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[Terrestrial] [Cable] [Satellite]
Page 2: [The Players:] [TCI] [Liberty Media] [AT&T] [Microsoft] [AOL] [AOL-TW] [News Corp] [DirecTV] [Comcast] [Others]
In 1997 the US Federal Communications Commission (FCC) issued a tranche of licences for digital services. They came with stretching implementation targets. The FCC wanted the top four major US TV networks (ABC, CBS, NBC, and Fox) to deliver digital TV to the largest 10 US cities by the end of 1998, to all viewers within a few years, and to then withdraw the analogue system by 2006. Further, the US, along with Canada and Argentina, has adopted the high-definition TV (HTV) system based on the ATSC standards. It is estimated that each local TV station would have to invest on average $8m, with a total industry bill of $16Bn, and this has made the industry uneasy. It's not just a question of their own investment but also how quickly consumers will invest in new digital TV sets at $2,000 or more a piece. So far only 4,000 HDTV sets had been sold in the US by mid 1999. Set-top boxes at $300 are cheaper but don't offer the same picture quality. Either way, there is also the additional cost of changing video recorders and satellite dishes. As at November 1998, 42 TV stations were transmitting digital TV.
In October 1999, 300 of the US's 1,600 TV stations presented a petition to the FCC requesting a switch to the COFDM (effectively DVB-T) standard. Their basis was that trials had shown the ATSC picture quality when carried over a terrestrial signal to be poor, especially for portable and indoor reception. However, the powerful Consumer Manufacturer's Association did not back the petition and the FCC rejected the petition.
In April 2001, the FCC relaxed the rules on same media ownership and will review cross media ownership rules (see Controversy).
Despite its large land mass, cable is very strong in the US, particularly in the urban areas, but is primarily used for delivering TV channels. At the end of 2000 there were 59m cable subscribers. Increasingly power is vested in a few major players, some of whom are telephone companies (see AT&T below), some software companies (see Microsoft below) and others in media (Time Warner). Over the next 5 years the cable companies will invest billions of dollars in converting to high speed digital networks. As an example, Time Warner at the beginning of 2000 had only converted to digital 2m of its 13m subscribers. Once this infrastructure is developed, cable companies will wish to charge a premium for other companies for access, as well as push their own services. However, Internet providers like AOL, are lobbying the government for access rights so that they too can share in the expected rich revenue streams. Meanwhile satellite services have reduced cable's market share to 82% and AOL has acquired control of Time Warner for a cool $184bn.
As of mid 1999, satellite services reached 12m homes, all being digital. In late 1999 satellite received a boost when the US passed legislation giving satellite operators the right to re-broadcast local TV programmes. Up until now, consumers had to subscribe to terrestrial or cable to get local programming. However, the legislation says nothing about fair pricing for satellite operators. The major satellite broadcaster is DirecTV (see below).
Until mid 2000, there were rules that barred a company from owning 2 or more stations in the same market. However, no company is allowed to have more than 35% of the TV viewing audience. In April 2001 the rules were relaxed. See US Regulators relax same media ownership rules and to review cross media rules.
[The Players:] [TCI] [Liberty Media] [AT&T] [Microsoft] [AOL] [AOL-TW] [News Corp] [DirecTV] [Comcast] [Others]
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