Testimony of Larry Irving
Assistant Secretary of Commerce for
Communications and Information
before the Senate Committee on Commerce, Science and Transportation
September 17, 1997
Good afternoon, Mr. Chairman and members of the Committee. Thank you for the opportunity to testify today. The National Telecommunications and Information Administration (NTIA) within the Department of Commerce is the principal adviser to the President on domestic and international telecommunications issues. As assistant secretary of NTIA, I am pleased to be here today to present the views of the Administration on the transition to digital television.
Digital television (DTV) marks a quantum leap forward in television technology and provides an astonishing array of possibilities for advancing national telecommunications goals. An important dividend of the transition from analog to digital television is that DTV technology results in more efficient use of the radio frequency spectrum. With DTV technology, the broadcast television industry's current requirement for 402 megahertz of spectrum will be reduced significantly to 252 megahertz, saving up to 150 megahertz of prime spectrum for other uses. DTV will also allow broadcasters to provide an expanded range of services to consumers, including high definition pictures, multiple program streams, as well as CD-quality audio programming and advanced digital services such as data transfer. In these ways, DTV can bring important benefits to millions of American consumers -- dramatically better picture quality and more viewing choices, advancement of American technological and economic strength, and more efficient use of the radio frequency spectrum.
The Telecommunications Act of 1996 makes clear that the public interest responsibilities of television broadcasters which have endured for more than 60 years still abide in the new DTV era. Public interest responsibilities are fulfilled in return for a broadcaster's exclusive use of the scarce public airwaves. Over these years, the contours of public interest obligations have been adjusted to reflect changes in economic, technological and social needs. The novel technological features of DTV gives cause to re-examine the public interest responsibilities of television broadcasters to determine whether the public interest lies in the retention, repeal or addition to these obligations.
The President has made his position very clear on the public interest benefits of free air time for political candidates and more educational programming for children. Furthermore, the President established the Advisory Committee on Public Interest Obligations of Digital Broadcasters by Executive Order 13038 on March 11, 1997. The Committee will provide advice to the Administration on the public interest obligations that digital broadcaster should assume. The President will appoint up to 15 members who represent diverse views from the commercial and noncommercial broadcasting industry, computer industries, producers, academic institutions, public interest organizations, and the advertising communities. The President has already announced the co-chairs of the Advisory Committee: Leslie Moonves, president of CBS Entertainment and one of America's most prominent and creative broadcasters; and Dr. Norman Ornstein, resident scholar at the American Enterprise Institute and one of America's best known political scientists. The President will announce the other members of the Committee in the near future. A report is expected from the group by mid-1998. NTIA will serve as the group's secretariat.
The Advisory Committee will be faced with a number of challenging issues ranging from free air time for political candidates to children's broadcasting and the application of public interest obligations in an HDTV or multiplexed digital world. These are difficult issues, but critical to defining the role of over-the-air broadcasting in the digital world. The Administration is hopeful that the Advisory Committee will work with broadcasters, industry and public interest groups to develop real and concrete public interest obligations that are fair and reasonable, but also recognize that broadcasters have been given unique access to a precious public asset.
Congress recognized the many benefits of DTV in the Telecommunications Act of 1996 which authorized the Federal Communications Commission to issue licenses for DTV services. While the Act gave the Commission discretion over whether to issue the licenses, it also imposed certain conditions on the assignment of licenses. The most significant features are that: (1) only incumbent television broadcasters are eligible to receive a 6 megahertz digital license; (2) licensees must return the "analog" spectrum currently used for broadcasting television signals; (3) digital broadcasters remain subject to public interest obligations on video programming as well as any new "ancillary and supplementary services" on the digital spectrum; and (4) the Commission must impose fees on subscription-based services to compensate the public for the value of the spectrum used for such commercial services. The Act otherwise provides digital broadcasters with substantial flexibility to develop their business plans for the delivery of DTV based on consumer demand.
