[Congressional Record Volume 144, Number 46 (Thursday, April 23, 1998)]
[Extensions of Remarks]
[Pages E662-E663]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


            CHALLENGES AND OPPORTUNITIES IN THE DIGITAL ERA

                                 ______
                                 

                          HON. DARLENE HOOLEY

                               of oregon

                    in the house of representatives

                        Thursday, April 23, 1998

  Ms. HOOLEY of Oregon. Mr. Speaker, I rise today to submit an article 
to the Record entitled ``Digital Watch; The Big Picture'' by Jerry 
Meyer, the Chief Executive and President of Tektronix, a global high-
technology company based in Wilsonville, Oregon. This article describes 
the challenges and implications of the transition to the digital 
transmission of television, telecommunications and information 
technology signals.
  Directed by Congress in the Telecommunications Act of 1996, the 
Federal Communications Commission mandated a ten-year period for the 
transition from analog to digital broadcasting.
  This industry imperative to disseminate the new technology has not 
necessarily created an instant demand for digital products, but it has 
driven the development of remarkable new interactive technologies.
  Mr. Meyer, whose firm is a global distributor of high technology 
components, including testing and interactive video equipment, is in an 
ideal position to observe trends in the digital industries.
  While emphasizing the unpredictability of these new markets, his 
article offered me a clear perspective on the possibilities that 
digital broadcasting creates and the scramble now taking place to 
capitalize on those opportunities. Thus, I am inserting this article 
into the Record and commend it to all of my colleagues for its reasoned 
approach to the new digital era.

                     Digital Watch: The Big Picture

                           (By Jerome Meyer)

       Even if you've heard the hype and seen the product demos--
     amazing color and clarity, images so real they look almost 
     3D--chances are you haven't given much thought to their 
     consequences. Most people never worry about how a broadcast 
     signal reaches their television set or computer terminal, and 
     most don't have to in order to lead profitable, happy lives. 
     Yet the move from a world of analog signals to a digital 
     version, raises a host of questions. Just how much will 
     consumers shell out for enhanced quality? Who will deliver it 
     to them? With telephone companies, Internet service 
     providers, and media powerhouses all scrambling for a ride on 
     the wave, what will the much-heralded ``digital world'' of 
     the future really look like?


                     Now You See It, Now You Don't

       A virtual hurricane, the digital revolution is sweeping the 
     worlds of telecommunications, broadcasting, and multimedia, 
     carrying consumers from the analog world of The Ed Sullivan 
     Show to the digitally supercharged computer games of Sega 
     Saturn. Like all transitions, this event isn't monolithic, 
     and it isn't pre-programmed. As the laboratory tools of 
     digital conversion and compression become available at a 
     price that makes them salable, programmers, movie studios, 
     producers, and advertisers are applying their creative genius 
     to the new delivery system.
       A simple comparative glance at a digital television picture 
     and an analog picture will give you a hint of how drastic the 
     improvement really is. The superfine visual and audio quality 
     is brought to you thanks to a technology chain that links 
     satellite makers, cable operators, content providers, and 
     electronic manufacturers.
       Even telephone companies like GTE (which recently bid to 
     buy Internet service provider BBN Corp. for $616 million) and 
     US West are fast expanding beyond their traditional delivery 
     mediums. Digital technology will make packaging offerings of 
     wireless services such as paging and data transfer more 
     widely available.
       In a sense, the perceived needs of the consumer are driving 
     this revolution into a digital state of high quality and 
     dependability. It is no longer enough to deliver the consumer 
     to another technology barrier. Motorola's global scale 
     Iridium project is just one attempt to deliver digital 
     technology into a world marketplace.
       Are consumers responding?
       Without a doubt. Although just 150 commercial satellites 
     spin overhead today, you can expect to find the sky cluttered 
     with almost 2,000 of them in just seven years. When you 
     consider that that could provide a market of more than 1 
     billion people, it's no wonder media moguls like Rupert 
     Murdoch are running hard to put in place the content and 
     capability to service those markets.
       There are an estimated 50 million people surfing the 
     Internet. Last year, computer sales outpaced those of 
     televisions. At the same time, it is clear that the consumer 
     is not wedded to a particular delivery system and will shop 
     for price and quality.
       The mad scramble for digital conversion has created dynamic 
     responses, but it has also caused some confusion. From my 
     vantage point at Tektronix, I am able to measure the needs of 
     the people who are using digital technology everyday. As 
     demand grows for better ways to test and measure the digital 
     stream of information--whether into a TV or onto a computer 
     screen--I see some patterns and possible pitfalls.
       The debate over whether consumers will use their 
     televisions or their computers for digital images ends up 
     being about ease of use. Whether my ``network appliance'' is 
     made by Sony or Philips or comes mail order from Dell or 
     Compaq doesn't really matter. What matters to the consumer 
     is: Is it better than what I already have? Does it cost more 
     or less? What programming or content will it give me access 
     to?
       Some pundits and news media would have us believe that 90 
     million television owners are going to drive down to the 
     store Monday morning and buy brand new digital televisions. 
     Current prices for the screens make that unlikely, but just 
     as with the VCR, when consumers finally get a glimpse of 
     something that is demonstrably better--and digital is--
     computer makers and consumer electronic makers will have a 
     great opportunity. Most large-scale manufacturers are already 
     making plans for the 10-year analog to digital changeover 
     mandate by the FCC.
       Already, computer makers and their chip allies, like Intel, 
     see an advantage to being on the consumer's desktop. And, of 
     course,

