Transition to Digital TV Offers Huge Opportunities

Canada was scheduled to complete the digital television transition this week, with stations switching their over-the-air broadcast signals from analog to digital. The transition represented a tremendous opportunity to advance the Canadian digital agenda, leading to higher quality digital over-the-air broadcasts, freed-up spectrum that could be used to facilitate greater telecom competition, and the promise of billions in new revenues to fund a national digital strategy.

Yet despite the promise of the transition, the near-total absence of policy and political leadership has led to a digital disappointment. Some broadcasters will complete the transition on time, but the CBC has been granted a one-year delay. There has been minimal publicity about the change, which may leave some Canadians without television access by the end of the week. To make matters worse, the government has thus far failed to articulate a policy on how the freed-up spectrum will be auctioned and how the revenues will be allocated.

Transition to digital, explained

The basic notion of the transition is fairly straightforward. For decades, Canadian broadcasters have used spectrum to transmit over-the-air analog broadcast signals.

Before the widespread use of cable and satellite, many Canadians used antennas -- "rabbit ears" -- to access those broadcast signals.

On Aug. 31, most Canadian broadcasters will have completed the switch from analog to digital broadcasts. The shift to digital brings several advantages including better image and sound quality as well as more efficient use of spectrum, which will open the door to new telecom services. It also requires those relying on over-the-air signals to obtain a digital converter box to convert the new digital signal back into analog signals their TV sets will recognize (cable and satellite customers are not affected).

Why it's turning into a flop

Fingers can be pointed at several targets for the digital disappointment. The federal government adopted a hands-off approach from the outset. In contrast, the U.S. government subsidized the cost of the transition, establishing a coupon program to ensure that all consumers retained television access. Canadian Heritage Minister James Moore firmly rejected a similar approach.

The Canadian Radio-television and Telecommunications Commission, charged with leading several aspects of the transition, failed to muster much enthusiasm from the Canadian broadcast community. CRTC chair Konrad von Finckenstein repeatedly raised alarm bells about the need to prioritize the transition, yet private broadcasters were loath to go beyond the bare minimum. Some opposed investing in public service announcements alerting the Canadian public about the effect of the transition. Given this lack of publicity, there may now be thousands of Canadians left without television signals by the end of the week.

Canada's public broadcaster obtained a last-minute reprieve after it became apparent it could not meet the deadline. The CBC still faces a financial squeeze in completing the digital transition, raising questions about whether the federal government will find new funds to address the shortfall.

A spectrum of rich possibilities

While the digital transition begins as a broadcast issue, it will soon revert to a question of telecom policy. The freed-up spectrum -- known as the 700 MHz spectrum -- opens up a host of possibilities for new innovation, competitors and open Internet access. It is viewed as particularly valuable spectrum since it easily penetrates walls, making it ideal for delivering wireless high-speed Internet services. The government carried out a public consultation on the issue earlier this year, but has kept mum on its plans.

This week was to have marked the end of the Canadian digital television transition. Instead, only a patchwork of broadcasters are completing the transition on time, many Canadians may be left without access, and there is lingering uncertainty about what comes next for the freed-up spectrum.