Cable MOSs to offer HDTV...........................................
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SKEPTICS ASIDE, SOME CABLE OPS START PUSH TOWARD HDTV ROLLOUT
By FRED DAWSON
Widespread doubts about high-definition television in and out of cable mask a growing recognition in some quarters that MSOs will be best served by taking a leading role in bringing the new format to the public.
While even its staunchest proponents in cable recognize that the onset of HDTV is fraught with difficult issues and potential dangers, they believe that market opportunities, as well as competitive pressures, will drive them to launch services in some places as early as the end of this year.
Among the MSOs leaning in this direction are Time Warner Cable, Cox Communications Inc. and Cablevision Systems Corp.
"In our discussions with [cable] programmers, our position has been that we might support an HDTV signal or two on our cable systems," said Alex Best, chief technical officer at Cox.
"We haven't made any commitments yet, but there are good reasons to be moving in this direction," Best added.
Competition, specifically from a direct-broadcast satellite provider, is a key reason, Best said. Indeed, last week, DirecTv Inc. announced that it would broadcast pay-per-view movies and events in HDTV this year.
Cox also wants to put pressure on broadcasters to do likewise, rather than using their digital spectrum to deliver multiple channels in standard-definition format.
And there is the obvious market pressure that will arise as broadcasters make their moves into HDTV, starting as early as November in the top 10 markets.
"We have to move in tandem with the broadcasters," said Michael Luftman, vice president for public affairs at Time Warner Cable. "I can't say that it will be on day one in these early markets, but it will be soon after."
Beyond these defensive reasons, there is the strong possibility that movies available in HDTV format from DVD (digital versatile disk) will help to push penetration of HDTV sets. That should create a niche of high-end customers who would be strong candidates for movies and sports delivered over HDTV feeds from cable programmers.
Last week, Thomson Consumer Electronics Inc. said HDTV sets could initially cost as much as $7,000. But, as Best noted, it's in the interests of the manufacturers to aggressively price the sets once they're in the market, which could lead to rapid price declines by next year.
Many cable programmers are anxious to tap into this market, noted David Fritch, senior manager of marketing strategies for digital network systems at NextLevel Systems Inc.
"When HBO [Home Box Office] made the announcement that it intends to deliver HDTV signals, it shifted the whole argument from being a broadcaster issue to being a cable issue," Fritch said. "There are a lot of programmers stepping up to supply feeds."
CABLEVISION'S PLANS
The combination of early adopters, DVD and cable HDTV feeds makes for a potentially rich opportunity, in Cablevision's opinion.
"There are high-end users out there with pretty high levels of pent-up demand for what HDTV can deliver," said Wilt Hildenbrand, vice president of engineering and technology at Cablevision.
While not downplaying all of the issues that stand in the way of "doing it right," Cablevision believes that it has nothing to lose and everything to gain through an aggressive HDTV posture.
"By the last quarter of this year, we plan to have some type of services running on a closed-circuit basis, and we may even carry them out into our cable systems," Hildenbrand said.
By closed-circuit, Hildenbrand means that the company intends to use its venues at Radio City Music Hall and Madison Square Garden to provide on-site HDTV displays and as sources for signals to be delivered over the company's fiber routes to its cable stores and other sales centers.
"The problem is that if everybody waits for somebody to move first, nobody moves first," he said.
Cablevision, with the closed-circuit and cable-delivery strategies using its own programming sources, can make the first move, Hildenbrand said.
"HDTV doesn't have to go out over the air, and it can be made available on an elective basis, so why not leverage the capacity that we've built into our systems to take advantage of whatever opportunity is out there?" Hildenbrand said.
Of course, as Best noted, not all cable systems are equipped to deliver the 750 megahertz of capacity that Cox and Cablevision have built into some of their systems.
"We have a lot of 550-MHz systems that are completely filled with analog channels, which means that we'd have to take something off to deliver HDTV," Best said.
In fact, that painful reality provides DBS with an opportunity to win the first round in the competition for HDTV early adopters, Best noted.
"But after 10 rounds, there will be a knockout, and cable will be the one left standing," he added.
This is the case because as HDTV moves into the mainstream several years from now, cable will have the capacity, with network upgrades, to convert a large share of its venue to the format, while maintaining a high channel count. In contrast, Best said, DBS, with 32 transponders and the ability to deliver only one or two HDTV signals per transponder, will see its channel capacity sapped dramatically over time.
GNARLY ISSUES
Just how much capacity HDTV will consume on cable systems is one of the many gnarly technical issues that the industry faces as it deals with manufacturers and broadcasters on several fronts. The capacity issue is tied to which of the 17 Federal Communications Commission-endorsed formats cable operators choose to send over their pipes: As many as four HDTV feeds might be possible per 6-MHz channel using the lowest-end formats, versus only one feed at the highest end.
"We don't want to get involved in delivering a bandwidth hog that expropriates our capacity if there's no perception of significant value on the part of the consumer," said Jerry Bennington, senior vice president of Cable Television Laboratories Inc. "But in the absence of real products and the ability to test the differences, it's hard to make choices."
Last summer, at the annual CableLabs meeting, executives viewed three formats over two monitors supplied by Matsushita Electronics Corp. -- one a $5,000-level set, the other a $50,000 prototype.
"You could definitely see a difference on the $50,000 display, but there wasn't a big difference between the low- and high-end formats on the other monitor," Best said, echoing opinions offered by other executives at the viewing.
SECURITY ISSUES
Another major hurdle involves the need for copy protection in the handoff of the HDTV signal from the set-top to the digital TV set, which is also a major issue in the offering of HDTV over DVD systems.
Hollywood, concerned that the high-quality replication possibilities of digital could lead to theft of "in-the-clear" signals, wants encrypted signals to stay encrypted all the way into the TV set, which means that everybody must agree to a baseline security system for HDTV movies, however they are delivered.
Cable interests participating in negotiations with the consumer-electronics manufacturers reported that significant progress has been made on this issue, with prospects good that there will be a solution announced in the near future.
"There have been two leading proposals in these discussions, and now, one is winning out," said Bill Wall, chief scientist for digital technology at Scientific-Atlanta Inc.
There is already agreement on the physical-layer communications bus that will serve as the interface in connecting digital devices of all descriptions at the TV set, Wall noted.
But for all of the progress and the imminence of HDTV, the cable industry as a whole has not yet warmed to the concept the way that it has to other new service opportunities, Bennington noted.
"MSOs are pursuing the technical and business issues with a sense that they want to be in a position to support their customers to whatever extent there is demand for HDTV, and to let the customers decide whether it's a business," Bennington said.
"We need to get the baseline technical issues resolved, but there's not nearly the momentum in this area that there is in MCNS [Multimedia Cable Network System, the cable-modem standard] and OpenCable [the advanced set-top initiative]," he said.
Where cable's dealings with broadcasters are concerned, the CableLabs HDTV task force, under the leadership of Cox CEO James Robbins, has not yet followed up on its first round of meetings with broadcasters prior to the Western Show, Bennington said. But the group was encouraged by the responses at the first round of meetings, and it intends to "regroup" on the subject shortly, he added.
Cable has a lot to offer to broadcasters, Bennington added, given their interest in a premium payback on digital TV to complement whatever thin ad-revenue streams they can find.
"We don't want to be regulated or blindly pushed into a fixed solution in this process," he said. "We want to be adaptive." |
