Report No. DC-95-103 ACTION IN DOCKET CASE July 28, 1995 ADVANCED TELEVISION SYSTEMS AND THEIR IMPACT UPON THE EXISTING TELEVISION BROADCAST SERVICE (MM Docket No. 87-268) The FCC today took the next major step toward bringing digital television to the American public. The Commission issued a Notice of Proposed Rule Making to invite comment on a broad range of topics affected by the transition to digital broadcasting and to revisit decisions made in an earlier 1992 order when it was not apparent that digital technology would permit, among other things, multiple program streams to be delivered using a single 6 MHz channel. The NPRM recognizes the evolution of digital technology and advances made in the development of a standard for digital broadcasting of video, including high definition television (HDTV). Today's Notice identified four goals which will guide the on-going rule making process: þ To preserve our nation's free, universal broadcasting service. þ To foster an expeditious and orderly transition to digital technology which will allow the public to receive the benefits of digital television, including HDTV. þ To eventually recover spectrum in contiguous blocks from coast-to-coast for new, as yet undefined services, to allow the public the full benefit of its spectrum. þ To ensure that the spectrum will be used in a manner which best serves the public interest. The Commission reaffirmed its decision that current broadcast licensees be granted initial eligibility to shift from the existing analog broadcast technology to a more efficient digital service. In a departure from previous decisions, broadcasters would be allowed greater flexibility in responding to market demand by transmitting a mix of HDTV, standard definition (SDTV), and perhaps other services. - more - - 2 - The Commission requested comment on these and other issues: þ What limits should there be on use of the ATV channel, and should there be a minimum requirement for HDTV transmissions? þ How should broadcasters' public interest obligations be affected by the shift to digital broadcasting? þ How should the end of the transition be determined, and are there ways to shorten the transition that would preserve the interests of both broadcasters and consumers? þ Should a simulcast requirement be imposed upon licensees? þ What steps should be taken to optimize recovery of spectrum? þ Should small market stations receive special consideration? þ Can the special needs of non-commercial licensees be accommodated? þ Should mandatory receiver standards be adopted? þ How are existing laws, such as must carry, affected by the transition to digital broadcasting? In addition to exploring these critical transitional issues, the Commission also released a Notice of Inquiry. This NOI asks questions regarding how to best allocate future uses of recovered spectrum. It is expected that this Notice will be followed by two additional proceedings later this year. After receipt of a recommendation of a standard from the Commission's Advisory Committee on Advanced Television Services (ACATS), expected this November, one item will seek comment on the specific issues relevant to the endorsement of that standard. The other item will study the issues related to the allotment and assignment of channels during the transition period. These, in turn, would be followed by a final report and order sometime next year which will launch the Advanced Television System. Action by the Commission July 28, 1995 by Fourth Further Notice of Proposed Rule Making and Third Notice of Inquiry (FCC 95-315). Chairman Hundt, Commissioners Quello, Barrett, Ness and Chong. - FCC - News media contacts: Audrey Spivack and David Fiske at (202) 418-0500. Mass Media Bureau contact: Saul Shapiro at (202) 418-2600. Statement of Chairman Reed E. Hundt Advanced Television Systems and Their Impact Upon the Existing Television Broadcast Service MM Docket No. 87-268 July 28, 1995 This is an immensely important proceeding. It is now clear that the transition to digital broadcasting is different in kind, not just degree, from the transition from black and white to color. One could not have said that in 1992 when we issued our last order in this proceeding, which assumed that this venture was simply about whether broadcasters could provide a prettier, eye-popping, high definition picture. But one cannot avoid that now. The flexibility that the digital broadcast standard will allow -- the opportunity for broadcasters to provide not only high definition programs, but also multiple standard definition programs and other services -- makes it unavoidable that television broadcasting in the 21st century will be vastly different from television broadcasting of the 20th. So this proceeding marks the beginning of the end of the analog chapter of television's history, and the beginning of the beginning of the digital chapter. At this watershed, the Commission has an obligation to review all of the major policy issues that the transition to digital broadcasting presents. And the Notice of Proposed Rule Making that we adopt today quite appropriately seeks comment on all of those issues, especially including the question of what public interest obligations are appropriate for the digital broadcasting world. This proceeding gives the Commission an opportunity to ensure that free over the air television finally fulfills the vision of one of my predecessors, Chairman Paul Porter, who in 1945, at the dawn of the analog television era, expressed the hope that television would truly "inform, educate and entertain an entire nation." I look forward to the participation in this proceeding of everyone it affects -- representatives of industry as well as viewers, people on both sides of the television screen. I especially look forward to the participation of parents, educators and others who can speak for America's children, because it is our kids who stand the most to gain, and the most to lose, from our decisions in this proceeding. July 28, 1995 SEPARATE STATEMENT OF COMMISSIONER SUSAN NESS Re: Advanced Television Systems and Their Impact Upon the Existing Television Broadcast Service (MM Docket No. 87-268) Today we begin a crucial phase of our proceeding on advanced television (ATV). Our attention centers on the ramifications of permitting broadcasters to employ digital advanced television technology. I believe it essential that broadcasters have the ability to compete in the increasingly crowded digital multimedia marketplace. The video world has changed dramatically since the black-and-white NTSC standard was adopted in 1941 and modified for color in 1953. The broadcasters saw these changes coming when they petitioned to initiate this proceeding in 1987. They were right that the world was changing. The surprise is in how substantial those changes are. Today, cable delivers a multitude of channels, both broadcast and exclusively cable programming, to two-thirds of US households. Direct broadcast satellite (DBS) has trailblazed with its superior quality digital picture. Wireless cable is planning to convert to digital transmission. Local multipoint distribution service (LMDS) and video dialtone (VDT) promise to become additional providers of innovative programming services. (There are even experiments using the Internet as a program delivery medium.) Each of these systems has the potential also to offer high definition television with its significantly enhanced picture and compact disk-quality sound. Competitors to broadcasting can move into the digital multichannel world -- and offer HDTV -- without FCC action. For broadcasters to remain competitive, however, the FCC must act to provide them with the tools to compete. The necessary tools include temporary additional spectrum to enable digital conversion while continuing to serve the analog community; a market-responsive conversion schedule; a digital transmission standard that can dynamically deliver both HDTV and multiple streams of standard definition programming (or some form of future programming that may or may not resemble interactive media); and reasonable flexibility in product offerings to generate additional revenue to pay for the cost of digital and HDTV conversion. Today, and in upcoming proceedings, we propose such tools. For the American public, this new technology holds the promise of substantially more and, I hope, better quality programming. Broadcasting is the only video delivery system that is offered free of charge, universally available and, therefore, accessible to all, young or old, rich or poor. Advanced television assures the future viability of free over-the-air television. The American public also will continue to benefit from the public interest obligations required of broadcasters by law. These mandates include airing educational and informational children's programming, making time available for political debate, and preventing the broadcast of indecent or obscene programming. In return, broadcasters are not charged for use of the public's airwaves. With multiple channels and vastly improved quality through digitization, broadcasters will have ample resources to better fulfill these public obligations. The Commission and the public should demand no less. In addition to new service offerings, the American public will gain a significant amount of valuable spectrum for other uses. That spectrum will be reclaimed from the broadcasters in the next decade without cost to the taxpayer. Our proposal requires existing broadcasters to return their original channels once conversion to digital transmission is substantially completed. The obligation to return their original spectrum after a reasonable transition period is the underpinning of this proceeding, justifying the decision to allow incumbent broadcasters temporary access to an additional channel for the transition. If the obligation to return that channel is not carved in stone, the public interest in providing the tools for conversion to digital is seriously undermined. For broadcasters, the cost of the transition to ATV is considerable. During the temporary transition period, they will have to run two separate stations, one digital and one analog. They will have to replace much of their studio equipment and obtain a new transmitter and antenna. The cost to the American consumer is also considerable. For the first time, advances in television transmission will not be backward compatible. Our old TV sets won't receive the new signals. Consumers eventually will need to buy new television sets or decoder boxes or rent such equipment. If this is to succeed, consumers must be able to see the benefits of conversion; it will not be free. For both the broadcaster and the consumer, we seek a transition procedure couched in market realities, yet sensitive to the needs of the consumer. There is no template for dealing with flexible spectrum use in a digital world. Nor is there a template for determining how best to assure that the public reaps the benefit of this new digital marketplace. I am certain, however, that whatever regime we ultimately establish for transitioning broadcasters from analog to digital must assure that the original spectrum is returned and that broadcasters' public interest obligations are reaffirmed. In short, broadcasters must continue to play a leading role in the video marketplace as we move from analog to digital technology. The considerable value of free over-the-air broadcasting must be preserved -- and enhanced. Today's action sets the stage. July 28, 1995 SEPARATE STATEMENT OF COMMISSIONER RACHELLE CHONG Re: Advanced Television Systems and Their Impact Upon the Existing Television Broadcast Service, MM Docket No. 87-268 There are times when the pace of technology overtakes all else, including the pace of regulations. Advances in digital technology have brought us to a stage where it is prudent for the Commission to look at our past advanced television ("ATV") decisions with a fresh eye. We must ensure that our path is still true -- that is, it is the one that serves the public interest best. In the coming digital world, information -- whether it be data, voice or video - - will consist of digital bits flowing effortlessly across wired or wireless transmission pipelines. Digital encoding and transmission technology will give broadcasters the potential to send on a simultaneous basis not only video, but voice and data too. Thus, licensees of ATV channels can look forward to substantially increased technical capabilities due to this advanced technology. The public can look forward to a broad panoply of benefits from this advanced technology: (1) sharper, brighter