FCC takes a bite of digital TV profits...
By Karen J. Bannan, Inter@ctive Week
November 19, 1998 3:02 PM PT
The Federal Communications Commission today adopted rules that will give the government a portion of revenue collected for over-the-air digital programming.
The move will require broadcasters to pay the government between 4 percent and 6 percent of all profits.
$7,000 for HDTV, and nothings on
Broadcasters received additional channel spectrum earlier this year to broadcast high-definition TV (HDTV) programming, however some are considering offering multiple standard-definition channels instead of a single HDTV channel, analysts said. Because HDTV provides no real revenue stream, broadcasters would be able to realize profits from pay-per-view or pay-per-use audio, video and data programming.
Multi-casting vs. HDTV
"How do local broadcasters make any money with HDTV? They can't. [Multicasting pay-per-use] is a pot of gold for the local broadcasters. Besides, we see most people would rather have better quality programming than prettier pictures," said Sean Kaldor, vice president of International Data Corp.'s Consumer Device Research division.
However, because the airways are considered public property, Congress asked the FCC to levy fees that would recover some of the revenue, said Dennis Wharton, senior vice president at the National Association of Broadcasters (NAB), an industry group that represents radio and television interests.
Initially, the NAB had asked the FCC to impose fees of 2 percent after two years. "We wanted to give broadcasters two years to allow the competition to get off the ground," Wharton said.
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