in the
analog world will be able to continue to get a TV signal in the
digital world. We have gone through very, very thorough and
scientific analysis on this. And the bottom line is in order to
accomplish the robust reception that COFDM does, it steals
energy and it reduces coverage. You just can't get around that.
That is the way it is.
Mr. Tauzin. The gentleman's time has expired. The Chair
raises the gentleman from Mississippi, Mr. Pickering, for a
round of questions.
Mr. Pickering. Thank you, Mr. Chairman. Thank you for
holding this hearing today. Let me ask Mr. Hyman a follow-up
question concerning the schedule 2006 incentives for you all to
be able to meet that. What do you see as the realistic
timetable for broadcasters to make the 2006 schedule? Do you
think that is a realistic schedule first?
Mr. Hyman. You mean the rollout of terms of will all
broadcasters--will all consumers have 85 percent penetration
with respect to the rollout of digital?
Mr. Pickering. That is correct.
Mr. Hyman. We certainly believe it is going to be some time
after 2006. I think what we have heard today devices are
certainly not at affordable prices, even though some of my
colleagues at the table would suggest otherwise. I think a
1500, $2000 device is a pretty expensive for the lunch pail
carrying member of the public. I also believe that the
inability to provide ease of reception is going to continue the
snail's pace of the rollout, again, with the 34,000 receivers.
We are nowhere close to the kind of rollout that we envision.
This is less than \1/30\th of 1 percent of Americans, the
American television households have these over-the-air
receivers. We believe there needs to be a stimulation in the
rollout of affordable product that is work for ease of
reception. That will go a long way to this.
Broadcasters are building out, you heard comments from Mr.
Chapman as to how quickly that is occurring. But it is the
consumer who ultimately is going to decide the success of this.
He or she is the one that is going to buy the product. And at
the end of the day, if they are not buying the product we are
not going to be successful.
Mr. Pickering. What incentives or regulatory initiatives
are reform could we take to get us there on time?
Mr. Hyman. Well, certainly we believe if the manufacturers
can offer affordable products, and also a transmission system
or digital standard that works, I can appreciate that they want
to sell larger theater-sized devices with higher profit
margins, but I think we can get consumers into digital
television much quicker if much smaller products that are
offered, they allow people to pick the kind of television that
suits their viewing needs as well as their family budgets.
Mr. Pickering. If broadcasters are able to use some of the
spectrum for ancillary or incidental services or other
commercial diversification, would that speed or restrain the
efforts to make the transition?
Mr. Hyman. It is really guesswork here. With some deference
to Mr. Miller from Viacel, certainly any way to roll out
digital in any form intuitively would make sense, but I think
we are placing the cart before the horse. My primary business
is delivering free over-the-air television into the family
room. I can't do that reliably without placing an antenna
outside a window and running it through the room. I think we
need to solve this dilemma first before we get to the next
step.
Mr. Pickering. Mr. Lewis, Mr. Shapiro, how would you like
to respond, and what is your sense that we will see the
manufacturing of the market develop in such a way that
consumers will buy the product and the transition from the
manufacturing side?
Mr. Shapiro. I think as Members of Congress, you can make a
clear statement to the American public that you are going to
stay the course, that several years ago there was this battle.
Broadcasters agreed upon a standard. Now, some broadcasters are
questioning it. They don't want to make the investment in
digital or they have a vested interest in keeping it analog. I
think it is important to send out the message to broadcasters,
they are going to be held to the deal. The deal was free
spectrum in return for broadcasting in digital to the standard.
Let us stay with it.
The free marketplace, I think, has already proven that
consumers want digital television. They are buying it. The
products sold out. The only challenge is in the broadcast end
right now, quite frankly. Until broadcasters are broadcasting
something, they are not talking about changing the standard,
then consumers are going to be questioning whether to invest in
the broadcast portion of the television set. But the product is
already a marketplace success. We have to make it clear as a
country that we are staying the course and we are not tempted
to follow the lead in Europe, which is focused on a totally
different world envisioning the mobile applications and
Internet and all the sorts of things that have nothing to do
with free over-the-air broadcasting into the American home.
Mr. Campbell. May I add something, please, sir. I would
just like to say, as a retailer, many of our customers are not
looking to have a bow tie hanging from their television set on
top of their TV. As far as the expense is concerned, I was just
curious whether the COFDM, whatever, is that going to lower the
price instantly to 499 for a television. I just saw this board
over here, for 299, you will be able to receive HDTV on your
computer system. If you look at the DTV guide, there is a story
in here by Best Buy that talks about DTV, myself included. The
sales are incredible. We just went to a high of 63.9 percent of
all of our big screen sales right now are DTV or HDTV. It is
not a flawed format as far as a retailer. I am tired of hearing
of the consumer being bombarded by Sinclair, that they have a
defective or format that doesn't work. It does work. Thank you.
Mr. Tauzin. The gentleman's time has expired. The gentleman
from Florida.
Mr. Stearns. Thank you, Mr. Chairman. And I ask unanimous
consent that my opening statement be made part of the record.
