SAN MATEO, Calif. At least three new service providers and two spectrum resellers are staking claims to slices of the 6 MHz of digital TV spectrum for new businesses in data broadcasting, promising to make datacasting a hot topic at the National Association of Broadcasters meeting, which starts in Las Vegas April 8. However, technical, business and regulatory issues lie ahead for the companies trying to build a home for data on over-the-air digital-TV real estate.
Geocast Network Systems Inc. (Menlo Park, Calif.), Dotcast Inc. (Palo Alto, Calif.) and Wavexpress (New York) will roll out datacasting services tied to their own patented technology in an attempt to keep their services proprietary, although all three connect to a standard PC. At least one analyst said these efforts could fragment the nascent datacasting market before it gets off the ground.
Meanwhile, spectrum brokers such as iBlast Networks (Los Angeles) and a consortium called Broadcaster's Digital Cooperative, headed by Granite Broadcasting and Paxson Communications, will pool and lease DTV spectrum for data services. Ultimately, the combined efforts of all the players could run afoul of regulatory guidelines that attempt to balance use of the new DTV spectrum for TV, data and public-service applications.
Perhaps the largest cloud on the horizon for the datacasters is an ongoing debate over the fundamental modulation scheme used for digital TV in the United States. The Advanced Television Systems Committee (ATSC) formed a task force this week to review problems with the reception of digital signals. Critics maintain the vestigial sideband (8-VSB) method adopted by the ATSC is inferior to the coded orthogonal frequency-division multiplexing (COFDM) scheme backed by Sinclair Broadcast Group.
"Without solving the first problem of receiving 8-VSB signals correctly, there is no point in doing data services," said Nat Ostroff, vice president of new technology at Sinclair. Leo Hoarty, chief technical officer at Dotcast, agreed. "We know we can't get 8-VSB signals using an indoor antenna in a crowded city area. There is too much multipath interference," Hoarty said.
The Federal Communications Commission has so far resisted efforts by some broadcasters to reopen the modulation standards debate. An official said the FCC couldn't "rejigger" the ATSC specification to include COFDM because it would, among other problems, throw off the FCC's table of channel allotments. Still, the commission said recently in launching a biennial review of the conversion to digital TV that it would consider new field-test results in judging the success of the conversion.
The ATSC task force addressing the issue was schedule to meet for the first time Friday (March 31). Mark Richer, ATSC's executive director, said that the group hoped to make recommendations to the ATSC's executive committee in six months, by building consensus on the issue among both ATSC members and nonmembers.
The modulation issue also has implications for anyone who wants to send data signals over DTV airwaves to mobile devices such as a Palm Pilot or cellular phone. That's because the current 8-VSB spec is not as robust as COFDM for mobile applications. One FCC official acknowledged that "mobility is a big issue" for datacasters seeking digital TV spectrum.
Meanwhile, datacasters are forging ahead with plans mainly targeted at delivering data to PCs. Many are planning on marketing trials this year, with services starting in early 2001.
Geocast has partnered with Thomson Multimedia to design a set-top box for its service, equipped with a DTV receiver card, hard disk, CPU and USB connector, complete with rabbit-ears antenna.
Dotcast is building a Linux-based box designed to work with either a PC or a TV over analog or digital TV airwaves. It comes with two tuners one for NTSC and another for DTV signals and a DTV demodulation chip, hard drive and processor (most likely, Intel Corp.'s Pentium). The company will provide the option of an MPEG-2 decoder chip and wireless connectivity, for those who want to connect the box to a TV. "The goal is to turn this into a home media server," said Hoarty.
Wavexpress, a joint venture between Sarnoff Corp. and Wave Systems, claims a service that could work with any DTV add-in card for the PC. However, data cached into a PC's hard disk would need a special USB dongle featuring a cryptographic chip called Embassy designed by Wave Systems. The chip, using triple-DES encryption and functioning as a secure e-commerce metering device, claims to provide a tamper-proof environment within the client PC for hosting the Embassy service.
Stephen Carrol, vice president of broadcast distribution at Wavexpress, said the "e-commerce component" is what separates Wavexpress from others. Carrol claimed that Wavexpress has a patent on how its serial data bits are encrypted, broadcast, captured and stored in a local hard drive for electronic commerce. Users can try out or rent software, such as a videogame, already cached into a hard disk.
Some of the datacasters defended the proprietary nature of their platforms. "We designed a box separate from a PC because we want to keep the box always on to receive broadcast data," said James Ramo, chief executive officer at Geocast. Processing and caching broadcast data in a hard disk is "sufficiently taxing to a CPU in a PC. Consumers should be able to receive data without worrying about available space left on their PC's drive," Ramo added. Hence the hard disk in the Geocast box.
Datacasters bill themselves as helping bridge the infamous "last mile" to the user's home. Geocast partner Allbritton Communications (Washington) said the group's plan is to aggregate spectrum and content and distribute it nationally to PCs over an "enormous pipe."
"They have a good plan to deliver rich media directly to PCs," said Jerry Fritz of Allbritton, which owns an ABC affiliate in the nation's capital that served as a beta test site for earlier datacasting platforms.
Yet some industry experts warned this past week that different companies' disparate business models and often incompatible technologies could complicate market momentum for datacasting. "The market for datacasting could be fragmented even well before it gets off the ground," said Judith Abrams, principal at TechIntelligence, a Garrett Park, Md.-based consulting firm.
Sinclair's Ostroff flatly predicted that "all of the early implementation of datacasting will fail. You've got to have a ubiquitous open standard box so that viewers can receive anybody's signals."
Among those trying to sell spectrum rather than services, Granite Broadcasting Corp., which reaches 7 percent of the nation's households, forged an alliance with 11 other broadcast television groups to aggregate DTV spectrum. "Our concept is similar to a Sunkist or Ocean Spray cooperative, where members collectively market crops and share expenses," said Stewart Park, senior vice president of digital broadcast development at Granite. The Digital Broadcaster's Cooperative will hold its first meeting right after the NAB show, he said.
Granite's competitor, iBlast, works with small local TV stations to produce a huge DTV spectrum. In return it negotiates, on their behalf, with anyone interested in using the spectrum. The company claims it has already concluded exclusive agreements with 143 local television stations in 102 markets, covering more than 80 percent of U.S. homes. Broadcasters such as Granite, however, decided not to work with iBlast, "because they take a huge cut from our potential revenue," Park said.
Sinclair's television group, which includes ABC, CBS, Fox, NBC, WB and UPN affiliates, reaches approximately 25 percent of U.S television households. Asked about its datacasting plan, Ostroff said, "We already have our own spectrum in reserve for data business. We don't see any need to partner with anyone."
Free TV endangered?
Aside from potential incompatibilities, all the players will also have to deal with the vagaries of the regulatory environment. Regulators said the big issue for them is determining whether new datacasting services are "ancillary and supplementary" as defined by the telecom law. "Do you allow all these services to eat up all the DTV spectrum" and endanger free, over-the-air TV? an FCC official asked.
The FCC does not stipulate how many bits out of 19.3-Mbit/second bandwidth available on 6-MHz DTV spectrum can be used for datacasting. But the telecom law does say, "The FCC may adopt such technical and other requirements as may be necessary or appropriate to assure the quality of the signal used to provide advanced television services." It also says the commission "may adopt regulations that stipulate the minimum number of hours per day that such signal must be transmitted."
The FCC is considering broadcasters' public-interest obligations imposed in exchange for the free DTV spectrum, and whether those obligations should be extended to datacasting. Some public-interest groups have argued that broadcasters should be required, for example, to provide free datacasting services to schools.