Order Code RL31260
Report for Congress
Received through the CRS Web
Digital Television: An Overview
Updated June 13, 2002
Lennard G. Kruger
Specialist in Science and Technology
Resources, Science, and Industry
Congressional Research Service ˜ The Library of Congress
Digital Television: An Overview
Summary
Digital television (DTV) is a new television service representing the most
significant development in television technology since the advent of color television
in the 1950s. DTV can provide sharper pictures, a wider screen, CD-quality sound,
better color rendition, and other new services currently being developed. The
nationwide deployment of digital television is a complex and multifaceted enterprise.
A successful deployment requires: the development by content providers of
compelling digital programming; the delivery of digital signals to consumers by
broadcast television stations, as well as cable and satellite television systems; and the
widespread purchase and adoption by consumers of digital television equipment.
Congress and the Federal Communications Commission (FCC) have set a target
date of 2006 for broadcasters to cease broadcasting their analog signals and return
their existing analog television spectrum licenses to be auctioned or used for other
purposes. While the nation’s transition to digital television is proceeding, most
observers believe that widespread adoption of DTVs by consumers will not be
achieved by 2006, and that television stations will continue to broadcast both analog
and digital signals past the 2006 deadline. The key issue for Congress and the FCC
is: what steps, if any, should be taken by government to further facilitate a timely,
efficient, and equitable transition to digital television? To address this question,
Congress and the FCC must confront a highly complex policy landscape, involving
different industries, technologies, and interests, including: content providers,
commercial and noncommercial television broadcasters, cable and satellite television
providers, consumer electronics manufacturers and retailers, and consumers.
No major legislation has yet been introduced into the 107th Congress directly
related to digital television. However, Congressional committees are keenly
monitoring the pace and progress of the digital transition. A number of options for
Congressional action have been proposed. These include: mandating digital tuners;
mandating dual carriage of digital and analog programming; accelerating the vacating
of analog television spectrum; legislating a process whereby interoperability
standards and copyright protection technologies will be implemented; and extending,
strengthening, and/or altering the transition deadlines. While stakeholders are
working to resolve some of these issues, pressure is building on the Congress to act
as the DTV transition deadlines become closer.
Contents
What is Digital Television? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Role of Congress and the FCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Status of the DTV Buildout . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Creation of Digital Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Delivery of Digital Signals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Consumer Purchase of DTV Products . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Digital “Must Carry” Debate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Mandating Digital Tuners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Copyright Protection Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Cable/DTV Interoperability Standards . . . . . . . . . . . . . . . . . . . . . . . . 14
Digital Conversion of Public Broadcasting Stations . . . . . . . . . . . . . . 15
Reclaiming the Analog TV Spectrum . . . . . . . . . . . . . . . . . . . . . . . . . 16
Low Power TV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Fees for Ancillary or Supplemental Services . . . . . . . . . . . . . . . . . . . . 19
Public Interest Obligations of DTV Broadcasters . . . . . . . . . . . . . . . . 20
Tower Siting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Activities in the 107th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Appendix – Legislation in the 107th Congress Related to
Digital Television . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
List of Tables
Table 1. Digital Conversion Schedule for Television Stations . . . . . . . . . . . . . . . 3
Table 2. Recent FCC Proceedings Related to Digital Television . . . . . . . . . . . . . 6
Digital Television: An Overview
What is Digital Television?
Digital television (DTV) is a new television service representing the most
significant development in television technology since the advent of color television
in the 1950s. DTV can provide sharper pictures, a wider screen, CD-quality sound,
better color rendition, multiple video programming or a single program of high
definition television (HDTV), and other new services currently being developed.
DTV can be HDTV, or the simultaneous transmission of multiple programs of
standard definition television (SDTV), which is a lesser quality picture than HDTV
but significantly better than today’s television. Or, alternately, DTV could deliver
as part of a multiple offering, some other service such as the distribution of text or
data (for example, electronic newspapers or stock quotes) or even a high speed
connection to the Internet.
There are three major components of DTV service that must be present in order
for consumers to enjoy a fully realized “high definition” television viewing
experience. First, digital programming must be available. Digital programming is
content produced with digital cameras and other digital production equipment. Such
equipment is distinct from what is currently used to produce conventional analog
programming. Second, digital programming must be delivered to the consumer via
a digital signal. Digital signals can be broadcast over the airwaves (requiring new
transmission towers or DTV antennas on existing towers), transmitted by cable or
satellite television technology, or delivered by a prerecorded source such as a digital
video disc (DVD).1 And third, consumers must have a digital television product
capable of receiving the digital signal and displaying digital programming on their
television screens. To receive digital broadcast signals, consumers can buy digital
monitors accompanied with a set-top converter box (a digital tuner),2 or alternatively,
an integrated digital television with digital tuning capability already built in.
Role of Congress and the FCC
Congress and the Federal Communications Commission (FCC) have played
major roles in the development of DTV. Starting in 1987, the FCC launched a
decade-long series of proceedings exploring the potential and feasibility of a
transition from conventional analog televisions to advanced television systems.
1At present, commercially available DVD technology does not deliver digital programming.
2Set-top converter boxes can also be used to enable conventional analog televisions to
receive digital signals over the air. However, analog televisions hooked up to digital tuners
cannot display high definition pictures.
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While the original term used to describe the new television system was high
definition television (HDTV), the FCC used a broader term – advanced television
(ATV) – referring to any television technology that provides improved audio and
video quality. After it became clear that ATV would be using digital signal
transmission, the FCC began (in 1995) to use the term DTV (synonymous with ATV)
to describe the new service more accurately.
In December 1996, after lengthy debate between television manufacturers,
broadcasters, and computer firms, the FCC adopted a standard for DTV signal
transmission based on recommendations of the Advanced Television System
Committee (ATSC).3 The ATSC standard allows for 18 different video formats, of
which four have subsequently been adopted for commercial use.4
Meanwhile, the Telecommunications Act of 1996 (P.L. 104-104) provided that
initial eligibility for any DTV licenses issued by the FCC should be limited to
existing broadcasters. Broadcasters would be issued DTV licenses while at the same
time retaining their existing analog licenses during the transition from analog to
digital television. The Act provided that broadcasters must eventually return either
their existing analog channel or the new digital channel. Also in the 104th Congress,
a major debate took place over whether to direct the FCC to conduct auctions for the
spectrum allocated for DTV. The FCC estimated the commercial value of the DTV
spectrum to be between $11 billion to $70 billion. No legislation was enacted,
however, and the FCC did not obtain the authority to auction the DTV licenses.
In 1997, the FCC adopted rules5 to implement the Telecommunications Act, and
granted DTV licenses to some 1600 full power incumbent television broadcasters.
The DTV licenses consist of 6 megahertz (MHz) of unused spectrum within the VHF
and UHF frequency bands. Because DTV signals cannot be received through the
existing analog television broadcasting system (known as NTSC6) the FCC decided
to phase in DTV over a period of years, so that consumers would not have to
immediately purchase new digital television sets or converters. Thus, broadcasters
were given 6 MHz of new spectrum for digital signals, while retaining their existing
3FCC Fourth Report and Order In the Matter of Advanced Television Systems and Their
Impact on Existing Television Service, MM Docket No. 87-268, FCC 96-493, released
December 27, 1996.
4Four video formats are being used commercially by U.S. television producers and
manufacturers. These four formats are described by the number of lines they produce per
each picture frame, and whether they use interlaced (i) or progressive (p) scanning
techniques. These are: 480i and 480p (suitable for SDTV broadcasts), and 720p and 1080i
(HDTV). The progressive scan video format is more compatible with PC displays, while
the interlaced scan is more compatible with analog television receivers.
5FCC Fifth Report and Order In the Matter of Advanced Television Systems and Their
Impact on Existing Television Service, MM Docket No. 87-268, FCC 97-116, released April
21, 1997.
