Qualcomm’s Best-Laid Plans for Cell Phone TV Service

2/4/09Follow @bvbigelow

Updated Feb. 4 at 3:55 p.m. PST with the House of Representatives approving a four-month delay in DTV conversion. See below for more details.

At the Consumer Electronics Show in January, Qualcomm’s MediaFlo subsidiary unveiled plans to nearly double its FLO TV service for cell phones, by expanding into 108 U.S. markets this year. The San Diego company said it would begin its expansion after Feb. 17, the date when television stations across the country are supposed to switch from analog- to digital-based broadcast equipment, leaving the analog spectrum for FLO TV. Now the company’s expansion plans are on hold, like a late-night TV test pattern.

If the U.S. House of Represenatives revisits a bill that would postpone the digital TV switchover until June 12, MediaFlo’s expansion also will be delayed by four months. “What else you can do?” MediaFlo senior vice president Matt Milne told a San Diego telecom group yesterday. “You wait until the June 12 date, and you do the same thing then that you were going to do on Feb. 17.” In the meantime, he added, “you continue to work on your rollout, and you optimize your networks so you have even more markets ready to go.”

Media Reports from Washington indicate the House could reconsider the issue as early as today, and that a delay appears likely to pass. Milne says that’s what he’s been hearing as well.

Update, Feb. 4:  The House voted 264-158 to postpone the analog-to-digital TV conversion to June 12. Because the Senate passed the measure unanimously last week, the bill now heads to the White House, where President Barack Obama is expected to sign it. 

The Feb. 17 conversion to digital TV is described as a truly historic milestone by CommNexus San Diego, a local wireless industry association that invited MediaFlo’s Milne and other industry experts to discuss the transition yesterday. Bill Zears, the San Diego-based regional director for the Federal Communications Commission, told the group that the government’s latest survey in October showed public awareness of the pending switch was up to 92 percent.

Qualcomm, which paid more than $550 million to buy operating licenses in the 700 MHz spectrum that TV broadcasters are vacating on Feb. 17, is opposed to further delay. The company’s MediaFlo service offers 15 channels of digital TV programming on the same 700 MHz frequency—also known nationwide as Channel 55.

Nevertheless, President Obama and prominent Democrats are concerned for the estimated 6 percent, or roughly 6.5 million Americans, who are mostly without means and who are “completely unready” for the planned change. The delay won’t fix the problem. But delaying the digital TV conversion to June 12 will give the elderly, poor, and other unprepared Americans more time to get devices that convert the new digital TV signal into the old analog TV signals used by vintage TVs.

On Jan. 26th, the Senate unanimously approved delaying the Feb. 17 digital TV switchover to June 12. But two days later, the House couldn’t muster the necessary two-thirds majority to adopt the Senate measure. A House vote today, however, would require only a simple majority to get approved.

“I wonder if another four months of delay will change this much,” San Diego wireless industry consultant Ricardo Tavares told me after the meeting. Even if the delay is approved, Tavares says the U.S. is still ahead of Europe and most of Asia in implementing digital TV broadcasts.

That’s probably not much consolation for Qualcomm, Verizon, or AT&T, which have collectively spent billions of dollars to acquire the necessary spectrum and build out the wireless networks needed to deliver TV programming to wireless devices. But Tavares says he doesn’t think it will fundamentally alter their first-to-market advantage if they still have an all-US mobile TV network operating in June.

Qualcomm’s MediaFlo says its FLO TV service already offers complete programming to Verizon and AT&T in 65 major markets nationwide, including Atlanta, Chicago, Dallas, Las Vegas, Los Angeles, New York, Seattle, and Washington D.C. MediaFlo’s 2009 expansion called for adding its service in 108 markets with an estimated 200 million customers, including Boston, Miami, Houston, and San Francisco.

Without Congressional intervention, Milne says MediaFlo plans to begin expanding into its new territory two days after Feb. 17. MediaFlo is ready to activate its FLO TV service in most of the new markets, and expects to be in full commercial operation by March 12.

But nobody expects that will happen anymore.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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