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DTV Angst Abounds - Broadcasting & Cable

DTV Angst Abounds

As initial subsidy funds dwindle, lawmakers get mixed signals on transition
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An optimist might suggest that as the digital-TV countdown clock continues to tick away toward the Feb. 17, 2009, deadline, problems should be dissipating. But if that is the case, it would be hard to tell from the issues that roiled in Washington last week.

Smaller cable operators, for one thing, are attempting to leverage the DTV transition in their battle with broadcasters over the retransmission consent process. Officials last week were making the novel argument that breakdowns in retransmission consent negotiations (many current contracts are up at the end of this year) could confuse viewers and impede the process.

Also in conflict is the issue of how to handle DTV-to-analog converter box subsidies when the program runs through its first round of funding—$890 million—less than two months from now. At a Capitol Hill oversight hearing on the state of the transition last week, there appeared to be confusion, or at least disagreement, over whether viewers whose $40 DTV-to-analog converter box coupons had expired would be able to reapply for them. Some key legislators have been pushing for an answer to that question, though the government agency overseeing the program may have to turn back to those same legislators to get that authority.

At that same hearing, Mark Goldstein of the Government Accountability Office (GAO) pointed out that more than a third of analog-only households surveyed indicated they had no plans to buy a new TV or converter box, or had no plans to hook up to cable or satellite, or did not know what they would do.

While the GAO has concluded that most people have cable and satellite service and will be unaffected by the transition, Congress remains worried about the millions classified in the TV “at risk” population.

Officials at the American Cable Association believe one “unforeseen factor” that could complicate the transition would be if cable operators—unable to come to carriage terms—were forced to drop station signals around the time of transition.

In a letter to Ed Markey (D-Mass.), chairman of the House Telecommunications & Internet Subcommittee, who presided over the hearing, ACA President Matt Polka expressed concern that this could cause “mass confusion” in the run-up to the digital transition. “Consumers will be unaware whether or not their lost channels are a result of the DTV transition, an unfulfilled personal responsibility such as buying the wrong converter box, or another issue entirely,” Polka told Markey.

The National Association of Broadcasters dismissed the argument. “Policymakers shouldn't be fooled by the ACA's desperate attempt to link retransmission consent to DTV—two issues with nothing in common,” NAB spokesman Dennis Wharton told B&C.

DTV Confusion Continues

The GAO's Goldstein also outlined for concerned legislators another potential headache: Fifteen percent of those households surveyed who already have their sets hooked up to cable or satellite said they'd be getting converter boxes, even though the boxes would be unnecessary. Of that group, a whopping 86% planned to apply for the government subsidy, despite the fact that there was no need to do so.

During the hearing, numerous legislators pressed a representative of the National Telecommunications & Information Administration for an answer on whether consumers would be able to reapply for DTV-to-analog converter box coupons that had expired.

So far, more than 450,000 coupons have expired without being redeemed, NTIA spokesperson Bernadette McGuire-Rivera told the committee. That figure represents 58% of all coupons that have so far reached their expiration date.

In a particularly pointed exchange, Rep. Bart Stupak (D-Mich.) complained that he and fellow Michigan Democrat and Commerce Committee Chairman John Dingell had written to the NTIA back in February, asking for an extension to the expiration dates. “It's been almost four months,” Stupak told McGuire-Rivera. “When are we going to get an answer, especially since we know that stores don't have enough converter boxes available?” Stupak said his staff had been unable to find any of the boxes on store shelves.

McGuire-Rivera said the NTIA would not make a decision on whether to extend the coupons' expiration date past the current 90-day period until later in the summer, but suggested Congress would have to weigh in to free up more money for that move.

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