ELIZABETH FARNSWORTH: This afternoon the Federal Communications Commission announced new rules to guide the transition to digital broadcasting. Here to explain them is FCC Chairman Reed Hundt.
Thanks for being with us. This is the biggest change since color came in in the '50s. What did the FCC do today and why?
REED HUNDT, Chairman, Federal Communications Commission: I can remember color as well. What the FCC did today is we said as Congress asked us to do by law last year give all the broadcasters today licenses to broadcast digitally. Now, we also had to make a whole bunch of other decisions that the Congress left up to us, and so we made a whole bunch of those decisions today too. And I think we tried to make two fundamental principles the rules in the country.
First of all, with respect to the commercial uses of digital television we have taken a very, very flexible approach, the most deregulatory approach that the commission has ever taken with respect to commercial broadcast. Second, with respect to the public interest purposes we've been much clearer, much, much more specific, and we've committed to a process to define with even greater specificity the public interest obligations that broadcasters will carry in a digital age.
ELIZABETH FARNSWORTH: OK. We'll get into that in a minute, but lay it out for us. What happens? In the big cities, for example, here in Washington, D.C., and San Francisco, and L.A., in New York, what happens and when? When will people have digital television available?
REED HUNDT: What we decided today was that by Christmas of 1998 one-seventh of the TV households in America will be able to go down to the local store and buy a digital television because they'll have something to watch. There will be at least three signals broadcasting digitally in their cities. And by Christmas of 1999 more than half of the TV households will have at least three signals being broadcast to them.
ELIZABETH FARNSWORTH: What's the philosophy that guided you? We saw the beautiful pictures of high-definition television, but you're really talking about digital television, which is -- explain the difference and tell --explain the philosophy that guided the way you made these rules today.
REED HUNDT: When I got to the commission three years ago, the idea was that this new invention would be about pretty pictures. But in the last three years we've had a digital revolution in this country, and at the FCC we've tried to go along and maybe even stay ahead of this revolution. So we changed the whole policy here from being one about pretty pictures to being one about digital broadcast.
And that means the door is open for lots of different changes. It's perfectly possible with digital broadcast that this show could be simultaneously broadcast in English or Spanish or French, four or five different languages. It's just an example, because you could send all the different versions of this show at the same time with your digital signal, or you could send kids' TV out at the same time as this show and try to get two totally different audiences at the exact same time. All that's called multi-casting, but digital technology makes that possible.
ELIZABETH FARNSWORTH: How does this relate to computers? Now computer operators or computer builders and computer programmers are happy about this as well as the broadcasters, right? Explain why that is.
REED HUNDT: We brought the computer industry into this process a couple of years ago. Now there was a little bit of tumble and tussle about this because previously it had been a TV manufacturer broadcast deal, but we brought the computer people in and we said, well, when this digital broadcast starts happening, shouldn't it go to PCs as well as TVs, shouldn't it be possible for PCs and TVs to kind of merge as a product? And I think that's what you'll see in the future because of the changes we've made in the policies.
ELIZABETH FARNSWORTH: What does the consumer have to do to benefit from this? What do you have to buy and what will it cost?
REED HUNDT: Well, you'll have to see what they offer you in Christmas of 1998, if you're in about a seventh of the households, and I think what you'll see on the shelves are PCs that watch digital television, and you'll see televisions that are a little bit more like PCs and that have the capability to receive this digital bit stream and do lots of interesting, fancy things with it. And I think what's going to happen is that the things that you use to watch TV will change, and so the content will change to keep up with those things.
ELIZABETH FARNSWORTH: Now, as we heard, there's been a debate about giving away the spectrum. What do -- what do broadcasters have to do in return for getting the spectrum that you gave them, the license that you gave them today which allows them to use spectrum, which is public property?
REED HUNDT: Congress had this debate and decided that there wouldn't be an auction of these licenses; instead, they would be given to broadcasters. Now today we tried to do two things to make that a fair deal for the American people. The first is at the end of nine years today's analog licenses need to be given back, and also we need to get about a third of all of the broadcast spectrum that's not really used right now, get that back anyhow. We're going to get a first swatch of 60 megahertz later this year.
ELIZABETH FARNSWORTH: Just so I understand, where has that been? Who has had that if it's not being used now?
REED HUNDT: Well, if you had a dial on your TV, which a lot of us don't anymore, but some of us can remember, there's a 60 and a 61 and a 62 and in most markets there isn't any TV station using those. They've always been out there, held in reserve, and so we're getting those back, and we'll be putting those up for auction in about a year, and using some of that spectrum for public safety purposes.
So all this is upside, but the other thing that is really important is that we intend to redefine public interest obligations for a digital age, and the commission voted today to have a new proceeding to let everybody in America comment on that. We're particularly interested in the views of Vice President Gore's commission which he's going to start up pretty soon. It will be a way for Americans to get a whole menu of public interest obligations that seem fair. They'll ask the FCC to apply those.
ELIZABETH FARNSWORTH: What might those be, just for example?
REED HUNDT: A really good example and one that's interesting Sen. McCain and President Clinton is the idea that digital TV could be used for free access by candidates for public debate in the media, and they wouldn't have to buy ad time like they were selling soap or cereal. I think that's a really excellent idea and could be coupled with campaign finance reform in Congress.
ELIZABETH FARNSWORTH: Overall, why is this important? What's really driving this? You explain some of it and that there's all this digital technology available. What if somebody doesn't want to use that, they like their old television? Why should they have to spend -- apparently they're going to cost about $2,000, right, until the cost goes down due to volume -- why should somebody have to do that?
REED HUNDT: You know, you've got a TV now, and you might have purchased for a small amount of money a cable box so that you could watch cable channels with it. In the future you could purchase a box that would let you watch digital channels on today's TV, so the TV, itself, is not going to become defunct or non-operational. You might just have to buy a box to continue to use it. Or you could go buy a new --
ELIZABETH FARNSWORTH: So you could use your TV, buy this box, but I understood if you bought the box, it won't be as good as if you buy one of the new TVs that can really use the new technology. Is that wrong?
REED HUNDT: It still could take all the signals down, including the many new channels, so even 10 years from now I don't think any TV that you still want to be using at that time will be out of business. But the real point is that this whole new medium will be invented, and you know, at some point somebody went to the first painter and said, you know, you're using those watercolors, why don't you try these oils, and the painter invented really new kinds of pictures, and I think that's what you'll see with digital television.
The medium, itself, will change in ways that we cannot really imagine and that the government does not really need to predict, and if that happens, I think people are going to be very eager over the next decade to buy the receivers that really show the new content the way it's intended to be displayed. And I think people will be as interested in the new products as they are in all new products, and we'll see a pretty fast take-up rate.
ELIZABETH FARNSWORTH: So what happens just in the next year? Do the broadcasters now have to work out some of the technology problems that we saw in the introductory piece?
REED HUNDT: I think the creative community will start experimenting with the medium. I think broadcasters will go out and they'll get some real estate and some towers and start transmitting and by Christmas of 1998 the first products will be coming out over the air, and we'll see if I'm right in my prediction that they will really be as different as the medium is.
ELIZABETH FARNSWORTH: Well, Mr. Chairman, thanks for being with us.
REED HUNDT: Thank you.