ON DEREGULATION OF SPECTRUM AND LOSS OF ANALOG TV

"DON'T MESS WITH MY...INTERNET"?

Speaking of regulators and the Internet (see preceding post), this is a relevant late-breaking update from the Wall Street Journal, on the congressional and cable/media/telco tug-of-war on mandated transition to digital TV, and freeing up valuable spectrum for wireless, internet-related applications:

UPDATE: Republicans' Digital TV Bill Gets Mixed Reviews

DOW JONES NEWSWIRES
May 26, 2005 3:25 p.m.

   

   By Brian Blackstone
   Of DOW JONES NEWSWIRES

WASHINGTON -- A House Republican plan for a firm digital television transition date of Dec. 31, 2008, received a mixed response Thursday from cable and broadcast industry officials and Democrats on the House Commerce Committee.

All parties professed support for the broad goal of advancing the transition to digital from analog television signals, and freeing up valuable spectrum in the process.

Yet broadcasters expressed concern about the effects of a so-called "hard date" on the roughly 21 million households that rely on over-the-air signals. A cable official, meanwhile, fretted about proposed carriage obligations. Democrats said subsidies, which aren't contained in the draft bill, are needed to pay the roughly $50 to $75 cost for each converter box.

House Commerce Committee Chairman Joe Barton, R-Texas, stressed that the bill is "an evolving document" and that he's open to changes - except in the transition date itself, saying the Dec. 31, 2008, date "is probably frozen."

The committee's ranking Democrat, John Dingell, D-Mich., called the draft bill "well intentioned" but said it didn't go far enough to protect consumers.

"The draft is a good starting point," said James Yager, chief executive of Barrington Broadcasting in prepared testimony on behalf of the National Association of Broadcasters.

Under current law, the transition would occur sooner than in the draft bill, on Dec. 31, 2006, but with the critical caveat that 85% of households are ready to receive digital signals either by having a digital-ready television or a converter. That could take many years. Barton himself had preferred the Dec. 31, 2006, date under current law but without the 85% penetration caveat, but moved that date in hopes of winning support from Democrats.

"Eliminating the 85% penetration test and setting a 'hard deadline' to end analog broadcasts will bring consumers and the economy the benefits of digital television faster, and enable all parties to plan," the draft bill states.

Transition backers - which include cellular carriers and high-tech companies like Dell Inc. (DELL), Intel Corp. (INTC), Microsoft Corp. (MSFT) and Qualcomm Inc. (QCOM) - say the analog spectrum in the prized 700-megahertz band currently used by broadcasters could be sold to the private sector and also be used by emergency responders. Estimates for proceeds that the government would receive by selling the spectrum run from $10 billion to as high as $30 billion.

To ease the transition, the draft legislation would require retailers to affix warnings to television sets stating that broadcasters will cease transmitting analog, over-the-air broadcasts after Dec. 31, 2008. It would also move up the date when digital tuners must be included in TV sets with 13- to 24-inch screens to July 1, 2006.

W. Alan McCollough, chief executive of Circuit City Stores Inc. (CC), said he's "absolutely" OK with the Dec. 31, 2008, transition date as long as it's "reliable and unconditional." He was cautious on the tuner mandate, saying development of such features is best left to the marketplace.

Under the proposed legislation, cable operators would be required to carry the primary digital signal from must-carry broadcasters. If cable companies choose to convert one digital must-carry signal into analog, they must do so for all of their must-carry broadcasters in the market.

Yager from the NAB backed that provision as "good for consumers."

Yet Kyle McSlarrow, head of the National Cable & Telecommunications Association, which has long opposed such dual-carriage requirements, said the draft bill "fails to strike an appropriate balance."

"Dual carriage of every must carry broadcaster's high definition signal and its down-converted analog signal would impose an untenable burden on cable operators and programmers," McSlarrow added.

Democrats and consumer groups, meanwhile, stressed the importance of subsidies, noting that lower-income households tend to rely most on over-the-air analog televisions.

Citing national cost estimates for converter boxes of between $2 billion and $3 billion, Gene Kimmelman of Consumers Union called the price tag "startling."

"If you have an analog clicker in one hand, you'd better have your wallet in the other because the government's coming after both," said Edward Markey, D-Mass.

Barton suggested a willingness to compromise on subsidies, saying he'd support "a limited, means-tested subsidy." But some Democrats insisted that subsidies cover all affected television users. In contrast, Cliff Stearns, R-Fla., said he's not sure if a subsidy program is needed, especially if consumers have ample warning about the switch-over date.

One area where there seemed to be agreement was the heavy political cost to committee members if they get the TV transition wrong and incur the wrath of millions of TV watchers, and voters.

If analog sets go dark on Jan. 1, 2009, "we will find a rebellion that makes the Whiskey Rebellion look like a tea party," said Jay Inslee, D-Wash.

"One thing I've learned as a politician is you don't mess with people's cars or their TVs," said Bobby Rush, D-Ill.

By Jan.1, 2009, Bobby Rush (if he's still in Congress) and his peers will likely realize that people have added un-metered "broadband wired/wireless Internet services" to that sacrosanct list of things you don't mess with...it may even be more important than "their TVs", since a fair amount of TV content could end up flowing right through wired and wired broadband connections by then. 

Get ready to start emailing your congress-person...