A review of Hernan Galperin\u27s New Television, Old Politics: The Transition to Digital TV in the United States and Britain, Cambridge University Press, 2004. Based on comparative case studies in Britain and the United States, this book analyzes the transition to digital television in both countries, considers governmental regulatory strategies, and focuses on the impact of various factors, including political influence and market and technological changes

Hart, Jeffrey A.

English

Indiana University Bloomington Maurer School of Law

Federal Communications LawJournalVolume 58 | Issue 1 Article 81-2006The Continuing Role of State PolicyJeffrey A. HartIndiana UniversityFollow this and additional works at: http://www.repository.law.indiana.edu/fcljPart of the Administrative Law Commons, Communications Law Commons, Comparative andForeign Law Commons, and the Legislation CommonsThis Book Review is brought to you for free and open access by the LawSchool Journals at Digital Repository @ Maurer Law. It has been acceptedfor inclusion in Federal Communications Law Journal by an authorizedadministrator of Digital Repository @ Maurer Law. For more information,please contact wattn@indiana.edu.Recommended CitationHart, Jeffrey A. (2006) "The Continuing Role of State Policy," Federal Communications Law Journal: Vol. 58: Iss. 1, Article 8.Available at: http://www.repository.law.indiana.edu/fclj/vol58/iss1/8BOOK REVIEWThe Continuing Role of State PolicyNew Television, Old Politics: The Transition to Digital TV in the UnitedStates and Britain, Heman Galperin, New York, N.Y., CambridgeUniversity Press, 2004, 311 pages.Jeffrey A. Hart*Hernan Galperin uses comparative case studies of the transition todigital television in the United States and Britain to address a variety oftheoretical questions regarding the relative impact of political factorsversus markets and technological change on regulatory regimes. The bookis organized into four parts. The first part introduces the topic and providesbackground on digital TV. The second and third parts focus on the digitaltransitions in the United States and Britain, respectively. The fourth partcontains summaries and conclusions.In Chapter One, Galperin argues that three factors were the impetusfor the transition to digital TV in both countries: the steady decline of thedomestic consumer electronics industry, "the international diffusion of theinformation revolution agenda, and the spectrum shortage created by therapid growth of mobile telephony and other wireless telecommunicationsservices."' Nevertheless, the strategies chosen to make the transition andthe outcomes of these strategies differed markedly.According to Galperin, three nation-specific factors producedvariance in strategies and outcomes across the two countries: theorganization of the state (cabinet-led parliamentary v. presidential*Jeffrey Hart is a professor of political science at Indiana University-Bloomington. Over hiscareer, Professor Hart has focused his research on international politics, technology,international competitiveness, and telecommunications. Recently he has written onglobalization, economics, and the politics of digital television.1. HERNAN GALPERIN, NEW TELEVISION, OLD PoLITIcs: THE TRANSITION TO DIGITALTV IN THE UNITED STATES AND BRITAIN 15 (2004) [hereinafter NEW TELEVISION].FEDERAL COMMUNICATIONS LAW JOURNALgovernment), the normative orientation of media policy, and the legacy ofthe analog TV regime.2The British transition included greater efforts to foster competition inbroadcasting than the U.S., partly because Britain started its transition witha lower level of competition. The dominance of the national publicbroadcaster, the British Broadcasting Corporation ("BBC"), was animportant differentiating factor, but Galperin argues also that a majorimpetus for British strategy was the threat posed by the rapid success ofpay TV services delivered via satellites controlled by Rupert Murdoch andhis allies.Despite its dominance, however, the BBC did not always get its way.Galperin attributes this to the British government's ability to resist captureby either public or private interests, in sharp contrast to the Americansystem, which was the result of the centralization of power made possibleby cabinet government. Overall, the "American strategy ...privilegedcontinuity over reform." 3 The U.S. efforts at broadcasting reform werestymied by private local broadcasters who successfully used the idea ofpreserving "free TV" as their watchword throughout the long struggle.Chapter Three does a good job of providing background about theregulatory regime for analog TV in the United States. Galperin describesthe public interest standard for the licensing of stations by the FederalCommunications Commission ("FCC") and the impact of new technologieslike VCRs and cable TV. There is nothing particularly new here, but it is agood summary nonetheless.Chapter Four summarizes the U.S. debate over high definitiontelevision ("HDTV") in the 1980s and shows how it led to the idea topursue digital television ("DTV") in the mid 1990s. DTV included thepossibility of HDTV digital broadcasts among other ways of using thespectrum allocated for DTV. The implicit deal with local broadcasters wasthat they would be loaned an additional television channel to experimentwith digital services during the transition. They would have to return theanalog channels once the transition was completed.In Chapter Four, Galperin also discusses the changing views of thebroadcasters as represented primarily by the National Association ofBroadcasters ("NAB") and their ongoing battles with the cable operators asrepresented by the National Cable Television Association ("NCTA"). Thebasic conflict between the two was over "must carry" rules.4 Earlier FCCdecisions and Supreme Court rulings had determined that cable operators2. Id. at 23.3. Id. at 18.4. Id. at 66.