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The‘Crucial’ Cable Subsidy Nobody Wants - Broadcasting & Cable

The‘Crucial’ Cable Subsidy Nobody Wants

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Never underestimate Washington’s ability to conjure up pressing national problems that can only be solved by the heroic application of taxpayers’ dollars, funneled through expensive government programs.

The latest example (OK, maybe not the latest—something worse probably happened three minutes ago) can be found in a new Government Accountability Office report on a bill passed by Congress in 2000 authorizing $1.25 billion in loan guarantees to help local communities finance satellite carriage of local TV stations or to build cable systems.
Oh, it was a dire situation back then. Congress was rushing to protect consumers in remote locales where broadcast reception is lousy and cable’s not available. Though in retrospect this sounds like a solution in search of a complaint, the GAO itself warned at the time that the “financially and technically risky” program could cost $365 million during its first five years. Congress approved it anyway, at the urging of Montana’s Sen. Conrad Burns and Virginia Reps. Bob Goodlatte and Rich Boucher.
“This bill is crucial for Americans in rural and smaller markets who rely on their local television stations for news, politics, weather, sports, and emergency information,” Goodlatte pleaded on the House floor shortly before the bill was approved.
Now five years has passed and GAO is still trying to kill the program—but not because it’s too expensive. The GAO’s new report urges a shutdown because not a single penny has been loaned, and only one application has been received. (It was turned down.)
It seems that the good-old unsubsidized free market is bringing local channels to the TV-deprived at a rapid pace. The latest numbers available show that just 600,000 U.S. households couldn’t get local stations via cable or satellite as of September 2004. That’s down from 2.9 million the year before.
Happily, administering the unspent funds and fielding non-existent requests has kept several bureaucrats occupied. The program has cost $1.2 million in salaries and overhead for staffers provided by the Agriculture, Commerce and Treasury Departments.
And Goodlatte is not disappointed. The lawmaker believes the program served its purpose, says an aide: “Satellite decided to provide more local signals than they would have, had Congress not spoken on the issue.”

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