05.15.2005 08:00 AM
DTV talks stuck on subsidies

As Republicans and Democrats on the House Energy and Commerce Committee negotiate over digital TV legislation, the key division between them is not over a fixed date for an end to analog broadcasting — but rather on how to craft a subsidy program designed to ease the transition to digital television for Americans with limited means, a report in the National Journal said.

Chairman Joe Barton, (R-TX), and Telecommunications Subcommittee Chairman Fred Upton, (R-MI), met last week on the DTV legislation with their Democratic counterparts: Energy and Commerce ranking member John Dingell, (D-MI), and Rep. Edward Markey, (D-MA), the ranking member on the subcommittee. No agreement was reached.

Public discussion of the talks has centered on December 31, 2006 – the proposed hard date set by Barton and Upton for the transition to digital broadcasts. But those issues are not the chief stumbling blocks in the Republicans’ discussions with Dingell and Markey.

Rather, the key question centers on how extensive a program Congress should craft to subsidize the purchase of the set-top boxes that allow viewers to watch digital television signals on existing analog sets. It is estimated that such boxes will cost $50. But, without a box, existing analog television sets unconnected to cable or satellite systems will go dark when Congress cuts off analog broadcast signals on the hard date for the transition.

Barton wants to impose an income test on the subsidy program, and to limit it to households that do not currently subscribe to cable or satellite. But such an approach raises administrative questions, including how the government would know whether a viewer seeking a rebate is eligible.

The FCC or another agency that administers the subsidy program would have to have access to information from other sources to cross-check applicants against cable and satellite company subscriber lists — and to verify subscribers’ income.

Democrats, the report said, have concerns both with this means-testing approach and with a proposal that over-the-air viewers buy boxes first and seek rebates later. An alternative approach would allocate set-top boxes for free, or at a nominal cost, to anyone who shows up at an electronics retailer. That would avoid the need to verify income levels or cable or satellite subscriptions.

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