It's obvious that broadcasters must keep up with constant improvements in picture and sound quality, and high-definition represents a dramatic leap forward in these areas. Belo has chosen to broadcast in 1080i, the highest-resolution format. This is the same format that CBS, NBC and [The] WB have chosen for high-definition programming, and it is compatible with formats chosen by ABC and Fox.
Beyond this quality improvement, the digital television revolution over time will offer significant new opportunities to television programmers. For local television news operations, this includes enhancing and expanding our news product. Digital technology creates the possibility of new programming forms—utilizing data, graphics and different camera angles to make television a more interactive and informative experience. It also offers the prospect of enhanced revenues through more-targeted advertising and interactive advertising.
Some broadcasters want to offer more choices to their viewers through multicasting—using spectrum to offer multiple channels of standard-definition programming rather than a single high-definition feed. Theoretically, a local broadcaster may choose multicasting to reach specific demographics ... to offer a local weather channel ... to provide zoned newscasts ... or to offer a Spanish-language channel. But there are significant political hurdles for multicasting carriage on cable and satellite systems anytime soon.
Belo will focus for the time being on providing our audiences a single high-definition program service. But the fungible nature of spectrum, the capacity of fiber networks and improvements in digital compression technology mean that programming choices will only continue to grow over time.
But here's your reality check: Only 4% of U.S. households have a digital television set, according to the Consumer Electronics Association. While demand is increasing, we need continued leadership by the FCC to drive the digital transition.
Specifically, the commission must address the critical issue of digital must-carry for licensees such as Belo. Local television licensees are operating two channels during the DTV transition: our existing analog channel as well as a new digital channel. The transition end date—currently scheduled for 2006 or when 85% of a market's viewers can receive a digital television transmission—requires licensees to relinquish one of the channels, discontinue analog service and complete the changeover to digital.
The absence of digital must-carry severely restricts our ability to reach audiences and hinders the overall DTV transition. This is the most critical issue that the FCC and Congress must address for us to move forward. We need an aggressive and focused FCC to continue to push along. I'm optimistic that this will happen.
Television licensees must keep up with the expectations of our audiences. We're living with the first generation of Americans who have been born into the interactive digital era, and this has profound implications for the television industry.
Our audience is ready for us; it's time for us to deliver on the promise of digital television.