PxPixel
Rethinking the DTV deal - TvTechnology

Rethinking the DTV deal

Don't you just hate it when some-one reneges on a deal? It doesn't matter whether it is a small thing like meeting for lunch or a big thing like a job
Author:
Publish date:

Don't you just hate it when some-one reneges on a deal? It doesn't matter whether it is a small thing like meeting for lunch or a big thing like a job offer - when someone changes their mind or realizes the deal isn't as good for them as they thought we all get peeved. It becomes so much worse when someone hints we are not going to meet our part of a bargain before we even get a chance to.

Recently at the Museum of Television and Radio, FCC Chairman William E. Kennard made what was, in large part, a political speech about the social and international effects of television and the responsibilities of broadcasters during this year's political season. From the title of his speech, "What Does $70 Billion Buy You Anyway?" you might have guessed that he also took the opportunity to poke at some DTV implementation doors, a subject he approached by declaring how much DTV could do for children. One of DTV's purposes is "to serve children in dynamic, innovative ways" with more educational programming, Kennard said. "So the parents of 10-year-olds do not have to choose between allowing their children to watch Buffy the Vampire Slayer or Dawson's Creek or resigning them to cartoons."

Mr. Kennard obviously believes it is the children's duty to be permanently ensconced in front of the TV. Although many broadcasters would be happy to provide more educational broadcasting, market realities are such that most cannot afford to do so.

Then Kennard went on the attack. He pointed out that bandwidth is "the most valuable resource of the information age" and broadcasters should speed up the return of "the valuable analog spectrum to the American people." By "people" of course he means big business.

What seems to have got up the Chairman's nose is the small print of DTV spectrum allocation. Congress has put Kennard between the proverbial rock and a hard place - they want the old analog spectrum sold to balance the budget, but they also made the rules on the allocations. The one rule that has become the problem is that broadcasters have been granted the additional digital spectrum in addition to that used for analog transmissions, which they can keep until 2006 or until DTV penetration reaches 85 percent of the American market, whichever is later. Kennard believes that "later" actually might not be until 2025.

So Kennard is accusing broadcasters of "spectrum squatting," calling the business model of the next decade one where the slogan might be a Twix commercial, "Two for me, none for you." Even if this is true - and there is certainly reason to believe that it is not entirely untrue - it was rather insulting to the industry in general. Congress could certainly be described as creating the monster Kennard believes he is having to live through. Congress has also created his alter-ego dilemma in getting back that spectrum. He needs, perhaps, to direct his frustration to that branch of government instead of accusing the broadcasters first in a political approach.

To persuade broadcasters to get back on the implementation track Kennard wants Congress to close the 85 percent loophole, require DTV capability on all new receivers after January 2003, and require broadcasters to pay a fee for their analog channels after Jan. 1, 2006. That "spectrum-squatters' fee" would escalate yearly until "broadcasters complete their transition to digital and return the analog spectrum to the American people."

This is not how you deal with contract agreements. You read the small print with all the other text and you look at the implications of what you are signing. You look at the ramifications, the what-ifs and the probabilities and then decide whether to commit yourself. Once you have committed you go along with it - or you go back to the negotiating table and give something more to the other parties to make it happen the way you would like.

With a tiny chunk of 700MHz spectrum netting the government $519 million recently and auctions in Britain raising $33 billion, and Germany $45 billion, the phraseology sometimes used by officials is quite astonishing. The head of the FCC's wireless bureau recently told a Senate committee, "Today we simply do not have enough spectrum to give everyone all that they want." Give? At these prices the beachfront properties that spectrum represents are hardly suitable for the first-time buyers in wireless businesses.

But when you come to a spectrum argument with the mindset that the broadcasters - a huge chunk of your oldest customers - are sitting on a $70 billion giveaway that you now think is not fair maybe you need to start thinking about your replacement. You only become part of the problem, Mr. Kennard, when you think in terms of punishment rather than help. Many stations need that help to make this transition, sit down with them and work around it.