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An Overview of Digital TV
Gazeta Mercantil , São Paulo   May 15, 2006

Business concerns will prevail in choice of technology
Ricardo Tavares*

Worldwide, digital TV is in its infancy. The migration of analogue TV toward digital TV is occurring simultaneously in several countries. In each of them there are currently at least two common issues, both closely related.

First, television broadcasting companies use political influence to interfere with market competition, thereby limiting their competitors' access to the extra broadcasting spectrum created by digital efficiency. Second, in countries where broadcasters have imposed their approach to digital growth, digitalization is slower than in countries where governments have created broad policies to encourage competition.

In the USA, broadcasters began the digitalization debate with two central objectives: 1)  

To maintain broadcasters' free access to spectrum, while at the same time the telecommunications industry paid billions of dollars for spectrum for mobile telecommunications; (2) To protect themselves from the entrance of new competitors.

These goals are reflected in the priority given in the USA to high definition TV (HDTV), which requires the use of more spectrum. When the FCC (the telecommunications regulatory agency in the USA), met the demand for high definition, it included it in the technical standard ATSC and required, through regulation, that TV broadcasters implement the migration to digital TV within a rapid time frame.

The broadcasters withdrew, and the deadline for eliminating analogical transmission expired without the companies having implemented the new infrastructure or programming. New legislation introduced by the US Congress and signed by President Bush last February extended the final deadline to 2009 for the end of analogical transmission and earmarked U$1.5 billion to subsidize low income consumers' purchase of TVs. Will this put them back on track? We'll see.

England, on the other hand, used migration to digital TV (DVB standard) to bring more competitors into the paid-TV market, creating competition for BSky. Today England is the country with the most widespread use of digital TV in the world, with more than 55% of receptors digitalized.   Broadcasters entering the market who are interested in widening their subscriber base actually subsidize consumers' acquisition of digital TVs. Mobile digital TV is being tested and will be launched as soon as the business models are consolidated.

In Japan, the dominant TV broadcaster, NHK, is a state company which taxes the entire population to maintain its programming and systems. NHK is just beginning to develop networks and programs in the three principal urban areas of the country. "Contributions" -which are actually taxes in disguise--facilitate the transition to digitalization, but it is still very limited. Japanese industry typically creates technological models specific to the domestic market in order to avoid internal competition in the country. This model does not always allow for competitiveness globally. The Japanese business model for mobile TV is still not well defined, especially with regard to commercial relations among radio broadcasters and telecommunications operators.

In Brazil, the choice of the Japanese standard is defended by national broadcasters in technical terms. But certainly there are important business reasons that have not been made explicit. The DVB standard, for example, owes nothing technically to the Japanese standard, so Brazilian broadcasters' preference for the Japanese standard doesn't appear to be based on technology, but on business interests.

International experience should be taken into account at this decisive moment. There is questioning about the opinions of current owners of open-TV, which should be maintained.

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*President of TechPolis, international consulting firm in technology policies, based in San Diego, USA and São Paulo, Brazil.