Let me ask Mr. Hatfield here. We have the Europeans using
the COFDM and the Americans the 8-VSB. And of course, we think
it came about because of the private enterprise and the
government dictated in Europe, and I guess Japan too. What do
you see long term having these two different systems? Do you
see any problem?
Mr. Hatfield. No I, think they are both--I think they are
both really fine systems. I should make that clear. But
broadcasting is, as we have heard testimony today, broadcasting
is different in different parts of the world. We have a system
here. Our history is different. The way we organize
broadcasting here is different with wide coverage, high-powered
stations and so forth. So I am very comfortable with the fact
that there may be one country may have one system and another
country may have another. Because it reflects the--it may well
reflect their own history, their own requirements and so forth.
Mr. Stearns. You know when Macintosh got started, Apple got
started, you had the PC and the Windows, they weren't
compatible. Now they are almost compatible. Do you think
somewhere down the road we will have that same possibility that
Sony or RCA will be able to make the television so that they
will be compatible with both systems?
Mr. Hatfield. You know, I think there is people here at the
table that could probably answer that question better than I
can. Not that I am trying to duck it. But we are in the
business of seeing what, you know, software changes or whatever
would be needed to be able to maintain compatibility or ship
products into both markets.
Mr. Stearns. Mr. Lewis. You seem like you would be
interested.
Mr. Lewis. I think in the end the economics of the consumer
electronics industry will not allow that convergence that you
are talking about. To put the cost into the set of two
different standards, and then sell it at retail here is not
going to be a viable situation. And so the Mac and the PC share
common software, and that may be true with video being
converted between the two formats and being sent out, but I
don't see that you will have a PC with a Mac inside of it, so
to speak, or a Mac with a PC inside of it in the future.
Mr. Stearns. A lot of us are probably looking at digital
television on our computer screens. So when Dell sells a
computer in the United States or sells it in Europe, it is
going to have to have something different for COFDM or 8-VSB.
Mr. Matt Miller. Since I am trying to talk to folks who
want to do video on PCs, I will address that one. Cost is
really the enemy even more than time. In the PC industry
especially, they operate on razor-thin margins. Our customers
would love to have us do essentially a COFDM version of this
board so that they can buy from a common supplier. But the
likelihood of their building a universal PC is very slim. So
what they will do is they will stuff it with one set of
components for use in the U.S., and they will stuff it with a
different set of components for use in parts of the world that
have different standards. The likelihood of having a device
which receives both transmissions simultaneously is very slim.
You don't need it.
Mr. Stearns. If you had two cards, wouldn't that work if
you had----
Mr. Matt Miller. Twice the cost. That is twice the cost.
And cost is really a religion in this environment. It is a
religion in everybody's environment. So while it is technically
conceivable that you can make one chip that would decode both
of these formats, they don't really have a lot in common. So
the chip that we have got here decodes both the U.S. cable and
U.S. broadcast on a single chip very efficiently. Because those
2 signals co-exist in one market. Right now we don't have the
VSP and the COFDM signals coexisting in one market so there is
no market need. And technically they really don't have a lot of
common. It is a lot of work to put the two together.
Mr. Stearns. This is dealing, Mr. Hyman, I guess, Mr.
Chapman. You know we on this committee always talk about this,
providing your HDTV signal. This has probably been asked
before, but how much of the 6 megahertz TV channel do you plan
on utilizing for ancillary services such as streamlining data?
Maybe you can quantify this if it has been talked in a general
peripheral way; maybe you can quantify it for us and tell us
this is what it is going to be. Is it possible? Mr. Hyman, you
can start.
Mr. Hyman. Thank you, Congressman. We have made no
commitments and don't have any plans to broadcast anything
other than digital television. Have we looked at it? Yes. Have
we discussed it? Yes. But we have been so focused on trying to
improve the reception for this primary business that we are in,
which has been our core business for 50 years, that to be
perfectly frank, we haven't been able to get past that to
figure out what would happen next. I would like to, and
certainly as anyone who is challenged in a business, would like
to be able to do the best they can and improve the services,
but it is too far down the road because we have a more
immediate----
Mr. Stearns. As we come across to Mr. Chapman, Mr.
Hatfield, you can tell us what you think should be done. In
other words, do you think they should be able to use it and how
much.
Mr. Chapman?
Mr. Chapman. Let me share our vision, which is somewhat
different than many others in this room today. First of all,
with regard to spectrum aggregation, there are presently four
companies that are involved in this business. We have the local
telephone company, and of course, they want to be in this
business. We have the cable companies, and they want to be in
this business. Cox has high speed modems that deliver that
today. We have AT&T, and they want to be in that business.
Quite frankly, I think anybody that is going to think that they
can set up a toll booth on the television digital signal is
going to be very disappointed.
Quite frankly, I would expect in the years to come, and
actually many of those that deal with making predictions,
indicate that the cost of bit delivery will go down faster than
the cost of long distance telephone. So our whole existence as
a company has to do with local service to our local
communities. Half of the people that work for LIN television
either work in the news department or the technical department
to support that. We see our role not changing. Our role is to
really service local community.
