Bush budget proposal could tax broadcasters into transition
February 16, 2005
The budget President George W. Bush submitted to Congress last week includes a proposal to tax broadcasters $500 million for their analog spectrum in 2007.
The measure is intended to persuade broadcasters to vacate their 6MHz of spectrum used for analog service, bringing an end to the long transition from standard NTSC transmission to ATSC service.
The idea to assess an analog transmission fee isn’t new. However, in the past lawmakers who were friendly to broadcasters succeeded in blocking any such measure. Retirements and new chairmanships have changed all of that, leaving broadcasters vulnerable to such measures.
As it stands, television broadcasters will be required to return spectrum used for analog transmission to the government by the end of 2006 but not before 85 percent of the TV audience can receive their DTV transmissions. Relatively slow consumer demand for DTV sets has left many in and out of the government speculating that it might be 50 years or more before the 85 percent threshold is reached.
The president and many in Congress, however, want a speedy return of the spectrum so it can be auctioned off to other spectrum users, generating as much as $100 billion in revenue for the U.S. Treasury.
The president’s budget for 2006 projects a $427 billion deficit.
The threat of a new tax is the second setback for broadcasters. On Feb. 10, the FCC voted unanimously to impose rules to force cable systems to carry all of a local broadcaster’s DTV signals. The commissioners also voted 4 to 1 against imposing a dual carriage requirement on cable systems that would have forced them to carry a broadcaster’s NTSC and DTV equivalent simultaneously.
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