Digital TV crystal-clear, but 'multicasting' model blurry: Making a buck from spare digital TV channels is a challenge, though one firm is eyeing city for wireless cable

September 26, 2005

While Multicast Networks Group plans to offer TV stations a network of programs they can run on their digital channels, pioneers in so-called "multicasting" of digital signals have had other visions.

And like many pioneers, they've taken arrows.

Jeff Smulyan, president of Indianapolisbased radio and TV empire Emmis Communications Corp., last year proposed leasing unused digital bandwidth from TV stations. Once he gained enough of these unused channels in a given market, he planned to deliver a sort of over-the-air cable TV service via the stations, with at least 30 popular channels, for $25 a month.

Smulyan's idea was a hit when he unveiled it at the National Association of Broadcasters convention last year. But he's all but shelved the concept after concerns about profit potential and competition from cable channels.

"We're in some discussions with people, but it's taken a back seat," said Smulyan, whose company is selling its TV stations. "It's a challenge because you really need an industry effort to move it."

Smulyan was beaten to the punch-perhaps fortuitously-by U.S. Digital TV, a Salt Lake City company that delivers the same over-the-air concept in Albuquerque, Las Vegas and Salt Lake City.

USDTV even swung a deal with Wal-Mart to sell its receivers in its stores, including those in Indianapolis. Non-USDTV customers can use the boxes to receive digital broadcasts on any TV-albeit in something akin to DVD-quality resolution when viewed on conventional sets.

USDTV planned an aggressive nationwide rollout early this year but that fizzled for lack of cash. Some analysts are preparing for a funeral.

"We are still very much alive," countered USDTV officer Brent Petersen. "We do plan to go into Indianapolis in the near future."

"Better them than us," said Michael Ruggiero, who heads Multicast Networks Group. His company as recently as last year was planning to launch a similar overthe-air broadcast concept.

But Ruggiero said the whole model fell apart when it became evident some TV stations wouldn't be willing to rent some of their unused digital spectrum.

"It's kind of hard to herd cats," he said.

It's not even clear whether viewers-at least the initial buyers of digital TV sets-would even want to leave their cable and satellite providers for over-the-air cable.

Some of these so-called early-adopters are technology geeks who expect the highest-quality picture after spending thousands of dollars for digital sets. They complain concepts such as USDTV rob local stations of extra digital channels that are then sliced and diced to cram in more programs-with picture quality diminished.

To many of them, the digital spectrum is to be kept as pure as General Ripper's "precious bodily fluids" in "Dr. Strangelove." On the enthusiast Web site SatelliteGuys, one reader complained of attempts to divvy up extra digital bandwidth of TV stations for use by USDTV.

"They buy bandwidth from your local Pimp [over-the-air] affiliates, thereby turning the affiliate's HD signal into HDLite. Please for the good of all HD, do not support this!"

Complained another digital disciple: "In many ways, it's just like cable-too many channels sucking off the same bandwidth."
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