America’s Gamble on HDTV : Television: The U.S. is developing its own standards for digital-coded receivers. But there’s a big risk in the rush to an unproven technology.

In an era when computers double in power every few years, and high-technology gadgets such as fax machines and cellular phones become virtual necessities overnight, it seems almost quaint that America’s television system is still based on technology from the 1950s.

But change is coming, and recent events indicate that the long-awaited switch to high-definition television will be a more radical departure than many had expected. Specifically, several American companies have revealed proposals for an HDTV system that would use the digital code of computers, an advanced technique that most believed was not yet feasible.

This transition has further raised the stakes for the broad array of industries and interest groups scrambling for position in HDTV. For television viewers, high-definition television simply means crisper pictures and better sound--in essence, movie theater-quality images on the living room TV. But for movie moguls, computer companies, TV network executives and government trade officials, HDTV will bring major changes in how business is done.

And the stakes are especially high for the U.S. electronics industry. That’s because Japanese companies have long been ahead of their U.S. counterparts in HDTV technology, and the market for HDTV equipment is expected to be so large that it will control the development of a huge swath of the electronics business.

It’s no wonder, then, that the emergence of U.S.-developed digital technology as a key factor in the advancement of HDTV has created quite a stir. But though few dispute the potential benefits of digital HDTV, the sudden rush to this unproven technology is risky.

If the proposed systems do not work as promised when they are tested by the Federal Communications Commission beginning next year, the United States could find itself back at square one in the HDTV race.

And even if the technology proves viable, it’s unlikely to do much for U.S industry’s ability to compete in the television equipment business. It might be a source of pride to have a U.S.-designed HDTV system that’s more advanced than those in other countries, but most of the profits will still flow to the Japanese and European companies that dominate the international consumer electronics business.

“If we develop (a superior) American standard for HDTV, will the United States begin again to manufacture TV sets? Absolutely not,” says James C. McKinney, president of the Advanced Television Standards Committee, an inter-industry advisory group. “HDTV is not the industry that will save the U.S. as a technological competitor or balance our trade books, and nothing we do is going to affect that.”

That view is contrary to what many had hoped for several years ago, when U.S. industry suddenly awoke from a long nap and realized that Japan was poised to dominate yet another emerging high-tech industry. The Japanese government broadcasting company and big Japanese electronics firms had been quietly working on HDTV for more than 20 years while American companies retreated from consumer electronics. By the mid-1980s, the Japanese were bringing their system to market and the United States seemed prepared to accept it.

But European governments, anxious to protect their beleaguered consumer electronics companies, refused to accept the Japanese system and in 1986 launched a government-subsidized project to develop a European HDTV system. That destroyed the possibility of an international standard for HDTV, and helped shift the debate in the United States, where there was growing concern about Japanese domination of the computer chip business and other high-tech industries.

And HDTV promises to be an important industry indeed. A 1988 study commissioned by the federal National Telecommunications and Information Administration said sales of HDTV receivers and VCRs could be worth as much as $144 billion a year by the end of the next decade, and as many as 100,000 U.S. jobs could be at stake.

Furthermore, high-definition television sets will be sophisticated devices that use advanced computer logic chips, large amounts of computer memory and new types of display screens. U.S. computer and component companies fear that if the Japanese dominate HDTV, they will also dominate those component markets as well and gain a further boost for their efforts in the computer business.

That line of reasoning caused several congressmen and industry groups, led by the American Electronics Assn., to push for a government-funded HDTV development effort. The Bush Administration, though, refused to back the project and even squeezed out a key defense department official who had advocated such a policy.

But the FCC, which regulates over-the-air broadcasting, decreed that any U.S. HDTV broadcast system would have to operate within the existing broadcast spectrum and be compatible in some way with existing television sets. The Japanese system, designed for satellite broadcasting, didn’t fit those criteria.

The FCC then solicited technical proposals that would meet those criterion, and five proposals--including one from the Japanese Broadcasting Corp., two all-digital systems from American companies and one from a consortium of European firms and an American research laboratory--were submitted by the deadline last June. The systems will be tested beginning next year at the Advanced Television Testing Center in Alexandria, Va., and the FCC will make a final decision in 1993.

Many have applauded the fact that the United States will now, at least, have its own standard for HDTV. “We’re pleased at the progress,” said Pat Hubbard, vice president of the American Electronics Assn. “We’re not jumping with joy, but it’s not as black as it was two years ago.”

And others say that the United States will not only have its own standard, but will in fact have a superior standard. A digital HDTV system that records and sends signals in computer code could prove to be a more flexible system, one that will help facilitate the gradual merger of computer and television technology. Eventually, one could capture an HDTV signal on a computer and integrate that image into a document.

“This is going to put us in a very good position,” said Joseph Flaherty, vice president for engineering and development at CBS. “Digital technology is sweeping through all of communications. If (digital HDTV) works, this will be a technology that can last well into the 21st Century.”