6The National Television Systems Committee (NTSC) was the industry group that
developed the currently used U.S. television standards. For a discussion of the difference
between analog and digital signals, see CRS Report 96-401 SPR, Telecommunications
Signal Transmission: Analog vs. Digital.
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6 MHz for analog transmission so that they can simultaneously transmit NTSC and
DTV signals to their broadcasting market areas.7 The simultaneous broadcasting
(“simulcasting”) of the same programs in both digital and analog modes was intended
to allow viewers who have not yet purchased DTV sets or converters to continue to
receive television programming during the transition to DTV.
The ruling required television stations receiving the DTV licenses to build their
DTV facilities according to a schedule determined by the size of their markets. Table
1 shows the time line established by the FCC for DTV conversion. The FCC can
grant extensions to licensees unable to meet the schedule due to unforeseeable or
uncontrollable circumstances, such as an inability to secure tower locations for new
antennas.
Table 1. Digital Conversion Schedule for Television Stations
Stations
Conversion Deadline
affiliates of the four major networks in
May 1, 1999
the top 10 markets.8
affiliates in markets 11-30
November 1, 1999
rest of all commercial television
May 1, 2002
stations in the smaller markets
noncommercial television stations
May 1, 2003
The FCC set a target date of 2006 for broadcasters to cease broadcasting the
analog signal and return their existing analog television spectrum licenses to be
auctioned for other commercial purposes. During the 105th Congress, the Balanced
Budget Act of 1997 (P.L. 105-33) made the 2006 reversion date statutory, providing
that a “broadcast license that authorizes analog television service may not be renewed
to authorize such service for a period that extends beyond December 31, 2006.”
However, the Act requires the FCC to grant extensions for reclaiming the analog
television licenses in the year 2006 from stations in television markets where any one
of the following three conditions exist:
! if one or more of the television stations affiliated with the four national
networks are not broadcasting a digital television signal;
7Using digital technology, the DTV frequencies can be placed in the vacant portion of the
same spectrum band currently allocated for analog (NTSC) television without interfering
with analog television broadcasts. For background information on radiofrequency spectrum,
see CRS Report RL30829, Radiofrequency Spectrum Management: Background, Status, and
Current Issues.
8The top ten television markets (in terms of advertising revenue), in order, are New York,
Los Angeles, Chicago, Philadelphia, San Francisco-Oakland, Boston, Dallas-Fort Worth,
Washington DC, Atlanta, and Detroit.
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! if digital-to-analog converter technology is not generally available in the
market of the licensee; or
! if at least 15% of the television households in the market served by the station
do not subscribe to a digital “multi-channel video programming distributor”
(including cable or satellite services) and do not have digital TV sets or
converters.
The FCC continues to monitor the status of the DTV conversion of both
commercial and noncommercial broadcast stations. On October 11, 2001, FCC
Chairman Michael Powell announced the creation of an FCC Digital Television
(DTV) Task Force to review the ongoing transition to DTV, and to make
recommendations on how to facilitate the transition and promote the rapid recovery
of broadcast spectrum for other uses.
Ongoing DTV-related FCC activities and proceedings are presented in Table 2.
The FCC is issuing periodic progress reports on the DTV buildout,9 and has the
option of granting deadline extensions to broadcasters. On November 8, 2001, the
FCC announced it would modify a number of its DTV transition rules, in order to
facilitate and speed the DTV transition. The changes permit stations to initially build
lower-powered (and less expensive) DTV facilities, while retaining their option to
expand their coverage area as the digital transition progresses. Meanwhile, the FCC
declined to issue a blanket extension of remaining DTV construction deadlines.
However, the FCC will consider, in limited circumstances, individual requests for
extensions due to financial hardship. Specifically:
Stations seeking an extension of time to construct DTV facilities on
this basis must provide detailed evidence that the cost of meeting the
minimum buildout requirements exceeds the station’s financial
resources . . . a brief downturn in the economy or advertising
revenues will not be considered a sufficient showing of financial
hardship. Rather, the showing must reflect the particular station’s
financial status over an economically significant period of time. In
addition, the applicant must provide detailed evidence of its good
faith efforts to met the deadline, including its efforts to obtain the
necessary financing.10
Approximately three-quarters of the 1,240 full-power commercial stations in the
United States did not meet the May 1, 2002 conversion deadline.11 Most have
received (or will likely receive) six-month deadline extensions from the FCC. On
May 16, 2002, the FCC adopted a Notice of Proposed Rulemaking (NPRM) which
9The most recent progress report is contained in: FCC Report and Order and Further Notice
of Proposed Rule Making, In the Matter of Review of the Commission’s Rules and Policies
Affecting the Conversion To Digital Television, MM Docket No. 00-39, FCC 01-24,
January 19, 2001, p. 4-6.
10FCC News Release, “FCC Acts to Expedite DTV Transition and Clarify DTV Buildout
Rules, November 8, 2001.
11See: General Accounting Office, Telecommunications: Many Broadcasters Will Not Meet
May 2002 Digital Television Deadline, GAO-02-466, April 2002.
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proposes increasingly severe sanctions every six months on stations who have not
constructed digital facilities and do not demonstrate that their failure to do so was
either unforeseeable, beyond their control, or due to legitimate financial hardship.
Sanctions progress from admonishment, to issuance of a notice of apparent liability
for forfeiture, to rescission of the station’s DTV license.12
Meanwhile, a provision in the Public Health Security and Bioterrorism
Preparedness and Response Act of 2002 (H.R. 3448, H.Rept. 107-481) addresses the
digital conversion of full power television stations that received their analog licenses
after the FCC allocated digital spectrum to existing analog stations in 1997. Section
531 of H.R. 3448 requires the FCC to allot a digital channel to any requesting full-
power television station that had an application pending for an analog television
station construction permit as of October 24, 1991, and which had its application
granted after April 3, 1997. Any station receiving digital spectrum under this
provision is required to complete construction of its digital facility within 18 months,
without the possibility of an extension. Stations are also prohibited from operating
an analog signal on its designated digital channel. The bill’s conference report states
that this provision will allow recent broadcast licensees to foster a digital audience
during the transition period to digital television without having to terminate analog
service, and that without this change, those stations would be denied the flexibility
to operate an analog and a digital facility simultaneously in the near term, especially
in major markets.
12See: [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-222561A4.pdf]
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Table 2. Recent FCC Proceedings Related to Digital Television
In the matter of:
Type of Action
FCC and Docket Number
Review of the Commission’s
Memorandum Opinion and
FCC-01-33013
Rules and Policies Affecting
Order on Reconsideration
MM Docket No. 00-39
the Conversion to Digital
November 15, 2001
Television
Review of the Commission’s
Report and Order and Further
FCC-01-2414
Rules and Policies Affecting
Notice of Proposed Rule
MM Docket No. 00-39
the Conversion to Digital
Making (FNPRM)
January 19, 2001
Television (includes FNPRM
on digital tuners)
Carriage of Digital Television
First Report and Order and
FCC-01-2215
Broadcast Signals
FNPRM
CS Docket No. 98-120
January 23, 2001
Commercial Availability of
FNPRM and Declaratory
FCC-00-34116
Navigation Devices
Ruling
CS Docket No. 97-80
September 18, 2000
Compatibility Between Cable
Report and Order
FCC-00-34217
Systems and Consumer
PP Docket No. 00-67
Electronics Equipment
September 15, 2000
Nondiscrimination in the
Notice of Inquiry
FCC-01-1518
Distribution of Interactive
CS Docket No. 01-7
Television Services Over
January 18, 2001
Cable
Remedial Steps for Failure to
Notice of Proposed
FCC-02-150
Comply With Digital
Rulemaking
MM Docket No. 02-113
Television Construction
May 16, 200219
Schedule
Status of the DTV Buildout
The nationwide buildout of digital television is a complex and multifaceted
enterprise. A successful buildout requires: the development by content providers of
compelling digital programming; the delivery of digital signals to consumers by
13[http://www.fcc.gov/Bureaus/Mass_Media/Orders/2001/fcc01330.pdf]
14[http://www.fcc.gov/Bureaus/Mass_Media/Orders/2001/fcc01024.pdf]
15[http://www.fcc.gov/Bureaus/Cable/Orders/2001/fcc01022.pdf]
16[http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-00-341A1.pdf]
17[http://www.fcc.gov/Bureaus/OPP/Orders/2000/fcc00342.pdf]
18[http://www.fcc.gov/Bureaus/Cable/Notices/2001/fcc01015.pdf]
19http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-02-150A1.pdf
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broadcast television stations, as well as cable and satellite television systems; and the
widespread purchase and adoption by consumers of digital television equipment.
