Digital television (DTV) is defined in two quite different ways, and they are often confused. In one sense, it refers to the digital transmission of television signals by TV operators. But in the other, it means several relatively new TV formats—for example, high-definition television (HDTV) and interactive television (ITV)—that digitization renders more feasible.

Digitizing TV signals for transmission makes eminent sense because this increases the capacity of today’s transmission technologies. As a result, digital transmission is spreading fast. Yet there is little reason to expect every new digital-TV format to catch on as quickly; in fact, HDTV may never amount to much, while all digital formats face tricky technical and economic hurdles.

The difference between the two aspects of digitization should be understood by everyone connected with the industry: operators of TV systems, content providers, viewers, and, in particular, governments, many of which are basing policy decisions on unsubstantiated beliefs about how to transmit digital TV

signals and what digital services should be offered. In some countries, includ-ing Australia, Taiwan, and the United States, governments are giving away broadcast spectrum valued at tens of billions of dollars for DTV uses that in hindsight may not make sense. Even so,...