How do we plan on doing that? Let me give you an example
right now. Tonight in New Haven, Connecticut, roughly oh, 1 in
almost 2, we will have almost 20 percent of the audience at 6
watching our television station. Our news, WTNH. We have an
association right now with Yale New Haven Hospital. And once a
week they provide medical reports, the breakthroughs in
medicine, health issues, but that, in television, can only be
maybe 2 minutes. As you know, a newscast is appointment
viewing, 30 minutes in length, 7 minutes in commercial, 3
minutes in weather 3 minutes in sports and 28 stories. This is
television; this is what we do. Sight, sound, motion. More
Americans get their news from television than any other source
today. But we would not be able to provide all the
breakthroughs on medicine. So what we do today is we send
people from our television news to our Internet. In June, we
had one 1.8 million visits. One of the highest in the country
on that. Simply because we were providing the consumer with
more than just television. We are giving them, in essence, the
newspaper of tomorrow. The data newspaper of tomorrow. I think
that what we need to do, and I think there is a Cajun phrase,
lagniappe, which means more, additional----
Mr. Tauzin. It is pronounced ``lagniappe.'' You are going
to have to work on that.
Mr. Chapman. That is what we plan on doing. I guess it
means a bonus, something additional. So tomorrow we hope to
actually be closer to our audience by the use of digital. As
you know, predictions 3 years out suggest that people will be
getting half of what they get over the Internet today on maybe
Palm 7s or telephones. It doesn't matter how it is received.
Our interest is ensuring that the American public receives the
best and possible technology there is today. We are agnostic
when what system that comes to. The American television system
is the envy of the world today. Our interest is seeing that
universal service, to the rich, to the poor, to the rural, to
the urban continues, and that we become a major part of that in
the future, just as we have today. We are here to suggest that
we need to preserve that system.
Mr. Tauzin. The gentleman's time has expired. The Chair
would ask a couple of questions before we finish and Mr.
Stearns would like a few words in closing. I will be glad to
recognize him. First of all, Ms. Lathen, where we are on cable
must carry at the FCC right now. Where are you?
Ms. Lathen. We, as you know, we started a proceeding in
July 1998. And----
Mr. Tauzin. You started proceedings in July 1998.
Ms. Lathen. That is correct.
Mr. Tauzin. Where are you now?
Ms. Lathen. In that proceeding, there were two issues we
were looking at, one of the cable carriage issue, which is the
dual issue of carriage, and the second issue was the
compatibility issue. We extracted the compatibility out from
that proceeding and put it into OET to take a look.
Mr. Tauzin. When is that going to happen?
Ms. Lathen. That is going on right now.
Mr. Tauzin. When does the carriage issue come to a head?
Ms. Lathen. I don't know when the Commission is going to
schedule the issue for completion. I think what the Commission
has done is they have tried to see what things were going to
happen in the marketplace. For example, we have seen AT&T and
Charter as well as other MSOs enter into retransmission
agreements with some of the major broadcast networks.
So I think that for now, we would continue with the
compatibility proceeding. We also have a November deadline for
completing the Satellite Home Viewer Improvement Act's
provisions that deal with analog carriage. So I think we feel
that at that time we will be able to look at both digital and
analog carriage from the satellite perspective and to harmonize
those two proceedings.
Mr. Tauzin. Second, is the Commission moving on any inter
operability standards?
Ms. Lathen. I believe we are. We mandated that the
manufacturers have to separate the security pod from the set
top box and the date for that was July 1. Cable labs have told
us that, in fact, they have separated the pod, and they met the
July 1 date for the digital box. We have had some concerns
about the hybrid box. That is the box that is both an analog
and a digital box. And there were some systems involving 10
MSOs that were not in compliance with respect to the rules that
pertain to that. They have asked for waivers and we are working
on that.
Mr. Tauzin. I don't want to get into the policy questions.
We don't have time today, but obviously Mr. Chapman makes a
point that until some of these policy questions are addressed,
that they have problems in producing the programming. Because
they don't know whether to reach the ultimate consumer. So I
will be submitting some questions in writing to you about those
issues and how the Commission views them, and whether or not
you see that as a problem with delaying the rollout or whether
that is going to get resolved in the marketplace. I also want a
quick question to perhaps Mr. Hyman. And Mr. Chapman, you can
answer this, I understand that current technology 1080i, the
highest standard of HD television, can be delivered with less
than 6 megahertz spectrum; is that correct?
Mr. Hyman. I think the issue might be in something like
19.39 megabits.
Mr. Tauzin. Let me ask you, do you need all 6 megahertz to
deliver the highest quality HDTV standard today?
Mr. Hyman. To be perfectly frank, I don't know, we know the
answer to that because no one has developed a system smaller
than 6 megahertz. The way it is designed today is the 6
megahertz system is used entirely to carry the signal.
Mr. Tauzin. Is it technologically feasible to deliver the
HDTV 1080i highest standard, high definition signal with less
than 6 megahertz? Mr. Chapman, you want to try?
