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Dueling DTV Bills - TvTechnology

Dueling DTV Bills

Lawmakers vie to end analog TV
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Lawmakers vie to end analog TV

WASHINGTON

Ending analog television is becoming the Holy Grail of secondary issues on Capitol Hill. In between judicial appointments, John Bolton, the Patriot Act and the "memo," lawmakers jockeyed to introduce DTV bills.

In the House, draft legislation for a Dec. 31, 2008 date continued to circulate while Sen. John McCain (R-Ariz.) recycled his SAVE LIVES Act, which calls for the analog broadcast spectrum to be available as of Jan. 1, 2009. Meanwhile, Senate Commerce Committee Chairman Ted Stevens (R-Alaska) was expected to unveil a DTV bill of his own.

McCain, who has long vilified the broadcast industry, reintroduced SAVE LIVES at a press conference where he linked broadcasters to 9/11 casualties. Because broadcasters failed to turn over their transition spectrum according to schedule, first responders had inadequate communication links on that day, he said.

"Firefighters inside the towers were unable to get transmissions to evacuate the building," McCain said.

In his statement on the Senate floor, he was far more conciliatory.

"I continue to believe that broadcast television is a powerful communications tool and important information source for citizens," he said. "I know that on 9/11, I learned about the attack on the Twin Towers and the Pentagon like most Americans--by watching television. Therefore, this bill seeks to not only protect citizens' safety, but also the distribution of broadcast television."

SAVE LIVES ("Spectrum Availability for Emergency-Response and Law-Enforcement To Improve Vital Emergency Services") was introduced in the 108th Congress where it was quickly derailed.

The new version, S.1237, includes DTV provisions covering public education, warning labels and digital-to-analog converter subsidies.

The House draft, which had yet to achieve bill status at press time, made no mention of providing a subsidy for converters, an issue that divided members of the House Commerce Committee.

"It's unacceptable that we have no plan to remedy consumers," said Ed Markey, (D-Mass.) at a committee hearing on the draft.

Joe Barton, (R.-Texas), committee chairman, said he would support a limited subsidy, while Cliff Stearns, (R-Fla.), said he was "not convinced a subsidy is necessary."

BUDGETING FOR BOXES

McCain's bill includes a converter subsidy of around $463 million--the amount necessary to cover the 9.3 million households that do not exceed twice the poverty level, according to the Government Accounting Office.

The original version of the bill set aside $1 billion for converter-box subsidies from spectrum auction proceeds--the subject of wildly fluctuating projections.

Aside from the uncertainty of how much money spectrum auctions will raise, no one knows for sure how many people rely exclusively on over-the-air television, or how many of them will have digital TV receivers by 2009.

At a hearing on the house draft bill, Consumer Electronics Association chief Gary Shapiro testified that "including set-top boxes, by 2009 we will have sold 97 million DTV tuners, and we estimate that over-the-air tuners will be found in 86 percent of American homes."

Two weeks after the hearing, the FCC goosed the dissemination of digital broadcast (ATSC) tuners by making manufacturers put them in TVs sooner than previously required.

All large and mid-sized TVs shipped for sale in the United States will have to include ATSC circuitry by March 1, 2006.

(The tuner requirement does not apply to products that are "monitor only;" but to TVs that otherwise have analog broadcast reception capability.)

The FCC's original tuner mandate required that half of 25- to 35-inch sets include tuners by July 1; and that 100 percent have them by July 1, 2006.

The CEA asked to have the halfway point dropped in exchange for moving up the 100-percent deadline by four months. Instead, the FCC kept the 50-percent deadline and moved the 100-percent date up four months.

The commission also opened a Further Notice of Proposed Rulemaking to move the final deadline for smaller sets--13 inches and larger--up by six months, from July 1, 2007, to Dec. 31, 2006. The notice also asked for comments about whether a tuner requirement should be extended to sets with screens smaller than 13 inches.

CONSEQUENTIAL COSTS

The CEA wanted the halfway point on mid-sized sets ditched because it said the ATSC price premium drove away retailers, who are not subject to the FCC rule. The cost of putting ATSC circuitry into a TV set is around $80 to $100, which translates into about $300 retail, according to an analysis of current market prices.

A $300 price differential for sets that look identical has led to a strong market for analog TVs, which outsell the digital/direct-view LCD/plasma category by about 4 to 1.

As of July 1, 2004, half of sets 36 inches and larger had to include ATSC reception. Eight months later, ATSC-capable sets in that size category comprised less than one-third of what reached showroom floors, according to a survey of ads in major metropolitan newspapers tracked by New York-based TV expert Mark Schubin.

From March 28 through June 3, of 1,237 ads for TVs 36 inches and larger, 387--31 percent--included ATSC tuners.

Those larger sets account for about 18 percent of sales to dealers, while the mid-sized category accounts for about 40 percent. Thus, CEA members fear being left with warehouses full of mid-sized ATSC sets.

At least one consumer electronics manufacturer embraced the FCC action. TTE, the TV-making joint venture of Thomson and Chinese appliance giant TCL Corp., is in the process of rolling out a line of low-priced (sub-$400) standard-def DTVs. Greg Bosler, executive vice president of the TTE North America Profit Center, said TTE was "eager" to complete the DTV transition and sell more of the cheaper sets. A $300 27-inch model, demonstrated on Capitol Hill in May, is due to hit the market later this year.

RESPONSE

The NAB was quite keen on the tuner decision, having endured a recent barrage of CEA flack over just how many households rely on broadcast television. In turn, NAB members have persistently complained that it's wrong to force an analog shut-off when manufacturers continue to flood the market with analog TVs, regardless of how many Americans rely on broadcast television.

"We salute Chairman Martin and other FCC commissioners for accelerating the original tuner schedule," said NAB President and CEO Eddie Fritts, "and we strongly support the proposal to move up DTV tuner compliance for smaller TV sets."

Fritts also issued a gingerly worded statement following McCain's scathing press conference.

"As former Homeland Security Director Tom Ridge has noted, local television stations provide a lifeline service during terrorist attacks, hurricanes, tornadoes and other natural disasters," he said. "We are committed to completing the digital transition in a timely fashion, including return of analog spectrum, and will work with Congress to ensure that millions of consumers are not left stranded by a premature end to analog broadcasting."

POLITICS PENDING

The antagonism between the NAB and McCain intensified last year when SAVE LIVES got shot down in the final hours of the Senate. The bill was essentially dismantled by an amendment from Sen. Conrad Burns (R-Mont.) that allowed the FCC to waive the deadline "to the extent necessary to avoid consumer disruption."

Chairman Stevens, who succeeded McCain as head of the Commerce Committee, supported the Burns amendment, as did Sen. Daniel Inouye, (D-Hawaii), who is now co-chairman.

Stevens was also the special guest at a mid-June fund-raiser for Burns, a former broadcaster who has often defended the industry on Capitol Hill. At press time, Stevens was expected to unveil his own analog deadline bill at any time, prompting reporters at McCain's press conference to ask why he simply didn't wait for that bill.

"Just because I'm not chairman of the Senate Commerce Committee doesn't mean I won't act," McCain said.