NTIA Pressed to Broaden Box Program

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Washington— The federal government must allow every U.S. household to seek financial aid to pay for digital-to-analog converter boxes after analog TV transmissions are halted in early 2009, top broadcasting and electronics trade groups said last week.

The industry groups — led by the National Association of Broadcasters and the Consumer Electronics Association — said that in designing the converter program, Congress included every household and did not give the executive branch authority to add to, or subtract from, the eligibility pool.

<p>At a Glance</p>

There are 21 million broadcast-only homes in the U.S., which have 45 million analog TV sets, according to the National Association of Broadcasters. Cable and satellite homes have another 28 million analog TVs not connected to either pay service.

All 1,749 full-power TV stations are required to end analog transmission on Feb. 17, 2009,

Congress passed a law to set aside up to $1.5 billion to subsidize converter boxes to keep analog sets working beyond 2009.

Source:Multichannel News research

NAB and CEA said the program would violate the law if the Commerce Department’s National Telecommunications and Information Administration (NTIA) excluded any household from participating.

“It is impossible to read the statutory term 'households,’ either on its own or with reference to the rest of this section of the [law], to mean 'households that exclusively rely on over-the-air broadcasts.’ NTIA’s proposed interpretation is, accordingly, not authorized by the statute,” NAB and CEA said in a Sept. 25 filing at NTIA.

Earlier in the year, NTIA proposed to exclude cable and direct broadcast satellite homes.

Further, NTIA said it might even means-test the program by allowing only low-income, broadcast-only homes seek funding.

NAB spokesman Dennis Wharton declined to say whether broadcasters would take NTIA to court.

“I think we will work with NTIA, Congress, and others to make sure that there are no households that are disenfranchised. It’s all about the consumer,” Wharton said.

On Feb. 17, 2009, all 1,749 full-power TV stations are required to end analog transmission, completing the industry’s transition to all-digital broadcasting. The next day, every freestanding analog TV set will go dark without a digital-to-analog converter. Analog TVs connected to cable or satellite are not expected to experience any disruption.

According to NAB, the U.S. has 21 million broadcast-only homes, which have 45 million analog TV sets. Meanwhile, cable and satellite homes have another 28 million analog TVs not connected to either pay service.

Pressured by NAB, Congress passed a law that set aside up to $1.5 billion to subsidize converter boxes to keep analog sets working beyond 2009. Under the law, each household is entitled to seek from NTIA two converter-box coupons worth $40 each.

The $1.5 billion is enough to fund 37.5 million converter boxes. If every broadcast-only home requested two coupons, there would not be a sufficient number of coupons — a deficit that probably persuaded NTIA officials that some coupon triage was necessary.

But NAB and CEA insist that NTIA must administer the program as Congress intended, with all 105 million occupied housing units eligible to participate without regard to wealth and income.

“[NTIA] constricted definition of 'households’ is inconsistent with the [law], and it would impermissibly prevent millions of Americans from obtaining benefits which Congress has provided to them,” NAB and CEA said.

The National Cable & Telecommunications Association didn’t file comments with NTIA.

David Donovan, president of the Association Maximum Service Television (MSTV), said cable and satellite homes needed to be included by NTIA because they had “second and third” TV sets that were broadcast-only and were important in households with “multiple generations.” Broadcast-only TVs, he added, were also important during weather emergencies if cable systems go dark.

NTIA has more than a year to put the final touches on the converter-box program. The agency is planning to issue coupons on a first-come, first-served basis from Jan. 1, 2008 to March 31, 2009.

NAB and CEA said it was unclear how NTIA would actually go about preventing ineligible cable and satellite subscribers from applying for coupons.

“Such an endeavor might entail intrusion into and surveillance of subscribers’ records nationwide, thereby raising serious privacy concerns,” NAB and CEA said.

MSTV’s Donovan said he didn’t expect broadcast-only homes to get shortchanged because cable and satellite homes managed to obtain the lion’s share of NTIA coupons.

“In some of your second- and third-set homes, people may just go out and buy a new TV set and not use the coupon,” Donovan said.

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