[Vol. 58CONTINUING ROLE OF STATE POLICYcould be required to carry the signals of local broadcasters. 5 This wouldhave to be renegotiated for digital TV, especially if local broadcasterschose to use their digital channel for "multicasting"-broadcasting anumber of standard-resolution signals (somewhat like a mini-cable system).The Author briefly discusses the rise and decline of the linkagebetween the debates over HDTV and DTV and concerns over the decline inU.S. economic competitiveness vis a vis Japan and Western Europe. Healso briefly discusses the arguments between the U.S. television andcomputer industries over DTV standards and the ungainly compromise onpicture formats embedded in the FCC decisions of the mid 1990s.6 Both ofthese topics are covered in greater detail in other works.7Chapters Five and Six deal with the changes in the DTV bargain thatoccurred after 1996 when the White House and key leaders in Congressdemanded a quick return of the analog channels so that a spectrum auctioncould be used to reduce the budget deficit. The debate over the 1996Telecommunications Act included a discussion of the DTV transition. Thelocal broadcasters successfully lobbied for new rules that would delay thereturn of the analog channels. These rules required that 85 percent ofhouseholds be able to receive digital signals before the broadcasters wouldbe obliged to return their analog channels.8 That threshold has yet to bereached.Chapter Seven provides a description of the European context for theBritish transition. The British case differs from that of the U.S. in thatBritain is embedded in a larger system of governance thanks to itsmembership in the European Union, making this chapter absolutelynecessary. After quickly reviewing the reasons for the European rejectionof the Japanese proposal for HDTV standards in the mid 1980s, Galperinturns to a discussion of the politics behind the Multiplexed AnalogComponents ("MAC") systems that were supposed to replace the analogcolor TV standards in Europe. He provides a summary of the Europeandebate over Open Network Provision ("ONP") standards that weredesigned to apply not just to telecommunications networks but to all high-bit-rate digital infrastructures, including digital broadcasting. The ONPdebate played a key role in the British transition strategy because keypolitical actors strongly embraced the ONP approach.Chapter Eight provides a description of the regulatory regime for5. Id. at 67.6. Id. at 87.7. See, e.g., JOEL BRINKLEY, DEFINING VISION: How BROADCASTERS LURED THEGOVERNMENT INTO INCITING A REVOLUTION IN TELEVISION (1997); JEFFREY A. HART,TECHNOLOGY, TELEVISION, AND COMPETITION: THE POLITICS OF DIGITAL TV (2004).8. NEW TELEVSION, supra note 1, at 110.Number 1]FEDERAL COMMUNICATIONS LAW JOURNALanalog television in Britain. It contains a short history of the idea of "publicservice broadcasting" that has played such an important role there. TheBBC was never particularly well liked by Conservatives, includingWinston Churchill, but it came under particularly heavy fire during theThatcher administration. Thatcher wanted, in particular, to change thefunding scheme for the BBC so that the BBC would lose its dominantposition. The Major administration did not agree with this idea, however,so despite the addition of competitors to the BBC in the form of theindependent television companies and Murdoch's satellite-delivered payTV services, the BBC managed to remain the dominant force in Britishbroadcasting. Galperin argues that the Major administration, by separatingthe transmission services of the BBC from its programming andencouraging it to expand its commercial activities, made it both necessaryand possible for the BBC to engage in a successful form of publicentrepreneurialism during the digital transition.Chapters Nine and Ten detail the rather baroque maneuvers thatoccurred once the British government decided to get serious about thedigital transition. These all concerned Digital Terrestrial Television("DTT") since all earlier attempts in Britain other than Murdoch's to enterthe digital satellite television market had failed spectacularly and cabletelevision had been unable to compete successfully with analog terrestrialTV or satellite pay TV.The key players on the government side, besides the BBC, were theIndependent Television Commission ("ITC"), the Department of Trade andIndustry ("DTI"), and the Office of Telecommunications ("OFTEL"). TheITC was primarily responsible for decisions about licensing and a few otherregulatory duties mandated by Parliament under a series oftelecommunications acts. The DTI was concerned primarily withencouraging the building of high-speed digital networks and creating amore favorable environment for digital technology more generally, whilethe OFTEL attempted to "nurture ... competition and prevent dominantfirms from leveraging market power across the supply chain." 