Creation of Digital Programming. Digital programming is created with
digital cameras and other digital production equipment. Digital content tends to favor
more “visual” types of programming – such as sports events or movies – which take
full advantage of the high-definition viewing experience. Currently, the amount of
available digital programming is limited, but gradually becoming more widespread.
Among broadcast networks, CBS produces the largest amount, with digital high-
definition broadcasts available in all of its prime time scripted entertainment series
during the 2001-2002 series. ABC is offering HDTV broadcasts in 60% of its prime
time schedule.20 PBS has also been active, producing digital programming as well
as offering multicasts over digital channels in some local markets. NBC and FOX
are starting to offer digital programming as well, and a number of local television
stations have begun offering their evening news in a high definition format. Among
cable networks, HBO currently offers the most amount of digital programming.
Other cable networks producing digital programming include Showtime, A&E,
Discovery, and Madison Square Garden.21
Two factors generally inhibit content providers from accelerating the production
of digital programming. First, because relatively few households have digital
televisions, networks have a diminished incentive to invest the money to produce
digital content. Much digital programming is being produced by networks in
sponsorship/partnership with consumer electronics companies who manufacture
digital televisions. Second, content providers (e.g. networks and movie studios) are
reluctant to provide digital programming until a digital copyright standard is in place
(see discussion below, under “Issues”).
Delivery of Digital Signals. Currently, there are three ways digital
programming is being delivered to consumers. Digital signals are: 1) broadcast over
the airwaves; 2) transmitted over a few channels provided by satellite television
systems; and 3) provided via digital cable service in a very small number of markets.
Broadcasting. According to the National Association of Broadcasters (NAB),
as of June 4, 2002, there were 422 stations (both commercial and public)
broadcasting digital signals in markets.22 This represents about 26% of the nation’s
approximately 1600 television stations. On the other hand, the 128 markets currently
receiving digital transmissions cover about 87% of U.S. TV households. Television
stations must construct new facilities and purchase new equipment in order to
transmit digital signals. According to NAB, costs range from $8-10 million to fully
20National Association of Broadcasters, Destination Digital TV, October 22, 2001, Vol. 1,
No. 4, p. 1.
21Cable & Telecommunications Overview, 2001, June 2001, National Cable Television
Association.
22For latest statistics, see: [http://www.nab.org/newsroom/issues/digitaltv/dtvstations.asp]
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convert a station to digital operation.23 The FCC has granted construction permits to
1415 stations, about 84% of the total number of DTV allotments.24
Approximately three-quarters of the 1,240 full-power commercial stations did
not meet the May 1, 2002 conversion deadline. As of May 8, 2002, 909 commercial
stations have requested from the FCC an extension of the May 2002 deadline in order
to complete construction of their DTV facilities. So far, 525 have been granted and
61 have been dismissed.25
Satellite. There are two direct broadcast satellite (DBS) television services
available in the United States: Echostar’s DISH Network and Hughes’ DirecTV.26
Both offer a few channels of HDTV programming. To date, DirecTV has a channel
of HBO and a channel of pay-per-view (movies and events) in HDTV format.
DirecTV has launched an HDTV sports channel, with the goal of offering 24 hours
of HDTV programming by mid-2002.27 The DISH Network currently has three
existing HDTV offerings: HBO, Showtime, and a pay-per-view channel. Echostar
and CBS have announced an agreement that will allow the satellite company to offer
CBS high definition programming to DISH subscribers in a limited number of
markets (currently New York and Los Angeles).28 Satellite TV customers need added
equipment (a slightly bigger satellite dish and either a set-top box or built-in satellite
HDTV reception capability) in order to receive high-definition programming on their
digital televisions.
Cable. With some exceptions, most cable franchises do not currently offer
high-definition (digital) programming to subscribers.29 Cable companies have been
reluctant to carry channels of digital programming (thereby displacing some existing
channel offerings) until more consumers have the digital television equipment
23Testimony of Ben Tucker, Chairman of NAB Television Board, in: U.S. Congress, House,
“Digital Television: A Private Sector Perspective on the Transition,” Hearing Before the
Committee on Energy and Commerce, Subcommittee on Telecommunications and the
Internet, March 15, 2001, 107th Cong., 1st Sess., p. 72.
24Presentation of Mass Media Bureau at January 17, 2002 FCC Open Commission Meeting.
25See: [http://www.fcc.gov/mb/video/files/dtvsum.html]
26In October 2001, Echostar and Hughes signed a merger agreement. The merger is under
review by the FCC, the Department of Justice, and Congress. For more information, see
CRS Report RL31226, Satellite Television: The Proposed Merger of EchoStar and DirecTV,
by Marcia S. Smith.
27Communications Daily, Sept. 7, 2001, p. 10.
28“EchoStar puts CBS into HDTV Orbit,” Electronic Media, Jul 16, 2001.
29Many cable (and both DBS commercial services) are “digital.” However, “digital
cable”generally refers to technology which converts analog programming to a digital signal
which is transmitted to the consumer and then converted back to analog form for television
viewing. “Digital cable” allows cable companies to provide more channels, as well as high
speed (broadband) Internet service. However, the “digital” signals transmitted over cable
systems use different digital standards than the DTV standard used by broadcasters and
current DTV sets; therefore current digital cable services currently cannot be directly
received by DTV sets.
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necessary to view digital programming (see discussion of “must carry” below). Also
there are copyright, standards, and interoperability issues between the cable system
and DTV sets that must be resolved (see “copyright and standards” below).
The reluctance of cable companies to carry digital programming is beginning
to change, however, as cable providers in several markets have announced plans to
carry digital or high-definition channels. On May 1, 2002, the nation’s top ten cable
companies pledged to implement FCC Chairman Powell’s voluntary plan, which
calls on cable operators to carry digital signals of up to five broadcast or other digital
programming services by January 1, 2003.30
Consumer Purchase of DTV Products. DTV products are now available
from several manufacturers that offer varying features and technical characteristics.
Currently, most consumers who purchase DTV products are purchasing digital
television monitors, available at prices ranging from about $1000 to $3500,
depending on screen size and other features. Digital monitors are primarily being
used by consumers to watch DVDs,31 regular analog television, and digital
programming over a satellite television system. A digital monitor must be coupled
with a set-top digital receiver or tuner (costing $500 to $600) in order to receive
digital broadcast signals.32 An integrated DTV, which contains a built-in digital
tuner, is sold at prices ranging from $3000 to $12,000.33 Over the past two years,
prices for DTV monitors and receivers have dropped by 50%. As the market for
DTVs expands, prices are expected to decrease further.34
According to the Consumer Electronics Association (CEA), DTV sales (from
suppliers to retail outlets) totaled 1.46 million units in 2001, about a 125% increase
over the amount sold in 2000. The 2001 sales bring the total number of DTV
products sold since 1998 to 2.5 million. Of this number, 362,000 integrated sets and
set-top decoders (digital tuners) have been sold. CEA estimates that 16% of DTV
monitors and sets sold since introduction are capable of receiving, decoding, and
30McConnell, Bill, “Cable Takes the High-Def High Road,” Broadcasting & Cable, May 6,
2002, pp. 54-60.
