Q&A on U.S. Digital TV with NAB's President.

Edward O. Fritts presides over the National Association of Broadcasters (NAB) in Washington, D C., a lobby organization with 7,000 embers that groups all U.S. radio-TV stations. Until recently, NAB also represented all the U.S. TV networks. day, with increasing conflicts between the networks and their TV affiliates, ABC is the on remaining major network that remains a NA member.

NAB also organizes the world's largest technology market and conference held annually in Las Vegas, Nevada.

VideoAge. Why did the conflict between the networks and the affiliates reach such a boiling point and what is the solution?

Eddie Fritts. I don't wean to minimize the current tension between the networks and the affiliates, but we should remember that these disputes are nothing new. They tend to run in cycles, and we're in one of those cycles right now. Of course, the main dispute is over the 35 percent ownership cap. The networks are barred from owning I cal stations that reach more than 35 percent of the national television a audience, and they want to see the cap relaxed or lifted. NAB and the affiliates think the 35 percent ownership cap is still appropriate, and we have lobbied Congress and urged the FCC not to change the cap.

VideoAge. Is it possible that TV will not be an over-the-air form of communication (as stated by FCC chairman Michael Powell)?

Eddie Fritts. Actually, at the NAB 2001 Chairman's Breakfast, Powell did clarify his thoughts on the effect of the increasing willingness of consumers to pay for television. He said that it "shouldn't mean that [over-the-air television] is dead."

I don't foresee a future without free, over-the-air broadcasting. Even with the gains that have been made by cable and DBS, there are millions and millions of Americans who still rely solely on broadcasting for their television. And let's not forget the millions of cable and DBS homes that have second and third TV sets that receive those signals via over-the-air antennas. I wouldn't be surprised if half of all quote unquote "cable or DBS households" have a second television set that receives its signals over the air.

Broadcasters continue to provide a service that cable and satellite do not offer. Only broadcasters provide local news and information, emergency alerts and other services to our communities free-of-charge. No other industry comes close to the $8.1 billion in community service that broadcasters provide

annually.

Now as we move into the digital age, digital television holds tremendous potential for enhancing free, local television and for providing an array of services that will benefit consumers.

VideoAge. If TV stations retain their frequencies in the future, will they rent them to wireless?

Eddie Fritts. I don't believe we'll see broadcasters simply renting spectrum to wireless providers. However, I think you'll begin seeing a wide range of applications with the digital television spectrum in the near future. That will include the continued gains that have been made on the HDTV front, multicasting, datacasting and other services that marry the computer to the television. Most of this will remain free to the consumer.

NAB is committed to the digital transition and we, as an industry, have accomplished a lot. We have over 200 stations on the air with DTV signals. That's way ahead of schedule, and it includes markets as small as Quincy, Illinois and Madison, Wisconsin. Nearly 70 percent of all U.S. homes have access to at least one DTV signal. Also, there is more HDTV programming on broadcast television now than ever before. CBS is to be especially commended for its leadership in providing primetime HDTV programming and ABC has done quite a bit also. We have strongly encouraged the other networks to beef up their HDTV offerings.

It's important to remember that broadcasters cannot shoulder the DTV transition 1alone. For DTV to flourish, consumers have to have a chance to see the programming. That's why we've called for DTV tuner devices in every television set. Moreover, viewers must be given access to DTV broadcast channels on cable. Local stations are each investing millions of dollars to build digital facilities, but all this investment could be for naught if the cable industry continues using its gatekeeper clout to thwart the consumer. What is ironic is that at the same time cable MSOs [systems] are complaining about not having enough capacity its carry our digital signals; one of their representatives tells the FCC that once they upgrade to digital cable, they'll be "crying for content.

VideoAge. What are the key issues facing TV stations today?

Eddie Fritts. Obviously the conversion to digital is by far the biggest issue facing television broadcasters. Small- and medium-sized market stations in particular are under tremendous strain, given the softness in the advertising economy.

Currently on Capitol Hill, we're facing a very dangerous threat to free, over-the-air broadcasters. In the mask of "campaign finance reform," some legislators are pushing for massive discounts on advertising time for candidates. History tells us that if political candidates get cheaper discounts on airtime, they use those savings to buy more spots. Cheaper ads mean that viewers will be exposed to more ads, and more negative attack ads. How is that reform?

Broadcasters already give millions of dollars a year in free-air time in the form of debates (many such offers are rejected by political candidates), local news coverage, and many hours to community and public-service efforts. Political candidates already get the lowest rate possible -- reducing the rate as it is in the [Democrat Senator Robert] Torricelli amendment to the proposed bill would only shift the cost of campaigns to broadcasters.

VideoAge. Is it possible to have a universal TV standard with the Internet?

Eddie Fritts. We've settled on a digital TV standard in the U.S. -- and it is the 8-VSB standard. Proponents of [European] COFDM simply did not make a compelling case for switching horses in midstream or adding COFDM as an option. That's not to say that we won't work toward advancements in 8-VSB. But there is no more controversy over the transmission standard in the U.S. The standard is 8-VSB.

VideoAge. NAB is increasingly becoming an Internet market and conference. Are you looking to change your scope and membership?

Eddie Fritts. NAB is and always will be a trade association for free, local, over-the-air broadcasters. Our main mission is to promote and protect the interests of radio and television broadcasters in Washington, D.C. and around the world.

However, the 2002 NAB spring convention is designed to encompass all communications industries, including radio and television. We bill it as "The Convergence Marketplace" for that very reason. We believe it is vitally important to expose our radio and television station members to new technology trends and products from nor only the U.S., but from around the world.

We're proud of the growth from abroad. At this year's convention, more than 30,000 of the 113,000 attendees were international. To me, that vindicates our efforts to make the NAB spring show a truly global event.