Prisoners of Digital Television

A misadventure in high-tech regulatory policy -- and a Harry Potter Fix

Mike Godwin from the April 2003 issue

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In addition, efforts to control analog input-output interfaces, recorders, and display devices, in order to ensure the effectiveness of some marking schemes, may spell the end of plug-and-play interoperability among consumer electronics devices -- a convenience that every Radio Shack or Sears customer has come to expect.

The Harry Potter Fix

Is it possible to create a compromise that addresses the concerns of all these groups? Politically speaking, it might not be. As a matter of public policy, though, it might. I lay out that compromise here, but first, a warning and a request: Please don't hate me for suggesting that the FCC impose a new set of regulations when, in fact, we'd probably be better off if it sat this one out. I'm no fan of the commission, and remain appropriately skeptical of its expansive role in regulating broadcasting. But the fact is that the FCC is under immense pressure from Congress to further the DTV transition. It will almost certainly choose to act, and whatever it chooses to do will probably be big. If we can't stop the commission from acting at all, we should help it find a plan that, at worst, does no harm. At best -- if the stars line up and we hold our mouths just right -- it might actually solve the DTV problem with minimal costs to the rest of the us.

The Harry Potter fix begins with three basic steps.

First, Congress would keep its 2006 deadline for the return of extra spectrum but allow broadcasters to choose which spectrum they return. They could keep their old analog spectrum or their new digital spectrum, but they'd have to give back one or the other. (This step assumes for the sake of simplicity that spectrum is fungible. The actual implementation of the giveback will be somewhat more complicated due to technical allocation issues, but compared to the regulatory problems of the current state of affairs it would be relatively straightforward.)

Second, TV stations could continue analog broadcasting if they wished. Those that wanted to continue analog broadcasting but continue to build out to, or experiment with, digital broadcasting could choose to buy or license additional spectrum, more of which should be available once the "loaned" spectrum has been reclaimed by the Commission, acting as a proxy for the general public. Furthermore, broadcasters who continue to transmit digital signals would be allowed to choose between the 8VSB standard and any other standard that might work more effectively (e.g., the COFDM standard now prevalent in Europe).

Third, the FCC would require all national networks, as a condition of continuing to hold their licenses, to transmit their prime time and late-night programming via the Internet. Local broadcast licensees likewise would be required to Netcast their locally generated programming.

"Wait a minute," you may shout at this suggestion. Internet distribution of licensed creative content? Won't that worry copyright holders? Aren't such worries the very motivation for the technology mandates they keep proposing?

Sure they are. That's why the FCC must also allow content companies to insist that delivery of licensed content be done through one or more secure digital multimedia systems, such as RealPlayer, QuickTime Streaming Video, Windows Media Player, or various Palladium-based schemes soon to be deployed. All of these systems, plus a number of others, offer reasonably secure delivery that prevents all but the most determined viewers from making unauthorized copies of content. They are not entirely hack-proof, but that is also true (indeed, much more true) of the proposed marking schemes. In purely practical terms, they already offer more protection than such schemes, not least because they are less costly to implement. Of course, broadcasters may choose to deliver some of their own content in the clear, and there may be occasions when copyright holders want to authorize or even encourage broadcasters to deliver some of their content in that manner.

What are the advantages to this three-part plan?

First and foremost, it takes advantage of market forces that are already in play. Consider the advantage to content companies in the secure-delivery-system requirement. Market competition already exists in this sector, and there are several major players, including Real Networks, Microsoft, and Apple. Market-driven solutions can evolve more rapidly and respond more quickly to new copyright security problems than any government-imposed standard can. For antitrust reasons, the FCC would not want a regulation that let content licensors dictate which one of the competing systems must be used -- that would permit them to leverage their copyright interests into control over commerce in areas outside of their copyrights. It would nevertheless be possible for the FCC to allow content creators to insist that licensees select a system that meets specified technology-neutral minimum security standards.

Another advantage: Secure Internet delivery of high-quality content would expose more Americans to the quality of high-definition TV and other digital offerings. Recent statistics suggest that about 70 percent of American households have personal computers -- about the same share that has cable. Current PC monitors, including analog ones, are excellent DTV display devices. DTV-Internet offerings may spur demand for even better technologies.

It's true that even the fastest home broadband connections require many hours of download time to deliver digital television. Content companies typically acknowledge that their marking proposals are anticipatory measures. That is, they are addressing not a current problem but a prospective problem they believe will appear when Internet bandwidth is expanded.

But we also know that, for infringers at least, waiting hours for downloads to complete has not been considered a serious problem, even on the current Internet. In addition, it is widely believed (although hotly disputed by many telecom observers) that Internet bandwidth to the home will continue to increase over the coming years. Many early Napster users waited a long time for MP3 files to complete their downloading over 56-kilobyte modem connections. The same is now true for those who download movie and television files via broadband.

This points to a larger development: Live delivery of television is increasingly unimportant to Americans, a fact that helps explain the widespread use of VCRs, TiVo, and other devices for time shifting. Current Internet bandwidth rarely if ever supports live high-definition TV. But we may reasonably assume that a jumpstarted demand for broadband-delivered digital television will fund the kind of infrastructure build-out required to enable quick or even real-time high-definition TV delivery. And since the FCC is concerned with promoting high-definition TV broadcasting we may note here that consumers who've found that their appetites have been whetted for high-definition TV, and who want it faster than the Internet can deliver it, have an obvious solution that also fulfills the Commission's mandate. To wit, they can buy an high-definition TV set and (assuming broadcasters iron out those pesky 8VSB transmission problems) get their must-see TV live, 24 hours a day, from over-the-air broadcasting sources.