Posted on July 7, 2008 by David Oxenford

The Digital Transition End Game in Smaller Markets - The Problem with LPTV

I recently attended the convention of the Montana Broadcasters Association, and just a few weeks before that I had been at an event sponsored by the Washington State Association of Broadcasters.  Talking with small market TV Broadcasters in those states, an issue that does not affect major television markets but which complicates the digital transition has become clear.  In smaller markets in many states, particularly in some of the western states where there are multiple geographically dispersed cities in many television markets, there is at least one network affiliate in many cities that is either an LPTV or TV translator station.   As we've written before, LPTV and translator stations are not required to convert to digital by the February 2009 digital conversion deadline.  Instead, these stations can continue to operate in analog until an as yet unspecified date in the future.  While these stations are allowed to convert to digital, many do not have the resources to do so.  Thus, many of these stations will continue to broadcast in analog after the February 18 transition deadline.  What makes the issue particularly problematic is that most  DTV converters do not allow the "pass through" of analog programming, i.e. once they are hooked up, television sets only receive digital signals and analog signals are effectively blocked.  This presents the potential of marketplace confusion for those viewers who do not receive their signals from cable or satellite, as they will be getting conflicting messages - being told to get a digital converter to pick up the full-power stations in a market as they convert to digital, but if the consumer buys the wrong converter box, they will not be able to receive other LPTV and translator stations in the same market.

The problem has been exaggerated as converter boxes with analog pass through have been delayed in reaching the marketplace.  When I bought converter boxes in Washington, DC early last month, neither of the two major electronics retailers had the converter boxes with analog pass-through available.  A well-reviewed box from EchoStar was supposed to hit stores last month, but it is in short supply.  I can find it on-line only at the Dish Network's (owned by EchoStar) own website.  Thus, for households who buy and connect most of the available digital converter boxes, suddenly their analog LPTV stations are gone.  In some of these smaller Western markets, that may mean the loss of one or more local network affiliates.

So why don't the LPTV station's just convert to digital?  One reason is cost.  In these small markets, the revenues are naturally much lower than those available to a large market TV station.  So the cost of the mandatory conversion of the full-power station with which the low power or translator is associated already strains the budget of the local station.  The costs to convert the LPTV or translator station are necessarily secondary.  And, I have been told, in many cases it runs several hundred thousand dollars to convert even an LPTV to digital, so it puts a strain on a local licensee to pay to make the transition at any time, much less as at the same time as the associated full powered station makes the required switch to digital.  And in some markets, stations may have multiple translators that need to be converted, and in some places, those translators are not even owned by the primary station but by poorly funded municipal authorities or voluntary TV associations formed to bring TV reception to rural areas.  Certainly, these organizations are hard-pressed to pay for a digital conversion of the translators they operate.  And the residents of these very rural areas in small western markets like those in Montana are the ones least likely to get cable or local-into-local satellite service. 

Thus, stations in these smaller markets have an even harder and more nuanced consumer education task ahead of them.  They must get viewers ready for the digital transition for the full-power stations in the market, but they must also let consumers know that only certain digital converter boxes will allow the reception of the translators and LPTV stations that are not making the conversion.  The Wilmington test (about which we wrote here) will provide one test of how this message will be received, as there is at least one LPTV station in that market that is not making the digital conversion in September.  But the real test as to how well the message gets out will be next February.  LPTV and translator  stations form an integral part of the television industry especially in western markets, and they cannot be abandoned.  Thus, the entire industry must join in efforts to recognize and ameliorate their issues to the extent possible, so that everyone is ready for next year's digital transition.
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Posted on May 28, 2008 by David Oxenford

What Will the FCC Learn from Wilmington - The Beginning of the End of the TV Digital Transition

With the Digital Television conversion date only eight and a half months away, the end game is beginning.  The FCC has announced that Wilmington, North Carolina will be a test market for the digital conversion, going all-digital on September 8 (or almost all digital, as the local NPR affiliate is not planning to turn off its analog signal, and one LPTV station will continue to operate in analog).  This will provide the FCC with an opportunity to determine what will really happen when the digital transition occurs in February of next year.  What will the FCC learn from this early test?  In the statement of Commissioner Copps at a recent town hall meeting held in Wilmington to address the digital conversion, some of the issues to be watched were set out.

Essentially, the Commissioner identified four different broad categories of issues that would be considered.  They are:

  • Technical issues - will the DTV signals provide adequate service to their communities?  Will the converter boxes be able to receive the signals with "rabbit ear" antennas, or will there be reception problems
  • Will consumers have received the word about the transition, or are there certain groups that will be particularly hard-hit by the transition, missing out on vital information about that transition?
  • How will various partnerships work?  The Commissioner identifies partnerships between various industry, government and community groups to distribute news about the transition, but there are also partnerships between stations and multi-channel video providers (cable and direct broadcast satellite) that need to be worked out
  • The unknown - what other issues that are not anticipated will arise?

As set forth below, many of these issues have been receiving extensive press coverage in recent weeks.

Last week, a Washington Post article addressed some of the practical problems with the digital conversion, identifying many of the problems that others have identified before, such as the fact that the digital signals are subject to breaking up when received on rabbit ears when there are people walking around a room, or airplanes or trucks passing near the house.  A similar article ran last month in the New York Times.  I have personally experienced the issue, having bought a digital converter box last weekend to hook up to an analog TV set.  Even though, from the second story of my house I can see some of the TV towers when there are no leaves on the trees, a TV on the first floor, which picked up digital signals clearly when there was no movement, would break up into pixels when there were people moving in the room.  A second floor TV with a better antenna had fewer issues.  But these problems will no doubt be faced by consumers as the transition occurs, and stations need to be prepared to address them with their viewers.  The Wilmington test will provide ideas on how bad the problems will be, and how great a consumer outcry will occur.

Last week, the New York Times also reported on a recent study that addressed the number of homes that were unprepared for the transition.  The report stated that 25 million homes have sets that won't work after the digital transition, and 10 million are completely unprepared for that transition.  While the Times report seemed to regard these figures as ominous, as television stations are only now beginning to really alert consumers about the transition, these figures may not be of as much concern as the article seems to imply.

Efforts are now being made by organizations across the country to educate the public about the transition.  Not only have the FCC rules requiring consumer education efforts by broadcasters, cable companies, and consumer electronics stores, about which we wrote here, been adopted, but voluntary efforts are underway around the country.  The NAB, the FCC, the consumer electronics companies, all sorts of community organizations and broadcasters themselves are conducting educational efforts all around the nation.  The FCC itself is conducting a seminar on converter box issues on June 19, and hosting another on May 28 sponsored by the NAB and DC's Congressional representative, Eleanor Holmes Norton.  Similar seminars are being conducted across the country.

Partnerships between broadcasters and multichannel video providers, to ensure that all are ready to "flip the switch" at the same time are also necessary.  And, as we wrote here, there is also a need for broadcasters to coordinate with each other to make sure that conversions which are contingent on each other are coordinated.  Industry organizations are working with stations to ensure that they work out these issues.

So, while there is much to do before the transition, the Wilmington experiment should help to clarify many of the issues that are to be resolved.  It will be interesting to see what is learned in Wilmington.  Whether it will be interesting to be in Wilmington when the conversion occurs remains to be seen.
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