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Wednesday, January 9, 2008

Switch to Digital TV On Track

FCC Chief: Switch to Digital TV On Track

FCC Chairman Kevin Martin confirms that the deadline for the country's switch to digital TV next year will not be postponed.
In a broad discussion at the Consumer Electronics Show,U.S. Federal Communications CommissionChairman Kevin Martin on Tuesday confirmed that the deadline for the country's switch to digital TV next year will not be postponed, explained the rationale behind the requirements for the current 700MHz auction and gave hints about his thinking regarding various communications megamergers.

Interviewed at the show by Consumer Electronics Association President Gary Shapiro, Martin said the February 2009 deadline for the digital TV switch is a "hard deadline." He said a postponement would "dis-incentivize" industry to make the transition.

"After all of our efforts we couldn't just turn around and say 'We're just kidding,'" he said.

About 50 percent of all homes in the U.S. now have digital TVs, and the CEA forecasts that some 28 million digital TVs will be bought in the U.S. this year, Shapiro noted.

Other FCC Updates
The transition to digital will not only improve picture quality for consumers, but also free up spectrum that can be used for wireless broadband, Martin stressed. He also noted that the extra spectrum provided by the switch would be used to improve public safety, allowing for better communications between fire departments and police. The need for better coordination among law enforcement and safety officials was a major point made in the 9/11 Commission report, he noted.

Requirements related to the auction for 700MHz spectrum blocks in the U.S. will play an important part in bringing broadband access to more people, such as inhabitants in rural areas, who have limited wireless options now, he said.

The spectrum auction has been broken up into blocks. One block, for example, has open-access rules and is broken up into 12 regional licenses across the U.S. There are also "buildout" requirements that will ensure that auction winners will actually put the spectrum to use in a reasonable timeframe, Martin said.

He declined to comment directly on the planned merger of Sirius Satellite Radio and XM Satellite Radio, currently under review by the Department of Justice. But he noted that the companies have been talking about a la carte pricing plans for shows, which would give consumers a wide range of options to choose different bundles of programs and prices. Martin said he would encourage content providers -- especially cable TV companies -- to offer this type of program-options plan.

One disappointment in the wake of communications industry deregulation has been the rising price of cable TV, he said.

Martin stopped short of saying that approval of the Sirius-XM merger would set a regulatory precedent for a rumored merger deal between satellite TV companies Echostar and DirecTV. But he did say that it would be important for the satellite TV companies to give consumers more pricing and program bundle options as part of any merger plan.

"This is the type of thing we'd be looking at," he said.

Digital TV switch to generate ad blitz
In an election year - especially a presidential year - most of us can expect an avalanche of TV advertising. But in 2008, the candidates may be competing for air time with the very broadcasters who carry their ads.

That's because broadcasters are desperate to get their message out soon enough to prevent an election year train wreck: that millions of TVs will go dark in 16 months unless viewers replace them or buy converters to equip them for digital broadcasting.

With almost half the population unaware of the switch, the National Association of Broadcasters this week announced plans to spend almost $700 million on an advertising blitz to tell Americans what's about to happen - and persuade them that it's for their own good.

It's a tough sell. Still, if you receive TV over the airwaves with an antenna - as opposed to cable or satellite service - start paying attention. More immediately, if you buy a new set this holiday season, make sure it's equipped to receive the new digital signals. This is also a good time to figure out whether your existing sets, even recent purchases, will work after the digital tsunami strikes.

Congress has told broadcasters to turn off the over-the-air, analog transmitters they've used for more than half a century on Feb. 17, 2009. They'll now rely solely on new digital transmitters whose signals aren't compatible with the tuners in traditional TVs without converter boxes.

These include millions of analog-only sets that consumers bought over the last few years, unaware that they were already on the road to Palookaville.

The broadcasters' PR strategy includes thousands of public service commercials, annoying "crawlers" that inch across the bottom of the screen during regular programs, educational programming, and even a traveling road show.

Altogether, NAB expects to create 98 billion "viewer impressions," an onslaught that may rival campaign pitches for sheer annoyance.

This is separate from the cable industry's $200 million program that aims to convince disgusted over-the-air customers that it's now worth their money to hook up to cable.

Unfortunately, critics say, the government isn't doing much on its end. Out of $1.5 billion appropriated for converter box subsidies, the government has allocated only $5 million for education - a situation that drew bipartisan ire at congressional hearings yesterday.

There will certainly be plenty of irate viewers to go around, considering that that government's program to provide every household $40 vouchers to defray the cost of up to two converters won't come close to the total cost of switching.

The converter boxes will cost $50 to $80 each. Many viewers may need new antennae, too. Even if the cost won't dent their retirement accounts, they will still have to go through the hassle of buying converters, hooking them up and possibly learning - as I did when I reviewed a digital TV - that they can't get all the channels they were accustomed to receiving.

For local TV stations, the stakes are tremendous. Once they get past the switchover, the new system will allow them to broadcast on three or four channels simultaneously, including high-definition broadcasts. That's an upside for viewers, too: They will also get an improved picture, even without high-definition sets.

