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January 19, 2001

SEPARATE STATEMENT OF COMMISSIONER SUSAN NESS

Re: Biennial Review - Review of the Commissionís Rules and Policies Affecting the Conversion to Digital Television

Todayís action is good news for industry and consumers.

I am pleased that the Commission has completed the first periodic review of the digital television transition. The issuance of this Order and Further Notice puts to rest some lingering issues that required resolution to assure a smooth transition. The broadcasting industry, together with the consumer electronics, cable television, and content industries, should now set aside division and delay, and forge ahead with the digital transition. I firmly believe that the transition from an analog terrestrial broadcast system to a digital broadcast system is in the public interest, but it must be executed in a manner least disruptive and most beneficial to consumers.

Digital Transmission Standard

I am pleased that on the basis of industry and Commission testing, the Report and Order concludes that the 8-VSB transmission standard should not be revisited. Under the leadership of MSTV and NAB, the broadcast industry conducted comparative tests of 8-VSB and COFDM. While it found that neither system worked perfectly in all settings, the broadcast industry, with few dissents, elected to continue to embrace the industry-designed and Commission-adopted 8-VSB standard. The industry also decided to devote significant resources to improve signal reception quality.

Broadcasters deserve much credit for resolving this issue. Its decision enables he Commission to conclude with greater confidence that 8-VSB should remain the digital television transmission standard. This important decision should now spur additional research in receiver design to ensure that consumers are able to enjoy indoor reception of digital television signals.

Digital Receiver Requirements

While the item does not mandate receiver performance standards, we will continue to monitor receiver quality during the transition and will take appropriate action on receiver standards as necessary. I urge consumer electronics manufacturers to make the necessary investment to improve receiver performance. This is a critical component of a terrestrial broadcast regime.

I am also pleased that we ask questions, but draw no firm conclusions in the Further Notice, regarding our authority and the desirability of requiring digital broadcast reception capability in a subset of future receivers sold in the United States. We need to weigh very carefully the cost to the consumer of such a requirement, as well as its impact on the digital transition. I am also interested in submissions regarding the availability and retail cost of simple decoders that will enable consumers to display digital programs on their analog sets.

In just 17 months, all commercial television broadcast licensees are supposed to have their digital systems up and operating. Is there adequate reception capability -- through digital receivers, decoders attached to analog sets, and cable television connectivity and program carriage Ė to reap the benefit of these new digital signals and to spur the production of original digital programming?

Today, the retail cost of digital receivers is prohibitively expensive for all but the most enthusiastic early adopters. Moreover, many of the sets sold today are incapable of receiving an over-the-air digital signal. Will the marketplace address this situation?

I am pleased that our Further Notice poses the question of whether digital television sets designed for cable connection should have a warning label if they are incapable of receiving and displaying a digital broadcast signal. Consumers have a right to know that information.

Next Steps

Now that the uncertainty over the transmission standard is resolved, is time for all industries involved in the digital broadcast food chain to come together and redouble efforts to achieve a speedy transition that works for the American consumer. Broadcasters must increase the amount of unique digital programming to whet the appetite of consumers and to make the case for cable carriage. Equipment manufacturers must improve receivers and lower prices dramatically. The cable, broadcast, and programming industries must work together with the consumer electronics manufacturers to ensure that viewers are able to receive all available digital programming, including top-quality productions. Finally, broadcasters and cable operators must negotiate in good faith for the carriage of digital signals on systems that have been expanded.

I intend to do my part to ensure that the Commission processes applications expeditiously and resolves issues necessary to the transition.