Analyst Says Subsidy Compromise Likely - Broadcasting & Cable

Analyst Says Subsidy Compromise Likely

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Stewart Wolpin, senior analyst, Points North Group, predicts that the House and Senate will split the difference on money for an analog-to-digital converter box.

Currently, the Senate DTV transition bill proposes $3 billion for the subsidy, which could cover 73 millino sets, while the House only $990 million ($830 after administrative costs), which could cover maybe 20 million or so.

Somewhere in between, he says, should be about enough to cover the 40 million or so households that will need to be covered. "That should be in the ballpark," he said.

Wolpin says that the House bill's "labrythine" process for getting the converter subsidy--applications, coupons, a first-come, first served approach," appears to "disincentivize" the very people who will most likely need it, including the poor and minorities, "a point echoed by House Democrats Tuesday.

If the bill passes with a provision requiring cable dual carriage of analog and digital broadcasts, Wolpin says look for cable systems to speed up their migration of cable nets to the digital tier to help prompt viewers to move there as well.

Wolpin says to reduce consumer backlash, the consumer education campaign required in the bill should emphasize the national security concerns of reclaiming spectrum for first responders rather than that their sets won't be working soon.

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