9Competition among these agencies played an important role in the Britishdigital transition.Chapter Ten, which is entitled "Murdoch Phobia," explains theoutcomes of the various bids for DTIT licenses on the part of variousconsortia, but more importantly why the competition for licenses wasstructured as it was. Murdoch's attempts to compete in the DTI spherewere mostly frustrated by government elites intent on fostering a Britishcompetitor to his satellite-delivered pay TV services.9. Id. at 192.[Vol. 58CONTINUING ROLE OF STATE POLICYChapter Eleven takes up the story of DTT licenses after the electionof a Labour government under the leadership of Tony Blair. There wasconsiderable continuity in policy from Major to Blair because of the twoadministrations' shared belief in the need for greater competition inbroadcasting while preserving the public service tradition. The BBC wasdisappointed that the new administration did not go along with its requestfor major user fee increases. When the independent television companies'digital TV service failed in 2002, there was no government bailout, and anew consortium was permitted to take its place that combined the resourcesof the BBC and Murdoch's BSkyB. (So, no need to feel sorry for RupertMurdoch.) Britain emerged in the end with two major digital broadcasters:the BBC and Murdoch. Was this "industrial policy through other means"?' °Galperin's comparative case studies show the enormous pressuresexerted on both governments to revise their regulatory regimes. He arguesthat the British digital transition went more smoothly, despite its variousglitches, than the American one. In Chapters Twelve and Thirteen, hesuggests that cabinet-led parliamentary government in Britain, as comparedwith presidential government in the United States, made it possible for theBritish government to act against the organized interests of thebroadcasting industry to establish a regulatory regime that recognized theregulatory impact of "digital convergence"--that is, the need for greaterconsistency of regulation of telephone networks, computer networks, andbroadcasting, as high-bit-rate digital transmission technologies permittedhigh-quality audio and video to be carried over a variety of transmissionmedia.The Author argues that inter-industry coordination problems wereimportant in both countries and that the transition was strongly influencedby state policy as a result. In Britain, "[inter-industry] coordinationproblems were minimized by past policy changes favoring industryconsolidation, national ... stations, and vertical integration in the pay-TVmarket."" In the United States, in contrast, the "organization of the state ...stands in sharp contrast to that of Britain. In a few words, it militatesagainst regime change and policy innovations .... Fragmentation of policyauthority favors fragmentation of interest representation."' 2 In the UnitedStates, inter-industry coordination problems and a fragmented governmentresulted in a more difficult transition.In somewhat of an after note, the Author summarizes his case againstthe arguments of globalization theorists about the declining power of the10. Id. at 226.11. Id. at266.12. Id. at 255.Number 1]FEDERAL COMMUNICATIONS LAW JOURNALstate: "The transition to digital TV reveals that policymakers have notpassively accepted losses in their ability to organize the media sector.'' 3The two case studies show how regulatory changes actually increased thepower of the state in some areas while diminishing it in others. It is thusbetter to speak about a restructuring or reconfiguration of the state as amajor consequence of globalization, rather than a retreat. And despiteglobalization and the alleged tendency of globalization to produceconvergence in regulation, the governments of advanced industrializedstates remained sufficiently different from one another to produce differentpolicy responses to similar challenges.This Book's main contribution is its careful analysis of the Britishtransition and its careful comparison of the transitions in the two countries.I have a few quibbles with Galperin's facts and interpretations. I would nothave been as comfortable about pronouncing the British transition strategysuperior to the American. Neither transition has resulted yet in theswitching off of analog services. The projected date for the end of analog is2009 in the U.S. and 2012 in the U.K. The British, like the rest of Europe,were blindsided by rapidly increasing demand for high-definition TV setsand programming-the Europeans decided to invest in a type of wide-screen digital TV that did not easily upgrade to high definition. 14 Still, Ibelieve Heman Galperin has performed a great service in providing thereaders of this Book with yet another reason to believe that states still havethe desire and the power to shape markets even in this new and gloriousage of globalization.13. Id. at 287.14. Peter Feuilherade, Europe Lines Up for TV Innovation, BBC News WorldEdition, Sept. 14, 2004, http://news.bbc.co.uk/golprlfrl-/2/hi/technology/3652402.stm.[Vol. 58

The Continuing Role of State Policy

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