Another episode of 'FCC Knows Best'

You would think a Bush administration FCC would take a more market-based approach. But like its predecessor, Michael Powell's FCC believes market forces are no substitute for the wisdom of government officials. A case in point is the FCC's digital TV initiative.

The FCC has sent the television industry on a forced march to the digital future. One worthy objective is to free some of the wasted prime spectrum for other uses. But mandating new technology is likely to drive some vendors out of business while denying low-income consumers access to affordable products and services.

The problem with this type of initiative is that affected parties talk about the public's interests while acting to further their own. TV set manufacturers would love to see mandatory digital broadcasts because that would create a market for digital TVs. Broadcasters would love to see TV set manufacturers forced to produce digital TVs, ensuring audiences for digital content.

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You would think a Bush administration FCC would take a more market-based approach. But like its predecessor, Michael Powell's FCC believes market forces are no substitute for the wisdom of government officials. A case in point is the FCC's digital TV initiative.

The FCC has sent the television industry on a forced march to the digital future. One worthy objective is to free some of the wasted prime spectrum for other uses. But mandating new technology is likely to drive some vendors out of business while denying low-income consumers access to affordable products and services.

The problem with this type of initiative is that affected parties talk about the public's interests while acting to further their own. TV set manufacturers would love to see mandatory digital broadcasts because that would create a market for digital TVs. Broadcasters would love to see TV set manufacturers forced to produce digital TVs, ensuring audiences for digital content.

We should have learned from past technology mandates that there is no fair way to enforce them. The result is endless tweaking in response to objections, followed by waivers for those who can't or won't comply.

According to a plan announced last August, manufacturers must start incorporating digital tuners in TV sets by 2004. Virtually all new sets must include them by 2007. VCRs and DVD recorders must also include digital tuners by the end of the transition period.

"Free TV" stations (unlike satellite and cable stations) are being forced to roll out digital service. In the process, many of the low-power TV stations that have sprung up will be displaced. While cable operators are not required to convert, controversy swirls around whether they must carry dual analog/digital broadcasts of their free TV stations - a move that could knock some cable TV channels off crowded systems.

All this is predicated on two dubious assumptions. One is that the transition to digital TV presents a chicken-and-egg dilemma only government can solve. The other is that nothing short of a mandate would facilitate a robust digital TV industry.

The chicken-and-egg argument says manufacturers won't produce plentiful digital TVs until there are abundant digital broadcasts, and broadcasters won't offer copious digital programming until there are ample digital TVs. But many technologies, such as CDs and DVDs, that faced the same dilemma succeeded without government intervention.

The idea that nothing short of a mandate provides sufficient incentive also is misguided. Tax breaks, first dibs on new spectrum and other enticements could be used to encourage digital TV development without harming businesses or consumers.

The attitude of Powell's FCC boils down to this: Industry won't move forward unless pushed, and consumers can't be trusted to make the right purchasing decisions. This FCC-knows-best philosophy, if applied to the 'Net, could lead to a cyberspace version of Ma Bell.

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