31Commercially available DVD technology does not yet support digital programming.
However, current DVDs viewed over a DTV provide a significantly higher quality picture
than DVDs viewed over regular analog televisions.
32Many consumers are asking whether their current analog TV sets will become obsolete
with the advent of DTV. Consumers can continue to use analog TV sets until the
broadcasters return the analog TV licenses to the FCC, after which, a set-top digital
converter box could be used to enable the analog TV set to receive the DTV signal. Digital
converters, however, will only enable the display of pictures comparable in quality to
existing sets. They will not provide HDTV-quality images, or other new services that may
come with DTV.
33“Super-size Your Set,” Consumer Reports, March 2001, p. 16.
34Testimony of David Arlin, Thomson Multimedia Inc. on behalf of the Consumer
Electronics Association, in: U.S. Congress, House, “Digital Television: A Private Sector
Perspective on the Transition,” Hearing Before the Committee on Energy and Commerce,
Subcommittee on Telecommunications and the Internet, March 15, 2001, 107th Cong., 1st
Sess., p. 47.
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displaying a digital signal either on their own or partnered with a set-top box. While
growth has occurred, the penetration of DTVs into the American home remains
small, with between 2 and 3% of the 110 million American households having DTVs
(mostly monitors), and less than 1% having the ability to receive digital signals. The
CEA predicts continuing expansion of DTV sales, with projections of over 30 million
DTVs sold to retailers between 2001 and 2006.35
Policy Issues
While the nation’s transition to digital television is proceeding, industry analysts
believe that widespread adoption of DTVs by consumers will not be achieved by
2006, and that television stations will continue to broadcast both analog and digital
signals past the 2006 deadline. The key issue for Congress and the FCC is: what
steps, if any, should be taken by government to further facilitate a timely, efficient,
and equitable transition to digital television? To address this question, Congress and
the FCC must confront a highly complex policy landscape, involving different
industries, technologies, and interests, including: content providers, commercial and
noncommercial television broadcasters, cable and satellite television providers,
consumer electronics manufacturers and retailers, and consumers.
Currently the three critical components of the digital transition – programming
and content, delivery of a digital signal, and consumer purchase of DTVs – appear
to be lagging and hindered by what many describe as a “chicken or egg” dynamic.
Most consumers are reluctant to buy DTVs until there is more high quality digital
programming to watch. Content providers have a diminished incentive to create
digital programming until a larger number of consumers are capable of receiving
digital television service. And television service providers (especially cable and
satellite) have little incentive to provide digital programming until more consumers
have DTVs and content providers supply more digital programming.
Broadcasters are currently under a statutory mandate to convert, with the
expectation that the presence of digital broadcast signals will provide sufficient
market incentives for other stakeholders to go digital. Much of the policy debate
revolves around the question of whether this strategy will yield a timely, efficient,
and equitable digital transition. If not, should conversion deadlines be extended, or
should additional government mandates – such as digital “must carry” or digital
tuners – be placed on other stakeholders in order to accelerate the pace of the
transition? Conversely, would further government intervention in the digital
transition produce undesirable market distortions? The following discusses a number
of specific policy issues related to the transition to digital television.
Digital “Must Carry” Debate. Responding to the debate between the
broadcast and cable industries over whether cable TV providers should be required
to transmit DTV programming, in July 1998 the FCC initiated a proceeding on the
35Consumer Electronics Association, Press Release, “CEA Releases Final 2001 DTV Sales
Figures,” January 17, 2002, available at:
[http://ce.org/market_overview/market_overview_newsroom.asp?area=21]
CRS-11
matter.36 Under the “must carry” provisions of the Cable Television Consumer
Protection and Competition Act of 1992, cable TV providers are required to transmit
local analog programs to their customers. This decision was based on the reasoning
that since cable TV has a predominant position in the market, “without mandatory
carriage provisions, the economic viability of local broadcast television and its ability
to produce quality local programming would be jeopardized.”37
The broadcasters (primarily the smaller networks and independent stations,
represented by the Association of Local Television Stations, but also the National
Association of Broadcasters) believe that the same principles and conclusions of the
1992 Act should apply to DTV services, leading to mandatory carriage of the DTV
programming by cable operators. Broadcasters argue that because most Americans
(about 65%) receive their TV via cable, the carriage of DTV programming by cable
providers is essential for consumers to purchase DTV receivers.
The cable companies (led by the National Cable Television Association, NCTA)
oppose any “must carry” requirements for cable operator carriage of DTV
programming, arguing that it would be an unlawful taking of their property, and that
they should be able to decide what content they provide on their own networks.
NCTA points out that, unlike the broadcasters who were given free spectrum licenses
for DTV, cable operators must build their own infrastructure to be able to transmit
DTV signals. Cable operators say they will carry broadcasters’ DTV programming
as soon as consumer demand warrants it. Cable television services provide a finite
number of channels to consumers, and any mandate to provide DTV programming
would require cable companies to remove other non-broadcast channels. Many cable
operators are investing in the upgrades needed to provide DTV, although the video
transmission standards adopted by cable operators may not be the same as those used
by the broadcasters. This could mean that different home equipment may be
necessary for cable services than for over-the-air TV reception. In addition, HDTV
programming will require cable operators to build a more robust transmission (i.e.,
greater bandwidth) capability than is required by SDTV, and some cable operators
may want to offer SDTV but not HDTV services. The cable industry also contends
that mandating carriage of all DTV broadcast transmissions will financially devastate
many smaller cable operators.
On January 22, 2001, the FCC announced its adoption of rules for cable carriage
of digital TV signals. Most notably, the FCC ruling does not require cable systems
to simultaneously carry both the analog and digital signals (“dual carriage”) of local
TV stations. The FCC tentatively concluded that “such a requirement appears to
burden cable operators’ First Amendment interests more than is necessary to further
36FCC Notice of Proposed Rule Making on Carriage of Transmissions of Digital Television
Broadcast Stations, CS Docket No. 98-120, released July 10, 1998.
37Ibid., p. 5. Satellite television is also subject to must carry requirements. See CRS Report
RS20425, Satellite Television: Provisions of the Satellite Home Viewer Improvement Act
and the Launching Our Communities Access to Local Television Act, and Continuing Issues,
by Marcia S. Smith.
CRS-12
a substantial governmental interest.”38 A Further Notice of Proposed Rulemaking
(FNPRM) will continue to collect public comment and investigate this issue.39
While not approving a dual carriage mandate, the FCC did rule that a digital-
only TV station, whether commercial or non-commercial, can immediately assert its
right to carriage on a local cable system. Additionally, a TV station that returns its
analog spectrum and converts to digital operations must be carried by local cable
systems. Cable systems must carry “primary video,” defined as a “single
programming stream and other program-related content.” The FNPRM will define
the scope of “program-related content.”
Mandating Digital Tuners. Currently, less than one percent of American
households have purchased DTVs equipped or accompanied with digital tuners that
can receive digital broadcast signals. Some groups (for example, broadcasters)
advocate a government mandate that would require new televisions to contain built-
in digital tuners.
A study conducted by Arthur D. Little (and commissioned by the National
Association of Broadcasters and the Association of Maximum Service Television)
estimates that DTV set penetration would reach 75.5% by 2006, if the FCC were to
mandate that all new sets sold after January 1, 2004 have DTV reception capability.
Supporters of a mandate argue that requiring digital tuners would ensure a quicker
penetration of DTVs into American households, thereby giving digital content
providers and distributors greater incentive to produce and transmit digital content.
Consumer electronics manufacturers and many consumer advocates oppose a
digital tuner mandate, arguing that it would raise prices of television sets beyond the
means of many consumers.40 Opponents also dispute whether a digital tuner mandate
would effectively hasten the DTV transition, since 70% of households currently
receive their television via cable or satellite and therefore don’t require an over-the-
air digital reception capability. Finally, they argue that a digital tuner mandate would
constitute an inappropriate, unnecessary, and counterproductive government
intervention into an increasingly dynamic digital television marketplace.
