April 20, 2004 1:46 PM PDT

Powell to broadcasters: 'Evolve or die'

LAS VEGAS--Broadcasters could be made obsolete, if they don't adapt to consumers' needs in the face of emerging technologies.

That's the message Federal Communication Commission Chairman Michael Powell sent Tuesday during a keynote speech at the National Association of Broadcasters conference here.

"Broadcasting is the original mass media. On the other end, there's a rise of a digital generation that has access to highly individualized and customized news and information," Powell told an audience at the annual NAB conference.

"Where does broadcasting go as a business? Adapt, evolve or die."

Powell's comments reflect the tension for free, over-the-air broadcasters, as they struggle to compete amid a rise of for-pay cable and satellite services and new digital media offerings via the Internet, video-on-demand, and wireless and gaming technologies.

To stay relevant, broadcasters are migrating to digital TV tuners under mandate by the FCC, which is absorbing their spectrum channels for other industries like wireless. That move would allow broadcasters to multicast programming over six channels as opposed to one, with opportunities for tailoring broadcasts to specific communities.

But the shift may not come soon enough for broadcasters, given intense competition among various industries to reach consumers at the local level with news and information.

"You're going to have a problem, if (in coming years) a Wi-Fi broadcast is matching the service of a local broadcaster with a license for free over-the-air programming," Powell said. "There are a lot of people who want your schedule."

He said the government could yank the spectrum licenses or demand fees in such a case. He called on the industry to work together to find solutions, while assuring them that they will continue to hold a place in local programming.

Paul Ollinger, assistant director of engineering at Iowa Public Television, took Powell's words as a gentle warning. "If we're not relevant, we face losing our spectrum to these emerging technologies."

Powell's comments, which came in a conversation with longtime journalist Sam Donaldson, reflect overall changes at the NAB conference and within the industry at large.

Twenty years ago, broadcasters were the NAB's sole attendees. Now, they comprise about one-third of the audience, according to anecdotal accounts. Over the years, the gathering has diversified greatly to include new-media and technology companies, DVD content producers, wireless providers and, of course, satellite and cable companies.

Phone companies are even investigating new technologies for video and broadcasting. At a cocktail party for the Hollywood movie studios on Monday evening, attendees included executives from Cable & Wireless and Bell Canada.

As further evidence of the shift, the conference opened Monday with a keynote speech by Hewlett-Packard CEO Carly Fiorina, who similarly outlined a need for change in the broadcasting industry to allow for technology shifts. In years past, keynote speeches have been delivered by Walt Disney Chairman Michael Eisner and Time Warner Chief Richard Parsons.

Part of the problem that broadcasters face in a new digital environment is lack of support of their channels by cable operators. According to NAB CEO Eddie Fritts, nearly 1,200 local stations are broadcasting digital signals, but only a third of those are carried on cable.

"Our DTV and high-definition signals are all dressed up with no place to go," Fritts said in a morning keynote Monday. "I call on the FCC to break down the cable industry's digital dam and let the free broadcast signals flow."

Powell responded Tuesday to a question by Donaldson on the issue that the industry wants me to "let it freely flow by creating more regulations to ensure that it does." He emphasized the FCC's accomplishments so far in mandating DTV tuners and helping establish a broadcast flag to protect content from illegal copying, but he implied that he's reluctant to install more government regulation.

"This isn't about being antibroadcaster or probroadcaster. We're pro-the public," Powell said.

 

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