But it’s not clear exactly what advantages U.S. industry will reap from the selection of a U.S.-developed standard for HDTV.

“I’m skeptical of the notion that a standards change, or digital architecture, will make any more than a modest difference in America’s ability to compete,” says Charles Ferguson, a research fellow at the Massachusetts Institute of Technology.

He notes that the United States generally has superior design skills in complex digital electronics systems but that “the Japanese advantage in the base technologies--display technology, power management, miniaturization, volume manufacturing--is by now overwhelming. There’s a reason that they dominate the consumer electronics market.”

Indeed, no matter what HDTV standard is chosen, the basic technology will be licensed for a relatively modest fee to any company that wants to manufacture the equipment. Though Zenith Electronics, American Telephone & Telegraph, General Instruments and other firms decline to speculate on how much patent income they might reap if their system is chosen as the standard, all agree that it is not likely to be huge.

“If it were $1 per set, I’d be surprised,” said Dale Cripps, publisher of the HDTV Newsletter in Portland, Ore.

Joseph Donahue, senior vice president at Thomson Consumer Electronics Inc., a French--owned television manufacturing firm that was once RCA’s television division, says that existing consumer electronics firms will produce whatever equipment is necessary to serve the market.

“If it’s my standard, I’ll maybe have a one-year lead time, and that doesn’t really mean all that much,” he says.

And despite all the talk about the merger of computer and television technologies, no one expects American computer companies to get into the television manufacturing business. Thus Japanese companies that dominate the existing TV business are likely to dominate the HDTV business as well.

There’s also another danger in the move to a digital system: If it doesn’t work, the United States could end up with no viable HDTV system at all, or perhaps with several different, incompatible systems.

William Schreiber, former head of the advanced television project at the Massachusetts Institute of Technology and father of MIT’s own HDTV proposal, points out that digital transmission has never really been tested, and may not work in the interference-filled environment of over-the-air television.

“In an analog transmission, a small impairment makes a small problem in the picture. But with digital, a small impairment wipes out the picture entirely,” Schreiber said. “As far as I can tell, there has not been a single successful test of a digital broadcasting system. I think we’re seeing a lot of faddism.”

If the digital systems fail, the United States could end up with a version of the Japanese HDTV system after all. Also, cable and satellite television operators--who are not regulated by the FCC--might decide that the broadcast standard does not provide high enough quality, and move ahead with their own system.

Still, most agree that digital technology is worth a try, and holds out the possibility that the United States can gain a small piece of the HDTV market.

“It’s not obvious that having a U.S. standard will be a great help to us,” said Wayne Luplow, executive director of advanced research and development at Zenith. “On the other hand, if it were a foreign standard, that would be a big problem for the U.S. All we can do is try to get a little lead time.”

HDTV: SOME OF THE MAJOR PLAYERS Consortia and companies that have submitted proposals for HDTV broadcast systems to the Federal Communications Commission: * Zenith Electronics/American Telephone & Telegraph * General Instrument Corp. * Philips/Thomson/NBC/Sarnoff Research Laboratories * Japan Broadcasting Co. (NHK) * Massachusetts Institute of Technology Companies already manufacturing high definition television sets for the Japanese market: * Sony * Mitsubishi * Matsushita * Hitachi * NEC Companies (in addition to those at left) that are expected to sell HDTV sets in the United States: * Zenith (U.S.) * Thomson (France) * Philips (Netherlands) * Sanyo (Japan) * Samsung (South Korea)

TRANSMITTING HDTV

U.S. television broadcasters and federal regulators have been eager to have an HDTV system that uses traditional over-the-air broadcasting channels, and still does not disrupt the existing TV broadcasting system. Some companies believe the answer lies in coverting HDTV images into the digital language of computers--a series of ones and zeros.

This technique allows the signals to be sent at relatively low power, and thus HDTV transmission can be done in the unused channels sandwiched between the regular television channels, which are currently left open to prevent signals from interfering with one another.

1. HDTV Source

High definition television images, which have twice the number of horizontal lines as traditional TV pictures, are created with special high definition cameras or by converting from a high-resolution format such as 35 millimeter film.

2. Digital Video Encoder

Special computer chips convert the images to the ones and zeros of computer language. Then those digitized images are compressed, using a series of mathematical codes.

3. Transmission System

A low-powered radio signal, operating in a part of the television spectrum that currently serves as a buffer between channels, carries the digital signal to TV antennas.

Simultaneously broadcast with:

The existing television broadcasting system continues to operate as normal, serving conventional television sets.

4. Receiver

A decoder inside the high definition television set converts the digital data back into an image and displays it on the screen, which may in the future be a large, flat panel. Chips inside the TV also store images and eliminate imperfections in the picture.