[Ecommerce] Digital Transition Deal

[Manon Ress]

http://www.drewclark.com/

Deal Reached On DTV Transition Date

By Drew Clark

(Monday, December 19) The nation's transition to digital television
broadcasts would end by Feb. 17, 2009, under a pending compromise
between House and Senate negotiators on the issue. The nation's
broadcasters would have to return analog spectrum to the government
by that date.

Negotiators on the plan, which is part of a broader budget package,
agreed to spend $1.5 billion to subsidize the set-top boxes that some
consumers will need to receive television signals after the analog
cutoff. The negotiators also agreed to spend another $1 billion on
grants for communications systems used by public-safety officials.

The DTV compromise, part of a so-called budget reconciliation bill,
squeaked through the House early Monday on a 212-206 vote. It is
expected to be considered by the Senate Tuesday.

The House had set Dec. 31, 2008, as the "hard date" to end the DTV
transition -- three-and-a-half months earlier than the April 7, 2009,
date favored by the Senate.

The April 7 date had been devised to fall immediately after "March
Madness" -- when the college basketball playoffs take place -- so as
not to risk angering voters by having their TV reception interrupted
before then.

The Feb. 17 date retains the political advantage of falling after the
Super Bowl and the college bowl games on and around New Year's Day.

Once the digital transition occurs, consumers who own analog sets and
do not subscribe to a cable or satellite service will need a set-top
box to convert digital signals. The House had allocated about $1
billion for box subsidies, versus $3 billion by the Senate.

Broadcasters and consumer groups favored the more generous number,
but the Bush administration sought to spend less than $1 billion. The
$1.5 billion final amount roughly splits that difference. It is
expected that consumers will have to pay $20 per box after the subsidy.

The DTV language is part of the bill to reconcile budget and spending
initiatives in order to reduce the federal deficit because the
government plans to raise at least $10 billion from the auction of
the analog spectrum being returned by broadcasters.

Under the conference report, $7.4 billion would be devoted to deficit
reduction, with virtually all of the remainder of the auction
proceeds -- about $2.5 billion -- devoted to set-top box subsidies
and public-safety officials.

Public-safety officials would benefit from the DTV transition because
they would get exclusive access to one-quarter of the frequencies to
be cleared by the television broadcasters.

But in an unexpected move, Senate Commerce Chairman Ted Stevens, R-
Alaska, successfully negotiated $3 billion more for various security-
related communications programs, to be included in the fiscal 2006
Defense Department appropriations bill.

Stevens, who also chairs the Senate Defense Appropriations
Subcommittee, negotiated another $7 billion for a hurricane recovery
fund, heating for low-income citizens and border security. That
additional $10 billion would be contingent upon more revenue from
spectrum auctions.

While the Congressional Budget Office has estimated that setting a
digital transition date in 2009 would generate $10 billion, at least
three analyses by private groups have pegged the value of the analog
frequencies at $20 billion to $28 billion.

   <http://www.njtelecomupdate.com/lenya/telco/live/images/shared/
spacer.gif>
   <http://www.njtelecomupdate.com/lenya/telco/live/images/shared/
spacer.gif>


************************************************
Manon Anne Ress
manon.ress@cptech.org,
www.cptech.org

Consumer Project on Technology
1621 Connecticut Ave, NW, Washington, DC 20009 USA
Tel.:  +1.202.332.2670, Ext 16 Fax: +1.202.332.2673

Consumer Project on Technology
1 Route des  Morillons, CP 2100, 1211 Geneva 2, Switzerland
Tel: +41 22 791 6727

Consumer Project on Technology
24 Highbury Crescent, London, N5 1RX, UK
Tel: +44(0)207 226 6663 ex 252 Fax: +44(0)207 354 0607