The end of analog television is at hand. Pundits have predicted the death of analog before, but such forecasts were couched in caveats. Now governments are setting firm dates and planning for life after analog, when vast amounts of bandwidth will become available for new uses and the broadcast TV scene will change.
Around the world, governments have begun the analog shutdown, and it will accelerate rapidly during the next five years. In Germany, Berlin killed off analog in 2003, Munich did it this year [see photo, “Getting Ready”], and the rest of the nation is scheduled to follow suit by 2010. In the United States, Congress likely will legislate January 2009 as the shutoff date. The end-of-analog date in France is 2010. In Japan, it’s 2011. The United Kingdom, which turned off analog broadcasts in one Welsh community this year as an experiment, is slated to phase out analog completely by the end of 2012.
After analog television is phased out, digital over-the-air transmission will be the only game in town for those receiving free TV signals through antennas.
If television comes to you by cable or satellite, you won’t notice a thing. Satellite television is already digital, and so is much of cable. But eventually you will reap diverse rewards that you might not even connect to changes in TV broadcasting: better cellphone reception, opportunities to download video to your cellphone [see illustration, “Playing Soon”], and mobile broadband Internet. And, in the United States, you might see a modest dip in the federal budget deficit when the government sells off 108 megahertz of the old analog broadcast spectrum for as much as US $50 billion, by some estimates.
If you do rely on broadcast television, you’ll notice the changes even sooner. The first one might be a little painful: you’ll need a new TV set or, at minimum, a new tuner costing at least $100 [see sidebar, “Countdown to the End”]. With a new high-definition set, you’ll see a big improvement in the TV picture. Most digital programming is broadcast in HD, which brings the crisp, detailed images so prized by sports fans (who are determined never to lose sight of the ball or puck) and feared by news anchors (who know that viewers can see every bit of makeup they plaster on). Along with those sharp pictures comes digital surround sound—if you add the speakers.
In some countries, mainly in Europe, broadcasters have no plans for terrestrial broadcast of high-definition television. Nevertheless, digital broadcasting should bring other potential benefits. Some broadcasters may send out multiple standard-definition channels, perhaps “narrowcasting” shows to niche audiences or providing supplementary material, such as an interactive experience, with regular shows.
In any massive technology change, particularly one with so much money at stake, there are winners and losers. I’ll get to those. But first, to understand why this enormously valuable part of the spectrum will soon be up for grabs in an unprecedented high-tech rush, we have to go back to the late 1990s.
The United States was the first country to broadcast digital TV, in 1998, and its mechanism was basically followed by other countries in their own systems. So the U.S. experience is illustrative.
In the late 1990s, the Federal Communications Commission (FCC) loaned each TV broadcaster a second channel in the existing broadcast bands, 54 through 806 MHz. Interspersed among the broadcast channels are some spectrum gaps that minimize interference between them. To further minimize interference, the FCC skipped certain channels in a geographic region; for example, if channel 4 is assigned in one metropolitan area, the nearest channel 3 broadcaster is in a different metropolitan area. The skipped channels are known as taboo channels.
Each channel occupies 6 MHz, and that hasn’t changed. Rather, because digital transmission is less interfering and also less subject to interference, and because digital channels operate at lower power levels than their analog counterparts, the FCC assigned second channels into analog taboo channels. The FCC deemed the modest increase in the overall level of interference acceptable during the transition.
At the time of the bandwidth loan, Congress set year-end 2006 as the date when analog service would officially cease and the extra channels would be “returned.” At that point, the digital channels, with their low interference characteristics, could be repacked into less bandwidth—a swath between 54 and 698 MHz. The move would free 108 MHz of spectrum—the upper end of the UHF band, or TV channels 52 to 69—for other uses. To put the potential value of that 108 MHz in perspective, note that the entire AM radio spectrum is less than 1.2 MHz. All local area networks using IEEE 802.11b and 802.11g, the most common forms of Wi-Fi, occupy just 83.5 MHz. Congress looked forward to a lucrative spectrum auction to help balance the federal budget.
The 2006 date, however, came with a caveat: on a market-by-market basis, at least 85 percent of households would have to own at least one television that could receive digital signals.
It has been clear for months that the 85 percent criterion will not be met next year, so the U.S. plan will be delayed [see sidebar, “Countdown to the End”]. But for how long? Now, many of the affected players—consumer electronics and computer manufacturers, along with communications and other companies interested in using the recaptured spectrum—do not want a “soft date.” Instead, they have been agitating for a hard one, with no further chance of delay.
