1. Standard Setting in High- Definition Television (HDTV)

2. Color Television The color TV technology used in the US today is known as the National Television Systems Committee (NTSC) system. In 1941, RCA, the owner of NBC and a leading manufacturer of black-and-white sets, was a powerful force in the radio and television world. Throughout the 1940s, CBS, the leading TV network, was pushing for the adoption of the mechanical color TV system it was developing.

3. New Technology vs. Old Technology When a new technology is invented, there are a few interesting questions. The effects of compatibility between two different generation of technologies on firms and customers?

4. Compatibility Old Hardware Old Software New Hardware New Software Forward compatible Backward compatible

5. Compatibility Non-compatible: Nintendo Backward compatible: CD/DVD, Sony PS/PS2, MS DOS/Window O/S, BW/Color TV Forward compatible: BW/Color TV, Color/HDTV

6. For increasing the adoption of color TV, which one is better? (1) B/W can receive color TV signal. (2) B/W cannot receive color TV signal.

7. Color Television The FCC adopted the CBS system in Oct 1950 A major obstacle for the CBS system was that it was not backward-compatible: B/W sets would not be able to receive color program. CBS had no manufacturing capability and no alliances with manufacturers.

8. A Historical Comparison: Adoption of Color Television Since a major consumers with B/W TVs could not receive color TV signals, limited programs in color were available. To customers, color sets offer little added value because of the limited programs in color.

9. The FCC officially reversed its 1950 decision so that B/W TV sets could receive color TV signals. Then, the number of programs in color increases. Forward compatibility increased the color TV adoption.

10. Color Television TV system has three major components: programming, distribution equipment and reception equipment. The effects of compatibility, a direct effect and an indirect effect.

11. PAL/NTSC Performance Limitations Flickering and ghosting Low resolution (more apparent as TV sets become larger) It requires cutting off the side panels in showing material shot for exhibition on wide movie screens.

12. Promise and Lure of HDTV Picture quality - equivalent to 35mm film by using roughly 1,000 lines The higher resolution permits much closer viewing Screen aspect ratio (the ratio of screens width to its height) - 16:9 Compared with NTSCs 4:3 A wider screen reduces the picture in the box feeling of current television and allows standard 35mm movies to be viewed. Sound quality - equivalent to compact disks

13. Adoption of HDTV For HDTV to succeed, HDTV programming must be available, HDTV signals must be delivered to home, and consumers must purchase HDTV receivers and videotape machines

14. HDTV Development in the U.S. To broadcasters as a group HDTV was a threat, not a promise HDTV increase their costs considerably, e.g. transmission equipment costs $38m They cannot charge more for an improved service They only benefit if viewers watched more TV. They probably would but not by much because on average each TV household already watches seven hours a day.

15. HDTV Development in the U.S. Each individually might want to adopt HDTV, but as a group all might be worse off A prisoners dilemma structure among broadcasters

16. Broadcast B NTSCHDTV Broadcast A NTSC 5, 53, 7 HDTV7, 34, 4

17. HDTV Development in the U.S. In broadcasting, they could do that to prevent HDTVs adoption: They discourage FCC from moving quickly to set standards for HDTV The claim that the already developed technology was unsuitable and delay any implementation

18. Competition for spectrum at the FCC FCC considered reallocating some unused parts of TVs ultrahigh frequency band (UHF) to cellular service

19. HDTV Development in the U.S. Broadcasting has traditionally been organized around local stations These terrestrial broadcasters face increasing competition Cable TV Direct broadcast satellites - signals sent to home satellite dishes Fiber optic networks to homes

20. Evaluating HDTV using the Criteria HDTV signals can easily be sent via cable or via satellite signals that do not use the crowded and valuable portion of spectrum suitable for ground-to- ground transmissions

21. Scarce Spectrum Allocating Criteria Scarce Spectrum should be reserved for applications that are highly valued; and cannot easily be offered without using such spectrum

22. Spectrum uses A new generation of TV presents an opportunity to reconfigure use of the spectrum Provide TV service via satellite or via cable Can free up critical spectrum space for a number of alternative technologies for future use But FCC decided to fit HDTV into the already crowded terrestrial TV spectrum

23. Spectrum Issues and the FCC Major social cost of implementing HDTV through terrestrial broadcast is the use of scarce spectrum space

24. Results of Terrestrial HDTV A heavily squeezed HDTV system Extra costs Compromised quality Reduced scope for later enhancements Less spectrum available for other uses Even less spectrum for other uses when additional spectrum was allocated to existing terrestrial broadcasters to reduce interference between adjacent channels

25. Other Major Decisions by FCC FCC decided to protect the installed base in the hands of consumers as well as to protect the existing broadcast industry It decided that the introduction of HDTV must not strand owners of existing sets

26. Other Major Decisions by FCC Either the HDTV standard must be receiver compatible or else NTSC broadcasts must be simulcast alongside HDTV broadcasts during a probably long transition period FCC has decided to use a simulcast approach