Mr. Hyman. Can I defer to our vice president of new
technology who was in that business for several years?
Mr. Tauzin. Let me get Mr. Chapman's answer.
Mr. Chapman. Let me address it this way: This past April in
Indianapolis in our television switch, CBS affiliate, we
actually broadcast 63 basketball games for the NCAA. Some were
two or three at the same time. But not in the highest quality.
Mr. Tauzin. I understand that. I am asking you in the
highest standard 1080i technology, what is the spectrum
requirement? Can you do it in less than 6 megahertz?
Mr. Chapman. It depends on the programming. If we are going
to do Meet the Press or this hearing here today, you don't need
that. But if you are going to do a basketball game----
Mr. Tauzin. A lot of motion you need more output. But it is
conceivable to do a lot of programming in HDTV for less than 6
megahertz using the highest standard 1080i, right?
Mr. Chapman. Depending on the program, yes, sir.
Mr. Tauzin. What would happen if you had this antenna off
the window sill and put it on the table? What would happen with
the reception?
Mr. Hyman. It will go away.
Mr. Chapman. My Hyman says it will go away. Is that
correct?
Mr. Lewis. I don't know. We haven't done it.
Mr. Tauzin. Why didn't you put it on the table as Mr. Hyman
did? I am trying to find out among you dueling engineers who is
more credible, and one, you put an antenna on the table and one
put it in the window, and the other one is telling me if you
put it on the table it won't work.
Mr. Matt Miller. First this issue of dangers of live
production. Okay. We are arguing about 20 feet. We have when we
were in this room looking at the signals earlier.
Mr. Tauzin. Did you try it on the table?
Mr. Matt Miller. Yes, it worked just fine.
Mr. Tauzin. Why didn't you--why did you put it in the
window?
Mr. Matt Miller. Risk reduction. I wanted to be absolutely
sure that it was going to work.
Mr. Tauzin. Mr. Shapiro.
Mr. Shapiro. Only 5 percent of the consumers view using an
indoor antenna for primary. It is a tradeoff.
Mr. Tauzin. I understand the numbers. That is on the record
already. I am just asking why when we had 2 engineering
demonstrations. You choose a different place to put the
antenna. And why it went behind the curtain instead of in front
where we could all look at it.
Mr. Miller.
Mr. Robert Miller. In New York a few weeks ago, there was a
demonstration of Mr. Miller's board. There was 12 or 13 booths
in the Marriott Marquis in Times Square. And they had windows
on both sides, you could see in the midtown Manhattan from a
moderately high floor, 17th floor or something like that. We
were right in the center of New York City, and I asked Mr.
Miller about the reception of 8-VSB. He said he had solved the
problem of reception on 8-VSB. I said well, that means that
everyone here is receiving over-the-air reception and no one
was receiving over-the-air reception in that facility and in
most places in New York City.
I would like to also make a comment about the single
frequency network. You should understand that a single
frequency network with 8-VSB means that have you to keep the
signal from seeing the broadcast signal that you are
rebroadcasting, whereas with COFDM you can have antennas
anywhere you want.
Mr. Tauzin. I understand. That is one of those tradeoffs.
But the question I asked you I want to go back to it is if you
put that antenna on the table, that there was a higher risk,
that you would be receiving a picture; is that right?
Mr. Matt Miller. Yes. For the record, there is a higher
risk.
Mr. Tauzin. So that your experiment could have failed if
you had to put the antenna on the table.
Mr. Lewis. I would like to weigh in and say there are three
issues that tradeoff: coverage, interference and reception. On
reception, we are not to the full extent of what we can achieve
with VSB.
Mr. Tauzin. Let me try to wrap. I will ask Mr. Stearns if
he has any other comments at the end, too. We talked a lot
about the deal, the agreements we had on the spectrum and HDTV
and the digital transition. Let me give you my perspective on
what is not in the deal. What is definitely a deal breaker
would be for broadcasters to lease off or sell off that
spectrum and profit from the sale of lease of it. That is
clearly not in the deal. Any broadcasters who did that, I
think, would run a risk of Congress revisiting the deal and
reclaiming spectrum.
The deal was that the 6 megahertz of digital spectrum was
to be used for digital transmission, including HDTV, and that
the broadcasters could use it for ancillary services. If they
got into any kind of competition with anybody else, they'd have
to pay for it. That was the deal. It would be a clear deal
breaker for anyone to think they could profit by selling this
spectrum off or leasing it off.
Second, what is not in the deal which would be a deal
breaker for broadcasters not to show the American public HDTV.
Now, I don't know who is in the room representing any
broadcaster who thinks that they can provide digital television
with that 6 megahertz without giving Americans a chance to look
at HDTV. But my understanding of the deal was that Americans
were going to see it. And the Americans were going to choose
whether they wanted it or not in the marketplace, but they were
going to chance to see it.
