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The multibillion dollar project to develop high-definition television
for Europe should be abandoned, unless the European Commission agrees to
substantial subsidies for broadcasters using the technology. This is the
view of Europe’s largest manufacturer of consumer electronics, Philips.

The Dutch company will decide at the end of the year whether to continue
with the analogue HDTV system it developed along with other companies in
a pan-European Eureka project. If Philips drops the system, called HD-MAC,
it will be free to concentrate on an all-digital HDTV system it is developing
with Thomson of France as a contender for a future HDTV system for the US
market (see ‘The shape of TV to come’, this issue).

In a statement at the company’s headquarters in Eindhoven last week,
Jan Timmer, Philips’ president, made clear for the first time that if the
HD-MAC system fails, it will be the fault of the European Commission.

In the early 1980s, European television researchers developed the analogue
MAC system for transmitting TV pictures from satellites. HD-MAC built upon
this research and in 1986 a European directive made MAC the standard for
European direct broadcast satellites because it would then be easier for
broadcasters and consumers to move on to HD-MAC. But a loophole let broadcasters,
such as Rupert Murdoch’s Sky, use lower power telecommunications satellites,
such as Astra, for direct broadcasting without using MAC.

‘There has been excellent cooperation in Europe,’ says Timmer. ‘Technically
we have reached the end point. We are ready to move from MAC to HD-MAC.
There is only one problem – financing.’ The European Council of Ministers
meets in Edinburgh in December and will vote on whether to spend 850 million
Ecus ( £600 million) of European taxpayers’ money subsidising HD-MAC.
Timmer leaves no doubt that if they do not, Philips will regard HD-MAC as
a lost cause. If HD-MAC fails, said Timmer, there is no guarantee that the
digital HDTV system Philips and Thomson is developing will stay ahead of
rivals from the US or Japan.

‘Europe is casting aside the head start it had,’ Timmer said, and he
laid the blame squarely at the feet of the Commission. ‘The EC directive
provided an escape and allowed the improper use of telecoms satellites.
It was a basic mistake. It was deplorable.’