Taxpayers Down Tube With Digital Mandate

A congressionally mandated switchover to digital TV is proving costly to both consumers and the industry, analysts say, and taxpayers ought to be added to that list.

Some argue that consumers shouldn’t have to pay any expense related to the change because broadcasters are benefiting from the transition. Broadcasters respond by contending they didn’t prompt the change, and the transition has been costly to them.

Taxpayers, as usual, likely have the most logical reason to gripe because they are funding a government program to provide subsidies to TV owners who must switch their sets over to digital reception if they want their sets to work after next Feb. 17.

The Digital-to-Analog Converter Box Program allots every U.S. household two coupons toward purchase of boxes required for any analog television that will be used to receive signals after the nationwide cessation of analog broadcasts Feb. 17, 2009.

In the end, consumers will pay both directly and through their federal taxes, Aricka Flowers wrote in an article published in Info Tech & Telecom News.

All full-power television stations now broadcast both analog and digital signals, but starting early next year, over-the-air broadcasts will be in digital only. The change is not a response to market pressures, but was mandated by Congress in the Digital Television Transition and Public Safety Act of 2005 to free up the spectrum currently used for analog broadcasts.

People who still use an analog signal television that does not have a digital tuner will need a converter box to turn the digital signal to analog and feed it into the set. Congress set up the converter box program to alleviate the burden on consumers resulting from the mandate.

Shermaze Ingram, senior director of media relations for the National Broadcasters Association’s digital TV team, said through the government’s program, “everyone will get help to pay for converter boxes.” Ingram said this is especially important “for people in low-income households.”

Consumers will receive up to two $40 coupons per household. Computer boxes range in price from $40 to $75, so by shopping around some people will pay “little to nothing” for the boxes, Ingram indicated.

Some industry watchers say consumers should not be financially responsible for the change at all. Daniel Ballon, a policy fellow at the Pacific Research Institute, said: “It is really the broadcasters who are benefiting from this transition.”

But, broadcasters argue the transition they didn’t dictate also has been costly to them.

Ingram explained the decision was federally mandated by Congress and said the conversion to digital is costing broadcasters “billions of dollars. Even the smallest television stations will have to pay a minimum of $3 million to $5 million to have capability to send out the signal — and that does not include the fancy stuff like having an HDTV signal for your local news, for example.”

Another viewpoint being expressed is that the switch to digital uproar is not really a very big deal that will impact a lot of people.

It is causing much confusion among many television owners, said Ballon, but, “In the end, I’m not sure how many people are really going to be affected by this.”

He explained the industry has been preparing for the switch a very long time, and electronics manufacturers have been making televisions with the capability to pick up digital signals several years. He predicted a very high percentage of consumers have no worry about making adjustments for the conversion.

“This could be another Y2K situation where everyone gets very excited about a change, and it turns out to be much ado about nothing,” Ballon concluded.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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