Telco TV

Obama DTV Plan Splits AT&T, Verizon

1/12/2009 4:55 PM Eastern

Washington -- President-elect Obama's plan to delay the nation's switch to digital broadcasting on Feb. 17 has driven a wedge between AT&T and Verizon Communications as a key senator prepares legislation that would postpone the transition perhaps by 90 days.


AT&T released a letter Monday night endorsing a three-month delay as a special, one-time event designed to aid consumers who could lose over-the-air TV service when analog signals are shut off at midnight on Feb. 17.


"From AT&T's perspective, a smooth transition from analog broadcast transmission to digital is in the public interest and will ultimately inure to the benefit of all Americans," AT&T senior executive vice president James Cicconi said in letter to House and Senate Commerce Committee leaders.


While AT&T is willing to accommodate the wishes of the new Obama government, Verizon CEO Ivan Seidenberg is concerned that any delay would do more harm than good and should be rejected.


"Not only is it unclear that a delay will ensure a smoother transition, but it is likely a delay would undermine the DTV transition by causing significant disruption and consumer confusion," Seidenberg said in a blunt letter to the same lawmakers.


Obama transition co-chair John Podesta last week asked Congress to delay the transition for an unspecified period of time.


Podesta cited problems with a $1.34 billion converter box coupon program and the lack of preparedness by poor, elderly and rural Americans as reasons for a delay.


Although the coupon program has about $620 million to spend, about 1.3 million coupon requests are on hold owing to a federal budget law that bans the Commerce Department's from mailing new coupons before a batch of old ones has expired.


Meanwhile, Senate Commerce Committee chairman Jay Rockefeller (D-W.Va.) is preparing legislation to delay the transition by 90 days, though sources said the duration is still being negotiated.


Rockefeller wants the Senate to pass the bill this week, one source said.


Smooth sailing in the Senate seems unlikely based on the statement issued Monday by Sen. John Ensign (R-Nev.), who called for maintaining the Feb. 17 deadline.


"To delay this would be irresponsible, create a hardship for local broadcasters who have invested heavily in the transition, and simply postpone the inevitable," Ensign said.


Rockefeller's bill would also address the backlog with the coupon program.


"Congress should quickly eliminate the coupon shortage. If additional funding is needed, Congress should provide it," Ensign said.


In 2006, President Bush signed into a law bill that established Feb. 17 as the day when all 1,750 full-power TV stations had to stop beaming analog signals. Analog TVs need a digital-to-analog converter box to watch digital TV signals with an antenna.


AT&T and Verizon paid about $16 billion combined for spectrum auctioned last year by the Federal Communications Commission. But the two can't use the new airwaves until analog TV stations vacate as part of the complicated movement of TV stations associated with the DTV transition.


AT&T and Verizon want to use the spectrum to rollout their most advanced wireless broadband access services, also called 4G service.


"Delaying the DTV transition will delay our ability to upgrade those frequencies to 4G broadband for American consumers and have a negative impact on our nation's international competitiveness," Seidenberg said.


In his letter, Cicconi expressed the same concern, saying AT&T deserved compensation for the time it couldn't exploit the wireless broadband licenses.


"So long as the legitimate interests of licensees are addressed, AT&T will support one-time, limited extension of the current cutoff date," Cicconi said.

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