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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Meanwhile, nonsimultaneous delivery of premium content may constitute a new application for pure peer-to-peer distribution. (It would be a great irony if the Internet's peer-to-peer functionality, once regarded as an unmitigated problem, could be harnessed to enhance the delivery of commercial content in ways that financially benefit content producers even as they increase consumer choice.)

And if it doesn't work out that way -- well, then the point is moot. If there is not enough bandwidth to allow a legal market in high-definition TV content, it follows that there isn't enough bandwidth to allow substantial piracy of it either.

Other Beneficiaries

The consumer electronics sector would also benefit: It would still get to sell high-quality computer monitors (essentially TVs without tuners) and might sell many more as audiences discovered alternative ways to access high-definition DTV content.

The information technology sector, remaining unencumbered by the government's technology mandates, would get to compete to develop secure content delivery systems. Provided the choice of secure delivery systems is left to the broadcaster, competition alone ought to be enough incentive for continuous innovation in these delivery components, driving down price while improving ease of use, quantity of features, and quality of playback. (It's instructive, in this connection, that consumer feedback about copy protection schemes revolutionized the software industry in the 1980s. The result was that most commercial software companies either abandoned copy protection or developed protection schemes, such as registration, that were less onerous for ordinary users.)

Broadcasters would be able to approach the shift to digital with a lot more flexibility. Local broadcasters in particular would gain. Not only would they be able to preserve their existing geographically based audiences (by not requiring them to abandon their old TVs and buy more expensive ones), but they would be able to reach new audiences around the world. Diversity of programming would be advanced, since an innovative local program would have the potential to reach a national or international audience. (This has already been the experience of radio stations that have echoed their programming to the Internet.) And reaching that larger audience would mean more advertising dollars for the station.

Consumers, too, would benefit, and not just because they wouldn't have to junk old TVs. They could still do fair-use time shifting (and other legal but unlicensed uses of commercial content) with their VCRs, TVs, TiVos, ReplayTVs, eyeTVs, WinTVs, and other digital and analog devices, including PC capture devices, as long as there was continued analog distribution. Perhaps more important, market competition among secure delivery systems might begin to offer similar fair-use features in the purely digital arena as well, especially once we've refueled the market for competition in the delivery-system sector.

Meanwhile, broadcasters could experiment with offering "must-see" TV at times convenient to audiences, or more than once. As far as the TV viewer is concerned, there would be an immediate improvement in convenience: Instead of waiting until Thursday night to see the new episode of Friends, you could click on the Friends Web link anytime you wanted during the week the current episode was showing.

That, of course, is just one possibility -- lots of experiments would be possible. Another approach would be to give viewers a choice between "free" (that is, advertising-supported) prime time content and subscription-based, ad-free versions of the same programming. In other words, a viewer could choose to treat a network more like NBC or more like HBO. Perhaps you even could choose on Monday night to receive Friends on Wednesday. Since live broadcasting is increasingly unimportant to many TV viewers, your advance choice would allow the program to be buffered either in your system or in nearby servers, to be displayed on command. Such choices might matter more to viewers than any high-quality images.

And Congress? In a nutshell, it would be able to promote a transition to DTV without imposing any new expenses on TV consumers or imperiling "free" broadcasting. In fact, it would offer an expanded set of models for how free broadcasting can profitably work. It would get its "loaned" spectrum back and would be able to auction most of it off, consistent with budgetary plans, while reallocating portions of the spectrum for public use.

In short, every major stakeholder bloc would benefit, and consumers would be inconvenienced minimally, if at all.

Harry's wand-waving plan could work, and there may be other plans that do even better. But we'll only be able to weigh these alternatives if we set ourselves free to find alternatives to the current deadlocks, and resolve to avoid policy solutions that are worse than the problems. Both Congress and the FCC have been known to rival even J.K. Rowling in keeping us frustrated while we wait to find out how the story turns out. Let's hope we don't have to wait until 2006 for the next installment. And let's insist on a happy ending.