I got a little sort of thing to tell you about. I have seen
HDTV a number of times. I saw it at the Super Bowl. I saw the
HDTV coverage of the Super Bowl in the ABC suite. One of the
amazing moments was when everyone who competes to get in those
seats in the front to see the live action left the seats in the
live action to gather around that liquid crystal screen and
watch it on HDTV inside the suite. What was more amazing was
that John Travolta was a guest in that suite and he was sitting
out there by himself. People left the chance to sit and visit
with John Travolta to come and watch that liquid crystal screen
because it was a series of important plays that nobody wanted
to miss this, that incredible, almost 3-D experience of HDTV.
Americans, I think, will want to see that. And I think our
deal was that they were going to see it. It would be a very big
mistake for broadcasters, networks or anyone else, cable
companies, anybody else who kept it from reaching the American
consumer. What is also not in the deal in terms of this digital
transition is any development of systems that don't reach
consumers. The consumers are left out somewhere in this
country, whether they are in the rural parts of America or this
urban center of our country, whether they live in mountains or
high buildings, that they are entitled to receive these signals
from this 6 megahertz of spectrum that we allocated for digital
transition. What I think is not in the deal, but I will leave
it to your discretion on this one, is that Americans shouldn't
have to buy a set for the specific location of living in at a
specific time they are living there. That I hope we are going
to have a system that works. I can take my television with me
when I move, whether it is across town or across country.
I recognize Mr. Stearns that we are not going to take our
television with us when we go to Europe, we are going have two
different systems obviously. But we ought to be able to move
around this country and move around town and still get
reception on the same set with the same equipment. I would hope
that is what is in the deal is that whatever we do with
standards, whether it is in the post production problem area
and I understand your concerns, Mr. Rainey, we talked about if
privately, I think there are real concerns about how much post
production is going to cost when we had too many different
formats out there, or whether it is in the question of what,
how we transmit a signal and how we receive it.
I would hope that part of the deal is that we get all these
new services out to as many people as possible so that prices
can come down and more people can afford them, and that free
television remains a part of the equation, because that is why
we gave 6 megahertz to the broadcasters in the first place was
that free television would remain part of the equation. And the
final part of the deal of the analog spectrum has to come back.
I want to remind everybody of that. We set a date of 2006. It
looks like we are not going to make it at the current pace and
that is sad.
What is also part of the deal is that we can extend that
2006, but only because we have to.
And so my final question, and I am going to put to all of
you and ask you to respond in writing on is what can I do? What
can Mr. Stearns do? What can we do as Members of Congress to
expedite this process so we can get this new system in place as
rapidly as possible for as many Americans as possible at
affordable rates as possible without leaving anybody else and
get it done in a way that we don't have to have any more
battles, or whether the spectrum was allocated correctly or
wrongly, and we don't have to have any more battles over which
standards work or don't work.
I need all your help on that. What are the steps we have to
take between now and 2006 that we haven't taken? Please come
back to me on that.
Mr. Stearns.
Mr. Stearns. Mr. Chairman, I can give you an answer to that
question. I think most of them agree, if you give them tax
depreciation acceleration or tax credits for the defendant. Of
their high definition television as well as you give that to
producers of HDTV, I think the market would explode much like
we do for some other industries.
Mr. Chapman. Where can I sign up?
Mr. Stearns. I think incentives are what we need here so we
get--American public has HDTV. I think the reason you are not
going ahead is because of huge capital expenses, is because you
are not sure the public is going to buy it and the TV is
$10,000. So by the tax code like we have done in other
industries. But Mr. Fern, as I understand it, Pace Micro
Technology is a British broadcaster. Is that what you do? I
wasn't sure what you did.
Mr. Fern. We are a manufacturer based in the U.K., but we
now have set up a facility in Boca Raton, Florida. We develop
and manufacture equipment for television operators. So we are
supplying Time Warner Cable, Comcast, BellSouth entertainment.
Mr. Stearns. I think you are the only one on the panel who
is probably understanding the British market. I thought you
might give an overview of what you saw here and of whether you
could give some insight that maybe perhaps we don't have.
Mr. Fern. Thanks for the opportunity. I think just to--I
certainly can talk a little bit about the way the British
market is developing where the--obviously, I can't speak for
the government, but what it appears that they are doing is
managing the transition to digital coordinating between
satellite cable and the terrestrial broadcasters to free up the
spectrum as early as possible. So they are providing--there is
none--there aren't obviously financial incentives, but they are
trying to get----
Mr. Stearns. There are not financial incentives.
Mr. Fern. There are not financial incentives, but what they
are doing is ensuring a very healthy competitive environment
between the operators.
Mr. Stearns. What kind of incentives? I didn't quite
understand.
Mr. Fern. I don't believe they are financial incentives,
but they regulate to ensure that there is a very healthy
competition between all operators.
Mr. Stearns. It must be that the existing cable is so
expensive, and this new HDTV is coming down or something?
Mr. Fern. No, there isn't high definition in the U.K. We
have the--the picture quality is very good and U.K. Consumers
don't have such a large living room, so there is not such big
television sets.
Mr. Stearns. If every British citizen has a choice between
HD television, would they care?
