A barebones approach by the government could subsidize poor Americans' switch to digital TV for perhaps as little as $412 million, according to numbers submitted to the Federal Communications Commission by various industry groups and some arithmetic by B&C.
The money would cover the cost of analog-to-digital converter boxes needed to ensure that the 6.15 million low-income households who don't subscribe to cable or satellite can keep at least one of their existing TVs working after the U.S. government orders stations to turn off their analog channels.
Demographic data on the 13% of American households that don't subscribe to DTV were submitted to the FCC this week.
The commission requested the information to help it solve one of the most bedeviling questions of the DTV switch: How to make sure viewers who rely solely on free-over-the-aren't hurt when analog channels are turned off. By law, the old channels will be taken away when 85% of Americans can view a DTV signal in their homes, either through their pay TV service or a digital-ready set. To help it decide how to speed the DTV transition the FCC wants to know whether those that refuse to pay for TV service make their decision because of lack of funds or for other reasons.
Sentiment is growing at the FCC and on Capitol Hill that the government should fund the cost of converters for those too poor either to afford pay-TV service or buy new DTVs.
According to the National Association of Broadcasters, there are 20.5 million households that rely solely on over-the-air service. Separate numbers submitted by the Consumer Electronics Association show that only 30% of those without pay-TV make their decision because of financial reasons. Assuming that converters can eventually be bought for $67 apiece (a Motorola prediction), buying a converter for those households would cost $412 million.
Other refuseniks, CEA found, have other reasons such as lack of interest in TV.
Those costs for subsidizing poor people's sets could rise if Congress decides to provided extra converters for additional sets in their homes. Rep. Rich Boucher has suggested going even further. Opposed to making any consumer pay for the DTV conversion, he wants all TVs not connected to pay TV to get a free converter.
According to NAB's numbers, there are 73 million of those "unwired" sets in America. If each received a free converter, the government's cost could be as high as $4.9 billion. Subsidizing converters is critical to implementing the FCC's current plan to speed the DTV transition.
The Media Bureau has proposed that analog channels be shut off by 2009 if some kind of subsidized box is provided. How widely subsidized boxes will be is up for debate.