III. Comments
8. Technical Standards for DTV. We received a broad range of comments regarding the
Fifth Further Notice about whether and how to adopt technical standards for digital broadcast and
the proper role of government in the standard setting process. There is widespread agreement among
commenters that selection of a DTV standard should be analyzed in terms of network effects, that
is the indirect benefits that accrue to other DTV users when any particular user adopts DTV.
Broadcasters, computer interests and cable interests agree that broadcasting is a network product;
that issues surrounding selection of a DTV standard are influenced by network effects; and that in
order to evaluate the various alternatives, it is important to understand how network effects will
operate. While commenters agreed on a common analytical framework, they disagreed on the
relative severity of the startup, coordination and potential splintering problems facing digital
broadcast television. Startup refers to the situation where everyone would be better off adopting
DTV technology but no one has the incentive to move first. Coordination is the collaborative effort
by broadcasters, consumer equipment manufacturers, and program producers that is necessary to
introduce DTV. Splintering refers to the breakdown of the consensus or agreement to use the DTV
Standard.
9. Commenters also disagreed on the availability and effectiveness of market-based
mechanisms to solve these problems and to facilitate the goals and objectives established in this
proceeding. Broadcasters, equipment manufacturers and some consumer groups contend that DTV
has startup, coordination and splintering problems that are more severe than those of other network
industries and that a DTV standard adopted by the Commission is needed to overcome these
problems. In contrast, cable and computer interests contend that all sectors of the broadcast
industry have significant incentives to reach a consensus on transmission and reception standards
without a government mandate.
10. Broadcasters warn that a market-driven selection of a standard would result in barriers
to the introduction of DTV if different incompatible systems develop. Under a market-based
approach, for example, broadcasters in the same community could select different and incompatible
transmission systems so that consumers would only be able to obtain service from those television
stations using the system that is compatible with the receiver they have purchased and be denied
access to those using another transmission system. Broadcasters maintain that a government-
mandated standard is essential to ensure a universally available, advertiser-supported over-the-air
digital broadcast service in the future. In contrast, cable interests do not agree that there are unique
characteristics or public policy goals attendant to broadcast DTV, or that there would be a market
failure unless a mandatory transmission standard is adopted. They argue that the rationale for not
adopting transmission standards for DBS, PCS, MMDS, and DARS applies to DTV.
11. There is likewise a range of opinion on the merits of the ATSC DTV Standard.
Broadcasters, equipment manufacturers, the Grand Alliance, and ATSC urge the Commission to
adopt the complete ATSC DTV Standard. They contend that only a Commission-adopted standard
will supply the certainty needed by all parties to undertake the transition to DTV and that the ATSC
DTV Standard is the best DTV standard in the world. The Grand Alliance contends that "[t]he
system's all-digital layered architecture, its packetized data transport structure, its use of headers and
descriptors, its support of multiple picture formats and frame rates with a heavy emphasis on
progressive scan and square pixels, and its compliance with MPEG-2 international compression
and transport standards, give it unprecedented and unmatched interoperability with computers and
telecommunications." (Footnotes added.)
12. Computer interests, lead by Computer Industry Coalition on Advanced Television
Service ("CICATS"), urge us not to adopt a DTV standard but state that if we decide to the contrary
we should only mandate a minimum base-line standard based exclusively on progressive scanning
technology. The National Telecommunications and Information Administration ("NTIA") stresses
the need for a single mandatory DTV standard but recommends limiting a standard to only those
elements necessary to provide certainty, encourage adoption, ensure the opportunity for
technological developments, and promote evolution to an all-progressive scan system. NTIA
concludes that the best solution would be for interested parties to reach a consensus on disputed
issues.
13. While favoring a mandatory DTV standard, most commenting cinematographic and
imaging interests (with the significant exception of the Motion Picture Association of America,
Inc.) oppose adoption of the ATSC DTV Standard in its current form because of its inclusion of
interlaced scanning and other perceived deficiencies, particularly in its video and audio
specifications. MPAA, however, supports all aspects of the Standard including its use of both
interlaced and progressive scanning and its 16:9 aspect ratio. As noted above, the cable industry
opposes adoption of mandatory standards. The National Cable Television Association ("NCTA")
is not critical of the specific ATSC DTV Standard, but questions whether any standard should be
dictated by government. Nevertheless, it recognizes the need for performance standards for
controlling interference.
14. Public interest groups generally favor adoption of a single mandatory standard although
they differ on what that standard should be. For example, Consumer Federation of America and
Media Access Project ("CFA/MAP") believes that the public interest will be served if the
Commission adopts a digital television standard that 1) reduces the cost of digital receivers and
converters and 2) permits the convergence of video and computer technologies. In contrast,
National Consumers League urges adoption because "n the absence of a standard, consumers will
be confused. The marketplace will send a number of conflicting messages as new products will
diverge in purpose and application. Demand for HDTV and related products will not materialize,
and we will not experience the dramatic price reductions normally associated with consumer
electronics products. The market will simply not be able to function efficiently, and consumers will
literally pay the price." Citizens for HDTV contends that the Commission should adopt the
Standard for several reasons, which include "the unique 'open' and 'universal' nature of the Nation's
broadcasting system, as distinguished from other media; the appropriate role of government...in
adopting and mandating this Standard; the certainty and confidence [it] affords for investments by
consumers...; and the importance of the Standard to DTV compatibility with today's NTSC broadcast
system and the Commission's planned recapture of part of the TV bands after the transition is
completed."
