FCC Grants Broadcasters Relief
Now that the FCC has relaxed some rules and deadlines of the digital buildout, commercial broadcasters must decide whether to transmit a full-power digital signal by the May 2002 deadline or get started with lower-cost, lower-power signals and risk getting left behind.
While most major-market stations have their transition plans well under way, smaller and more cash-strapped stations got some relief in November when the FCC delayed its requirement that broadcasters replicate their entire analog reach with a digital signal. They also allowed part-time digital output initially and indicated they would consider prolonged economic hardship as a rationale for waivers of the deadline.
Many broadcasters have hailed the move as just enough of a change to get the digital signals up.
"This will help stations get on the air quicker," said NAB spokesman Dennis Wharton. "Just the mere fact that we don’t have to replicate [the entire analog reach] will save enormous amounts of money."
"They are allowing a reasonable phase-in of transmission power and they are providing for limited waivers," said John Lawson, president and CEO of the Association of Public Television Station. "To me, they got it about right."
The changes mean stations have a new option meeting the deadline with a cheaper, bare-bones digital system, and build to full power later. But it’s not clear how many will take that approach.
"I’m not seeing a rush to low-power," said Jay Martin, marketing director of Maine-based Dielectric Inc., which expects to sell 295 antennas this year, up from 187 in 2000. "The people who committed to high-power are keeping high-power."
But for the stations having the most trouble with the transition, mainly in the smallest markets, there are many ways to avoid huge up-front costs. Broadcasters can start with a single low-power standard-definition stream and minimum metering equipment, for example. Eventually, the law will demand full power and many figure the viewers will demand high-definition broadcasts and other digital features.
Harris Corp. told the FCC that a small-market station could reach minimum digital sign-on, not counting tower construction and some other costs, for less than $160,000 for a 500 W transmitter. A Mission Hills., Calif., company, Ktech Telecommunications, says it can install a 100 W system in four weeks for under $100,000.
"People who have been saying, ‘Let’s wait and see,’ and have not been actively thinking about [the transition] must now think about what they will do, " said Dale Mowry, vice president of TV product planning for Harris. "And I don’t think it’s going to be a knee-jerk, automatic, ‘We’ll go on at minimum.’"
The staggered entry is a potential further frustration for those who are clearly meeting the deadline and are impatient for more programming and ubiquitous digital coverage.
"It does provide relief to some of these smaller markets especially, but we want the transition to take place as quickly as possible," said John Greene, vice president for special projects at Capitol Broadcasting Co. Inc., which operates two high-definition digital stations in Raleigh, N.C., the 29th U.S. market. "You can reduce power, and rather than installing a three-tube, four-tube transmitter, you install a one-tube or even one of the solid state transmitters at a lower cost and cover a smaller area, and put up an antenna on the side of an existing tower."
"All that will slow us down. We do need total coverage," he said. "We’ve got to have saturation in order for [DTV] to be viable."
While the FCC regulations do not mandate advanced digital services or HDTV, competition might.
"If you have an opportunity to build a better widget and you’re in the widget business, you better build a better widget, because somebody else will pass you if you don’t," Greene said.
Viewers will demand expanded services anyway when they buy their advanced TVs, the thinking goes.
"We believe there will be some phone calls to the stations as people start to buy digital televisions, and people will say, ‘(A) I can’t get any of this HDTV programming that I was promised, and (B) I can’t get your signal and I’m only 15 miles from the transmitter. What’s going on?" said Mowry.
Broadcasters also seek more tools from the government to make the transition and keep over-the-air TV viable amid the reach of cable and satellite, especially in small markets. Congress is helping public stations directly, with $20 million appropriated this year for the transition and more expected in Fiscal Year 2003.
But the commercial stations in smaller markets say this transition needs the economic strength that consolidated ownership might provide. The broadcasters also want mandatory carriage of their digital signal on cable television, something that the cable industry has opposed.
"In the smaller markets, we just don’t have the money," said Granite Communications Co. President Stuart Beck. "It’s a very hard transition [and it has] zero business plan."
Beck urged a broader look at the issue, including an examination of the plan to end analog broadcasts when digital sets reach 85 percent of a market.
"I see a world in which important services have the potential to go dark in some markets," he said. "We’re walking down a tough road here. What about the guy on the farm that’s not going to get ‘E.R.’ anymore?"
NO MORE WAITING
Whether or not they like the latest version of the deadline, broadcasters unclear on their digital future have little time to avoid decisions.
"What we expect to see now is a large number of broadcasters who have been waiting will come off the sidelines, if you will, and enter the mainstream," said Mowry. "The broadcasters who have been waiting, watching, will now have to move into the action phase. And as they move into the action phase, they now have some other options."
But those who wait much longer risk putting manufacturers into a winter crunch that could reduce choices and increase their costs.
"There’s going to have to be a lot of ordering in November and December for the demand to be met," said Mowry.
Reduced power may not be the best option for broadcasters in the medium-sized markets. For one thing, much of the equipment will need replacement when the station goes to full power, and most broadcasters don’t want to go through a transition twice or even three times.
And many of the less-robust stations are in so-called "hyphenated" markets, in which the community of license is just a small portion of the listening area, so using a low-power digital signal risks leaving out most viewers.
Meanwhile, broadcasters and hardware manufacturers say the networks and programmers must continue developing content to give consumers a reason to buy digital televisions.
History shows that hardware sales take off when programming arises, said Consumer Electronics Association Vice President for Technology Michael Petricone, who said digital sales are nonetheless strong.
"It’s important that we move forward and get some compelling digital content on the air," he said. "That should be the objective that guides our policy."
FCC Grants Broadcasters Relief