Although Congress has yet to pass legislation to set such a date, both the House of Representatives and the Senate seemed in late summer 2005 to be converging on 1 January 2009.
Shortly before any hard date, the band rush will begin. Congress, eager for the money, is pushing the FCC to start the auctions as soon as possible. The Congressional Budget Office is advising that the auctions be delayed until after other, unrelated spectrum auctions are completed. Spreading them out will prevent a sudden glut of bandwidth, thus optimizing returns. Auction winners would require a year or two to gather the money they’d need to invest in developing their newly acquired spectrum segments. So for them, if bandwidth is to become available at the end of 2008, auctions in late 2006 or early 2007 would be ideal.
“Beachfront Spectrum” is what analysts are calling that soon-to-be-auctioned upper 108 MHz, because it is ideal for cellular services. Signals at those frequencies propagate farther and penetrate buildings better than signals in today’s cellular bands, which go up to 1.9 gigahertz. Best of all, cellphone system operators expect infrastructure costs to be reduced by 90 percent, because fewer cells will be required, given the longer distances signals will travel.
Thanks to such advantages, the cellular phone companies are likely to compete hard for this valuable bandwidth. Exactly what they would do with it is a closely guarded secret, at least until winning bidders are selected. Nevertheless, it’s not hard to imagine the winners launching third-generation services, including mobile video and wide-band Internet access, which would enable cellphone users to receive video programming and e-mail on the run.
The FCC’s huge menu of allowable uses for the new frequencies identifies “[f]lexible fixed, mobile, and broadcast uses, including mobile and other digital new broadcast operations; fixed and mobile wireless commercial services, as well as fixed and mobile wireless uses for private, internal radio needs. Could also include two-way interactive, cellular, and mobile television broadcasting services.”
Perhaps the best early indicators of what will happen with the freed-up bandwidth are recent events in Berlin—the first city to turn off analog television—and in the United States, where a couple of preemptive auctions gave developers access to segments of spectrum on the condition that they not interfere with broadcasters still using them.
The “Berlin Switch” is an intriguing novelty. It was possible because the region affected is relatively small, with 1.8 million households in the TV market, and because an overwhelming number of those households—all but 160 000—subscribe to cable or satellite television. Nonsubscribers each coughed up at least $200 to buy a set-top converter, and for less than $1 million, the government subsidized the purchase for families on welfare.
What the switch gave Berliners, mainly, was an increase in the number of broadcast stations—from 12 to 27. Multiplexing allows four digital channels to fit in the space previously allotted to a single analog channel. (This excludes HD broadcasts, because they require more bandwidth.) The switch also gave the government 35 MHz to use—or sell—for new services.
With more channels, viewers of broadcast television in Berlin have access to niche programming and channels previously available only to cable or satellite subscribers. Programming now includes Eurosport; Arte, with art movies, documentaries, poetry, and theater; Phoenix, with political news; Viva II, with pop culture for people in their 20s; and several new local channels.
In the United States, in 2001 and 2002, the FCC auctioned off four small slices of spectrum totaling 6 MHz in the 746- to 806-MHz range, the upper 700-MHz band, that had been allocated as “guard bands.” Along with the right to use the spectrum came tight rules to minimize interference with public-safety services. This RF real estate is intended for the rental market: the buyers will act as landlords, leasing the spectrum to third parties. The FCC packaged the spectrum in two pieces for 52 market areas, creating 104 licenses, which were auctioned for $540 million. The top three winners were Access Spectrum, Nextel, and Pegasus Communications.
Access Spectrum LLC, in Bethesda, Md., winner of 21 licenses, announced at the time that it had begun negotiating rental agreements. In addition, Access, formed in 2000, is likely to build private wireless networks for businesses in some of its bands.
Plans of the other winners are murkier. Nextel is using its 40 licenses as bargaining chips and recently agreed to return them to the FCC as part of a deal involving interference reduction in the 800-MHz band. Pegasus won 34 of the 104 licenses but has been quiet about its plans. The largest independent provider of the DirecTV satellite service, Pegasus is having financial problems, and some of its subsidiaries filed Chapter 11 bankruptcies in 2004.
Then, in 2002 and 2003, the FCC auctioned off 18 MHz between 698 and 746 MHz, which covers three UHF channels, 54, 55, and 59. Again the spectrum was packaged into geographical pieces, both to be attractive to buyers and to maximize returns. Channel 55 was sold in six regional chunks, while 54 and 59 were sold as a pair in 734 markets. Altogether the sales brought the U.S. government $145 million.
