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Remarks by
William E. Kennard
Chairman, Federal Communications Commission
Before
Variety/Schroders Media Conference
March 24, 1999
New York, NY

Television in the Digital Age

(As Prepared for Delivery)

Almost 40 years ago, when he was Chairman of the FCC, Newt Minow gave a very famous speech to the National Association of Broadcasters about the state of television. Most people remember it as the "vast wasteland" speech.

But there was another important point that he made in that address. Surveying the country at mid-century, Minow said that "ours has been called the jet age, the atomic age, the space age. It is also, I submit, the television age."

We can argue about what else Newt Minow said that day, but he was right on that score ours has been the television age. It has provided the common cultural experiences that have made us American whether it's "Roots," the Superbowl, or "Seinfeld."

It has brought us history from the moon landing to the fall of the Berlin Wall. It has incited us to action by bringing the brutality of Selma and Montgomery and the starvation of Cambodia and Ethiopia into our homes. Ours truly has been a television age.

But what will be the future age? Some have said that we are now living in the Tabloid Age. Some say it's the Information Age. Others argue that it's the Internet Age. Following in Minow's tradition, I submit to you that while it may be all of these, it's more fundamentally the Digital Age.

There is no single transformation that is having a more profound impact on communications today than the transition from analog to digital.

You wake up in the morning, your alarm clock is digital. So is your CD player, your mobile phone, and even your coffee maker. Almost every major electronic appliance today is digital except one, the television. But, finally, that too is changing.

With the launch of John Glenn into space last year, the first digital broadcasts began. Now, there are 51 stations covering 26 media markets that are broadcasting a digital signal.

And here in New York, Cablevision is showing Ranger and Knick games in high definition. Now, considering their records, maybe that's not such a good thing.

Anyway you look at it, the TV business and the entire entertainment business is entering a new phase. But what exactly is this business?

I know that everyone in this room probably has an answer to this. We have charts and graphs telling us what the entertainment business is, was, and will be.

But to answer this question I turn back to the beginning of television, to that wisest of TV men, Ernie Kovacs. He explained the business this way: "There's a standard formula for success in the entertainment medium, and that is: Beat it to death if it succeeds."

For almost 50 years, the formula for television has pretty much stayed the same. Whether it's live or taped, in black-and-white or color, or a sitcom or a drama, TV has been about presenting visual entertainment to a passive audience sitting at home. It's been about taking the stage or the movie screen and transporting it into your living rooms. And for almost 50 years, this formula has been a success.

When it came time to finalize digital TV standards a few years ago, many broadcasters and manufacturers were focused on providing clearer, sharper, and prettier pictures for their audiences. They wanted to deliver a better product. But fundamentally, it was the same product just new and improved. So they wanted to set an exact standard for picture quality that would deliver the highest resolution video possible.

But we at the FCC said that DTV is not only about a prettier picture. So we left it open. We gave broadcasters flexibility in how they use DTV in order to encourage innovation, creativity, and most importantly, greater benefits to the American people. And since then, the Internet has exploded. And the business of DTV has radically changed.

At this year's Consumer Electronics Show, CEMA conducted some of the first live focus-groups on DTV. They found that almost three-quarters of those surveyed don't just want pretty pictures. They want data too. They want to be interactive.

We live in a different world. A world that demands a new formula.

Although high-definition pictures are mesmerizing, I think that it is clear that data is the "killer app" of digital TV. Just as the jet airplane revolutionized travel in the sky, when the broadcast airwaves go digital, it will revolutionize how we travel on the Information Superhighway.

Frank Lloyd Wright once said that TV was "chewing gum for the eyes." Well, if he was alive to see the digital documentary of his life that PBS ran earlier this year, he would know that TV is, and will be, much, much more.

With digital, it will become an interactive experience. It will be an avenue of endless exploration. Programming will not just be judged by its length, but by its depth -- by how many layers of additional information and entertainment lie beneath it.

Last week, I co-hosted a forum in Los Angeles on what kinds of TV our kids watch. One of things that we learned was that children already are watching TV in an interactive way.

They'll be watching "Dawson's Creek" on the TV, while surfing on to its website on their computer, at the same time theyll be logged into a chat room to talk about the show afterwards. What digital TV can do is bring this all into one space and onto one screen. It will bring interactivity to the most popular electronic medium that we know: television.

And I believe that when we marry the technological potential of digital to the ubiquity of television, the impact on our economy, our society, and on your businesses will be immeasurable.

Think about it. Everyone has a television. So when that medium becomes digital and TV can be an on-ramp to the Information Superhighway, it will serve as a foot-bridge -- for millions of Americans -- across the digital divide.

And on top of this, it gets broadcasters back into the digital game.