Mr. Fern. I think technological advancements give the
better picture quality, because you can put some electronics in
what you are seeing in the display which gives you much better
display.
Mr. Stearns. Thank you, Mr. Chairman.
Mr. Tauzin. Thank you. Let me thank you again. You have
come from all across America. I hope the audience has
recognized that. You have come there around this country to
enlighten us today. I hope we are a little more enlightened. I
am frankly a little more confused in one area. I apologize for
that. You have been very helpful in regard for enlightenment.
The record will stay open for 30 days. If you would like to
volunteer to submit any other statements, you may not have been
able to answer a question, you want to answer it more fully,
you have 30 days to do so. My great thanks to you. The hearing
stands adjourned.
[Whereupon, at 12:50 p.m., the subcommittee was adjourned.]
[Additional material submitted for the record follows:]
Supplemental Testimony of Sinclair Broadcast Group, Inc.
Sinclair Broadcast Group, Inc. (``Sinclair'') hereby supplements
its testimony for the July 25, 2000 hearing of the Subcommittee on
Telecommunications, Trade, and Consumer Protection regarding the
current status of the transition to digital television (``DTV''). In
his closing remarks at this hearing (the ``DTV Hearing''), Subcommittee
Chairman W.J. ``Billy'' Tauzin asked the hearing witnesses to
supplement the written record with information relating to a number of
different issues facing the DTV transition. Accordingly, Sinclair now
offers its views to the Subcommittee on a number of these matters, with
a focus on what it believes is the fundamental issue now facing the
broadcast industry and the U.S. viewing public: The ATSC 8-VSB
reception problem, and broadcasters' urgent need for the flexibility to
operate using a second DTV transmission standard, DVB-T, that has been
quality-proven and widely adopted around the world.
i. congressional action needed to accelerate the dtv transition
Most fundamentally, Chairman Tauzin asked the witnesses at the DTV
Hearing what Congress can do to facilitate the transition from analog
to digital television broadcasting in the United States. As Sinclair
urged in its original testimony to the Subcommittee, Congress should
expeditiously take a crucial step towards overcoming the delay that now
jeopardizes the transition: Congress should implore the FCC to adopt a
second, optional DTV transmission standard, DVB-T, that has been
quality-proven and widely adopted around the world, and for which an
abundant supply of transmitting and receiving equipment is already in
place. Flaws in the DTV transmission standard adopted in the U.S. (the
``ATSC 8-VSB standard'') prevent us and other broadcasters from
providing a signal that can be easily received by the millions of
consumers using the small, simple antennas now so common. Sinclair is
confident that adoption of a policy of flexibility with respect to
transmission technology represents a practical, time-efficient solution
to the current DTV delay.
As Sinclair's own testing demonstrated last year and an ATSC draft
report on 8-VSB recently confirmed, and a detailed study conducted by
the University of Massachusetts concluded, the ATSC 8-VSB standard
suffers poor performance under ``multipath'' conditions. As a result,
the ATSC 8-VSB standard does not and will in all likelihood never
support consumer-expected ease of reception or reliable over-the-air
service to millions of television households lacking a clear line-of-
sight between their TV antennas and broadcasters' DTV transmitters. For
the most part, these are the millions of households that use the small,
simple, inexpensive set-top antennas, rather than a large rooftop
antenna. (It should be noted that the improved reception performance of
DVB-T with simple set top antennas could cause some consumers to
discontinue expensive cable and/or satellite subscription service,
subscribed to in order to overcome poor over-the-air analog reception.)
Largely because of these reception problems, the DTV transition has
stalled. As recent Congressional Budget Office Report explained, there
will likely be little consumer acceptance of DTV if consumers have to
do more than they now to do watch over-the-air television. Less than
50,000 DTV receivers capable of receiving DTV service have been sold in
the United States to date (most of these to distributors, retailers,
and broadcasters), and at this rate it will likely be fifteen to twenty
years before U.S. broadcasters will be able to turn in their analog
spectrum. By comparison, Sweden, with a population of less than nine
million, launched DVB-TV in April, 1999, and by July, 2000, there were
over 30,000 DTV receivers in consumers' homes. Sinclair believes that
by granting each broadcaster the option of using either ATSC 8-VSB or
the DVB-T standard, Congress can take an important step towards
reviving this transition. DVB-T has been demonstrated to provide ease
of reception and reliable over-the-air DTV service--even under
multipath conditions--to viewers using small, simple antennas in
broadcasters' core business areas, including over U.S.-sized 6 MHz
channels at HDTV data rates above 19.4 Mbps, as demonstrated during the
DTV hearing.
ii. adoption of an optional dtv transmission standard will not
jeopardize the universal compatibility of dtv receivers with dtv
broadcast stations
Chairman Tauzin made clear at the DTV Hearing that American
broadcast viewers must have DTV receivers that can tune into every DTV
station in every market. With such a universally compatible system, the
Chairman points out, viewers will be able to take their DTV receivers
anywhere in the U.S. and make use of that investment. Sinclair agrees
with Chairman Tauzin that the American public has a right to such a
seamless DTV system, and believes that a decision to give broadcasters
the flexibility to operate using DVB-T will not jeopardize this
critical goal.