Qualcomm Inc., of San Diego, won the auction for the spectrum previously occupied by channel 55 in five of the six auctions. It then bought the rights for the sixth region from Aloha Partners LP, of Providence, R.I. Aloha was formed to provide wireless broadband service and has been a big player in the auctions so far.
Qualcomm intends to use its spectrum to send video and audio programming to cellphones, PDAs, and other portable devices nationwide. It hasn’t announced what it intends to broadcast, but the content could include hit TV shows, clips of sporting events, and movie trailers. The company calls its service MediaFLO (“Media” plus “Forward Link Only”). Qualcomm plans to store video in the handsets to supplement video streamed live; that way, it hopes to eliminate the dropouts endemic to cellphone reception. If a voice signal drops out temporarily, you can just say, “What?” Video signal dropouts, however, cause annoying freezes, jerks, or blanks in the picture, and would discourage users.
Qualcomm is developing MediaFLO as a way to promote CDMA cellphone technology, which it pioneered. CDMA is winning out over the TDMA standard (popular in the United States) and is emerging as a strong competitor to GSM (popular in Europe). Today, CDMA is used in 35 countries, including the United States and South Korea. Qualcomm plans to integrate MediaFLO into its chip sets and to offer the service through partnerships with cellphone operators. It may eventually spin it off as a separate company.
Technology alternatives to MediaFLO are available and could be used for competing services in spectrum bands yet to be auctioned. One example is a variant of the Digital Video Broadcasting standard widely adopted in Australia, Europe, India, and elsewhere. The variant, called DVB-H, provides TV broadcasts to handheld devices and, like MediaFLO, is being used in the 700-MHz band. In South Korea, yet another standard for TV broadcasting to handhelds is being deployed—Terrestrial Digital Multimedia Broadcasting, or T-DMB—and it may emerge as a competitor in the United States.
Have you ever found yourself on a train, in a park, or at a ball game wishing you could pay a bill you’d forgotten about, or send a quick message, or download a tune stuck in your mind? According to Aloha, there are enough people who want to be “always on” to support a nationwide mobile broadband Internet service. The company, which resold its channel 55 spectrum to Qualcomm, was the big victor in the 54/59 channel-pair auctions. Aloha won 125 out of the 734 regional auctions and increased its holdings by buying the other two big winners. Aloha claims it now has spectrum in 244 of the 734 licensed markets, covering 175 million potential customers, including 100 percent coverage in the nation’s 10 largest markets and 84 percent coverage in the top 40 markets.
Though not revealing which technologies it will deploy, Aloha did announce last year that it would launch a 2005 market trial of mobile broadband Internet access using Flash-OFDM (orthogonal frequency-division multiplexing). Developed by Flarion Technologies Inc., in Bedminster, N.J., Flash-OFDM is a spread-spectrum technology that uses the Internet Protocol. Signals jump quickly from frequency to frequency within a given channel in a seemingly random pattern generated by an algorithm. The resulting signal causes minimal interference with those in the same and neighboring channels and is itself not easily interfered with. Different base stations use different hopping patterns, further reducing interference and allowing the bandwidth to be used efficiently. The FCC recently granted Aloha permission to run a market test in Tucson, Ariz., presumably of Flash-OFDM.
Two auctions held so far accounted for just 24 MHz of the 108 MHz that will eventually be sold. Of the 84 MHz remaining, in 1997 the FCC reserved 24 MHz for public-safety communications, such as police and fire services—those located at four of today’s UHF TV channels, 63, 64, 68, and 69. Since the 9/11 attacks on the United States, Congress has been paying a lot of attention to the public-safety communications plan, originally with little fanfare. In fact, congressional eagerness to reallocate the swath of spectrum is the main impetus behind a drive to set a firm date for the transition to digital television. The Save Lives Act of 2005, introduced in the Senate in June, calls for expediting the reassignment of the spectrum for public-safety purposes and requires spectrum to be taken back from broadcasters by 1 January 2009.
Although Congress is driving the agenda to free portions of spectrum for public-safety use, local governments will decide how they will be used. Metropolitan-area governments, for example, would like to alleviate the congestion that plagues existing emergency services. They are concerned with voice and text transmission, already in use, and are looking to add wideband transmission of images. On-the-scene images can help emergency responders and their dispatchers. With broadband access to stored records, fire or police teams could review building plans and blueprints.
