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H.R.___, Regarding the Transition to Digital Television
Subcommittee on Telecommunications and the Internet
Mr. Robert C. Wright
Introduction: THE DTV TRANSITION THROUGH
CONSUMERS' EYES Subcommittee Chairman Upton and Congressman
Markey, Full Committee Chairman Tauzin and Congressman Dingell, and Members of
the Subcommittee, thank you for giving me the opportunity to present NBC's
views on America's transition to digital television. I and other senior
NBC executives have been privileged to appear before this Subcommittee several
times over the past decade to discuss digital television service, and I welcome
the chance to provide a fresh look at where things stand and what remains to be
done to complete successfully the conversion to digital television. As the Members of this Subcommittee are all too
aware, the DTV transition is not moving forward as rapidly as many of us would
like. There are a number of unresolved issues, the complexity of which, either
from a legal, technical or business perspective, is daunting. May I
suggest with full appreciation for the enormous resources that have been and
continue to be devoted by so many to this effort, that we take a step back and
view this transition in very basic terms. First, what is our goal? The Congress and
especially this Subcommittee has been clear that we should strive to complete
the digital television conversion as quickly as possible, targeting the end of
2006. The staff discussion draft released last week reaffirms that
determination. That means DTV penetration must be accelerated and
ubiquitous. At NBC, that is our operating assumption. How do we achieve that objective? The
answer ultimately lies with the consumer. All of us here today have
promised a great deal to consumers about the wonders of the digital television
revolution. We must deliver on our promises. We must justify the
investments we are asking consumers to make to adopt digital television. What will it take for consumers to embrace
digital televisions? First, the consumer must get better content than
their analog television experience. Second, consumers should be able to
gain access to digital television in the same manner, and with the same ease,
that they have become accustomed to in the analog world, whether they receive
their television over-the-air or over cable or satellite. Third, consumers
should receive greater and certainly not less functionality in their consumer
electronics products, including display and recording devices. Finally,
the transition must be affordable. How do we fulfill these consumer-friendly
objectives? I suggest that we do not need to and should not reinvent the
wheel. The analog television model has served our nation extremely well.
We have nearly 100 percent analog television penetration. So let's take
a look, from the consumer's perspective, at the analog television experience,
what makes it as widely accepted as it is today, and then let's apply those
lessons to DTV. Today, a consumer can walk into a retailer such
as Circuit City and purchase a very affordable, decent-sized, analog television
set. There's never any question in the consumer's mind about certain
things - for instance, that the television will receive all over-the-air
signals and that it will be portable anywhere in the U.S. If that consumer
desires cable, he or she will be able to plug their cable ready television into
the cable, without a set-top box - again, a functionality that television will
have anywhere in the U.S., with any cable system to which they may subscribe.
They also will receive local broadcast signals, unencrypted, on a low-cost basic
tier, and they will receive those signals without degradation. It's simple.
It's easy. It's affordable. It's complete. Our analog
television experience today, as "low-tech" as it might be compared to the
wonders of digital technology, provides an invaluable model for how to drive
consumer acceptance and use of this new form of television technology. Let's deal with some specifics of how we
implement or, where necessary, adapt the analog model to the digital universe. HIGH QUALITY CONTENT Exciting, high quality content will drive
consumer acceptance of digital television. Certainly, high definition will
play an important role because of the dazzling video and audio clarity it offers
viewers. Digital technology, however, also creates the possibility
of new programming forms, utilizing accompanying data, graphics, and different
camera angles to educate and entertain the viewer and to make television a far
more interactive and informative experience than it is today. Broadcasters
need to explore and experiment with the full panoply of programming
opportunities to develop the optimum mix for their viewers. NBC and the other major broadcast networks are
ramping up our high definition programming. NBC has invested approximately
$100 million in facilities and infrastructure to make available high definition
programming. NBC, like CBS, broadcasts high definition in the 1080i
format, providing the highest resolution possible. NBC plans to increase
its high definition programming to 60 percent of its prime time and late night
lineup, plus special events, movies and sports. CBS and ABC already are
meeting or exceeding Chairman Powell's HDTV targets set forth in his April
2002 voluntary initiative. Fox promises other high-value content. Content owners simply will not continue to
release high definition and other high quality programming unless they have
confidence that the digital works they release, regardless of the distribution
method, are protected from illegal piracy, and especially from instantaneous,
unauthorized retransmission over the Internet. Although piracy of
copyrighted works has been a problem in the analog world, it is far more acute
with DTV where it is possible to make nearly unlimited copies of digital content
without degradation. NBC supports the use of the broadcast flag as an
acceptable means, technically, for protecting over-the-air digital content.
But let's remember that the flag itself is just a data bit. To work as
it is intended, there must be an enforcement mechanism for digital television
receivers and other consumer electronics and computer equipment to recognize and
respect the broadcast flag when it is present. Encryption and/or
watermarking can and should also respect the traditional expectations of
consumers to record and otherwise use digital broadcast content for
noncommercial purposes within their digital networks. High Definition and Other High Quality Digital Programming Must Be Made Available to Viewers By Network Affiliates, Cable and Satellite Broadcast Affiliate Responsibilities If the broadcast networks' commitments to
provide HDTV and innovative multicast programming is to translate into a
revolutionary viewing experience for consumers, the digital broadcast signal -
in all its richness and variety - must reach consumers. NBC's owned and operated stations are leading
the way. A majority of them are transmitting full power digital broadcast
signals, and we expect that problems hindering the others, such as the siting
difficulties in New York following the September 11, 2001 terrorist attacks on
the World Trade Center, will be resolved within a year. Additionally, NBC
is focused on integrating our newly acquired Telemundo stations into our digital
plans. Within the broadcast world, however, tens of
millions of viewers will not be able to enjoy high definition programming unless
network affiliates pass through the HD signal. High definition is negated
if a network affiliate only retransmits the network feed in standard definition.
