Digital by (Federal) Demand
The Federal Communications Commission has decided it can't wait for a digital television market to develop according to laws of supply and demand. It'll step in and mandate one instead.
The FCC's recent decision to require a digital tuner in every new TV set by 2007 does just that. Consumers in the years ahead will supposedly have no choice but to purchase some means of receiving digital signals versus the analog signals currently used for most broadcasts.
The FCC's aggressiveness in this matter reflects the federal government's determination to push broadcasting into the digital age. In 1997, Congress passed a law requiring that all broadcast signals be converted to digital by 2006. All stations were to have begun at least some digital broadcasting by May 1, 2002. Most missed that deadline.
Broadcasters balk at a hefty investment in digital if most viewers can't receive the programming. Hence the FCC's prod on the receiving end.
Higher prices for digital sets TV makers say the tuners will cost an extra $100 or more could cause a consumer backlash. But the FCC and broadcasters confidently assert increased availability and demand will soon shrink prices.
Why all the rush? First, lawmakers view the onset of digital TV as opening new economic realms, such as interactive TV. Second, and maybe most important, the federal government wants to get its hand on the big chunk of spectrum now used by analog signals. Digital signals use much less of the spectrum. The freed-up air space will be auctioned by the government, bringing in considerable revenue.
But will the lure of clearer pictures and interactive capabilities move the public to reinvest in television? The FCC's move is designed to give people little choice. Still, it's hardly certain that American consumers can simply be herded into fulfilling the government's digital dream.