Overview of This Week’s Report: “Transition to Digital TV”

Wilmington, N.C., may rank 135th among the nation’s television markets, but it will be getting outsized attention in September when the city’s four full-power TV stations become the first in the country to pull the plug on traditional broadcasting and go all-digital.

The vast majority of viewers in the Cape Fear coastal region will hardly notice when the four stations stop sending out signals composed of analog, or continuous, electromagnetic waves at noon on Sept. 8 and begin transmitting only in digital “bits” – ones and zeroes. But local broadcasters and cable systems, electronics dealers and federal communications policymakers are working hard to make sure that viewers with older TV sets and no cable or satellite service know what to do to make sure the screens on their non-digital sets do not suddenly go dark.

The Federal Communications Commission (FCC) picked Wilmington as the guinea pig for the much-ballyhooed, long-delayed switch to digital television now scheduled nationwide for 11:59 p.m. on Feb. 17, 2009. The change holds the promise – already being realized in many markets – of clearer pictures, better sound and more programming.

The change also moves TV stations from a coveted part of the electromagnetic spectrum to a smaller band, freeing considerable airspace for wireless communications and public safety. The federal government’s auction for a major portion of the released spectrum in March fetched more than $19 billion, mostly from established wireless carriers (mainly Verizon and AT&T) with yet-to-be-unveiled plans for a new generation of broadband communications services.

Broadcasters, however, have faced and are still facing a host of operational problems in getting ready for the change – along with a price tag put at more than $5 billion for technological and operational upgrades. Some of those costs are for equipment and studio improvements needed for high-definition television (HDTV), the high-resolution video technology that – because of the extra bandwidth required – is impractical to broadcast on analog.

The estimated 15 million to 21 million consumers without digital TVs or cable or satellite service – around 15 percent of TV households – are also facing a modest cost. Most will have to buy a converter box to change the over-the-air digital signal to an analog signal compatible with their older set. The converter boxes retail for around $50 to $70, but the federal government is offering coupons worth $40 toward the purchase price.

“It’s a massive undertaking,” says Kathleen Abernathy, a former FCC commissioner who now practices communications law in Washington.

FCC Chairman Kevin J. Martin calls the transition “a historic moment” while also stressing the “daunting” nature of the change. Testifying before the Senate Commerce Committee on April 8, Martin said the commission had completed new channel assignments for TV stations and is monitoring construction of post-transition facilities. He also cited surveys showing heightened consumer awareness of the transition, but with some number – anywhere from 20 percent to 35 percent of Americans – still uninformed about the change. “We still have more work to do,” Martin said.

For their part, broadcasters are also generally upbeat about preparations for the Feb. 17 switch. “It’s going really well,” says Shermaze Ingram, senior director for media relations at the National Association of Broadcasters (NAB). More than 90 percent of stations nationwide are ready for the transition, Ingram says. NAB surveys found that consumer awareness more than doubled from 38 percent in early 2007 to 90 percent this spring.

Consumer groups are less confident about how the transition is going. “I don’t know nor does anyone else,” says Andrew Schwartzman, president of Media Access Project, a Washington-based public interest advocacy group. “I hope for the best. I’m more anxious than most. We’re really not going to know how good or how bad it is until next February.”

“Anybody in the industry will say things are going well,” says Philip Swann, who tracks the high-definition TV industry on his blog, TVPredictions.com. “When you look at the statistics and listen to the concerns expressed by various congressional leaders, you get a different story.”

Joel Kelsey, a policy analyst with Consumers Union, says the group’s survey found “many, many misconceptions” among TV viewers. “Awareness has significantly increased,” Kelsey says. “I’m not sure how much understanding has increased.”

In Wilmington, retailers are scrambling to stock store shelves with converter boxes following the joint announcement of the pilot project by FCC and local officials and local broadcasters on May 8. “It’s definitely increased sales,” says Al Pearce, manager of the Circuit City store in Wilmington. “Most people are trying to get converter boxes ahead of time so that they don’t have to deal with the rush after.”

“People call panicked that their TVs aren’t going to work,” says Larry Van Zomeren, a telephone sales operator at the local Best Buy outlet. “We have to tell them that if you have cable or satellite you’re covered, and if you bought a TV in the last four years you’re probably covered. Once people find that out, they usually calm down.”

For their part, Wilmington broadcasters say they are glad to have been asked to be a test market for the transition and eager to get on with it. “It’s time to get it done,” says Gary McNair, general manager of WECT Channel 6, the NBC affiliate.

“Quite frankly, I’ll be happy the sooner it’s over,” says Constance Knox, general manager of WILM Channel 10, the CBS affiliate. “I can be worried in January, or I can be worried in August. While the rest of the country is sweating bullets in January, we will have taken care of it.”

In addition to permitting better image and sound quality, the switch to digital will allow broadcasters to transmit multiple “streams” of programming – “multicasting” their existing, primary channel along with one to five others. Broadcasters in many markets are already multicasting. Many commercial stations have added 24/7 local weather channels, while public television stations are broadcasting additional educational, travel, nature and public affairs programming.

Wilmington broadcasters are moving slower in providing viewers with new programming. WECT has added a weather channel, but the other three stations – WILM, ABC affiliate WWAY and Fox affiliate WSFX – are not yet multicasting. WSFX tried an all-music channel, but dropped it because the channel “didn’t really produce the [hoped for] revenue,” according to General Manager Thom Postema.

The scheduled Sept. 8 switch in Wilmington has one distinctive problem: The change is due to occur at the height of the Atlantic Coast hurricane season. Broadcasters and local officials have two concerns. Any viewers who fail to make their older sets digital-ready by the scheduled date will be unable to receive emergency information from TV stations. And most consumers are unlikely to buy converter boxes for smaller, battery-operated TVs, which would be essential in the event of a power outage.

To guard against any communications outage, Mayor Bill Saffo says the FCC is promising to postpone the switch if the region faces an actual hurricane threat at the time. In addition, the public television station serving the region, WUNC in Chapel Hill, will continue broadcasting in analog for the time being.

Saffo says he is pleased so far with the FCC’s work on the transition, but he stresses that the agency “must invest the resources locally” to make the switch run smoothly. “We anticipate there will be problems,” he adds.

Nationally, a market-research firm is warning that digital TV signal coverage may be more limited in some areas than broadcasters and the FCC are anticipating – disadvantaging some viewers using antennas. Their solution, says the Los Angeles-based market-research firm Centris, may be to install costlier roof-top antennas or to shift to cable or satellite service. Broadcasters and consumer-electronics manufacturers dispute the study.

Meanwhile, the broadcast and cable industries are in a high-stakes standoff over cable systems’ obligation to carry local TV stations in the digital era. Broadcasters say the federal “must-carry” law, enacted in 1992, should be interpreted to require cable systems to carry all of a digital broadcaster’s channels, not just its existing, primary channel. “Why would we have a policy that discourages those additional channels from being carried on cable?” asks Donald Donovan, president of the Association for Maximum Service Television, an association of major broadcasters that has been a prime mover in advocating and advancing digital TV.

The cable industry says the issue should be left up to negotiations between local broadcasters and local cable systems. “We don’t believe that a government mandate is either necessary or called for,” says Bruce Dietz, a spokesman for the National Cable Television Association (NCTA).

So far, the FCC has sided with cable on the issue. With one exception, the commission also has declined so far to adopt recommendations from media-access advocates to expand public interest obligations on broadcasters on the new digital channels. In the one exception, the FCC voted in 2004 to extend the existing requirement for a minimum of three hours of children’s programming to each digital channel.

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