Friday, October 28, 2005

Should Taxpayers Subsidize Your TV?

Would you prefer for 73 million TV sets in America to go dark at the end of Dec., 2008 or would you rather wait until April, 2009 for the blackout?

It now appears that one of those two dates, or perhaps a compromise date falling in between, will be carved in stone by Congress as the date when all standard television broadcasts in the U.S. will cease.

The House Energy and Commerce Committee last Wednesday passed a measure that would require all TV broadcasters to switch to the improved-quality digital transmissions by Dec. 31, 2008. The Senate Commerce Committee has already approved a date for the switch of April 7, 2009.

Under current law, broadcasters need not switch entirely to digital until at least 85 percent of the homes in America can receive a digital signal. But Congress wants a firmer time frame, because they would like to use the freed-up airwaves for something else. It might take a decade before those frequencies are available under the present law.

The analog frequencies now used by TV will be converted to emergency transponder services and commercial wireless services. The FCC would auction the frequencies, which could be worth $10 billion.

Regardless of the new blackout date for analog TV, will the switch mean that those who can’t afford to purchase a new digital television be left in the dark?

Not necessarily.

The House measure would provide up to $990 million to subsidize converter boxes so those who can’t afford a new TV can continue to watch a converted digital signal at the government’s expense.

Some democrats want a larger subsidy. One proposed amendment, which was defeated, would provide two vouchers for every household that wanted them to purchase a converter box. Each box is worth about $60.

Some republicans, on the other hand, baulk at having to subsidize anything. An amendment by Indiana Sen. Steve Buyer that would have stripped away all subsidies was also defeated.

It’s really a balancing act between two points of view: Should American taxpayers have to subsidize converter boxes so the poor, or those who prefer not to buy a new television set, can continue to watch Fear Factor? Or should we force everybody, even those who can’t afford it, to upgrade their hardware?

Of course, it appears to me that there is another option. Remember that $10 billion the government is going to get from auctioning off the old airwaves? Why not use a billion dollars of that money to subsidize converter boxes?

People tend to keep their television sets for at least five years. So in three years from now, most of those who purchased a standard analog TV set within the last couple of years will be ready for an upgrade anyway.

Unfortunately, many families have multiple TV sets in their homes. And every one of those sets will have to be upgraded to digital or be connected to a converter box. It will be an expensive proposition.

The best advice is to forget about purchasing a standard TV if you are in the market for a new one. And if you’re not yet in the market, but expect to be before 2008, you will be lucky to find an analog TV for sale. Already they have been relegated to a small corner of the sales floor.

So really, only those families who have recently purchased an analog TV and who generally can’t afford to upgrade for 10 years or so will be at a disadvantage when the switch takes place.

And it looks as though those families will be taken care of with a subsidy in the neighborhood of a billion dollars. It’s a relatively small price to pay for a smooth transition to a much superior technology.

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