After the auctions held so far and the allocation for emergency services, 60 MHz of the bandwidth to be vacated by analog television remains to be sold [see illustration, “The FCC Auction Plan”]. This section, consisting of channels 52, 53, 56 to 58, 60 to 62, and 65 to 67, is slated to be divided into five blocks. Four of the five will be channel pairs: 52 and 57, 53 and 58, a pair of 5-MHz channels in 60 and 65, and a pair of 10-MHz channels in 61 to 62 and 66 to 67. Channel pairs can best be used for services that require the same capacity in each direction, like today’s cellphone services.
The fifth block will consist of today’s channel 56, which is better suited for one-way transmission, such as broadcasting to cellphones. It could also be used for services that can utilize an existing cellphone channel as the return path—for example, video on demand, in which your request is phoned in and then the material is sent to your cellphone over the broadband channel. The FCC plans to offer the blocks in six regional areas, making it simpler for well-funded companies planning to roll out national services to assemble bandwidth.
The sale of the five blocks will complete the reallocation. The oft-quoted $50 billion valuation for the 108 MHz may be too high, given that the first 24 MHz sold netted $685 million and that the 24-MHz public-safety spectrum won’t be sold at all. The $50 billion number comes from a May 2004 estimate by the New America Foundation, a Washington, D.C.based public policy institute, citing FCC and other data. On the other hand, it is possible that the chunks of spectrum auctioned in the first two rounds went cheap because buyers didn’t know when they would actually get them.
If a firm date is set and the auctions for the remaining spectrum sections are held not too far ahead of that date, the auctions of the remaining 60 MHz could bring the total raised up to $30 billion. Congress is expected to require that a portion of those proceeds, probably less than $5 billion, be used to fund subsidies to help low-income families convert their analog TV sets to digital.
Whenever so much money and infrastructure are at stake, there are inevitably winners and losers. The companies bringing in the bids at the auctions appear initially to be winners, but some of their ventures are bound to fail.
Manufacturers will be huge winners. New services and technologies necessitate new equipment. Sales of televisions, studio gear, and other consumer and professional equipment are already growing. Still to come are business opportunities opened by new mobile services.
Broadcasters should be winners. By upgrading their technological backbones, they have improved their quality of service and now have the flexibility to pursue new opportunities such as narrowcasting to niche markets. However, while broadcasters have invested heavily in the digital transition, they have not yet fully exploited digital’s advantages of higher-definition pictures and new services.
Broadcasters have two strategic advantages over cable and satellite providers. For one, local broadcast stations know their markets in a way no national programmer can. For another, broadcast television is wireless and eminently portable; viewers don’t have to plug into the cable network or to a carefully aligned satellite dish. They don’t even have to find small hot spots, since receivers pick up broadcast signals almost anywhere. But broadcasters are only now starting to use HDTV in their local programming, primarily for news. And U.S. digital service does not support mobile service to vehicles and pedestrians with handheld devices. It is telling that reassigned broadcast spectrum is being used to offer mobile video services that broadcasters themselves are unable to support. Nor is this now a priority for them.
Political leaders might be losers, if they are perceived as forcing unwanted change and expense on the public. And if the transition is disruptive, they will be blamed. But overall, governments should be big winners. When the transition is completed, governments will have served their constituencies well by shifting broadcast television to a superior, more flexible service and by reallocating vacated broadcast spectrum to other useful services.
In the short term, some consumers, particularly the least well-off, will be losers. They will see blank, snowy screens on their antenna-fed analog TVs when analog service is terminated. To continue receiving programming, they will need to buy and install digital conversion set-top boxes or switch to cable or satellite service. Either way, it’s going to cost them.
In the end, though, consumers will be winners, with new and improved services available. They will have access to HDTV’s great pictures, accompanied by surround-sound audio. They will have uniformly high-quality reception anywhere in a broadcast area, and additional services will include some within traditional broadcast channels but even more coming in the auctioned broadcast spectrum.
About the Author
Robert M. Rast (IEEE Senior Member) is industry liaison for Micronas Semiconductors Holding AG and chairman of the board of the Advanced Television Systems Committee, an international standards-setting body. In the 1990s, he was General Instrument Corp.’s digital HDTV advocate, and in 1993 he became one of the leaders of the newly formed Digital HDTV Grand Alliance.
To Probe Further
More information about the analog shutoff and spectrum auctions is available at http://www.fcc.gov.
To learn more about Qualcomm’s MediaFLO technology, go to http://www.qualcomm.com/mediaflo.
Flash-OFDM technology is described at http://www.flarion.com/products/flash_ofdm.asp.
Read about DVB-H technology at http://www.dvb.org.