Coming Soon (Maybe): Even More TV Channels

COMING SOON (MAYBE): EVEN MORE TV CHANNELS
[SOURCE: New York Times 6/11, AUTHOR: Richard Silkos]
As America careers toward its much-touted conversion to the all-digital transmission of television signals -- the digital switchover is now set in stone for February 2009 -- the debate over multicasting is looking like another shining example of the law of unintended consequences when technology comes into play. Multicasting, by the way, is the entertainment industry term for broadcasting several television channels in the space, or bandwidth, of a current analog broadcast signal. There are technical issues related to this, but the upshot is that with new digital frequencies and equipment, a local station can now beam roughly four digital channels on its signal where a single analog channel once existed. Or it can broadcast the current signal and sublet the extra spectrum, or space, for other purposes, like Internet access, infomercials or pay-TV services. Now, the first question one might rightly ask is this: Who cares about multicasting when there are already hundreds of cable channels available in millions of households, and a bewildering array of new download services and Webby ways of getting video material? Where television programming is concerned, there is no reason to believe that more is more. But there is a compelling argument to be made that multicasting is a public good because it uses a national resource -- the airwaves -- to deliver more and better free television into people's homes. While only 15 percent of America's households currently receive their television over the airwaves, rather than through cable or satellite, some cool new channels may help to quell a potential uproar over the fact that old analog televisions will not work with new digital signals. Bruce Leichtman of the Leichtman Research Group in Durham, N.H., estimates that when the digital switch is thrown in 2009, there will be about 75 million analog TV's nationwide that get their signals only from rabbit ears. Their owners will need to buy $50 converter boxes to tune in after that. Unfortunately for broadcasters -- and, arguably, for viewers -- that 15 percent of households is not a big-enough market to make these new niche channels economically viable. For the model to work, broadcasters also need to make the new channels available to people with cable and satellite services -- and they want the channels to be distributed free, in the way federal law currently obligates cable companies to carry their primary local channels. The law is known as the must-carry rule, and several groups, led by the National Association of Broadcasters, are lobbying for what they call the digital must-carry rule: that all their broadcast signals, including whatever new digital multicast channels they cook up, should be included, free, on the basic cable lineup. There are several arguments for this. One of the most sensible is that local broadcasters have had to invest small fortunes in equipment to convert to digital broadcasting at Washington's behest, and that this is a way for them to recoup their costs.
http://www.nytimes.com/2006/06/11/business/yourmoney/11frenzy.html
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