and bigger pictures through high definition television ("HDTV"); (2) more channel options; and (3) and innovative services such as the ability to choose a different camera angle while watching a live sporting event. I am proud to be one of the facilitators bringing on this new digital age. We have posited four revised goals in this Fourth Further Notice: (1) preserving a free, universal broadcasting service; (2) fostering an expeditious and orderly transition to digital technology which would allow the public to receive the benefits of digital television while taking account of consumer investment in analog television sets; (3) managing the spectrum to permit the recovery of contiguous blocks of spectrum; and (4) ensuring that the spectrum -- both ATV channels and recovered channels now assigned to NTSC service -- will be used in a manner that best serves the public interest. I believe these are the right goals, and that we must balance them carefully as we continue to make the challenging transition. Preserving Free Universal Broadcasting I write separately to highlight my staunch belief that our overarching goal in this proceeding should be to ensure that we preserve a free, universal over-the-air television broadcasting service for Americans. I believe that free, over-the-air broadcasting is fundamental to the health of a democratic society. Broadcasters help safeguard freedom of speech and of the press. Broadcasters bring us a wide variety of entertainment, news, election updates, educational fare and other public service information. Television has become an integral part of the American life, giving us shared national experiences, inspiring and entertaining us, and sometimes disgusting and horrifying us. But always, television gives us ways to experience the broader world from the comfort of our own homes. In a digital world, there will be a continuing and vital role for broadcasters. The chararacteristic that separates commercial broadcasters from other communications industries is the fact that broadcasting is advertiser-supported and is freely available to anyone who owns a television set. Broadcasters have successfully built mass audiences and therefore wield significant influence among our citizenry. Advances in digital technology since our last major decisions in this docket have enabled broadcasters to consider new horizons beyond just a single high definition digital channel. The Grand Alliance has promised a transmission standard that may provide either one channel of HDTV, multiple streams of Standard Definition Television ("SDTV") services, or a host of other nonbroadcast services alone or in combination with broadcast services. This promise of flexibility has tremendous appeal. Broadcasters have voiced interest in providing new nonbroadcast services, utilizing their digital spectrum. Some believe that broadcasters should be completely unfettered and granted total flexibility as to use of its new digital channel, so long as, at a minimum, a single SDTV channel is delivered free to audiences. At this time, it is my view that the spectrum at issue in this proceeding should be used primarily for free, over-the-air broadcasting, consistent with the notion that broadcasters are public trustees of the airwaves. As such, they may use the public's spectrum so long as they provide in return free, over-the-air broadcasting and a variety of public service offerings. As they do now with their analog channels, I believe that broadcasters should be able to make some ancillary or concomitant uses of their new digital channels for nonbroadcast uses, so long as such uses do not interfere with or detract from the main broadcast services provided by the licensees. Should broadcasters desire greater flexibility than this, I welcome their input as to what extent and how this is consistent with their special status as broadcasters. Should a broadcaster desire to use its new ATV spectrum for a primary purpose other than free broadcast, I would ask whether such ATV spectrum ought to be given without charge to someone who is not committed to free, over-the-air broadcasting. In such a case, should such spectrum be returned to the government and relicensed to someone who is dedicated to the primary delivery of free broadcasting? Fostering an Expeditious and Orderly Transition to Digital I support our goal to foster an expeditious and orderly transition to digital broadcasting. While we naturally wish to make the transition in a speedy manner, I caution us not to disenfranchise those Americans who rely on their analog TV sets for over-the-air broadcast service. I hope that we can provide incentives for the industry (broadcasters, manufacturers, and programmers) to make the switch to digital TV more rapidly, while still safeguarding consumer interests. I am especially concerned about how to effectively assist small and noncommercial broadcasters who may face challenging financial issues in making the digital transition. I am keenly interested in ideas about how the Commission can help such broadcasters make the transition, while ensuring that the spectrum assigned to them during the transitional period does not lie fallow. Managing Spectrum to Recover Contiguous Blocks I also believe that we must be mindful of spectrum efficiency issues as we review our decisions to date. Spectrum is a hot commodity. I am particularly interested in hearing from commenters about whether we have modeled our transition to digital broadcasting in the most spectrally efficient way. Further, if we are able to "repack" the existing broadcasters into a smaller amount of overall spectrum at the end of this transition period and free up contiguous blocks of spectrum, how can we optimize use of this spectrum? Flexible Regulatory Frameworks Finally, I note how rapidly the pace of technology in this proceeding has made our last set of decisions in this docket potentially pass‚. This underscores the importance of this Commission putting in place a flexible framework of regulations. We must keep our eye on our goals to ensure they remain valid. We must not be afraid to put aside decisions that have been overtaken by advances in technology, and be forward looking to a new age in which we adapt proven successes like free, over- the-air broadcasting to new technologies like digital.