If the FCC gives broadcasters such flexibility, some proportion of
DTV stations will operate using ATSC 8-VSB, and some proportion of
stations will operate using DVB-T. In this environment, ATSC-only
receivers will be unable to receive a signal from DVB-T stations, and
vice versa. Sinclair believes strongly, however, that such ``single-
mode'' receivers will be rare. The consumer demand for DTV receivers
that can receive service from all DTV stations will likely far outstrip
the demand for single-mode receivers, and, as a result, equipment
manufacturers will design the vast majority of receivers to be capable
of receiving both ATSC 8-VSB and DVB-T programming.
Critically, there will be little or no disincentive weighing
against manufacturers' production of DTV receivers compatible with both
the ATSC and DVB-T standards. Counter to the claims of the ATSC
proponents at the DTV Hearing, the incremental cost to manufacturers of
incorporating a DVB-T demodulation chip into their DTV receivers will
in all likelihood be minimal. After all, the DTV receivers sold today
in the U.S. market are already configured to receive signals with
multiple modulation modes; these receivers are typically designed to
receive signals from DBS systems, cable systems, NTSC stations, and 8-
VSB broadcasters. In fact, the RCA DTV-100 DTV receiver used by Zenith
in its demonstration at the HDTV hearing, which also happens to be the
least expensive and largest selling consumer DTV receiver, employs
multiple modulation modes. It is irrational to conclude that the
addition of one more digital modulation standard will harm the
marketability of these receivers. This is particularly the case with
respect to the addition of DVB-T capability, since there are already
more than seven hundred thousand DVB-T receivers in service today in
the U.K. and Europe, many times the number of 8-VSB receivers that have
been sold in the United States (largely to retailers) over almost the
same period. Clearly, the equipment and expertise needed to incorporate
this technology into DTV receivers in the U.S. are readily available.
Certainly, the benefits of having a single, national transmission
standard no longer justify exclusive reliance on ATSC 8-VSB technology.
Adherence to this regulatory principle clearly becomes
counterproductive where, as here, the technology in question has been
shown to fall far short of expectations. Moreover, a flexible DTV
transmission policy would actually be consistent with the FCC's overall
approach to DTV technology. The ATSC DTV standard itself is not a rigid
one--the FCC avoided inflexible standards for numerous other DTV
operational parameters. There should be similar flexibility in the
basic selection of transmission technology.
The FCC no longer has any justification for singling out
broadcasting for application of a ``single standard'' mandate. The FCC
permits licensees in a variety of other services, including DARS, MMDS,
DBS, and PCS, to operate using any number of transmission technologies.
It is time for similar reliance on marketplace forces in the broadcast
context.
iii. a flexible policy that permits dvb-t operations in the u.s. will
not require a modification of the dtv table of allotments
At the DTV Hearing on July 25, 2000, certain pro-ATSC 8-VSB
witnesses asserted that if the FCC gives broadcasters the option to
operate using DVB-T, such action will require a modification of the DTV
Table of Allotments. This is a scare tactic that should be ignored by
both the Subcommittee and the FCC. To date, there is no technical data
indicating any additional interference would result from the use of
DVB-T. In fact, there is evidence to the contrary. The FCC's own Office
of Engineering and Technology (OET) issued a report (OET 99/2) which
stated ``most NTSC stations would receive 1 percent or less additional
interference to their predicted service area'' (emphasis added). No
modifications of the DTV Table of Allotments would be required even if
further data demonstrated the possibility of additional interference
existed if the FCC follows Sinclair's proposal and requires DVB-T
broadcasters to employ means to avoid additional interference such as
antenna beam tilting, antenna cut-outs, reduced power levels and/or use
of on-channel repeaters to avoid causing greater interference than what
would result from 8-VSB stations' operations at maximum permitted power
levels. This policy would ensure that the DTV Table would remain
unchanged.
Any broadcaster who felt that any of the foregoing actions would
result in inadequate signal coverage of his TV market could then simply
use the ATSC 8-VSB standard. Under the Sinclair proposal, a broadcaster
would make the free-market decision of which DTV standard best serves
his viewers.
iv. unlike atsc 8-vsb, dvb-t will permit the operation of on-channel
retransmission facilities
Chairman Tauzin also requested further testimony from the witnesses
regarding the ability of the ATSC 8-VSB and DVB-T transmission
standards to support the use of on-channel retransmission facilities.
As discussed below, only if the FCC gives broadcasters the option of
operating using DVB-T technology will broadcasters be able to fully
utilize various on-channel retransmission methods. On the other hand,
such operations will be extremely limited if the FCC maintains
exclusive reliance on the ATSC 8-VSB standard.
In the analog environment, broadcasters fill in areas lacking a
sufficiently strong signal through the use of TV translator facilities.
These separately-licensed facilities receive a signal from a
broadcaster's full-power station, shift that signal to another NTSC
channel, and retransmit the same programming into the pertinent areas.
