Digital Airwaves Bid Not Dead, Execs Warn

Two leading television executives urged station owners to continue to resist congressional proposals to make broadcasters pay for digital airwaves.

Presidential hopeful and Sen. Majority Leader Bob Dole (R-Kan.) has opposed as “corporate welfare” a provision in the recently enacted telecommunications reform bill that would allow TV station owners to acquire a portion of the broadcast spectrum for new digital TV channels for free. Some lawmakers favor an auction of the space, which could cost broadcasters tens of millions of dollars.

With action on the issue heating up again amid recent congressional hearings on the issue, Rupert Murdoch, chairman of News Corp., and Bob Wright, president of NBC-TV, both voiced concern at the annual National Assn. of Broadcasters convention here that an issue broadcasters thought they had won was not yet dead.

“I know a lot of you think the hard work is past,” Wright told an overflow audience at the Las Vegas Convention Center. “That’s not the way I see it.” The proposal to auction digital channels to broadcasters is still alive, Wright contended, adding, “I see the next five to six months as very critical.”

In a speech earlier, Murdoch, whose News Corp. is the parent company of the Fox Broadcasting Network, said: “The costs of making the transition to digital are absolutely terrifying,” even excluding the costs of bidding for a new digital TV license.

Murdoch pegged the equipment tab for the average station moving to the new digital format at $2.5 million to $3.5 million. And he said adding capability for the most advanced form of digital broadcasting, high-definition television, would cost $8 million to $12 million per station and as much as $100 million for the Fox network, plus $30 million a year in additional costs to uplink the more complex HDTV signals for satellite transmission.

HDTV, which has been under development for a decade, has a sharper picture, compact disc-quality sound and a wider, more rectangular screen than regular TV.

“A few people in Washington have the mistaken impression that providing the spectrum we need for the transition to digital is a form of corporate giveaway,” Murdoch told the audience. “You and I know that perception is far from the truth. . . . No one that I know has a proven business plan that will generate one extra dime in revenue to help pay for all this expense.”

The concern over digital TV came as a group of American and European companies demonstrated a new HDTV format in Las Vegas that is expected to be approved for all broadcasters by the Federal Communications Commission later this year.

The allocation scheme for new digital TV licenses contained in the new telecom reform bill is aimed at providing broadcasters with an easy way to introduce digital TV.

The provision would require the nation’s 1,500 TV station owners to return their existing analog channels to the federal government in 15 years, presumably after the industry migration to digital broadcasting was complete.

But several congressional aides, speaking at a panel session early Monday, doubted Congress would act on the issue this year, if ever.