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Still Waiting as Shift to Digital TV Struggles

Television: Despite some advances and pressure from regulators, broadcasters find themselves in a bind.


Make no mistake, Matt Stevens loves his new digital television. "It's the best thing I've ever bought," the independent filmmaker from New Haven, Conn., said.

His $2,000, 47-inch wide-screen Panasonic was one of the least costly high-definition sets on the market, yet it delivered a super-sharp picture and cinema-quality sound--as long as Stevens was watching DVDs.

To watch high-definition broadcasts from his local TV stations, he had to spend an additional $750 on a digital receiver. He covered the cost by selling some of his vintage comic books.

But he soon discovered that CBS' local digital station, which offers the most prime-time programs and sports in HDTV, was too weak to tune in to over the air, and it wasn't carried on cable or satellite. The local NBC and Fox stations in Connecticut, meanwhile, hadn't even begun broadcasting in digital.

All this was bad news but not a deal-killer for Stevens, who had no trouble tuning in to the local ABC station's digital channel. After all, the main reason he'd bought the receiver was to watch the series of 13 James Bond movies ABC was running in HDTV, the highest-quality form of digital broadcasting.

"Of course, just as I got [the receiver], they canceled the movies," Stevens said ruefully.

The reason? Lousy ratings.

Stevens' plight illustrates why so few consumers are tuning in to their local stations' digital channels, and why the broadcasters' federally mandated shift from analog to digital is still sputtering after five years and hundreds of millions of dollars.

Digital TV has made so little headway with the masses that a top federal regulator tried to light a fire under the industry last week by proposing a new set of "voluntary" deadlines. Meanwhile, more than 80% of the commercial TV stations are about to miss a real federal deadline for launching their digital channels.

The expensive sets and the shortage of HDTV programming, particularly on cable and satellite, have left the digital stations with only a cadre of determined viewers such as Stevens. There are about 2.7 million digital sets in the U.S., and only 10% of them can tune in to digital broadcasts. That compares with more than 250 million traditional analog sets nationwide.

The tiny audience for digital puts broadcasters, whose annual convention begins today in Las Vegas, in a bind. The federal government has ordered them to start making the shift away from analog broadcasting, but they can't build new digital businesses without viewers.

"We are replacing every consumer set in America, and that is a long-term process no matter how you slice it, how you promote it," said Edward O. Fritts, the National Assn. of Broadcasters' chief executive.

The government-mandated transformation of television began in 1987, when Japanese advancements in broadcasting led policymakers to call for a U.S. response. With the broadcasters' and set manufacturers' support, the Federal Communications Commission eventually adopted a digital alternative that stations could use for a range of services, including HDTV, multiple simultaneous channels, high-speed data transmissions and interactive programming.

Digital technology was supposed to change the way people watch TV. In addition to sharper pictures, broadcasters would be able to offer extras with every program: alternate camera angles during a game, for example, or downloadable soundtracks to movies.

Digital broadcasters don't use the same technology that the cable and satellite companies do in their digital offerings. The cable and satellite operators use digital to change the way pictures and sound are sent to conventional TV sets, while the local stations use digital to change the nature of the picture itself. That's why consumers need a digital TV to watch the new local channels in their full quality.

It's also why the FCC loaned each local broadcast station a second channel in April 1997 so it could gradually shift its programs from analog to digital. All 1,300 commercial broadcasters had to put their digital stations on the air by May 1, 2002, and all analog channels had to be shut down by the end of 2006.

So far, 273 commercial and public broadcasting stations have launched their digital channels. But more than 800 commercial stations have sought extensions to the May 1 deadline, and about 100 more don't even have construction permits yet.

Unless the transition picks up speed in a hurry, the federal government will have to wait to reclaim and auction the airwaves now being used for analog channels. Critics such as former FCC Chairman Reed Hundt predict it will take 20 years or more to clear those channels.

The cost: upward of $70 billion in revenue lost because the publicly owned spectrum could not be auctioned off for other uses, such as high-capacity wireless networks.

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