May 1998 Update

Michael McGregor & Thomas Spann

On page 109 we discussed concerns many engineers have about propagation problems associated with DTV. A new problem developed when WFAA-DT in Dallas put the first non-experimental VHF DTV station on the air. When engineers applied power to WFAA's digital transmitter operating on Channel 9, dozens of wireless heart monitors at Baylor University Medical Center (BUMC) went crazy. It seems those monitors also operate in the band of frequencies assigned to VHF Channel 9. The engineers pulled the digital signal off the air immediately and waited until BUMC could replace the monitoring equipment. No sooner had WFAA resumed digital transmissions, however, than calls came in from Dallas Methodist Hospital where, again, wireless monitors suffered massive interference. Under NTSC rules, no TV station in the Dallas area could be assigned to Channel 9 because there was a station on Channel 8; NTSC rules prohibit analog stations on adjacent channels being assigned to the same market. DTV rules, however, allow analog and digital stations in the same market to operate on adjacent channels. Makers of biomedical wireless monitors sold Dallas hospitals equipment that operated on frequencies "safe" from analog station interference, but apparently had not anticipated the effect of the FCC's DTV channel allocation policies. Broadcast engineers at WFAA were also unaware of the problem and warn that similar problems may appear in other markets as DTV stations begin operation on channels previously unused by broadcasters.

On page 138 and in previous updates we have noted the popularity of Panasonic's DVPRO digital tape format for electronic newsgathering (ENG). That trend continues with Panasonic reporting that more than 80 percent of stations in the top ten markets that have switched to a digital format for news acquisition have chosen DVCPRO.

Although almost everything related to DTV is subject to change, the four major TV networks have announced their plans for implementing DTV and HDTV. As noted in previous updates, CBS plans to offer HDTV using the 1080I (interlaced) format and SDTV (standard definition digital TV) using the 480I format at 60 frames per second. NBC also plans to use the 1080I format for HDTV but will use 480P (progressive) at 60 frames per second for SDTV. ABC says it will employ 720P for its HDTV programming and 480P at 60 frames per second for SDTV. Fox initially said it would offer no programming using a high definition format, but later announced it would offer some HDTV programming using the 720P format. Fox plans to use 480P at 30 frames per second for standard definition digital transmissions. As noted on page 142, the FCC's decision to allow broadcasters to select from among more than a dozen DTV formats continues to create uncertainty among broadcasters, equipment makers, and ultimately the viewing public.

As noted on page 189, the future of DBS remains uncertain, but the first quarter of 1998 shows continued growth for the service. Broadcasting & Cable (April 20, 1998) cites statistics provided by the Satellite Broadcasting and Communications Association showing DBS picked up almost a half million new subscribers during the first three months of the year, almost 200,000 of them in March alone. Figures for wireless cable were not as encouraging. The largest of the wireless cable companies, Heartland Wireless Communications Inc., still has fewer than 200,000 subscribers and the stock values of wireless cable firms remain low. The credit ratings of the wireless cable companies also continue to tumble as some firms find themselves unable to repay loans on time.

We noted at page 156 that the Telecommunications Act of 1996 spurred greater concentration of ownership in the electronic media by rescinding several ownership restrictions. That concentration continues. Broadcasting & Cable (April 6, 1998) reported that the nation's top 25 television group owners now own 36% of all the TV stations in the country. This amounts to 431 stations as compared to 379 stations owned by the top 25 owners one year ago. Recall that while there are no national limits on the number of television stations a company can own, the group is still limited to covering no more than 35% of U.S. television households. Fox Television, with 23 stations, has the highest household coverage of any group owner, covering 34.9 percent of television households. Sinclair Broadcast Group owns the most stations at 56.

Broadcasting & Cable (April 20, 1998) reports the concentration trend is continuing in cable television as well (p. 161). In 1994, the 10 largest multiple system operators (MSOs) controlled roughly 45% of cable subscribers. Today the top 10 MSOs control 74%. TCI is still the largest MSO, with subscribership totaling over 13.5 million. Total cable television subscribership reaches 64,800,000, and DBS subscribers now number around 8 million. By contrast, recent estimates indicate that approximately 62 million people in the United States use the Internet.

The Cabletelevision Advertising Bureau reports that ad revenues for basic cable networks in 1997 totaled $5.78 billion, a 22 percent increase over 1996 (compare to 1995, page 168). This amounts to 24.6 percent of all television advertising revenue for the year. For more information check out the Bureau's web pages at www.onetvworld.org.


