House Considers Subsidizing DTV Transition
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WASHINGTON -- Rep. Joe Barton (R-Tex.) said today he would introduce legislation to bring the digital television (DTV) transition to an expeditious end in order to clear broadcasters' beachfront analog spectrum to usher in advanced wireless services.
Under current law, broadcasters are required to vacate their analog spectrum by Dec. 31, 2006, or when 85 percent of the homes in their market are capable of receiving DTV signals from all broadcasters in that market.
The 85 percent rule has caused many in Congress to question whether the DTV transition can be met even this decade and the vacated spectrum auctioned off for wireless broadband and other services. Broadcast spectrum is considered especially prime because it allows for the penetration of walls and other obstacles over large distances.
"We could address this problem by eliminating the 85 percent penetration requirement and setting a Dec. 31, 2006, hard deadline for television broadcasters to cease analog broadcasts," Barton said.
A hard deadline, however, creates enormous problems for Washington: if the 2006 deadline is met, the 21 million Americans (approximately 20 percent) who receive only over-the-air-broadcasts will have their sets go dark on Jan. 1, 2007, unless they purchase sets with DTV tuners or subscribe to cable or satellite television services.
"These households represent some of the most economically challenged residents in our nation. Many are in less financially fortunate rural areas," Rep. Rick Boucher (D-Vir.) said. "I dont think any of us would expect these individuals to bear the burden of the transition that would turn their television sets into scrap metal."
The Federal Communications Commission (FCC), which is overseeing the DTV transition, voted last year to require all television sets 13 inches and larger to have DTV tuners installed by July 2007. The ruling also requires all television interface devices, such as DVD players, also ship with onboard DTV tuners by mid-2007.
"We are contemplating, in our hard-date legislation, the creation of some type of digital-to-analog converter program to assist exclusively over-the-air television households in getting those converter boxes," said Rep. Fred Upton (R-Mich.), the chairman of the House Subcommittee on Telecommunications and the Internet.
Both Barton and Upton said the cost of the converter box subsidy program could be covered by the proceeds of auctioning off broadcasters' analog spectrum.
"Clearing the spectrum on an accelerated and nationwide basis with hard-date legislation will raise the money necessary to fund the converter-box program," Barton said. "Without such legislation, the spectrum would remain encumbered for many years and yield far less at auction."
Boucher urged his colleagues not to "rush to judgment" over the converter box subsidy plan.
"The math that underlies this suggestion is questionable at best," Boucher said. "A $100 converter box supplied for 73 million television sets would cost $7.3 billion. The low end estimate of the revenue the government would receive upon the auction [of the returned spectrum] is approximately $4 billion."
A report by the Government Accountability Office (GAO) submitted to the House panel Thursday estimates the cost of a possible converter box subsidy program from as little as $460 million to as much as $10.6 billion.
The GAO report uses two scenarios for its estimates. In the first, the GAO assumes converter boxes will be needed for only over-the-air households and estimates the subsidy cost between $460 million and $2 billion.
In the second GAO scenario, the agency assumed that cable and satellite operators would be required to provide broadcasters' digital signals in "substantially the same format as broadcasters transmitted those signals."
In that case, cable and satellite subscribers would also need some sort of converter box in place to receive high-definition signals. The GAO estimated the cost of that subsidy program to be $1.8 billion to $10.6 billion.
Last year, the Bush administration said it opposed subsidizing converter boxes for Americans who can't afford the DTV sets. Instead, Bush supports an annual analog spectrum tax on broadcasters who fail to vacate their current spectrum.