Page 184 - Communication Commerce and Power The Political Economy of America and the Direct Broadcast Satellite

174 Communication, Commerce and Power

through which digital services (including HDTV) could be introduced
on a mass scale. 46 All in all, the most lucrative long-term pay-off
involving DBS may involve its application in efforts to establish
international HDTV markets as a means of generating a vast range
of spin-off hardware and software opportunities.
Television sets produced by Dutch-based company Philips and
French-based Thomson (and their subsidiaries) together account for
over one-third of the world TV monitor market and about two-thirds
of the West European market. 47 In order, at the very least, to preserve
this European market share relative to prospective Japanese and US
HDTV equipment manufacturers, Philips and Thomson pressed EC
officials to impose on member states an independent European HDTV
standard. In 1991 the European Commission responded and directed
DBS operators, manufacturers of relatively large-screen television
sets, DBS dish makers and cable television systems to institute a single
transmission standard called D2-MAC.
Remarkably, this decision was adopted without consultations with
relevant consumer associations nor any consideration as to how
broadcasters and viewers were to pay for the adaptation. It soon
became apparent that the MAC Directive was impractical. A number
of modifications were made. 48 Commercial telesatellite systems, such
as Astra, were allowed to continue their transmissions using the PAL
standard. The D2-MAC standard would be introduced over a five-
year period through simulcasts with the financial assistance of an EC
subsidy of more than $500 million. However, some of the largest
terrestrial broadcasters in Europe began developing advanced PAL-
compatible systems that would accommodate standard and wide-
screen ('quasi-HDTV') transmissions without exceeding current
terrestrial bandwidth allocations. The French government, in the
meantime, maintained that its broadcasters and telesatellite operators
should use the domestic SECAM system.
In the face of these developments, the European Union has shown
itself largely incapable of redressing the concerns of competitive
European corporate and national interests. It now appears that any
successful HDTV system must be capable of receiving D2-MAC,
PAL-Plus and SECAM transmissions. Moreover, these various trans-
mission standards will have to be encrypted and decoded involving the
continent-wide coordination of billing facilities. These developments
will require extraordinary private sector investments and levels of
cooperation. The EU, given its limited financial resources, is unlikely
to provide for more than a fraction of these costs. Corporations and,