Page 185 - Communication Commerce and Power The Political Economy of America and the Direct Broadcast Satellite

Capital, Technology and the US in an 'Open Market' 175

indirectly, home consumers, therefore will almost certainly be
European HDTV's primary financiers. A study conducted by finan-
cial consultants Coopers and Lybrand, however, estimates that the
cost of upgrading the equipment now already used by European
consumers to enable them to receive a universal European D2-MAC
signal would be in excess of $20 billion from 1993 to 2001. 49 More-
over, to view a high-definition signal, the initial price for a receiver
will be approximately $4,000. 50
At the end of 1992, a $1 billion EC 'action plan' to promote MAC-
based HDTV was blocked by the British and Dutch governments.
Philips, Europe's largest prospective manufacturer of HDTV re-
ceivers, subsequently announced that it would not proceed with its
MAC-compatible production plans. 51 The subsequent European
retreat from requiring both medium-and high-power DBS systems to
adopt the D2-MAC standard now is complete and, in part, it illus-
trates the market dominance of the Astra system. The European
private sector thus has been left to establish a de facto continental
DBS transmission standard, rendering the MAC Directive industrial
policy stillborn.
Unlike the European Union, formative commercial US HDTV
developments have been decentralized to such an extent that the
FCC refused even to consider an HDTV standards policy until
1988. After twenty-five years of research and development and
approximately $500 million in investment, Japanese interests already
have initiated analogue HDTV services over NHK's DBS system. In
the United States, on the other hand, private sector expenditures, up
until 1991, totaled no more than $20 million and, until 1997, HDTV
technical standards remained unresolved. 52
American public sector officials have taken a wait-and-see
approach to HDTV standards. Of special concern to the FCC were
questions regarding the compatibility of different HDTV systems to
existing NTSC television broadcasting standards and the financial
costs associated with their industry-wide implementation. US delays
have been most directly influenced by the NAB and its members who
see HDTV as a threat to the ongoing viability of their holdings. This
is the result of HDTV's need for large amounts of bandwidth -
capacities now available over most DBS systems and soon to become
plentiful through fiber-optic cabling. As a result of the insistence of
NAB officials that any prospective HDTV standard must be NTSC-
compatible, this fundamental NTSC-compatibility requirement
dominated all US HDTV proposals.