(as prepared for delivery)
Thank you, Gary, for your generous introduction.
I have been at the FCC for four years now, and this is the first time I have had the opportunity to attend the Consumer Electronics Show. I have wanted to attend in previous years but -- for one reason or another -- I wasn't able to make it. I'm especially glad that things worked out for me to attend this particular CES, for this is a particularly pivotal year.
Each new year brings an array of new products that create various kinds of excitement -- with new hopes, new opportunities, and (of course) new risks. But I truly believe that this year's show is special. We stand at the threshold of a new era in television. A dominant force in the lives of virtually every American is about to be changed -- fundamentally and forever.
The power of television is extraordinary. For most people in America, television is the primary source of information. Television is the mechanism by which most of us acquire our understanding of -- and form our opinions about -- our political system, our economy, and our culture. And television is also our predominant source of entertainment.
In short, television is our most persuasive and pervasive medium. And now television is on the verge of changes that hold the potential to further increase its power as a medium of information and as a medium of entertainment.
I have felt for some time now that, of all the decisions that I would be called upon to make as an FCC Commissioner, the ones that would most affect the day-to-day lives of every American would be those relating to digital television (DTV). I continue to feel that way today. And that makes it especially gratifying to see what your industry is doing to make DTV a commercial reality.
I spent several hours on the convention floor yesterday. I was really impressed by all the new products from which American consumers will be able to choose, particularly the number of digital and high definition television products.
Count me as a real enthusiast. DTV is a great technological leap forward. The U.S. standard is enormously advanced and extraordinarily versatile. Other nations around the world have to make their own decisions about how they will implement digital television, and I believe many will decide, on the merits, to adopt the standard developed here.
Consumers have diverse needs and expectations, but DTV holds the potential to bring new benefits to all of them. Sports fans will delight in the picture quality -- as demonstrated by the perfect spiral of a well-thrown pass, or the ice shavings kicked up as a skater completes a spin. They'll also welcome the wider aspect ratio -- seeing the runners on first and third, in addition to the pitcher and the batter. And with new data services sharing the bitstream, they can call up statistics at the punch of a button.
Those who prefer movies will likewise benefit from crisp picture clarity, but they may also revel in the richer and truer colors that HDTV delivers. Music lovers will exult in the multi-channel compact disk-quality sound. Advertisers and buyers alike will benefit when viewers can obtain detailed product information while the memory of an advertisement is still fresh.
The flexibility of DTV is vast -- and the full potential is far from fully explored. I know the pictures and sound are wonderful, but I suspect we'll soon be at least equally enchanted by the ancillary and supplemental services that DTV makes possible. Broadcasters will be able to transmit telephone directories, stock market updates, computer software, interactive educational materials -- and the list goes on. Even during the high definition broadcast of a live sporting event, there is sufficient "opportunistic" capacity to transmit the entire Washington Post, New York Times, and Los Angeles Times within a matter of minutes.
The flip side of flexibility is the potential for confusion. Where there is consumer confusion, there is market hesitation.
The transition that lies ahead is unprecedented in its magnitude and effects on consumers. It is essential that the transition go as smoothly as possible.
The introduction of color did not render black-and-white sets obsolete -- or require consumers to purchase converter boxes. Yet the DTV transition will have this effect. We are asking consumers to give up an analog system that has served them well. The potential for consumer dissatisfaction when the NTSC channels go dark should not be overlooked.
Even in the short term, there is a danger that many consumers will be mystified by the profusion of alternatives. If they are going to invest in a television set that displays "high definition" programming, they need to be confident that they fully understand the attributes of the system they are buying.
To the need to choose among over-the-air reception, cable, and DBS (to say nothing of VCRs, laser disks, and DVD) will be added new complications: How can today's consumer compare the virtues of 720 progressive scanned versus 1080 interlaced? How can one evaluate claims that 480 progressive is, or is not, "high definition?" What about the DBS transmission? If the set is hooked up to cable, will it still display true "high definition" with the same clarity as the broadcaster had transmitted?
Industry can sow confusion, or help to ameliorate it. Each of you will have choices to make about the way you deal with consumers. I hope you will help consumers feel comfortable with this transition. I believe it will serve your long-run interests to do so.
CEMA has taken an important step by adopting industry-wide definitions of the terms, "High Definition," "Standard Definition," and "Digital Television." But it sounds as if additional discussions may be needed to ensure that these terms are given a common meaning by broadcasters, cable companies, computer companies, and other interested parties, so that confusion on the part of consumers can be avoided.
I firmly believe that the success or failure of DTV is up to you, and to the consumers you serve. Government has a role in the process, but it is limited. These are the public airwaves, and we require that they be used in the public interest. The notion of the public interest takes on additional dimensions in the context of television broadcasting because of its central role in American lives and the massive investments consumers have already made in reception equipment.
It's our job to write service rules for broadcasters, to allot channels and set power levels, and to issue licenses. We have looked to industry to set technical standards, and adopted the resulting standard because that was the course that industry collectively favored to ensure confidence, momentum, and certainty; and again, it was in the best interest of consumers.
There are still some loose ends the FCC needs to tie up, however, as it winds down the regulatory process and the consumer marketplace takes over. Certain of those issues affect the ability of broadcasters in the Top 10 markets to meet their commitments to begin broadcasting in time for the 1998 Christmas selling season -- that's this year! I am determined to work with my colleagues to resolve the allotment table and service rules no later than the end of this month.
Prompt and decisive action is needed now so that broadcasters can get on with the business of broadcasting DTV, manufacturers can get on with the business of making DTV receivers and DTV-ready computers, and retailers can get on with the business of educating consumers why they should pay their hard-earned money to participate in this exciting new viewing experience.
And -- make no mistake -- cost will have a significant effect on consumer acceptance of these products.
As we see here today at this convention, all the industries involved are working diligently to make rollout of digital television a success. While there remain thorny issues to be resolved in the details, both for the industries and for the government, I want to commend you for all of your hard work to date; and encourage you to continue your efforts to make this ambitious transition to digital smooth and consumer friendly.
For my part, in those areas where governmental involvement is appropriate, I will continue to do all I can to make this a smooth and successful transition that benefits the American consumer.