But there are those who say that DTV is stuck at the starting gate. And to the extent that it is, it appears to be held back by two key problems. One is that creators and programmers need to come up with the compelling content so people will "want their DTV." And second, weve got to deal with these compatibility and interoperability problems.

The old days of television where time-tested formulas made it easy to fill a schedule will soon be over. In the digital age, it will not just be 30-minute sitcoms that win over viewers.

It's going to be the mixing of content to suit an individual, not a demographic. It's going to be composing entertainment, commerce, and communications in an appealing and seamless way. It's all of this, and it's none of this. That is the promise and the risk of the New Economy.

What works now, may not work next year, or even next month. After all, when Steve Case started AOL, no one thought that families would pay to send electronic messages to their friends.

But what AOL, Yahoo, Amazon, and all these ventures have in common is that they all took a chance on the future. That is what is needed if we want DTV. We need the courage to embrace the future. We need to experiment with our business plans. And we need to seize the opportunity of digital TV. And we at the FCC will give you the flexibility to do that.

The other major concern is compatibility and interoperability. These are important issues, but I believe that the battle over technology standards now raging goes far, far beyond the immediate issue of whether or not I can watch the local news in digital through my cable system.

Whats at stake here is whether Americans will have seamlessly integrated digital devices in their homes. And its not just about digital TV sets and set-top boxes. Its also about Palm Pilots and 3-D virtual reality game systems.

It's about what the on-ramp onto the Internet will look like and how easy it will be to be use.

It's about whether broadband, in-home networks will become a reality.

It's about how intellectual property will be protected in a future where copies and originals are indistinguishable.

It's about making interactive program guides that are accessible and easy-to-use by consumers as their roadmaps through the converged digital world.

These are tough issues. You have taken the first step and invested millions of dollars into this technology. I recognize that the stakes for your companies are huge. But we know that getting to the right technology solutions may take time.

Now, some are saying that the FCC should just step in and "fix" the problem. That I should decide how to run your businesses.

Over the years, Ive learned that the best solution to a business problem is a business solution, not a regulatory one. And this case is no exception. This is work that you, the entertainment industry, must do. You have to work these out. And you will.

But what I wont tolerate are strategic delaying tactics -- companies refusing to come to the bargaining table or squabbling for short-term advantage. Because in those scenarios, some companies may win and others may lose, but in the end, its consumers who will lose out.

And my job as chairman of the FCC is to make sure that consumers benefit from the digital age. I want all Americans and I mean all Americans to be able to use these amazing new technologies to better educate their children, to be able to communicate with people around the world, and to be able to learn the skills needed to survive and thrive in the New Economy.

But if consumers lose out, and we see gridlock and delay instead of progress, the FCC will have to act. And believe me, you do not want this. You dont want me and an army of FCC lawyers coming in and telling you what to do.

So although we will be looking to industry to settle these disputes, that does not mean that the FCC should not be vigilant. I have directed my staff to closely monitor industry progress, and all affected industries must keep us informed about what progress youre making and what obstacles you see. And heres what well be asking:

Can we find sensible copyright protection safeguards that respect the creativity of our artists, but enables consumers to use this technology to its fullest?

Will there be truly open standards for set-top boxes and digital-cable ready sets or will consumers have little choice?

Will consumers have a choice in interactive program guides or will the choice be made for them?

And will consumers be able to use all of the features that they paid for when they bought their new digital TV sets?

There may be different answers to these questions. But for business and for consumers, there is only one kind of solution. A solution that creates a robust marketplace. Like in the PC industry over the past 15 years, where open standards have produced incredible innovation and low prices.

But you must determine how we get there. As the digital TV market develops, it is not the place of the FCC to come in and mandate these answers. Our role now is to bring the parties to the table and facilitate solutions. At this point, we rather facilitate, than regulate.

We need to work together because this is the only way that we can survive the fundamental structural change that we are living through today.

We now live in the digital world and on Internet time. The entrepreneurial spirit which produced the movie studios and the television networks in the earlier part of this century is now being seen again with the Internet entrepreneurs at the latter part of the century. And this spirit and these technologies, affects us all. Your businesses, and even the FCC -- especially the FCC -- will look radically different in just five years.

But the challenges for us as we roll out DTV are the same as when we television first began. In those early days, Edward R. Murrow said, "This instrument can teach, it can illuminate, and yes it can inspire. But it can do so only to the extent that humans are determined to use it to those ends. Otherwise it is nothing but wires and lights in a box."

This, I believe, is our greatest challenge to make sure that this digital technology does not get mired in petty squabbles and that it becomes more than pretty pictures. That it inspires and uplifts. That it acts as a window on our world and a catalyst for change.

For in the Television Age, this was TV at its best. And, I am confident, that in the Digital Age, it can do this and much more. All we have to do is unleash it.

Thank you.