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Cable Technology Feature Article

January 12, 2009

Obama Team Urges Delay in Digital TV Transition

By Jessica Kostek, TMCnet Channel Editor

We have all been hearing about the switch from analog to digital TV and how we have to be ready for the February 17th switch if we consumers want to maintain our boob-tube habits. Commercials have been informing people to switch to cable or satellite TV, buy a television set with a digital tuner or buy a converter box that can translate digital signals from the airwaves into analog. Even the government got into the mix, being so concerned that they started a fund, helping along those who weren’t able to afford the costs for the transition. However, many are still being fashionably late with approximately 8 million households still unprepared.
According to the AP, to subsidize the converter boxes, most of which cost between $40 and $80, the government has been letting consumers request up to two $40 coupons per home. But any day now, the National Telecommunications and Information Administration (NTIA), the arm of the Commerce Department in charge of administering the coupon program, expects to hit a $1.34 billion funding ceiling set by Congress.
Because of these cause of events, President-elect Barack Obama is urging Congress to postpone the Feb. 17 switch from analog to digital television broadcasting, arguing that too many Americans who rely on analog TV sets to pick up over-the-air channels won't be ready and he may be right.
TV industry analysts at Nielsen Co. estimate that as of December, 6.8 percent of the 114 million U.S. households with televisions remained completely unready for the digital transition. Another ten percent still had at least one television set that was not yet ready.
Obama’s transition team co-chair John Podesta said in a letter to key lawmakers the digital transition needs to be delayed, largely because the Commerce Department has run out of money for coupons to subsidize digital TV converter boxes for consumers. People who don't have cable or satellite service or a TV with a digital tuner will need the converter boxes to keep their older analog sets working.
Obama officials are also concerned the government is not doing enough to help Americans – particularly those in rural, poor or minority communities – prepare for and navigate the transition.
"With coupons unavailable, support and education insufficient, and the most vulnerable Americans exposed, I urge you to consider a change to the legislatively mandated analog cutoff date," Podesta wrote to the top Democrats and Republicans on the Senate and House Commerce committees.
Because Congress set the Feb. 17, 2009 date for the change, it would have to pass a new law to postpone it.
Obama's request for a delay is a victory for Consumers Union, which had asked for the digital transition to be postponed
"We are extremely pleased the incoming administration is supportive of consumer efforts to ensure that poor, elderly and rural consumers do not face economic hardship as we move broadcasting to digital transmission," said Gene Kimmelman, the group's vice president for federal policy.
The Obama team decided to push for a delay after the National Telecommunications and Information Administration (NTIA), an arm of the Commerce Department, said Monday that it had hit a $1.34 billion funding limit set by Congress to pay for converter box coupons.
The NTIA said it had no choice but to start a waiting list for coupon requests as of Jan. 4, meaning that consumers who have applied since then are unlikely to receive their vouchers before Feb. 17. At this point, the agency is sending coupons to people on the list only as unredeemed coupons now in circulation expire, freeing up more money for the program. The waiting list currently has requests for 1.1 million coupons.
Congress is considering whether to step in with new accounting rules and possibly more money to get the program back on track.
In his letter, Podesta said government funding for both the coupon program and consumer education and support efforts is "woefully inadequate." Obama plans to include resources to help viewers through the digital transition in his economic recovery package.
His proposal to push off the transition, however, is running into some resistance, particularly among Republicans.
Meredith Attwell Baker, head of the NTIA, said the Bush administration opposes a postponement since the government and industry have "invested so much in preparing for this date."
A delay, she said, "would create uncertainty, frustration and confusion among consumers."
Baker added that the current administration wants to instead focus on quickly fixing the problems facing the coupon program to meet last-minute demand ahead of the Feb. 17 cutoff. The NTIA is asking for another $250 million in funding for the program.
Meanwhile, Rep. Joe Barton of Texas, the top Republican on the House Energy and Commerce Committee, insisted there is no need to "bail out" the digital transition program because the NTIA can send out more coupons as unredeemed ones expire.
"Ditching the deadline and slathering on more millions of taxpayer dollars . . . is just panic," he said in a statement.
But Senate Commerce Committee Chairman John D. Rockefeller, D-W. Va., said he would support delaying the digital transition "until we can do it right."
"The Obama administration deserves time to bring order to what has been an appallingly mismanaged process by the Bush administration," Rockefeller said in a statement.
Michael Copps (News - Alert), one of two Democrats on the Federal Communications Commission also agreed with his statement.
"More time can only help put in place the kind of consumer-focused outreach and assistance that should have been up-and-running months ago," Copps said.
For its part, the National Association of Broadcasters did not take a position on whether to postpone the switch to digital, but a spokeswoman said NAB believes the coupon program can be fixed without forcing a delay.

Jessica Kostek is a channel editor for TMCnet, covering VoIP, CRM, call center and wireless technologies. To read more of Jessica’s articles, please visit her columnist page.

Edited by Jessica Kostek