Policy

Stevens to NTIA: Count Cable Homes

10/06/2006 8:00 PM Eastern

Washington— Banning pay-TV homes from a $1.5 billion federal converter box program is opposed by Senate Commerce Committee chairman Ted Stevens (R-Alaska), a top Stevens aide said last week.

The U.S. Commerce Department, which is charged by law with administering the program, announced in July its tentative conclusion to exclude cable and satellite homes. Final rules are pending.

“That’s not going to stand. We’re not doing that. We’ve told them that,” Commerce Committee staff director Lisa Sutherland, a top Stevens adviser, told reporters last Tuesday.

FEB. 17 TURNOVER

On Feb. 17, 2009, every TV station has to cease analog broadcasting, ending the so-called digital-TV transition. But potentially millions of analog TVs will be useless if not adapted to display digital signals.

In the law enacted earlier this year, Congress set aside $1.5 billion to help defray the cost of digital-to-analog converter boxes, which allow TVs that rely exclusively on free, over-the-air signals to continue working.

Under the law, each household is entitled to seek two coupons worth $40 each. In a surprise move, the Commerce Department’s National Telecommunications and Information Association (NTIA) said it wanted to limit coupon eligibility to broadcast-only homes, a proposal strongly opposed by the National Association of Broadcasters as contrary to law.

NTIA was likely concerned about a converter box shortage. The $1.5 billion is enough money to finance about 37.5 million coupons, but according to the NAB, 21 million broadcast-only homes have 45 million analog TVs and pay-TV homes have 28 million analog sets not connected to cable or satellite service.

“There are people who have cable who also have over-the-air sets. We are not going to say that you can’t have [a coupon] because you have cable,” Sutherland said. “You might have one TV on cable and three over the air, so that’s not what we are doing. We never contemplated that ever.”

NTIA director John Kneuer indicated last Tuesday that he had not made a final decision regarding eligibility.

“I don’t think I would read affirmative decision making into what is explicitly a pre-decisional document,” Kneuer said in luncheon comments to the Association of Maximum Service Television (MSTV) .

But Kneuer also said he worried about running out of funds. “Part of that analysis is a recognition that there is a limited pool of money. So how does one maximize the limited pool of money?”

DEMAND UNCLEAR

NTIA also floated limiting the program to just low-income broadcast-only homes. Sutherland said that Stevens’ office opposed that as well because the Congressional Budget Office had determined that the cost to verify income would be prohibitively expensive.

The exact demand for converter boxes in late 2008 and 2009 is unclear because so much depends on the volume of digital TV purchases over the next 28 months. By the end of 2008, Kneuer said 140 millions DTV sets will have been sold — or more than one per U.S. household.

Sutherland predicted that digital TV sales would be large enough to ensure that NTIA had enough coupons to distribute.

“We think there is going to be a huge demand for everybody to have a digital TV and an HDTV,” she said. “And if by 2008, you don’t have one, you are going to be like a dweeb. People are going to think you’re like a weirdo.”

Last month, top broadcasting and electronics trade groups said the federal government must allow every U.S. household to seek financial aid to pay for digital-to-analog converter boxes after analog TV transmissions are halted in early 2009.

The industry groups — led by the NAB and the Consumer Electronics Association — said that in designing the converter program, Congress included every household and did not give the executive branch authority to add to, or subtract from, the eligibility pool.

September