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Is the Digital TV Multicasting Model Obsolete?

NYTimes reports that as America moves toward its conversion to the all-digital transmission of free to air television signals � the digital switchover is now set in stone for February 2009 � the debate over multicasting is looking like another shining example of the law of unintended consequences when technology comes into play.

Multicasting is the entertainment industry term for broadcasting several television channels in the space, or bandwidth, of a current analog broadcast signal. There are technical issues related to this, but the intended upshot is that with new digital frequencies and equipment, a local TV station can now beam roughly four digital channels on its signal where a single analog channel once existed. Or it can broadcast the current signal and sublet the extra spectrum, or space, for other purposes, like Internet access, infomercials or pay-TV services.

Some belive that multicasting is in the 'public good' because it uses a national resource � the airwaves � to deliver more and better free television into people's homes. While only 15 percent of America's households currently receive their television over the airwaves, rather than through cable or satellite, some cool new channels may help to quell a potential uproar over the fact that old analog televisions will not work with new digital signals.

Bruce Leichtman of the Leichtman Research Group estimates that when the digital switch is thrown in 2009, there will be about 75 million analog TV's in the U.S. that get their signals only over the airwaves. Their owners will need to buy $50 converter boxes to tune in after that.

Unfortunately for traditional broadcasters � and, arguably, for viewers � that 15 percent of households is not a big-enough market to make these new niche channels economically viable. But, there is another, perhaps more significant, issue. Will the fundamental notion of a TV 'channel' with linear programming be relevant at all in 2009. Meaning, given the current forward-looking viewer trends in news and entertainment consumption, is this really the best use of the available frequency spectrum, and is it truly in the public interest?

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