COMPANIES TELL FCC THEY'RE ON TRACK WITH DIGITAL TRANSITION

Perhaps most strikingly, Fox reluctantly said it planned to transmit at least 50% of its prime-time schedule in HDTV by the 2004-2005 TV season. Fox, owned by News Corp., was the last of the 4 major networks to make such a commitment, having long complained that it wouldn’t move toward HDTV unless potential piracy problems were solved first.

FCC Chmn. Powell said he was pleased Fox had joined the other networks by committing to HD programming: “I've often said that content is the engine that will drive the DTV transition forward. This announcement is the latest indication that the transition is beginning to shift into overdrive.”

News Corp. Pres. Peter Chernin, in a letter to Ferree, said the company hoped to begin transmitting before the 2004 season but said that depended on the speed with which it could replace equipment at the network and the stations it owned, the time it took affiliates to replace their equipment and News Corp.’s ability to reach agreements from show producers. However, Chernin tempered his response by saying he hoped the FCC would act quickly to institute the broadcast flag solution News Corp. helped to develop. Chernin called the flag “absolutely critical” to the transition. “My only hesitation in making this announcement [about HDTV in prime time] is the fact that, as of today, free over-the-air digital broadcast television is still unprotected from unauthorized redistribution outside the home, which poses a piracy risk that, as technology advances, will threaten the very existence of free commercial television,” Chernin wrote.

Chernin also said News Corp. was working with Time Warner Cable to provide its cable systems with high- definition telecasts of their hometown NBA, NHL and baseball games starting as soon as the fall. The company hopes to reach agreements with other cable MSOs soon, he said, and News Corp. is continuing high-definition, video-on-demand trials with Cablevision and Comcast for some of the company’s channels. Fox has been experimenting with other new digital programming services, including data broadcasting, Chernin said, but so far none “constitute a viable business for our network and affiliates.” Fox plans to begin airing promotional ads about HDTV in the fall and would like to partner with a CE manufacturer on a promotional campaign to encourage the public to buy DTV sets, Chernin said.

Comcast said it calculated that it and the companies from which it had bought systems would have invested $39 billion in 1996-2004 to upgrade cable systems to digital. HDTV now is available to 11.6 million (50%) of its customers in 20 major TV markets, Comcast said. The company said 78,000 customers had gotten set-top boxes needed to receive HDTV programming. Those customers don’t pay an additional fee for broadcast HDTV programming but must lease the box for a fee, about $5 per month depending on the market, and pay an installation fee, which also varies. Comcast said it was pursuing opportunities to sell cable service and equipment at retail outlets and had established relationships with Best Buy and/or Circuit City in some markets.

Zenith stressed it was doing its part to educate the public about digital TV by conducting “countless” demonstrations of HDTV technology, particularly in conjunction with big events, such as the Super Bowl and the NCAA Final Four. In a letter to Media Bureau Chief Kenneth Ferree, Zenith said it had participated in industry-wide events with the CEA, NAB, NCTA, ATSC and others. Zenith last year started a national ad campaign on the TV listing page in USA Today that highlighted “What’s on HDTV Tonight” and now is offering an online HDTV program guide. The zenith.com Web site helps consumers see which DTV stations’ signals are available in their area, what programming is available and equipment they may need. Zenith said its purchase materials also educated consumers, and it regularly sponsored HDTV broadcast programming, specifically on CBS and ABC.

Zenith also is working with (1) Public TV to produce a series of “HDTV Minute” programs. (2) A&E Networks on a road tour highlighting HDTV technology in 18 markets nationwide. (3) Comcast to promote its HDTV rollout in Chicago. What’s more, Zenith said, it’s offering a wide range of more affordable products, is planning to introduce an integrated HDTV set under $1,000 later this summer and is educating retail sales personnel. The company puts on seminars for broadcasters and broadcast equipment makers as well. “It is disappointing, however, that the broadcasters (with some exceptions) have not used their analog transmissions to educate their viewers about the DTV transition,” Zenith wrote.

An NAB spokesman, however, said “dozens and dozens” of broadcasters had used their airwaves and offered more than 12,000 NAB ads to educate people on DTV. NAB has spent millions of dollars to promote DTV, he said, and has created “watch parties” with Zenith in a number of markets. “I just think that’s a stretch to claim that broadcasters are not promoting digital television,” the spokesman said.

Zenith told Ferree it intended to meet the timetable for digital broadcast reception capability and to include an ATSC over-the-air tuner in all digital TV sets produced with an integrated QAM tuner for plug-&-play cable compatibility. Zenith said the cost to do so was “minuscule.” It said it was always working on improving the performance of its DTV receivers and expected continued gains. The majority of Zenith’s 2003 HDTV monitors, receivers and set-top boxes include digital connectors and the current plan is to include DVI/HDCP and 1,394/5C protected inputs on all integrated digital cable-ready plug-&-play HDTV receivers beginning in the 2004 model year, Zenith said. The plan is dependent, however, on the timing of what it hopes will be the FCC’s approval of the pact reached between the cable and CE industries on standards for plug-&-play products and services, it said.

Philips said that in 1998 it had co-sponsored a 43-city tour to promote and explain DTV to local broadcasters, retailers and local decision-makers. The company said it had been continually educating retail salespeople about DTV so they could answer consumers’ questions and had been active in many CEA DTV promotional campaigns around the country. Philips said it intended to meet or exceed the FCC’s deadlines on integrated ATSC reception in receivers. Like Zenith, Philips also took a jab at broadcasters, saying the availability of ATSC reception “greatly heightens the need for broadcasters to offer consumes greater amounts of high- quality HDTV programming, lest consumers balk when they tune to a DTV channel and find little to watch.” It said some broadcasters weren’t transmitting at full power, some affiliates weren’t passing through network feeds, some didn’t have digital carriage agreements with cable and broadcasters hadn’t promoted DTV on their analog channels. Philips urged the FCC to adopt the CE-cable plug-&-play agreement. It said it intended to integrate ATSC over-the-air reception capability and protected digital connections in “essentially all” TVs that were plug-&-play compatible.

DirecTV, saying it was a “passionate proponent” of HDTV, named 7 channels it would offer in HD. Three new channels -- ESPN HD, Discovery HD Theater and HDNet Movies -- will be added to the existing 4 -- HBO HD, Showtime HD, HDNet and the HD pay-per-view movie channel -- beginning July 1, it said. DirecTV also offers sports events in HD, including the Masters golf tournament, NBA games, NCAA March Madness basketball and NHL games. It said the 2003 NFL season would be carried in HD when available from the broadcast networks. Although the company is committed, the transition will create challenges from a “capacity utilization standpoint,” DirecTV said: “Capacity constraints have limited and will continue to limit DirecTV’s ability to offer standard format local broadcast channels, HD local broadcast channels and HD programming.” It said it hoped to acquire additional bandwidth and utilize its existing bandwidth more efficiently, “subject to satellite technology limitations and consumer demand.” The company said it had managed to provide those services without requiring larger or additional dish antennas for its customers because “DirecTV has placed all local broadcast stations within a designated market area (DMA) at a single orbital location.”