Senate Joins House in Approving DTV Bill

UPDATED: The U.S. Senate today finally approved Feb. 17, 2009, as the last day of
analog broadcasting in the United States, setting the stage to complete the
country’s digital television (DTV) transition.

As part of the Deficit Reduction Act of 2005, the DTV transition is expected
to raise billions from wireless broadband providers when the Federal
Communications Commission (FCC) auctions off the analog spectrum returned by

Part of the returned spectrum will also be used by public-safety officials
to improve interoperability between first responders, a key recommendation
of the 9/11 Commission.

Although the Senate made no changes to the DTV portion of the legislation,
Democrats managed to make some healthcare-related changes that will require
House approval before sending the bill on the White House for President
Bush’s approval.

The House may meet as early as Thursday in a pro forma session to deal with
the Senate changes.

“After years of debate and negotiation, the stage is now set for a
groundbreaking change in American innovation and public safety,” Ralph
Hellmann, senior vice president for Government Relations at the Information Technology
Industry Council (ITI), said in a statement.

“The expected presidential
approval of the reconciliation package means that the last hurdle has been

Hellmann said with a hard date set for the DTV transition, “America’s tech
companies can move forward with innovation that takes advantage of the
available spectrum. The door will finally be open for the development of
new technology products and services that provide exciting benefits for
consumers and businesses.”

The legislation provides $1.5 billion in digital converter-box subsidies for
the approximately 15 percent of U.S. households (20 million) that currently
receive exclusively over-the-air broadcasts.

Other subsidies included in the bill include $156
million for a national alert system, $43.5 million for a fully enhanced 911
emergency system, $75 million to help low-power television stations upgrade
to digital TV standards and $30 million to help New York City’s DTV

First responders will also receive $1 billion in grants for interoperable
equipment and training.

All of the subsidies will be funded through the returned spectrum auction
expected to happen within the next two years.

Left in doubt is the subsidy fate of 39 million households that currently
subscribe to analog cable services.

As originally drafted, the DTV bill permitted analog cable companies to
“down-convert” high-definition digital signals into standard-definition
analog signals, allowing subscribers to receive digital television without
purchasing what is expected to be a $60 digital converter box.

However, in the deal cut by Senate and House negotiators over the weekend,
the down-convert signal provision was eliminated.

“We are especially encouraged that the legislation thwarts the cable
industry’s desire to degrade delivery of HDTV pictures to consumers,” David
Rehr, president and CEO of the National Association of Broadcasters, said in
a statement following Monday’s House vote.

The converter-box subsidy for over-the-air television users is structured to
minimize participation by consumers who do not need a subsidized
converter box.

Under the plan, consumers will have to make an “affirmative
request” to receive up to two, $40 converter-box coupons. The coupons can’t
be combined for the purchase of a single converter box.

The lack of a down conversion provision may prompt lawmakers to push for a
second DTV bill that will either include the provision or provide digital
converter-box subsidy funding for cable analog subscribers.

The Senate’s original proposal set April 17, 2009, as the hard date and
allocated $3 billion for a subsidy program. The House’s original version
called for a Dec. 31, 2008, deadline with a $1.5 billion subsidy.

The DTV bill is part of a much larger budget package that the House and
Senate have been wrangling over all year.

Prompted by Republican leadership
demands to raise cash to reduce the federal deficit, both chambers
immediately eyed the potential $10 billion to $20 billion that the broadcasters’ analog
spectrum is expected to raise at auction.

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