ELIZABETH FARNSWORTH: You are looking at high-definition television, HDTV, television of the 21st century. Right away you can see the difference. The wider aspect ratio is closer to the shape of the screen at movie theaters. But because you're currently watching on a television set built with standard technology, there is no way to appreciate the clarity of HDTV's picture and sound.
JIM McKINNEY, Project Director, WHDTV: It's breathtaking. It is like watching a scene through window, rather than watching it on a television screen -- almost three-dimensional in nature. And the audio is every bit as good as compact disc audio.
ELIZABETH FARNSWORTH: Jim McKinney is project director of WHDTV in Washington, D.C., an experimental station created by the nation's broadcasters and major manufacturers of television equipment. In a sense, this is their proving ground for the new digital technology that eventually will replace the inferior analog system in use since American television began 60 years ago.
JIM McKINNEY: The reason that the station was founded was to learn as much as we could as rapidly as we can about the technological challenges of this new technology. It's amazing how much stuff has not yet been invented. For example, I don't yet know how to fade in and fade out a digital television picture. It sort of looks like the transporter room on "Star Trek." It goes sparkly. So someone needs to invent a fading system.
ELIZABETH FARNSWORTH: Currently, the limited programming WHDTV is offering can only be seen on a high-definition television set. And Jim McKinney has the only two in Washington, D.C., but McKinney's not ready to take one home.
JIM McKINNEY: Let me show you what a TV set looks like today, and we hope it'll get a lot smaller tomorrow. Here's the antenna coming down from the roof into the first stage of the receiver at your home. This huge blue cabinet built by Phillips is the video decoder. It is what produces the digital pictures on the screen. And in the third rack we have our encoding and decoding equipment for the Dolby AC-3 six channels of audio and the data receiver at the top of that cabinet.
Now all of that, these three cabinets, must be fit into your television set in homes, and I'm told that when this -- you've got to understand this is prototype equipment -- it's all been hand-soldered, very large parts, but when it is compressed physically through large-scale integration, all of these three cabinets will fit into about a third of a shoe box in the back of your TV set.
ELIZABETH FARNSWORTH: Of course, this means the television sets we're watching today will become obsolete, but not all at once. American consumers and broadcasters will be given nine years to make the transition to the new digital experience, a transition made possible through the broadcasters' use of a second television channel provided today by the Federal Communications Commission.
As FCC commissioners finalized the details of providing the second channel to broadcasters today about a dozen people demonstrated against what they called the giveaway of a valuable public resource, a prime chunk of the electronic spectrum which can be used for a vast assortment of profitable communication services. Whether second channels are on loan or, in fact, have been given away, depends a lot on who you listen to.
GIGI SOHN, Media Access Project: Broadcasters are getting what's been valued to be about $70 billion of the public's airwaves for free. No financial compensation necessary.
EDDIE FRITTS, National Association of Broadcasters: Really, this is a loan to facilitate an orderly transition of American consumers from analog television to digital television, so that it doesn't disrupt the consumer marketplace. We think that's the right way to go.
GIGI SOHN: Even if it is a loan, it's an interest-free loan, and the publisher gets something back.
ELIZABETH FARNSWORTH: Gigi Sohn, executive director of the nonprofit Media Access Project in Washington, says the second channel has the potential of being a big money-maker for the broadcasters. While high-definition television would consume all the space on a second channel, the FCC will permit broadcasters to subdivide the space, to offer a lesser quality digital picture, leaving room to provide other services too.
GIGI SOHN: They'll be able to do subscription pay TV; they'll be able to do subscription Internet services, data services, paging services, anything that anybody could do on a digital bit stream broadcasters will now be able to do on their new spectrum.
ELIZABETH FARNSWORTH: But just a few blocks away at the headquarters of the National Association of Broadcasters, association President Eddie Fritts says broadcasters have given little thought to anything, other than providing a better television picture.
EDDIE FRITTS, National Association of Broadcasters: I think HDTV, high-definition television, will be the major programming fare for almost every television station in America, particularly at the outset. In terms of ancillary businesses, we don't know if there are legitimate businesses at the end of that stream or not.
I think that's something that a trial and error will take place in terms of auctioning or fees. We have agreed, as part of the Telecom Act of 1996, that if we are using the spectrum for ancillary services, we'll pay the going rate that our competitors pay.
ELIZABETH FARNSWORTH: During last year's Senate debate on that telecommunications act, then-Senate Majority Leader Bob Dole held up the legislation, insisting Congress vote on auctioning off the second channel, in hopes of using the billions of dollars the auction would bring in to make a major dent in the federal deficit.
GIG SOHN: Well, Congress basically held, you know, two or three pro forma hearings. Sen. Dole left and a good friend of the broadcasters, Sen. Lott, became Senate majority leader. And that's where it all fell apart. I mean, almost as soon as Sen. Dole left, the new leaders of the relevant committees and Sen. Lott sent a letter to the FCC that said, go ahead, give it away; we want you to do it soon.
ELIZABETH FARNSWORTH: NAB President Eddie Fritts says an auction would have been unthinkable.
EDDIE FRITTS: Well, it would have left broadcasters out in the cold. There's no way broadcasters can afford to bid the auction prices and build an $8 to 12 million local television station and provide all of the community service activities that they are providing all for free to the American consumer. Broadcasters rely only on advertising to be able to provide all of the services they provide -- entertainment, sports, other news, and a whole plethora of activities -- to the American people. So free over-the-air television is very important.
ELIZABETH FARNSWORTH: Since they don't have to pay for their second channel, Gigi Sohn says, broadcasters should be required to meet some public interest obligations.
GIGI SOHN: For 60 years broadcasters have abided by the principle that they get free spectrum and in exchange they have to serve as public trustees, and that means doing certain things for their communities. Here they're getting more spectrum. It will give them more opportunities, and, therefore, I say they should have to do more.
ELIZABETH FARNSWORTH: Eddie Fritts doesn't necessarily disagree, but --
EDDIE FRITTS: This is a real question as to whether the government mandates particular types of speech, or whether broadcasters serving their local communities go to the marketplace and say, what can I do to serve my local community best, and I think examples are abundant of where broadcasters have raised money for charities, where they promoted different charities, where they have worked on big problems -- drugs, alcohol, and a whole range of issues that broadcasting either through their news programming, through their public affairs programming, or through special programs have really done a terrific job in serving their local community.
What we are saying is those same obligations apply tomorrow as they do today. We take great umbrage when the government says you have to do it in this form. We don't think Washington always knows best.