Belo Plan Calls for DTV Tax Credits

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Government custodians of the transition to digital broadcasting know they
can't turn off analog transmitters until digital-TV sets and converters have
thoroughly penetrated homes that do not subscribe to cable or direct-broadcast
satellite.

But with House Energy and Commerce Committee chairman Billy Tauzin (R-La.)
apparently determined to end the transition by Dec. 31, 2006, some industry
players are floating ideas that at once yield to the 2006 deadline and focus on
hastening consumer adoption of digital equipment.

The newest proposal comes from Belo Corp. -- owner of 19 local television
stations -- and it calls for tying the 2006 deadline to a series of
cable-carriage requirements and business-tax credits funded with revenue from
analog-TV-spectrum auctions.

Belo's plans would require dual cable carriage of analog and digital signals
until analog transmission ceases, as well as carriage of high-definition-TV
signals and multiple digital signals.

Tax credits would flow to 'any consumer-electronics manufacturer that
provides inexpensive analog-to-digital converters to American viewers,' Belo
said in an Oct. 24 filing at the Federal Communications Commission.

The tax credits could be bait for the Consumer Electronics Association, which
has raised a lot concerns about another feature of the Belo plan: the broadcast
flag. The CEA and computer companies fear that the broadcast flag, which is
intended to combat the piracy of digital content, would be used to erode
consumers' traditional home recording rights.

Belo, based in Dallas, said the tax credits would represent a 'safety net' to
ensure the completion of the transition 'without disenfranchising American
viewers.'

The company did not provide cost estimates for the tax credits or for an
unnamed 'fiscal incentive' for the consumer-electronics
industry.

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