Instant DTV Transition

"To say that the transition to digital television in the United States is not going well is a bit like saying that Mikhail Gorbachev's perestroika is falling somewhat behind schedule." That's what a Brookings Institution report last November had to say. Another half-year hasn't made much difference, and, although the Brookings Institution is hardly a neutral observer, politicians on both sides of the aisle would be likely to agree.

In this era of multicolor security alerts, public safety communications administrators are demanding more spectrum. Congress, of course, would like to fill the federal coffers with fees from auctioned-off television broadcast channels.

TV set manufacturers sometimes blame broadcasters, cable interests, and producers for not providing more programming to make consumers want to buy DTV sets. Broadcasters blame set manufacturers for not having DTV reception in every model and cable operators for not carrying DTV broadcasts. The cable community and program suppliers have their own complaints.

Through December 31 of last year, a grand total of 361,828 U.S. broadcast DTV receivers had been sold to retailers. Every DTV receiver in a store, in a warehouse, or at a broadcaster is one of those 361,828 that hadn't yet made it into a home, more than four-and-a-half years after the FCC announced its DTV rules.

As of September of last year, Nielsen put the number of U.S. television households at 105.5 million. Can anyone dispute that the broadcast DTV transition is not doing well in the U.S.? There is more than one television set per householdÑexactly how many more no one seems to know, but estimates range from 2.5 to 3. Some might be dedicated to nothing but video games; others might be used to watch TV from time to time.

If there are three TV sets per TV household and 105.5 million TV households, then there are about 316,500,000 TV sets in the U.S., virtually none of them with DTV-reception capability. Some say set manufacturers should be required to include that capability in all sets. But even if that were ordered today and implemented almost immediately, it would take more than a decade to get enough sets into homes to replace existing onesÑif consumers chose to do the replacing. Earlier this year, this column explored the possibility of the government replacing all 4:3 TV screens with 16:9. It was an unlikely concept. The government has nothing to gain from such a shape change.

DTV reception, however, is different from widescreen displays. The government does have much to gain if analog TV can be shut down. Public safety communications can get the spectrum it needs. Stations can be compacted into the DTV core frequencies, and the rest can be auctioned off. A broad range of values has been assigned to that spectrum. The closer the auction is to the availability of the spectrum, the more it's considered to be worth. For argument's sake, assume $100 billion for an auction taking place with imminent availability.

There has also been a broad range of costs posited for adding DTV reception capability to TV sets. Standalone boxes would cost more. Again, for argument's sake, assume a $100 cost for a standalone set-top box in 300 million quantity.

That comes to $30 billion, a not inconsiderable sum. As Senator Everett Dirksen once put it, "A billion here, a billion there, and pretty soon you're talking about real money." But, if that $30 billion expenditure enables the sale of $100 billion in wireless spectrum, the government actually nets $70 billion. The DTV transition would be completed in virtually no time.

Set-top boxes are a specialty of such U.S. manufacturers as Motorola and Scientific-Atlanta, so the $30 billion could also stimulate the U.S. economy, creating jobs and strengthening our manufacturing sector.

Yes, there are some minor details to be worked out. VCRs would have to be considered. There's also interoperability with existing cable and satellite receivers. And then there's the big one.

This plan works great if the government-provided receivers can, indeed, offer real-world reception capability, including indoors. But that's a tale for another time.