Pbs Dtv Costs Looming

Television Digest with Consumer Electronics, June 22, 1998

Most PTV station executives now have strong comfort level with technical and programming issues of DTV, it was clear at PBS annual meeting in Miami Beach last week, but they're concerned about conversion cost. Prospect of FY 1999 DTV funding from Congress "is not a very rosy one," APTS Vp-Govt. Relations Mary Dewhirst said. PTV constantly is reminded by members about budget limits, she said, and some members of Congress don't view FY 1999 as critical for PTV industry's conversion to DTV since deadline for move isn't until FY 2003 and likelihood is great that "the 2003 date will slip."

Dewhirst dismissed recent proposal by Vice President Gore for DTV funding, saying $450-million proposal is "very unlikely" to be vehicle for payment. Current plan calls for 90% of any DTV funding appropriated to CPB to go directly to licensees for each transmitter as matching grants, with untapped funds held in interest-bearing account until station can raise necessary matching funds, APTS Policy & Legal Affairs Vp Marilyn Mohrman-Gillis said. Remaining 10% would be used for hardship cases, she said, but APTS board on June 12 supported increasing that portion to 20%.

In projection of total DTV federal funding that PTV should expect, CPB Exec. Vp Fred DeMarco said "realities... may only be $600 million," part of what he called "conservative estimate." Industry task force last fall anticipated, after including discounts from group buys and increased efficiencies, that total cost to system would be $1.7 billion. As to who would receive separate hardship grants, focus has been on rural and sole-service stations, but attendees had many definitions of hardship.

In response to question on DTV equipment buys, PBS Exec. Vp-COO Robert Ottenhoff said PBS is "ready to go as soon as stations are interested," but said he has been getting "conflicting sense" of station commitment. PBS Pres.-CEO Ervin Duggan said waiting for clear signal that stations are ready may involve missed opportunities. He suggested formation of "joint buying group" that stations could join voluntarily, emphasizing that any stations that felt saving money in group purchasing would "compromise their integrity" could opt out.

Mohrman-Gillis said cable must-carry is "going to be a challenge." Of particular concern to APTS, she said, is that Telecom Act explicitly states "ancillary" services don't apply to must-carry. Key for PTV, she said, is to convince Commission to define "ancillary" narrowly. WebTV Pres.-CEO Steven Perlman said cable operators are likely to be required to carry only video, not data, but data services, some not yet dreamed up, will be heart of DTV revolution. "Your only way to send data" without cable carriage "would be over-air," he said, "but 2/3 of U.S. homes are on cable." Such decision by FCC would make PTV "the digital backwater of the next century... don't lose that battle."