OTA's Importance and Martin's Future

Just about all the talk about the DTV transition to this point has been about its impact on viewers. That's as it should be. In the end, this whole TV business is about delivering a service to the public (and making a buck on it, of course).

But the advent of DTV will also reshape the relationship between broadcasting and the multichannel providers -- cable and satellite -- in ways that will not be fully understood for sometime long past the Feb. 17, 2009, analog cut-off.

On Tuesday, I moderated a panel at a satellite industry conference -- the ISCe Satellite Investment Symposium -- that addressed this coming shift.

Two of the panelists predicted that millions who today receive over-the-air TV would chuck their antennas and sign up for cable or satellites.

Barry Goodstadt, of Centris, a research firm that is tracking DTV through consumer surveys, said that 8 million homes (more than half of today's 15 million over-the-air-only homes) would make the leap to pay TV.

That migration -- 5.3 million to cable, 2.7 million to satellite -- will add a combined $6 billion more to their annual revenues.

Goodstadt based his forecast on findings that the DTV signal is not as rugged as advertised and consumers are having trouble with antennas or simply don't want to hassle with them anymore.

James Ratcliffe, a cable and satellite securities analyst for Barclays Capital, was more conservative. He said that only about 2.6 million will go for cable or satellite because of the transition. Cable could almost give away its TV service for the opportunity to upsell the broadcast refugees broadband and telephone service, he noted.

Providing counterpoint to Goodstadt and Ratcliffe was MSTV President David Donovan, who felt that the predictions of reception trouble and over-the-air erosion were greatly overstated, particularly by Goodstadt.

He said so during the panel, and told me afterward that he would be more concern about a massive loss of over-the-air viewers if the country were not plunging into what appears to be a deep recession. People, especially those who resisted cable for years, aren't looking to add another monthly bill to the pile, he said.

Donovan makes a good point, but I am not as convinced about the strength of DTV signals and believe the truth may lay somewhere between between Goodstadt's and Ratcliffe's numbers. Millions of over-the-air viewers will be lost in this transition.

That's not good.

I know that broadcasting's over-the-air audience is not large and that, frankly, is doesn't represent the best demographics, but it is a vitally important audience -- from business and public policy perspectives.

In business, broadcasting's ubiquity -- its ability to reach every TV set in every home -- gives it an critical edge over TBS, USA and other general interest cable networks.

When mass advertisers want to reach as many people as they can, as quickly and as efficiently as they can, they turn to broadcasting. May it always be so.

Broadcasting's free and universal service also has Washington benefits.

When the next FCC chairman wants to know what broadcasters are doing to justify their use of the public spectrum, they can answer that they -- and they alone -- are providing a reliable conduit into each and every home in the country -- a critical capability in emergencies.

To my way of thinking, broadcasters owe the country nothing other than to keep those transmitters humming come hell or (more likely) high water -- something that they have demonstrated time and again they are willing to do.

By touting its universal service, broadcasters will also be able to keep at bay all those high-tech companies and lobbyists who covet all broadcast channels and make the argument that using them to reach a dwindling number of people is not good spectrum management.

For them, encroaching on white spaces is not enough.

In selling ads and in selling policy, broadcasters need over-the-air-only viewers and the more they have, the better off they will be.

Don't let them stray away.

I've never put too much stock in the theory that FCC Chairman Kevin Martin wants to run for public office in his home state of North Carolina.

He just doesn't seem the type. He's comes off as a bit too wonkish to appeal to the down-home folks and too thin-skinned to withstand the knocks of a political campaign.

But now the talk has emerged in a respectable publication, which makes it fair game for even more talk here on the World Wide Web. Washington Post columnist Al Kamen says Martin may want to grab the seat of 67-year-old Republican Rep. Sue Myrick after she retires. Myrick's district includes a portion of Charlotte.

Kamen reports the "idle chatter" about Martin in the context of an item on the FCC's sponsorship of NASCAR driver David Gilliland as part of its DTV education campaign. Kamen says Charlotte is a hotbed of NASCAR activity. In fact, it is a major local industry. Martin is buying local goodwill by buying NASCAR.