In April of 1997, the Commission allocated the DTV spectrum and announced the timetables for commencement of DTV services and the return of the "analog" spectrum. The Administration strongly supported the Commission's timetables as critical to an orderly nationwide transition to digital television and the expedited return of "analog" spectrum which can be reallocated for maximum public benefit.
The Administration regrets that Congress did not adopt the Administration's proposed firm date of 2006 for the termination of analog broadcasting in the Balanced Budget Act of 1997. Lack of a firm date could unnecessarily delay the digital transition which will bring about new services, consumer benefits and new jobs. The new law requires the Commission to grant a waiver of the date certain for the return of the "analog" spectrum made available by more efficient digital technology in any market that meets a multi-faceted test. This waiver provision creates opportunities for broadcasters to manage their deployment of DTV in a way that would enable them to retain use of their current "analog" spectrum indefinitely. This, in turn, would limit the Commission's ability to make the "analog" frequencies available expeditiously for new communications services. Moreover, without a uniform return date, it will be virtually impossible for the Commission to "repack" the "analog" spectrum into nationwide contiguous blocks, which will also constrain the possible uses of this newly available spectrum. The Administration is also deeply concerned that the waiver provision will have a negative affect on the Commission's ability to make 24 megahertz of spectrum in broadcasting band (Channels 60 to 69) available to the public safety community to relieve the severe congestion that hobbles its ability to perform vital services.
The new law also waives the Commission's duopoly and newspaper-television cross-ownership rules to permit broadcasters in certain markets to bid on the returned "analog" spectrum, in the event that the Commission decides to allocate the spectrum for digital television broadcasting. The Administration is concerned about any such waiver because it may increase media concentration in these markets, lessening the number of diverse sources of information for consumers.
The Administration is also concerned about media reports regarding the disunity among the broadcasting industry and the equipment manufacturers over the nature of the services to be provided via digital television, and the impact it could have on the rapid rollout of DTV services to the American public. This issue has been highlighted by the mixed responses from policymakers and the industry to the recent announcements by ABC and Sinclair Broadcasting indicating that their business plans potentially call for providing multiple channels of standard definition programming and subscription-based services, rather than offering high definition television (HDTV).
While HDTV may have initially driven the development of new advanced television technologies and consumer products, digital technologies have continued to evolve so that broadcasters can provide a wide variety of additional services beneficial to the public. In recognition of this development, Congress has given broadcasters the flexibility to base their DTV plans on the marketplace rather than mandating a utilization format. This flexibility should be complemented with greater coordination between broadcasters and equipment manufacturers to ensure that the public ultimately benefits from the transition to DTV.
To the extent that broadcasters are now considering ways to offer multiple channels of programming and subscription-based services rather than some HDTV services, a whole host of tough policy questions arise that Congress, the Administration , and the Commission must address. For example, what new equipment beyond a television set will consumers require to receive these multiple channels or subscription services? Who pays for this equipment? If more than one broadcaster multiplexes, will a consumer have to have a set-top box for each local broadcaster's services? Will this equipment be compatible with existing consumer electronics equipment, including VCRs, cable and broadcast satellite services equipment? What fee amount and structure should the Commission impose on digital broadcasters' subscription-based and commercial services in order to compensate adequately the public for the value of the spectrum used to provide these services? What subscription-based or commercial services, if any, should public broadcasters be permitted to offer on their digital spectrum? How best can the Federal government assist public broadcasters to make the transition to digital television? Do the program access provisions of the 1992 Cable Act permit broadcasters in a multiplexed environment to have access to cable programming and superstations? Should the must carry rule survive in a multiplexed environment, and if so, for which services or programming and in what format should a cable operator be required to carry it? Should a cable operator be required to carry a broadcast competitor's subscription-based services under the must carry rules? These questions, and more, remain to be answered.
Mr. Chairman, and members of the Committee, again, I appreciate this opportunity to share these views with you and I look forward to working with you and the Committee to develop policies that will speed the digital broadcasting transition. I look forward to answering any questions you may have.