Unruly Start for DTV Rules

Lawmakers are divided over a two-prong converter-box subsidy plan
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The new rules of the road for the DTV–converter-box subsidy hadn't been made public for more than a few hours last week before some Democrats and Republicans began sparring over them. The plan, the lawmakers suggested, already has its share of potholes, with only nine months and counting before the coupon program is set to start.

The government is helping pay for boxes that will allow consumers' analog sets to receive digital broadcasts once the plug is pulled on analog broadcasting in February 2009.

The debate centers on the strategy of the National Telecommunications & Information Administration (NTIA), the agency administering the plan, to divide the $1.5 billion subsidy into two parts. The first $990 million will go to provide coupons for $40 toward purchase of a converter by any household with an analog-only set, including homes where second or third sets are hooked up with cable or satellite. Another $510 million, for Congress to make available on an as-needed basis, will be used for homes with only analog TVs. (Details can be found at www.ntia.doc.gov/otiahome/dtv/DTVconsumers.pdf.)

One FCC commissioner, Democrat Jonathan Adelstein, pitched the necessity of a coordinated federal campaign to speak in one voice to consumers about the switch. The reaction to the new rules, however, was anything but unifying.

Rep. Ed Markey (D-Mass.), chairman of the House Telecommunications and Internet Subcommittee, called the plan confusing; a top Republican House staffer mocked that criticism of the NTIA program as elitist.

“The Bush Administration appears to have unwittingly restored a fuzzy picture to the digital-TV transition,” said Markey last week, adding, “The administration is evidently limiting the program because of concern that sufficient funding to cover all consumers who need boxes may not be available.”

Markey had pushed for more money to cover any analog set rendered unusable after the Feb. 17, 2009, transition to digital TV. He is in a betterposition to secure the extra funding now that the Democrats are in control.

Some Republicans have argued for a more limited approach to prevent abuses, pointing out that not everyone needs the subsidy to buy the boxes.

“The Telecommunications and Internet Subcommittee intends to review this and other aspects of the administration's plan in upcoming hearings,” Markey said last week, “to ensure that consumer welfare is protected and that the transition remains on track.”

His criticisms drew an almost immediate response from one top Republican staffer, who suggested that a broader subsidy would simply be a handout for people who don't need it.

“Nobody is interested in spending an extra half billion dollars of taxpayers' money to guarantee that every last television on some country squire's estate will work,” Larry Neal, deputy Republican staff director for the House Energy & Commerce Committee, told B&C.

“If the palace horses really need to watch Mr. Ed reruns down at the stable, fine,” he said. “But why are taxpayers responsible for buying them a converter box?”

That prompted a response from a Democratic Hill staffer, who e-mailed B&C pointing out that onetime House Energy & Commerce Chairman Joe Barton (R-Texas) had indicated that the converter-box coupons would go to anybody who requested them.

“How are the NTIA restrictions and [Deal's] comments consistent with Barton's prior statements?” asked the staffer, quoting an archived release from the committee: “The [NTIA] will administer the program, which will send up to two converter-box coupons to any consumer that requests [them].”

Citing the limit on funding, the NTIA had been leaning toward making the subsidy available to households relying solely on analog sets, perhaps establishing a means test.

There are an estimated 73 million analog-only sets in the U.S. As of March 1, no more analog sets can be shipped for sale, although those in stock can still be sold.

The $1.5 billion—minus administrative costs—that Congress set aside for the subsidy will cover about 33.5 million sets.

The subsidy and schedule have long been debate points among broadcasters hoping to retain as many eyeballs as possible and legislators trying to limit the fallout of a possible DTV train wreck as the fall 2008 elections approach.

NTIA Director John Kneuer explained last week that “sound public policy dictated the boxes be broadly available to consumers.”

The discordant voices will get a chance to weigh in during a public hearing on the rules NTIA is hosting March 19.

E-mail comments to jeggerton@reedbusiness.com

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