In that respect, I am very pleased that the Committee staff discussion draft
requires affiliates to pass through our high definition feeds without
degradation. Broadcasters must purchase the necessary equipment to do so.
Similarly, affiliates must be broadcasting at sufficiently high power so that
viewers who now receive a good over-the-air analog signal also can receive a
digital signal. It is not enough that a small subset of viewers living
close to a tower receive HDTV broadcasts. Suburban and rural consumers
also must realize those benefits. Cable and Satellite Carriage
A rapidly decreasing number of American TV
households are receiving broadcast programming over the air. Roughly 70
percent receive it over cable and perhaps another 10 to 15 percent receive it
over satellite. For those viewers whose primary television set in the home
is hooked up to cable or DBS, it is critical that they are able to view and use
all of the programming and data services broadcasters provide as part of their
DTV offerings. Although NBC's owned and operated stations, and
the vast majority of its affiliates, obtain cable carriage through
retransmission consent agreements, the FCC rules governing must carry are
important in establishing fundamental parameters for these agreements.
Again, the analog model for must carry codified in the 1992 Cable Act is an
excellent starting point. It is essential that the concept of digital must
carry encompass carriage of the entirety of the broadcast signal, including all
video, audio and data. Virtually every conceivable business model for
broadcaster utilization of digital technology envisions some multicasting - in
addition, in most instances, to HDTV. Multicasting increases diversity in
programming. It increases competition. It is good for consumers, who
will benefit from increased amounts of educational and information programming.
Similarly, broadcasters can use digital technology to offer data, providing such
"value-added" features as statistics, related articles or scholarly works
transmitted with digital programming. Cable consumers should have
guaranteed access to the full breadth of technological and information benefits
that DTV offers. Thanks to advances in digital compression, a cable
operator will be able to fulfill such a carriage obligation using approximately
half the capacity on its digital cable system that it currently uses to provide
carriage of an analog broadcast signal. Similarly, as in analog, it should be very clear
that cable and DBS operators should not degrade the HDTV broadcast signal as
they retransmit it to their subscribers. Again, the principle should be
clear: the viewer should receive the high definition signal the broadcaster
sends. Consumers Must Have Access to The Receiving Equipment They Need to View High Definition and Other High Quality Digital Programming. The final piece of the puzzle to assure consumer
satisfaction is the widespread availability of digital television receivers at
progressively more affordable price points. This equipment can range from
simple digital to analog converters to be used with existing analog television
sets, all the way to 65-inch fully featured, integrated DTV receivers. Just last month, the FCC took a very important
step in this direction by requiring consumer electronics manufacturers to
incorporate digital tuning capability in their television sets and VCRs on a
phased-in schedule to be completed by July 1, 2007. We join Congressman
Markey, who has urged the Congress and the FCC to adopt such a requirement for
the past five years, in applauding the FCC's decision. This will
expedite the DTV transition and is essential to those viewers receiving DTV
broadcasts over the air. But what of the viewer receiving DTV broadcasts
over cable? Today, approximately 50 percent of cable subscribers receive
their programming without a set-top box by simply plugging "cable-ready"
television sets in to the cable coming out of the wall. We must be able to
replicate that "plug and play" compatibility for digital television.
Again, the analog model applies. When a consumer seeking to purchase a
digital television receiver walks into a retail store like Circuit City and asks
the salesperson, "does it work with cable?", the salesperson must be able to
give a one-word, unequivocal answer: "Yes." Conclusion For the past 15 years, the Energy and Commerce
Committee and the Telecommunications Subcommittee, first under the leadership of
Chairmen Dingell and Markey and now under Chairmen Tauzin and Upton, have
provided constant and inspired leadership in developing advanced television
services. Last week's release of the staff discussion draft of omnibus
DTV legislation continues that honorable tradition. It addresses in some
fashion many of the points in my testimony. There is a placekeeper for
multicasting that I hope ultimately will be filled in consistent with my
testimony. NBC has concern about the 2006 "hard" deadline for cut-off
of analog transmissions that is proposed in the draft, because of its potential
to disenfranchise millions of consumers. Notwithstanding this reservation,
the draft legislation makes clear that there must be increased and accelerated
inter-industry cooperation to resolve all outstanding issues in the DTV
transition or Congress and the FCC will resolve them for us. NBC hears the
message, and is prepared to rededicate itself to accelerating the conversion to
digital television. The way to get there is to look at the challenges
through the eyes of consumers, building upon the analog model that has served
our nation so well. Consumers must get something not just somewhat better
than what they currently have, but rather something that lives up to what
they've been promised: a revolutionary improvement - in terms of quality,
flexibility and diversity - in their television experience. It is time
to get the job done, but as importantly, we must get the job done right. I welcome any questions that you may have.
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