Copyright Protection Technology. Many content providers (e.g. movie
studios and broadcast networks) are reluctant to provide high quality digital content
to DTV owners until they are assured that interoperability standards and technology
licensing agreements are in place to prevent consumers from making unauthorized
copies and Internet transmissions of digital content. In 1998, five consumer
electronics manufacturing companies – Hitachi, Intel, Matsushita, Sony, and Toshiba
– formed an entity called the Digital Transmission Licensing Administrator (DTLA,
also known as “5C”) to license a jointly developed Digital Transmission Content
38See: [http://www.fcc.gov/Bureaus/Cable/News_Releases/2001/nrcb0103.html]
39Federal Register, March 26, 2001 (Volume 66, Number 58), pp. 16523-16532.
40Estimated at an initial cost of $200 per set (see: April 6, 2001 Comments of the CEA to
the FCC, MM Docket No. 00-39). This figure is disputed by broadcasters (see: May 7,
2001 Comments of NAB/MSTV/ALTV to the FCC, MM Docket No. 00-39).
CRS-13
Protection (DTCP) technology. DTCP is designed to protect audiovisual and audio
content against unauthorized interception or retransmission in the digital home
environment.
On July 17, 2001, two major studios – Warner Bros. and Sony Pictures
Entertainment – announced a licensing agreement to adopt DTCP. The agreement
is designed to permit the studios to protect prerecorded media, pay-per-view, and
video-on-demand transmissions against unauthorized copying, and to protect all
content against unauthorized Internet retransmission, while assuring consumers’
ability to continue customary home recording of broadcast and subscription
programming.41
While DTCP protects content delivered to the home via cable or satellite, the
technology does not protect over-the-air broadcast content. Other major studios have
been reluctant to sign licensing agreements with DTLA until broadcast content can
also be protected. Additionally, broadcast networks (ABC, CBS, and Fox) have
opposed the 5C standard, arguing that the technology’s inability to encrypt over-the
-air broadcasts will cause high quality content to migrate toward cable and satellite
exclusively. A week after the 5C agreement with Sony Pictures and Warner Bros.
was announced, the five other major studios (Disney, Paramount, Fox, Universal, and
MGM) submitted a proposal to DTLA which would require digital broadcast content
to be encrypted with a “broadcast flag” preventing Internet distribution or
retransmission of digital content broadcast over-the-air. On June 3, 2002, a group of
engineers from the motion picture and technology industries42 released a detailed
“broadcast flag” proposal. While the proposal is strongly supported by the content
industry, the technology industry remains divided, with some companies supporting
and others opposing this particular proposal. Some consumer groups have also
expressed opposition. At the behest of House Committee on Energy & Commerce
Chairman Tauzin, continuing negotiations between the interested parties are
expected.
Another copyright protection issue of concern to content providers is what’s
commonly referred to as the “analog hole.” In the foreseeable future, many
consumers will continue to use analog televisions. In order to display the content
carried by digital signals, analog televisions will be equipped with a digital tuner (a
set-top box) which converts the signal from digital to analog. At this point, the
digital signal, even if content protected, is converted into an unprotected analog form
which could then be easily converted into a similarly unprotected digital form
subject to the unauthorized copying and Internet transmission the content providers
are seeking to prevent. Accepted copyright protection technologies to “plug” the
“analog hole” have not yet been developed, and will likely require further technology
development and negotiation involving the content providers and consumer
electronics manufacturers.
41DTLA Press Release, “DTLA, Sony Pictures Entertainment and Warner Bros. Announce
First Studio Licenses for Digital Home Network Technology,” July 17, 2001, see:
[http://www.dtcp.com/data/press/DTCP_PRESS_010717.pdf]
42The Broadcast Protection Discussion Group (BPDG), a subgroup of the Copy Protection
Technical Working Group (CPTWG).
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On February 28, 2002, the Senate Commerce, Science, and Transportation
Committee held a hearing examining the issue of digital content copyright protection
and its effect on the digital television transition and broadband deployment. The
hearing focused on draft legislation – the Security Systems Standards and
Certification Act (SSSCA) – which would set a deadline for the private sector to
agree on copyright protection standards. If the deadline is not met, the draft
legislation would mandate copyright protection features within digital consumer
electronic devices (such as personal computers). The embedded copyright protection
technology would prevent the unauthorized downloading of audio, video, or other
files. The draft legislation is strongly supported by movie studios and broadcasting
networks. It is strongly opposed by the consumer electronics industry and many in
the information technology (IT) community. The draft legislation was subsequently
introduced on March 21, 2002 by Senator Hollings as the Consumer Broadband and
Digital Television Promotion Act (S. 2048).
Cable/DTV Interoperability Standards. Interoperability standards between
digital televisions and cable systems are necessary in order for consumers to be able
to watch digital programming over their cable systems. Two separate entities – the
consumer electronics industry and the cable system operators – have embarked on an
often contentious process of determining the specific technical details of how DTV
devices will achieve compatibility and interoperability with cable systems. A key
issue is the extent to which embedded copyright protection technologies and
navigation features will reside within proprietary cable equipment, as opposed to
within consumer-purchased devices.
On February 22, 2000, the Consumer Electronics Association (CEA) and the
National Cable Television Association (NCTA) announced a voluntary agreement
on a set of technical requirements that permit the direct connection of digital
television receivers to cable television systems. However, consumer electronics
manufacturers and retailers have sharply disagreed with the cable industry over the
pace and details of the agreement’s implementation. On September 14, 2000, the
FCC adopted a Report and Order (FCC 00-342) establishing labeling definitions for
cable-ready DTV receivers, while also calling on the consumer electronics and cable
industry to finalize interoperability standards. The FCC directed the CEA and the
NCTA to file reports by November 30, 2000, and every six months thereafter until
October 2002, on the progress achieved toward implementing the February 2000
agreement. The reports reveal starkly differing perspectives on the status of
DTV/cable interoperability.
While citing “nominal progress” on the standards needed to ensure DTV/cable
compatibility, the CEA asserts that “at present, CEA members remain unable to
design or build any product with minimum competitive functionality for direct
operation on a cable system.”43 According to the CEA, the cable industry has failed
to provide technical specifications that would support a commercial market for
navigation devices (i.e. set top boxes) that would be competitive with cable
43Consumer Electronics Association, Written Ex Parte Presentation: PP Docket No. 00-67,
“Compatibility Between Cable Systems and Consumer Electronics Equipment,” November
6, 2001.
CRS-15
companies’ proprietary set-top boxes. On the other hand, the cable industry asserts
that it has complied with the FCC requirements on cable-DTV compatibility.
According to the NCTA, “there are no technical barriers to a manufacturer building
an integrated DTV model with the features described in the CEA/NCTA technical
agreement,” and that “cable operators have taken various measures to facilitate the
retail availability of set-top boxes.”44
The resolution of interoperability, as well as copyright standards issues, is
currently being negotiated by industry and encouraged by the FCC. Given that many
observers see the resolution of these issues as crucial to a timely and successful DTV
transition, it is possible that Congress may intervene at some point in the future, if
the many competing industries and interests cannot reach an agreement in a timely
manner.
Digital Conversion of Public Broadcasting Stations. The FCC has set
a deadline of May 1, 2003 for public television stations to convert to digital. Public
television consists of 177 licensees operating 354 stations nationwide. According
to the Public Broadcasting Service (PBS), as of May 2002, 75 PBS member stations
were offering digital broadcast services, covering approximately 55% of all U.S.
households.45 PBS estimates that about one third of public television stations are at
risk of not meeting the deadline,46 and would thus likely seek extensions from the
FCC.
