The Big Picture: Frank Beacham

DTV's Cuckoo Nest and the Public Interest

Getting a firm grasp on DTV in the days before NAB2001 is a bit like trying to stab a mound of Jell-O with a fork. When you think you've got it, the darn thing slips away again.

The much-debated digital divide is no longer about the gap between "haves" and "have nots." It has now become a tug of war between the real and surreal – sort of a "One Flew Over the DTV Cuckoo's Nest." About the only clarity emerging from the DTV wars these days is that the public's interest is consistently coming up short.

Look at the evidence: Shaky technology is declared to work – not by clear proof – but by press release. Publicly owned spectrum may soon be generating huge windfall profits from corporate failure. And – if the new chairman is to be believed – FCC regulation is suddenly no longer needed – unless, of course, it's required to protect the status quo of broadcasting's business interests.

Undoubtedly, the crowning moment of the latest 8-VSB vs. COFDM "resolution" was the statement by consumer electronics lobbyist Gary Shapiro that the transmission issue in America "is over, done, dead, gone." It's as if the industry PR machine has now found it can fix technical problems by simply issuing a press release.

One can envision that after some unsuspecting DTV set buyer is unable to receive over-the-air programming due to multipath interference, Shapiro will show up at his front door to proclaim that his free TV reception is now "over, done, dead, gone." Time to pay the cable or satellite company, Mr. Shapiro will inform the poor, unsuspecting viewer.

HIDDEN AGENDA

Could there be a hidden agenda here? Is it possible that transmission technology no longer really matters because the TV viewing world is now overwhelmingly dominated by pay television services? Could it be – though no one will admit it publicly – that broadcasters simply no longer care whether or not large blocks of viewers are unable to receive their over-the-air signals? One wonders.

The brazenness of Shapiro's public proclamation was equaled by Paxson Communications Corp., a broadcaster whose aggressiveness in exploiting the public's spectrum shows no bounds.

The federal auction of wireless licenses (now scheduled to begin Sept. 12) offers the promise of lucrative new bandwidth for wireless broadband Internet and phone services. The catch is that some of the frequencies on the auction block – in the 700 MHz range – are currently being used by broadcasters such as Paxson, which is airing programming on Channels 60-69.

With 18 stations that operate on the 700 MHz band, Paxson is expected to give back the frequencies when they switch from analog to digital transmission. The deadline for that transition is 2006 or when digital TV reaches 85 percent of the market, whichever comes later.

FINANCIAL INCENTIVES

In the interim, the FCC has said wireless companies that win licenses in the auction can use "financial incentives" with broadcasters to spur them to move out of the frequencies more quickly. Enter Paxson, which is so eager to "demonstrate to shareholders the value of the television spectrum the company holds" that it feels the need to put out a press release touting its potential windfall.

In fact, chairman Lowell Paxson, chomping at the bit, set the stage last summer with this provocative quote in the Wall Street Journal: "I was a farmer and I got lucky. Now people want to build a mall of my farm. God bless America."

Hmmm, last I heard, the public owns Paxson's spectrum "farm." Why shouldn't it be the public – not Paxson – who reaps the windfall profits from this auction? Funny how broadcasters who paid not a dime for their publicly granted spectrum expect to make profits off those who pay – especially in light of the broadcast industry’s failure to deliver the digital promises originally made to Congress.

Finally, FCC chairman Michael Powell jumped into the Cuckoo's Nest. The more I hear of Powell's new hands-off FCC philosophy, the more confused I get. What exactly does he mean?

Will the NAB now get everything it wants? Will the Telecommunications Act of 1996 now be allowed to plow ahead without a driver? If so, does this mean that cable rates – now up 24 percent and rising three times the rate of inflation – will ultimately climb to their preferred corporate levels?

MASTER PLAN?

Is all this part of a master plan? When TV viewers can't pick up an over-the-air signal on their new DTV sets, will they be forced to buy cable, where rates will eventually grow to exceed their car payments?

Will cable sticker-shock lead to lower-cost alternatives? Perhaps viewers will eventually purchase Paxson's programming on the broadcaster's new wireless video cellphone channel – the one hammered together after the winner of the spectrum auction couldn't afford to pay Paxson's price for his "farm."

One wonders.

Frank Beacham is a New York City-based writer and producer. Visit his Web site at: www.beacham.com. E-mail: frank@beacham.com.