[[Page E663]]

     our Pacific Northwest neighbor, Microsoft, has taken 
     advantage of the way your appliance works in order to serve 
     up information, news, and data. Microsoft recently 
     demonstrated its desire to be part of the ``screen 
     experience'' by paying $425 million for WebTV and $1 billion 
     for a stake in cable operator Comcast.
       Your future Internet experience--whether at home or at your 
     place of business--will not be rooted in the appliance, but 
     in the value it adds to your work or social life. Business-
     to-business on-line commerce is already beginning, and 
     structures are now being built to handle grocery shopping, 
     educational material, and banking for consumers. The growth 
     in e-mail tells me that people want to communicate with each 
     other, but it also offers a way to transform learning and 
     education.
       Applications will continue to drive the digital 
     marketplace, with technical solutions always playing catch-up 
     to the needs and desires of the consumer. Continuing price 
     pressure and the persistent need to lower costs--whether 
     through falling chip prices or sinking telephone charges--
     will also spur the digital conversion.
       But this urge to go digital isn't without its pitfalls. 
     Intense efforts and great spending by some of the best and 
     brightest companies has yet to secure a business model where 
     the consumer will pay enough money to make sophisticated, 
     costly technology a worthwhile business investment. 
     Interactive television trials are now showing the promise 
     they once had, though other kinds of digital interactive 
     technology is securing a market. Digital editing and digital 
     transmission of images and sound are no longer revolutionary.
       The fact that it is my own inclination to actually go to 
     the movies with my wife, rather than rent a video as our 
     children do, underscores the point that all consumers--and 
     all businesses--don't embrace change at the same speed. The 
     ``rush'' to replace the analog technology of vacuum tubes 
     with the high-speed elegance of chips and computers has taken 
     time, and that will continue.
       My perspective is perhaps a little different than most, 
     because I've been able to see how technology has become more 
     and more a consumer product. Turning out oscilloscopes for 
     the U.S. Navy--our old business--isn't exactly the kind of 
     thing that gets you headlines, unless there is a war on. But 
     the initial concept of testing and measuring the quality and 
     consistency of technology is at the root of this digital 
     revolution--and that just happens to be our business.