During the DTV transition, however, there will be significant
congestion in the broadcast TV spectrum, and those analog translators
causing interference to DTV operation will have to cease operation
during that period. It appears unlikely, moreover, that there will be
sufficient spectrum during that time to permit the operation of digital
translators.
If the FCC permits DVB-operations in the U.S., however,
broadcasters will be able to compensate for the loss of these
translators. With DVB-T, broadcasters will be able to utilize a variety
of on-channel retransmission facilities to fill in gaps in their
coverage areas. Thus, DTV broadcasters will be able to use on-channel
repeaters to retransmit their DTV signals into areas otherwise unable
to receive service due to mountains or other terrain.
Unfortunately, such on-channel retransmission methods would be
largely precluded if the FCC maintains exclusive reliance on the ATSC
8-VSB standard. Due to what would effectively be self-generated
multipath conditions, ATSC 8-VSB DTV receivers in areas covered by on-
channel retransmission facilities would likely be unable to
successfully receive a DTV signal.1
---------------------------------------------------------------------------
\1\ Sinclair notes that, with DVB-T, broadcasters will be able to
operate single-frequency networks that permit on-channel retransmission
facilities to operate at much higher power levels and thereby provide
greater coverage. In contrast to the simple on-channel feedback limited
repeaters proposed for ATSC 8-VSB, single-frequency networks are not
possible with that standard, since 8-VSB does not permit the operation
of real synchronized transmitters at broadcast-required power levels.
---------------------------------------------------------------------------
As a result, if the FCC maintains exclusive reliance on the ATSC 8-
VSB standard, those viewers who today rely on translators to receive
over-the-air TV will likely have no access to digital over-the-air
service during the transition, and may lose access to over-the-air
analog service as the DTV transition progresses and forces today's
translators off the air. A recently completed study of all licensed
translators determined that 32% of the nation's 100 million television
households (TVHH) are located in areas served by one or more
translators for over-the-air service or for delivery of a local over-
the-air broadcast signal to a cable head end. Significantly, far more
TV households are likely to lose access to DTV because of the absence
of DTV translators and on-channel retransmission facilities than would
fail to receive DVB-T service at the far perimeters of TV markets. If
the FCC does not permit DVB-T operations, the result will be a true
``digital divide'' between rural and remote areas of the United States
and those households able to receive ATSC 8-VSB service.
v. sinclair is committed to hdtv and has no plans to lease its spectrum
In his closing remarks, Chairman Tauzin expressed great concern
about the availability of HDTV to American consumers and broadcasters'
plans to ``lease'' their spectrum for use by other parties. Sinclair
addresses these points here. First, no matter what decision the FCC
makes with respect to the DTV transmission issue, HDTV will remain part
of Sinclair's DTV business plan. Sinclair is committed to providing
easy, reliable HDTV reception to all of its communities of license, and
this overriding goal has driven its efforts to convince the FCC to
permit DTV operations using DVB-T.
Contrary to the claims of some proponents of ATSC 8-VSB, DVB-T
supports the transmission of HDTV over U.S.-sized 6 MHz channels. In
tests conducted by Sinclair in Baltimore during the summer of 1999 and
in Las Vegas in April 2000, it transmitted its DVB-T signal at an HDTV
data rate of 18.67 Mbps. At the DTV Hearing, Sinclair transmitted its
HDTV programming at a data rate of 19.74 Mbps, a higher rate than can
be supported by the ATSC 8-VSB standard. In fact, DVB-T's COFDM-based
technology will permit significant increases in signal capacity over
time, and such improvements will likely permit high-quality reception
at even higher rates in the near future. In comparison, the 19.39 Mbps
data rate for ATSC 8-VSB is fixed, and this data rate will inevitably
be exceeded by an easily receivable DVB-T rate.
Congress and the FCC have sanctioned broadcasters' use of DTV
spectrum for the provision of ancillary services, and Sinclair expects
to offer such services to its licensed communities. If permitted to
operate using DVB-T, Sinclair and other broadcasters will enjoy
increased service flexibility, and will be able to simultaneously
transmit an HDTV programming stream and other content streams,
including Standard Definition Television and various data streams.
In connection with the potential provision of such ancillary
services, Sinclair cannot forever rule out any business strategy that
might ultimately increase the return on its enormous digital investment
and fulfill its fiduciary obligation to its shareholders. Sinclair does
not intend to lease or sell spectrum to other businesses or broadcast
consortia, however. Sinclair is not a participant in any of the
spectrum aggregation projects currently being considered by other
broadcasters, and Sinclair does not condone the decisions of other
broadcast licensees to pursue such projects.
conclusion
As Sinclair explained in its original testimony, it is time for the
FCC to give broadcasters the flexibility to operate using either the
ATSC 8-VSB standard or the globally proven DVB-T standard. If the FCC
continues its current policy of inaction, Congress should strongly urge
the FCC to move forward to enable the American public to realize the
full promise of digital television in the twenty-first century.
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