Raising money for the digital conversion is a challenge for many public
television stations, especially those in small markets. According to the Association
of America’s Public Television Stations (APTS), the total nationwide cost of
conversion is $1.7 billion. State governments and local communities have provided
most of the funding to date, about $748 million.47 Public broadcasters are seeking
a substantial federal contribution ($699 million over five years) for digital
conversion. This funding would be used to pay for the new equipment and physical
infrastructure required for digital conversion (e.g. transmitters, translators, and
production equipment). Public stations are seeking this funding from the Public
Telecommunications Facilities Program (PTFP), a grant program administered by the
National Telecommunications and Information Administration (NTIA) at the
Department of Commerce.
The PTFP, which has provided matching grants for public broadcasting
equipment for over 35 years, has already begun funding digital conversion, awarding
$15.7 million for 44 television projects in FY1999 and $18 million for digital
television transition for 31 projects in FY2000. The FY2001 grants were announced
on October 1, 2001. The PTFP awarded $35 million for 52 digital conversion
44National Cable Television Association, “Compatibility Between Cable Systems and
Consumer Electronics Equipment,” PP Docket No. 00-67, October 31, 2001.
45For the latest count, see: [http://www.pbs.org/digitaltv/dtvtech/map.htm]
46Rutenberg, Jim, “A Digital Divide Threatens Public TV,” New York Times, April 15, 2001.
47Association of Public Television Stations, Issue: Digital Television Conversion Funds, at
http://www.apts.org/
CRS-16
projects. Funding for digital conversion represents 83% of the total FY2001 PTFP
grant awards (which includes funding other equipment needs not related to digital
conversion).
For FY2002, the Administration requested $43.46 million for PTFP
(approximately the same as appropriated for FY2001). The FY2002 Commerce-
State-Judiciary Appropriations (CJS) Act (P.L. 107-77/H.R. 2500/S. 1216) matches
the Administration’s request of $43.46 million.48 On November 20, 2001, NTIA
published in the Federal Register a notice soliciting applications for FY2002
funding.49 For FY2002, NTIA plans to award $25 million for new grants, and $16
million to fund additional phases of multi-year projects initially funded in FY2000
and FY2001. While the exact amount of PTFP funding for digital conversion in
FY2002 cannot be determined until NTIA makes its award decisions, it is likely that
a large portion of the total PTFP FY2002 appropriation will be channeled toward
digital conversion needs. For FY2003, the Administration is requesting $43.58
million for PTFP, virtually the same level appropriated by the FY2002 CJS Act.
Whereas PTFP grants go for equipment, federal funds from the Corporation for
Public Broadcasting (CPB) are supporting the development and distribution of digital
content. For FY2001, the Labor-HHS-Education Appropriation Act (P.L. 106-554)
appropriated $20 million to CPB for investment in DTV programming and
distribution, but required congressional authorization before it could be released.
The FY2001 Supplemental Appropriations Act (H.R. 2216, P.L. 107-20, signed July
24, 2001) contained language authorizing release of those funds to CPB. For
FY2002, the Administration requested an additional $20 million for CPB for the
purposes of digital conversion. Both House and Senate versions of the FY2002
Labor-HHS-Education appropriation bills (H.R. 3061, H.Rept. 107-229/S. 1536,
S.Rept. 107-84) sought to provide $25 million to CPB for digital conversion. The
House bill would provide the funding pending authorization legislation. The Labor-
HHS conference report (H.Rept. 107-342) provides $25 million for equipment and
facilities to enable public broadcasters to meet the statutory deadline for digital
conversion as proposed by the Senate. The conference agreement does not provide
these funds contingent upon authorization as proposed by the House. The bill was
signed into law (P.L. 107-116) on January 10, 2002.
Meanwhile, H.R. 4641 (Wireless Technology Investment and Digital Dividends
Act of 2002), introduced on May 2, 2002 by Rep. Markey, would provide increased
funding through the PTFP to assist digital conversion of public television stations.
Reclaiming the Analog TV Spectrum. The goal of the FCC and Congress
has always been to complete the transition to DTV as quickly as possible, so that
NTSC (analog) spectrum can be reclaimed and reallocated for other purposes. Some
of the NTSC spectrum will be auctioned for commercial wireless services, and some
48For FY2002, PTFP received an additional $8.25 million through the Emergency
Supplemental, P.L. 107-117 (bringing the total FY2002 PTFP appropriation to $51.7
million).
49See: [http://www.ntia.doc.gov/ptfp/pdfForms/pffp_noa_2002.pdf]
CRS-17
of it will be used for new public safety services (the FCC has already designated
some of the analog TV spectrum for public safety use).
The current target date for broadcasters to return analog spectrum is December
31, 2006. However, the Balanced Budget Act of 1997 allows a station to delay the
return of the analog spectrum if 15% of the television households in its market do not
subscribe to a multi-channel digital service and do not have digital television sets or
converters. Given the slower-than-expected pace that digital televisions have been
introduced into American homes, few observers believe that the goal of digital
televisions in 85% of American homes by 2006 will be reached.50 Thus, some
observers are concerned that if digital television does not sufficiently penetrate
American homes in the near future, the analog spectrum will not be reclaimed, and
broadcasters will keep both analog and digital television spectrum licenses
indefinitely, thereby preventing spectrum from being available for commercial
wireless services and public safety applications (for example, police and firefighter
radio communications).
One issue is the channel 60-69 spectrum, also referred to as the upper 700 MHz
band. The Budget Act of 1997 directed the FCC to reclaim channels 60-69 starting
in 2001 (the auction has subsequently been postponed to January 14, 2003). This
constitutes a total of 60 MHz of spectrum, consisting of 24 MHz for public safety
services and 36 MHz for commercial wireless services. However, many incumbent
television broadcasters are currently using the spectrum, and will continue using it
until at least December 31, 2006. License winners may not cause interference to
incumbent broadcasters, making it very difficult to use the spectrum for some time
in the more populated parts of the country. In an effort to encourage band-clearing,
the FCC is providing flexibility to broadcasters to facilitate the development of
voluntary band-clearing arrangements between incumbent broadcasters and new
commercial wireless interests. In particular, a broadcaster that gives up one of its
channels to accommodate band-clearing will be allowed to continue to operate its
analog channel and convert to DTV through December 31, 2005, with the option of
a deadline extension if less than 70% of the television households in its market
are capable of receiving DTV signals.51
Meanwhile, the FCC has adopted allocation and service rules for 48 MHz of
spectrum in the 698-746 MHz band (lower 700 MHz band) currently occupied by
television channels 52-59. The order reallocates the spectrum to fixed and mobile
services while retaining the existing broadcast allocation for both new broadcast
services and incumbent broadcast services during their transition to DTV. The FCC
will establish technical criteria designed to protect incumbent television operations
during the DTV transition period, and allow Low Power Television (LPTV) and TV
50Historically , consumer electronics products take many years to be adopted. Since its
introduction in 1953, color television took roughly 25 years to enter 85% of American
homes. The video cassette recorder (VCR) took 15 years to reach 85% of homes.
51For more information, see FCC Press Release, “FCC Provides Certain Additional
Flexibility to Facilitate Voluntary Clearing of Incumbent Broadcasters in the Upper 700
MHz Band,” Sept. 17, 2001. See:
[http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-216145A1.pdf]
CRS-18
translator stations to retain secondary status and to operate in the band after the
transition.52 The lower 700 MHz band auction is scheduled for June 19, 2002.
Previously, both the upper and lower 700 MHz band auctions were scheduled
for June 19, 2002. During the spring of 2002, with the June 19 auction date
approaching, many in the wireless industry, along with the Department of Commerce,
called on the FCC to postpone indefinitely the impending auctions. Proponents of
postponement cite the lack of a comprehensive spectrum policy and the difficulty
faced by commercial wireless companies in forming a business plan to use spectrum
which may remain encumbered by analog broadcasters for an uncertain period of
time. Opponents of postponement (e.g. those who want the June 19 auction to go
forward) include some smaller telecommunications companies who seek to license
and use frequencies in rural areas, and incumbent broadcasters who wish to pursue
financial arrangements with commercial wireless companies for voluntarily vacating
the 700 MHz band before the 2006 statutory deadline.