Not predictable
But if the advertising blitz fails and enough Americans get riled up just before the election, Congress might be tempted to postpone the scheme. At the very least, broadcasters could wind up losing disgusted analog viewers to cable networks and online diversions.

Given the swirl of political and economic variables, there's no way to predict the outcome. In fact, this is uncharted territory. Never before has the government, by simple fiat, made such a reliable and important technology obsolete overnight - and with no demand for the change from consumers.

Most immediately at risk are viewers in 20 million American households who rely solely on free, over-the-air broadcasts.

1 household in 5
That's roughly 1 household out of 5. They are disproportionately occupied by the poor, who can't afford cable, and by the elderly, who vote in droves and know enough to punish those who've done them wrong.

In fact, the only reason why lawmakers who set this scheme in motion 11 years ago haven't already been tarred and feathered is that 80 percent of TV households get their broadcasts from cable or satellite companies. Those carriers will convert the new digital broadcasts for their customers' analog sets - at least for the time being.

Even among cable households, the NAB says, almost 15 million have second, third or fourth sets in bedrooms and kitchens that get their broadcasts over the air. Those sets will have to be replaced or converted, too.

Yesterday, the Commerce Department's National Telecommunications and Information Administration, which will administer the $40 voucher program, released a few details - including, the award of a $120 million contract with International Business Machines Corp. to manage the program.

Officials said applications for vouchers will be available online, by phone or mail, as well as through many public libraries whose staff will be trained to help applicants fill them out..

Comcast: Industry to standardize network, enabling new services without cable box
Facing pressure from regulators, the cable TV industry plans to make good on a promise to standardize its technology and open the door to televisions and other gadgets that don't need cable boxes to receive video-on-demand programs and other interactive services.

An industry initiative, to be renamed "tru2way" after a decade in the works, is expected to allow electronics manufacturers to make TVs and other gear that will work regardless of cable provider. By making devices compatible, the standard also could encourage the development of new services and features that rely on two-way communication over the cable network.

Comcast Corp., the nation's largest cable provider, will roll out the platform in all its markets by the end of 2008, Chief Executive Brian Roberts said in an interview with The Associated Press ahead of a speech Tuesday at the International Consumer Electronics Show.

Time Warner Cable Inc. is even closer to completion, Comcast executives said. A spokesman for No. 3 provider Cox Communications Inc. said the company will have "widespread deployment" this year.

"Our business model has changed completely, from a closed, proprietary model to an open architecture that will work across cable companies - not just across Comcast," Roberts said. "That was a Herculean job to accomplish."

Craig Moffett, senior analyst at Sanford Bernstein, said the industry is sending a hands-off signal to the Federal Communications Commission. Last summer, FCC officials said they would soon take on the issue of two-way compatibility between consumer electronics and cable systems.

"They don't have a lot of friends at the FCC right now. The cable industry has every reason to be nervous," Moffett said. "I suspect a lot of this is trying to beat the FCC to the punch."

CableLabs, the cable industry's research and development arm, which Roberts leads, was to announce Monday that its OpenCable platform, which began development in 1997, will now be branded as "tru2way."

Cable providers and device manufacturers have long disagreed over the technical specifications for two-way communication among their devices. There are TVs and set-top boxes in the market that can receive digital programming, but they can't talk back to the network, which would allow advanced interactive services. That leaves consumers with having to rent a box from the cable company.

And even with the new standards some discord remains.

Though the cable industry has inked separate deals with electronics companies, including Panasonic, Samsung and LG, consumer electronics giant Sony isn't on board.

The FCC - where Chairman Kevin Martin supports a more open and competitive environment - is also considering a different standard put forward by a group of consumer electronics companies.

CableLabs said it has inked licensing agreements with Intel Corp. and Broadcom Corp. to develop chips to run the software. And Microsoft Corp. is expected to integrate the standard into future versions of its Windows operating system for personal computers.

Comcast foresees "tru2way" branding on TVs, set-top boxes, PCs and other devices to signal their compatibility with cable systems.

On Monday, Panasonic and Comcast plan to unveil a slew of products that will be compatible with "tru2way," including a plasma high-definition television, high-definition digital video recorders and a portable DVR.

"You'll see a number of new 'tru2way' devices, and this is just the beginning," Roberts said. "This is Day One."

The Panasonic Viera Plasma HDTV with "tru2way" will go on sale this year. Panasonic's portable DVD player and recorder, called "AnyPlay," lifts off a docking station and allows consumers to watch the programs they've recorded anywhere they like, on its 8.5-inch LCD screen. It is to go on sale in early 2009.

Other products are expected to reach retail stores as early as the end of 2008. The timeframe gives cable leverage over the competing standard proposed by consumer electronics makers, whose devices might not make it to retail until 2009 at the earliest.

Moffett said cable operators are telling the FCC that the industry can work with consumer electronics makers on two-way cable-compatible products.

"That could tip the scales in their favor," Moffett said.

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