FCC to Seek Closer Look at Regulations for HDTV : Television: Changes in technology, marketplace cited. Policy options could save or cost millions of dollars.

Federal regulators looked like visionaries in the 1980s when they delayed the introduction of high-definition television to allow American engineers time to develop digital HDTV technology that catapulted the United States far ahead of foreign rivals.

The development of digital television prompted jubilant U.S. officials to predict an American comeback in consumer electronics, with the creation of up to 100,000 manufacturing jobs cranking out TV sets that would offer CD-quality sound and spectacular wide-screen video.

But today, as other nations close the U.S. technological lead and as American engineers put HDTV through its final testing paces, federal regulators Friday will propose a broad re-examination of digital television policy that could last months.

Critics say the regulatory delay will seriously thwart a technology that many experts tout as the biggest revolution in broadcasting since the introduction of color television in the 1960s. It might also delay the billions of dollars the federal government hopes to receive from auctioning the old analog TV airwaves broadcasters will give up when the transition to digital is complete.

“At some point we need to leave well enough alone,” FCC Commissioner James H. Quello complained in a recent speech before the California Broadcasters Assn. “ . . . When we are so close--so very close--to actually bringing the new generation of television to reality, it borders on irresponsibility to re-examine issues so basic, and already so thoroughly considered, that to reopen them threatens to derail what many have worked so hard for the better part of a decade to achieve: to bring advanced TV to the public.”

Added Bob Rast, vice president for HDTV at General Instruments Corp.: “We have been taking way too long. . . . Other countries are starting to catch up. I think it is important we get the [HDTV] standard done and deploy [it]. The only thing that Congress and the FCC can do is get out of the way.”

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But the regulators and many lawmakers don’t see it that way, because the technology and the TV market have evolved in some unexpected ways. What seemed a regulatory slam dunk a few years ago has become a complex set of technology policy options that could save or cost consumers and broadcasters tens of millions of dollars.

The FCC is expected Friday to seek public comment on a broad array of issues, including whether broadcasters should be required to carry a minimum amount of high-definition programming and whether the 15-year transition period to digital TV should be shortened to 10 years.

The FCC will also solicit input on whether broadcasters should be given the freedom to offer other communications services on the airwaves designated for HDTV, and on how broadcasters can best meet their public-interest obligations in the digital age.

The public will probably be given up to 60 days to respond to the issues, and the FCC staff could spend several more months reviewing comments before making final recommendations.

FCC Chairman Reed Hundt said the inquiry is necessary to lay a regulatory foundation for the introduction of HDTV.

“We are going to ask every question that there is to be asked,” Hundt said. “It’s time for a complete re-examination of all the principles underlying this technology. There’s nothing basic about the transition to digital television. We need to thoroughly understand . . . [the] options.”

Some proponents of HDTV said that while they are unhappy about the delay, they are sympathetic to the FCC’s regulatory task.

“The FCC process is taking four to five months longer than is optimum, [but] I don’t think there is any foot dragging,” said Jerry Pearlman, chairman of Zenith Electronics Corp., a leading television manufacturer that is part of the alliance of companies developing HDTV.

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Contrary to what many expected when HDTV burst onto the technology policy stage nearly 10 years ago, it now looks like an uphill battle to persuade broadcasters to spend millions of dollars to equip their stations for HDTV and to lure consumers into spending as much as $3,000 for a new television set capable of receiving the signals.

For one thing, the cable and satellite industries are well on their way to implementing more affordable digital video alternatives that could limit the acceptance of HDTV. The DirecTv unit of Los Angeles-based Hughes Communications Inc., for instance, has signed up more than half a million customers who pay about $700 for a TV set-top box and outdoor antenna, and another $50 a month to receive digital video broadcasts via satellite. Meanwhile, cable systems from Florida to California are experimenting with digital interactive video transmissions.

None of the digital technologies deployed so far feature the wide-screen aspect ratio of HDTV or its superior picture sharpness. But personal computers connected to the Internet and commercial on-line services are beginning to deliver, albeit slowly, the high resolution and other digital benefits that HDTV still only promises.

“With the rapid advances in other technologies, especially the personal computer, I think HDTV is a technology whose time may have passed,” said James Gray, president of Primestar Partners, a direct-broadcast satellite video venture backed by several large cable companies. HDTV has “become tremendously expensive, and there are other [cheaper] digital transmission technologies that are already on the market.”

Broadcasters have long been skeptical of the cost and consumer demand for HDTV. But the FCC, anxious to ensure that there would be free, over-the-air HDTV--and not just pricey cable or satellite HDTV--tentatively agreed to give each of the nation’s 1,520 TV stations a second channel with which to introduce the system.

In 1992 the FCC proposed setting a 15-year transition period during which broadcasters would retain their analog channel assignments while establishing digital service on the new channel. Once the transition was complete, broadcasters would give their original analog channels back to the government.

But obstacles cropped up.

Broadcasters learned that digital compression enabled them to put the second channel to all sorts of revenue-producing uses, such as data transmission, paging services and even extra video services. As a result, some large station owners, such as Rupert Murdoch’s Fox Broadcasting, don’t necessarily want to offer HDTV exclusively: They think it would be more profitable to carve the digital channel into as many as five analog channels featuring all-news, children’s programming and other fare--but it remains to be decided whether they will be permitted to do so.

FCC Chairman Hundt has been advocating shortening the 15-year transition period to 10 years to more quickly recapture the analog broadcast channels, which would then be sold to other users--for many billions of dollars.

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With so much riding on the outcome of these questions, some experts fear HDTV’s acceptance will be slowed--or even stymied altogether--if broadcasters are given too much flexibility in programming their digital channels.

But other experts aren’t so quick to write off HDTV.

“Other offerings may have taken the spotlight from HDTV . . . but the television set is the most ubiquitous technology in the home,” said Dale Cripps, publisher of HDTV Newsletter in Alsea, Ore. “HDTV is not going to go away.”