Policy

Wireless Operator Faces Costly Transition

2/16/2007 7:00 PM Eastern

Washington— For the past 25 years, hundreds of office buildings housing government agencies, trade groups, law firms and news bureaus have chosen to receive C-SPAN and a few 24-hour cable news channels over a wireless service provided by Capitol Connection, a nonprofit group affiliated with George Mason University in Fairfax, Va.

Although all full-power television stations need to shut off their analog TV signals on Feb. 17, 2009, and rely exclusively on digital transmission, Capitol Connection needs to transition now and spend up to $2 million — or $1,123 per subscriber — to get the job done within a matter of weeks.

All but its largest customers will need to buy digital set-top boxes at more than $200 a piece.

Capitol Connection operates a four-channel, low-capacity “wireless cable” system. Viewers receive programming over coaxial cables that stretch from inside the building to a rooftop antenna.

Transmitters beam channels from two line-of-sight locations that overlook commercial zones. The antenna collects local TV signals directly from station towers.

With 1,780 subscribers located in 550 buildings, Capitol Connection is a small service linked to about 5,000 TVs.

The company’s basic package costs $595.00 per year and includes C-SPAN, C-SPAN2, CNN, CNBC, and free local broadcast signals.

The video provider needs to switch now because Sprint Nextel has rights to its spectrum under Federal Communications Commission rules.

“We’re doing this because of the FCC and Sprint,” Capitol Connection’s founder and executive director Dr. Michael Kelley said.

Each requesting subscriber will receive one free digital set-top box.

Additional boxes will cost $235.00 each. Those boxes must be purchased, not leased.

About half of Capitol Connection’s $2 million in transition costs will be attributable to the set-top boxes.

“If we don’t sell the [other] boxes, we’re going to go broke,” Kelley said.

About 130 large customers are expected to avoid box costs by allowing Capitol Connection to convert digital signals to analog on the roof.

“It’s cheaper for them to get a headend in the top of the building and translate it to analog all through the building,” Kelley said.

September