The Auction Reform Act of 2002 – H.R. 4560 (Tauzin)/S.2454(Ensign) –
would indefinitely postpone the scheduled June 19, 2002 auctions of the upper and
lower 700 MHz band. H.R. 4560 (H.Rept. 107-443) passed the House on May 7,
2002. Opposing legislation was introduced into the Senate by Senator Stevens. S.
2481, the Auction Timing Completion Act, would require auction of 700 MHz
spectrum in compliance with existing statutory deadlines and would give the FCC
discretion to set the auction date for all other spectrum auctions in the future. On
May 24, 2002, the FCC announced its decision to delay the upper 700 MHz band
auction (channels 60-69) until January 14, 2003. The lower 700 MHz band auction
(channels 52-59) will proceed as scheduled on June 19, 2002.
Meanwhile, some have urged Congress to require broadcasters to return the
analog spectrum on “a date certain.” Under this approach, spectrum would be freed
up for other uses. Legislation in the 107th Congress (H.R. 3397, the Homeland
Emergency Operations Response Act introduced by Rep. Harmon on December 4,
2001) would prohibit any delay in reassigning the 24 MHz for public safety purposes,
and require those frequencies to be operational by January 1, 2007. The Wireless
Technology Investment and Digital Dividends Act of 2002 (H.R. 4641), introduced
by Rep. Markey on May 2, 2002, requires the FCC to ensure that any rules necessary
to effectuate the timely transition to digital television are promulgated and completed
prior to making available 700 MHz bands to commercial wireless services.
The Bush Administration, in its FY2003 budget request, proposed an analog
spectrum lease fees as an incentive for broadcasters to surrender their analog
spectrum. Under this proposal, the FCC would establish an annual lease fee of $500
million which commercial broadcasters would begin paying in 2007. While similar
fees were proposed by the previous two Administrations, Congress has neither
implemented nor endorsed this approach.
52FCC Report and Order in the Matter of Reallocation and Service Rules for the 698-746
MHz Spectrum Band (Television Channels 52-59), GN Docket No. 01-74, FCC 01-364,
released January 18, 2002.
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Low Power TV. Low Power Television (LPTV) was created by the FCC in
1982 to serve rural areas and individual communities within larger urban areas.
LPTV stations may not exceed 3 kilowatts for VHF channels or 150 kilowatts for
UHF channels, and must not cause interference in the reception of full service
television stations. Currently, there are 2184 LPTV stations in the United States.
Concerns have arisen that many LPTV stations will lose their licenses in the
transition to DTV. While the FCC’s February 1998 modification to its table of
allotments for DTV licensees did provide for some LPTV licensees to be relocated
to new frequencies, many would still lose their licenses under FCC digital transition
plans. To provide some relief for LPTV licensees, the Community Broadcasters
Protection Act of 1999 was enacted as part of the Intellectual Property and
Communications Omnibus Reform Act of 1999 (P.L. 106-113). This law established
a “class A” status to qualifying LPTV licensees, giving them a measure of protection
from full-power TV stations in the transition to DTV. The Act directs that Class A
licensees be accorded primary status as television broadcasters, prescribes the criteria
LPTV stations must meet to be eligible for Class A status, and outlines the
interference protection Class A stations must provide to other television stations. To
implement the Act, in April 2000, the FCC established rules for Class A LPTV
licensees, to facilitate the acquisition of capital for LPTV stations to continue to
provide free, over-the-air programming to their communities.53
In accordance with the 1992 Cable Act (47 USC 534), cable television providers
are required to transmit to their audiences the locally-generated programming of all
full-power TV broadcasters that request carriage, a provision known as “must-carry”
(discussed earlier). Under the 1992 Act, some LPTV stations are entitled to “must-
carry”status if they meet certain criteria.54 The FCC’s April 2000 ruling did not
address the question of whether Class A licensees should be entitled to the “must-
carry” provision, as are full-power broadcast TV stations. A petition filed with the
FCC argued that Class A licenses should be granted the same “must-carry” status as
full-power broadcasters. The FCC subsequently ruled that Class A stations do not
have the same must carry rights as full service television stations.55
Fees for Ancillary or Supplemental Services. The Telecommunications
Act (P.L. 104-104) states that if a DTV licensee offers ancillary or supplemental
services for which they receive a subscription fee or other compensation, the FCC
“shall establish a program to assess and collect from the licensee...an annual fee or
other schedule or method of payment ...” The Act further states that the collection
of fees “shall be designed (i) to recover for the public a portion of the value of the
public spectrum resource made available for such commercial use, and (ii) to avoid
53FCC Report and Order in the Matter of Establishment of Class A Television Service, MM
Docket No. 00-10, FCC 00-115, released April 4, 2000.
54Those criteria (47 USC 534) include (among other requirements) that the community of
license of the LPTV station has a population not exceeding 35,000, that there is no full-
power TV station licensed to any community within the county or other political subdivision
(of a state) served by the cable system, and that the LPTV station provides the only news
coverage in its community of license.
55FCC Memorandum Opinion and Order on Reconsideration in the Matter of Establishment
of Class A Television Service, MM Docket No. 00-10, FCC 01-123, released April 13, 2001.
CRS-20
unjust enrichment through the method employed to permit such uses of that
resource.”56 Congress is overseeing the FCC’s actions regarding implementation of
this law. Public interest groups have also maintained pressure on the FCC to establish
a fee program, arguing that broadcasters should compensate the American people for
the use of the DTV spectrum, and that fees should be required out of fairness to those
who paid for spectrum at FCC auctions (such as licensees for personal
communications services).
In November 1998, the FCC adopted rules to require broadcasters to pay 5% of
their gross revenues from ancillary or supplementary uses of DTV spectrum for
which they charge subscription fees or other specified compensation.57 These
include subscription video, software distribution, data transmissions, teletext,
interactive materials, aural messages, paging services, and audio signals. Home
shopping channels and “infomercials” are not subject to fees because the FCC did not
consider them new services. The FCC has initiated a separate proceeding to
determine how much non-commercial stations can use the DTV spectrum for
revenue-generating services, and whether they should have to pay spectrum fees.
Some consumer groups say that the FCC’s spectrum fees are not heavy enough on
commercial broadcasters, arguing that most revenue will come from home shopping
and infomercials. They also warn that public broadcasters should not be over-
regulated, arguing that too heavy a burden placed on public broadcasters could impair
their long-term viability.
On October 11, 2002, the FCC ruled that noncommercial stations are required
to use their entire digital capacity primarily for nonprofit, noncommercial,
educational broadcast services. However, the FCC also ruled that the statutory
prohibition against advertising on noncommercial broadcasts does not apply to any
ancillary or supplementary services presented on an excess DTV channels that does
not constitute broadcasting. The FCC further ruled that public stations must pay a
fee of five percent of gross revenues generated by ancillary or supplementary services
provided on their DTV service.58
Public Interest Obligations of DTV Broadcasters. In March 1997,
President Clinton established an Advisory Committee on Public Interest Obligations
of DTV Broadcasters, to make recommendations on how DTV licensees should
compensate the public for their licenses. Committee members were selected from
government, the broadcasting industry, academia, and consumer interest
organizations. After a series of public meetings in 1997 and 1998, the Committee
submitted a set of recommendations to Vice President Gore in December 1998. The
recommendations consist of mostly voluntary actions by broadcasters, including
56The Budget Resolution of 1997 (H.Con.Res.84) included a provision requiring
broadcasters to pay a spectrum usage fee of $2 billion over five years. Broadcasters strongly
opposed that provision, however, and it was not included in the Budget Act of 1997.