And speaking of advertising, we mentioned in chapter 6 (page 177) that, after a long self-imposed ban, broadcasters began to air hard liquor commercials in 1996. Seagram recently announced that the company's liquor ads have aired on 107 television stations and 300 radio stations across the country.

The U.S. Department of Commerce issued a study in April indicating that the Information economy is growing twice as fast as the overall economy. The study also finds that Internet traffic doubles nearly every 100 days and Internet commerce could exceed $300 billion by 2002. The U.S. Post Office recently announced it would be joining this upward trend, as businesses will soon be able to buy postage over the Internet and print out stamps on their laser printers.

The migration of sports programming from broadcast to cable channels discussed in Section 9.3 continues, at least in the case of baseball. The number of games on broadcast stations continues to decline while the number available on cable increases. Broadcasting & Cable's figures show that TV stations will broadcast 1,656 baseball games this season while cable will offer more than 2,000. Broadcasters say the decline is caused by many factors, including the fact there are fewer independent TV stations now than several years ago. Independent stations can devote time to sports, but affiliates have obligations to carry network programming. Some observers also point to the never-increasing cost of broadcast rights for sports and say cable, with income from both advertising and subscriber fees, can outbid broadcasters. If the trend continues, concerns about cable "siphoning" sports programming (see page 59) from "free" broadcasting may be renewed.

"Sweeps" (see page 278) weeks are always times when the networks pull out the stops to boost ratings, and this month's (May) efforts include several events likely to draw large audiences. NBC began promoting the last network episode of Seinfeld in mid-April. When Seinfeld ends its network run on May 14 some media observers think it may attract half the viewing audience or more. Stations offering Seinfeld in syndication will also cash in by running a special hour-long episode called "The Boyfriend" during mid-May. Many will run the special on May 14, but not during the time slot when NBC airs the last network episode. CBS is counting on viewers wanting to see the last episode of Murphy Brown, which airs on May 18, ending a ten-season network run.

A three-year study on television violence (Section 11.7) funded by the National Cable Television Association concludes that the overall level of violence on broadcast and cable TV has held steady. The researchers criticized much of the violence on television because it is sometimes glamorized and conveys the notion that violence causes little suffering.

With the impending move to digital broadcasting, much discussion among policy makers has focused on new public interest (p. 333) obligations for digital television stations. To fend off additional government requirements, the National Association of Broadcasters recently announced that United States broadcasters provided $6.8 billion worth of public service in the last year. This figure includes $4.6 billion as the value of public service announcements donated by broadcasters, $2.1 billion raised by broadcasters for charities, and $148.4 million worth of free air time for debates, candidate forums, and political conventions. For more information about the NAB's study, see www.nab.org/issues/.

The FCC's equal employment opportunity rules (p. 340, 181) were struck down by the U.S. Court of Appeals for the District of Columbia Circuit. The court ruled that the FCC had not proven the regulations served the public interest. At the time the FCC adopted the rules in 1968, less than 10% of broadcast employees were minorities. Today the figure is nearly 20%. When the rules were adopted less than 25% of all broadcast employees were women and today the figure is over 40%. Many commentators suggest the rules helped stimulate the growth in minority and female employment in the business.

We noted on page 351 that the FCC intended to auction spectrum for a new terrestrial microwave service, local multipoint distribution service (LMDS). The auctions were conducted in March and netted the government nearly $580 million.

Radio broadcasters and those they call "pirates" made news at the annual convention of the National Association of Broadcasters last month. Broadcasters are increasingly concerned about the number of unlicensed radio stations appearing on the AM and FM bands. Broadcasters claim these operators pose an interference threat to legally licensed stations and call on the FCC to increase its enforcement efforts. The "micro broadcasters" claim there is a need for a low power radio service to provide "voices" for disenfranchised people who cannot compete with large corporations for full power radio licenses. The NAB is strongly opposed to the creation of such a service, but FCC Chairman William Kennard seems sympathetic to those who believe there is a need for greater diversity. However, Kennard assured broadcasters the FCC will do all it can to remove illegal operators from the air and would not create a new low power service that would undermine the technical integrity of the broadcast spectrum. Low power radio was hotly debated at the NAB convention and you can learn more about this and other convention topics at www.nab.org. The FCC addresses issues related to low power broadcast radio stations at www.fcc.gov/mmb/asd/lowpwr.html.