                           The Digital Watch

       When you see a digital television picture you'll know it. 
     The clarity and quality is downright amazing, and some 
     digital broadcasting currently being received by digital set-
     top boxes looks almost 3D. Even with current standard 
     televisions, signals transmitted digitally via a satellite 
     make Thursday night's Seinfeld episode shine even brighter.
       The big question has never been, ``Gee, is this neat 
     stuff?'' The real question that keeps companies like Intel, 
     Sony, and TimeWarner up at night is: ``How much will 
     consumers pay for this technology?''
       Several events have coincided to make this a particularly 
     exciting shift for the industry. Not only are huge sums of 
     money being spent on a variety of new delivery systems, but 
     government deregulation also throws these new technologies 
     into the push-and-pull of the marketplace.
       When telephone deregulation started back in the mid-1980s, 
     the personal computer was outside the reach--and want--of 
     most people. Technology issues revolved around speed, size, 
     and standards. By embracing open standards of technology--a 
     concept similar to that of everyone agreeing on grades of 
     gasoline--the PC business boomed; even the Goliath IBM 
     learned a lesson trying to hang onto standards, while 
     companies like Dell Computer, Compaq, and Microsoft gave new 
     meaning to the mixing of technology and growth.
       In terms of going digital, Murdoch's Fox television network 
     is the most aggressive entertainment company. They are using 
     the digital shift to bring costs down as well as to build a 
     satellite distribution network that stretches around the 
     globe. I get a first-hand look at what these companies want 
     to do because they've got to know what the technology can do 
     before they deploy it. Whether transmitting stock prices or 
     television programs, you have to use technology to deliver it 
     to the customer.
       Right now, other broadcasters (CBS, NBC, and ABC) are 
     steering a conservative course. There's some good reason for 
     this. They have all been through the cable wars and were told 
     that their traditional dominance would be washed away like 
     Gilligan and his friends. With a massive capital spending 
     campaign to finance this government-mandated switch-over from 
     analog to digital transmission, no one wants a false start.
       The market players know that digital will be the de facto 
     standard in the next century. Ditigal technology will allow 
     companies to provide more information to consumers as well as 
     create challenges relating to costs and development. The 
     digital world will blur the lines between data and video on a 
     computer screen and the entertainment and news we have grown 
     accustomed to on our television sets.


                           Switching Channels

       One clear benefit of the digital world will be greater 
     choice. Individuals will be able to personalize the kinds of 
     information they receive as well as the medium they want to 
     use. Hand-held digital telephones with news, messages, 
     Internet connections, as well as the more mundane tasks of 
     scheduling, telephoning, and electronic files will be packed 
     into small cost-effective devices.
       Companies such as Motorola, Ericson, and Sony will lead the 
     consumer charge in this area, but an entire behind-the-scenes 
     technology deployment will have taken place--unseen by the 
     average customer. Digital standards provide the framework for 
     all the information traveling the airwaves. As broadcasting, 
     production, and distribution players battle for consumers, 
     they will all be using digital tools for combat. Traditional 
     broadcasting will be using two-way technology to connect with 
     viewers; production companies will have new video and audio 
     capabilities to engage the audience; and distribution will 
     follow the customer from room to room and from city to city.
       Imagine video technology at a reasonable price, bundled, as 
     part of a wider array of technology information choices. One 
     channel might be news; another might be a conversation with 
     co-workers or family members. Digital technology literally 
     unleashes whole new combinations of images and sounds that 
     can go anywhere and be transported for a fraction of their 
     traditional cost. While the corporate landscape will be 
     dominated by some of the same players competing today, it is 
     fair to say that everyone is watchful of new entries. As 
     digital technology becomes more and more pervasive, it also 
     will present new opportunities for startup and new ventures.
       Whether it is video browsers that let computer users watch 
     full motion, digital video with sound, digital signals sent 
     via satellites, or new digital transmission towers, the 
     consumer will be clamoring for the best technology at the 
     best price. The challenge for the consumer electronics 
     industry is to deliver it.

     

                          ____________________