The market is very small and the potential cost is very high. But Canadian TV broadcasters could be forced to provide free-to-air high-definition signals much sooner than expected, thanks to recent whip-cracking by the U.S. Federal Communications Commission.

On Aug. 8, the federal regulator voted 3-1 to order U.S. manufacturers to include digital tuners in all new TV sets with screen sizes of 36 inches or greater by 2004. All other TVs must be digital ready by 2007. This is in keeping with the FCC’s plans for the U.S. to abandon all analog TV broadcasting by the end of 2006.

‘We have no choice,’ said FCC chairman Michael Powell in a statement, ‘but to redouble our efforts to get to the other shore.’

Conversion to HDTV has moved slowly in the U.S., and slower still in Canada, where a ‘wait-and-see’ attitude has dominated. Few broadcasters in this country have seen any point in constructing expensive digital towers when HDTV sets currently account for roughly 0.1% of the market. Many have also doubted that the Americans could meet their 2006 deadline and, until recently, expected HDTV to remain a non-product into the next decade. Only one broadcaster, Toronto’s CHUM Television, has applied to the CRTC for a HDTV license.

But since the recent FCC rulings, things have changed. U.S.-made sets will almost certainly arrive by the year after next – bringing in free, high-definition signals from across the border and forcing Canadian stations to compete.

‘It will be the battle of Buffalo all over again,’ says CBC vice-president and chief technology officer Ray Carnovale. He says HDTV, on average four times sharper than DVD, could catch on very fast once HD sets are mass-marketed – perhaps repeating the recent record-breaking adoption of DVD, which hit 25-30% market penetration just five years after inception. ‘People are going to see this and say ‘This is what good video is all about. And you’re telling me I can get it for free, over the air?”

The replacement rate of TVs, one every seven years, means that at the very least there will be one HD set in every Canadian home by 2012. Carnovale is tight-lipped about CBC’s immediate plans, but says the network will ‘certainly not be ignoring’ HD.

Cross-border competition has already started because of Rogers Cable. The Toronto company has been picking up HD air signals from stations in Detroit since December 2001 and rebroadcasting them to its digital subscribers, completely bypassing Canadian broadcasters. Rogers re-airs ABC, CBS, NBC, Fox and PBS.

‘If there’s nothing available in Canada to pick up, that’s what [cable companies] are going to do,’ says Michael McEwan, president of Canadian Digital Television. ‘And they can do it. It’s not an issue.’

It will be especially hard for Canadian networks to keep up with the digital wave, as covering the country with brand-new digital transmitters will be, in the words of one network exec, ‘horrendously expensive.’ A network could cover the country’s large urban centres, 70% of the market, with perhaps 20 transmitters. But getting a signal to the other 30% – rural locales like Moose Factory and Inuvik – will be costly.

So it’s not surprising that Canada’s first HDTV broadcaster could be one that a) serves a single urban centre, b) faces heavy cross-border competition and c) can do it on the cheap. Citytv competes for eyeballs with several Buffalo-area stations and beams its analog signal from atop the CN Tower. As luck would have it, there’s room in the half-kilometre high landmark to add a digital system, sparing the expense of putting up a second tower.

Adding digital free-to-air services will cost roughly $400,000, says Chum Television VP business and regulatory affairs Peter Miller, a modest slice of the $2 million the station plans to spend on digital retrofitting.

Miller says HD fits the programming and business model of the technology-happy station. ‘We’re more movie-driven and our sense is that HD is going to be more crucial for movies than for series,’ he says. ‘A feature film shot on 35mm is, essentially, in HD. You just have to do the right conversion. We also tend to do be more retail-ad based than other corporate groups. So there might be potential for retail partnerships with [for example] Bay-Bloor Radio or Futureshop.’

‘There are also certain marketing benefits,’ he adds, ‘or bragging rights.’