57FCC Report and Order on Fees for Ancillary or Supplementary Use of Digital Television
Spectrum, MM Docket No. 97-247, released November 19, 1998.
58FCC Report and Order in the Matter of Ancillary or Supplementary Use of Digital
Television Capacity by Noncommercial Licensees, MM Docket no. 98-203, FCC 01-306,
released October 17, 2001.
CRS-21
providing five minutes per night of air time for candidate-centered discourse in the
30 days prior to an election. Some panel members wanted to recommend mandating
the free air time as well as other Committee proposals. The White House referred the
report to the FCC, which on December 15, 1999, opened a Notice of Inquiry (NOI)
proceeding to solicit public comment on public interest obligations of TV
broadcasters as they transition to DTV. After reviewing public comment, the FCC,
on September 14, 2000, issued a Notice of Proposed Rulemaking (NPRM) which
seeks to require television broadcasters (both digital and analog) to disclose on a
quarterly standardized form how they are serving the public interest.
Tower Siting. One obstacle to the broadcasters’ ability to offer DTV services
is the opposition from state and local communities over the building of new signal
transmission towers.59 In most cases, DTV antennas can be built on top of existing
towers used for analog TV broadcasting. If new towers are required, however, they
must be constructed before the stations can transmit DTV signals. In August 1997,
the FCC released an NPRM (FCC 97-182) to consider the preemption of state and
local zoning restrictions on the siting, placement, and construction of DTV
broadcasting facilities. In its January 18, 2001 Report and Order, the FCC concluded
that “while some stations are facing problems with tower availability and/or local
zoning issues, such problems do not seem to be widespread at this time.”60 The FCC
will continue to monitor the situation and intends to work with the involved parties
as problems arise.
Activities in the 107th Congress
Congressional committees are keenly monitoring the pace and progress of the
digital transition. On March 1, 2001, the Senate Committee on Commerce, Science,
and Transportation held a hearing on the transition to digital television.61 The House
Energy and Commerce Committee, Subcommittee on Telecommunications and the
Internet, held a hearing on March 15, 2001 entitled, “Digital Television: A Private
Sector Perspective on the Transition.”62 Further hearings are expected in 2002, and
a number of bills have been introduced into the 107th Congress relating in some way
to digital television (see Appendix).
On April 4, 2002, FCC Chairman Michael Powell submitted, to the Chairmen
of the House Energy and Commerce Committee and the Senate Commerce, Science,
and Transportation, a proposal for voluntary industry actions to speed the digital
television transition. The proposal, which is purely voluntary, is intended (in
Commissioner Powell’s words) “to provide an immediate spur to the transition by
giving consumers a reason to invest in digital technology today, while we continue
59For more information on DTV tower siting, see: [http://www.fcc.gov/mmb/prd/dtv/
60FCC Report and Order and Further Notice of Proposed Rulemaking In the Matter of
Review of the Commission’s Rules and Policies Affecting the Conversion to Digital
Television, MM Docket No. 00-39, FCC 01-24, p. 37.
61See: [http://commerce.senate.gov/issues/telco.htm#Hearings]
62See: [http://energycommerce.house.gov/107/hearings/03152001Hearing108/hearing.htm]
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to work on resolving the longer-term issues.”63 Specifically, the proposal calls on
industry to do the following:
! Broadcast networks – provide high-definition or other value added DTV
programming during at least 50% of their prime-time schedule, beginning
with the 2002-2003 season.
! Broadcast licensees – affiliates of top four networks in markets 1-100
broadcast a digital signal by January 1, 2003.
! Cable – systems with 750 MHz or higher carry digital signals of up to five
broadcast or other digital programming services by January 1, 2003.
! Direct Broadcast Satellite – carry signals of up to five digital programming
services by January 1, 2003.
! Equipment Manufacturers and Retailers – include over-the-air broadcast
tuners in new broadcast television receivers according to a specified timetable.
If industry can voluntarily meet some or all of the above goals, the pressure for
Congressional action in the face of looming deadlines may lesson. However, if
industry cannot take the voluntary steps necessary to accelerate the digital transition,
Congress and the FCC may take action to ensure a smoother and more timely
nationwide adoption of digital television. Public policy goals include: providing all
consumers with the benefits of a superior and versatile technology, ensuring a
dynamic and competitive marketplace, and increasing the availability of
radiofrequency spectrum for other uses. Options for congressional action include:
mandating digital tuners, mandating dual carriage of digital and analog programming,
accelerating the vacating of analog television spectrum, legislating a process whereby
interoperability standards and copyright protection technologies will be implemented,
and extending, strengthening, and/or altering the transition deadlines. Congressional
intervention regarding any of the above options is highly controversial and would
face significant opposition from one or more DTV stakeholders.
63For proposal and cover letters to Committees, see:
[http://www.fcc.gov/commissioners/powell/mkp_proposal_to_speed_dtv_transition.pdf]
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Appendix – Legislation in the 107th Congress Related to
Digital Television
H.R. 3397 (Harmon)
Homeland Emergency Operations Response Act. Prohibits any delay in
reassigning 24 MHz in the upper 700 MHz band (currently occupied by television
broadcasters) for public safety purposes, and requires those frequencies to be
operational by January 1, 2007. Introduced December 4, 2001; referred to
Committee on Energy & Commerce.
H.R. 3448 (Tauzin)
Public Health Security and Bioterrorism Response Act of 2001. Section 531
requires the FCC to allot a digital channel to any requesting full-power television
station that had an application pending for an analog television station construction
permit as of October 24, 1991, and which had its application granted after April 3,
1997. Passed by House December 12, 2001; passed by Senate December 20, 2001.
Conference report (H.Rept. 107-481) approved by House and Senate on May 22 and
May 23, respectively. Cleared for White House.
H.R. 4560 (Tauzin)
Auction Reform Act of 2002. Repeals statutory deadlines for spectrum auctions
of the 700 MHz band currently occupied by television broadcasters. Directs FCC to
indefinitely postpone scheduled June 2002 auctions of 700 MHz band. Introduced
April 24, 2002; referred to Committee on Energy & Commerce. Reported by
Committee (H.Rept. 107-443) May 7, 2002. Passed House on May 7, 2002.
H.R. 4641 (Markey)
Wireless Technology Investment and Digital Dividends Act of 2002. Requires
FCC to ensure that any rules necessary to effectuate the timely transition to digital
television are promulgated and completed prior to making available the bands of
frequencies at 747-762 and 777-792 MHz for advanced commercial mobile services
or other competitive wireless services. Also provides increased funding to assist
digital conversion of public television stations. Introduced May 2, 2002; referred to
Committee on Energy & Commerce.
S. 2048 (Hollings)
Consumer Broadband and Digital Television Promotion Act. Providing for
private sector development of technological copyright protection measures to be
implemented and enforced by federal regulations to protect digital content and
promote broadband as well as the transition to digital television. Introduced March
21, 2002; referred to Committee on Commerce, Science, and Transportation.
S. 2448 (Hollings)
Broadband Telecommunications Act of 2002. Title IV provides grants to public
broadcaster through the Department of Commerce for facility upgrades to transmit
digital television and to develop educational and public interest digital programming.
Introduced May 2, 2002; referred to Committee on Commerce, Science and
Transportation.
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S. 2454 (Ensign)
Auction Reform Act of 2002. Repeals statutory deadlines for spectrum auctions
of the 700 MHz band currently occupied by television broadcasters. Directs FCC to
indefinitely postpone scheduled June 2002 auctions of 700 MHz band. Introduced
May 2, 2002; referred to Committee on Commerce, Science, and Transportation.
S. 2481 (Stevens)
Auction Timing Completion Act. Requires auction of 700 MHz spectrum in
compliance with existing statutory deadlines and gives the FCC discretion to set the
auction date for all other spectrum auctions in the future. Introduced May 8, 2002;
referred to Committee on Commerce, Science, and Transportation.