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The Analog Shutdown and Broadcast Flag: The Government Decides

Digital television brings change and controversy By Charlie White

The Analog Shutdown and Broadcast Flag: The Government DecidesIn the United States broadcasting marketplace, the government is increasingly invoked to influence technology. Sometimes governmental control can be helpful, such as the government's lawmaking that finally compels television broadcasters to give up their analog signals by February 17, 2009. Other governmental actions are more controversial, such as proposals to require receivers to be able to read a broadcast flag, not allowing unauthorized content to pass through in its full resolution. In this report and analysis, we'll take a look at the role of government and broadcasting, exploring these two concepts in particular.

On February 7th of this year, President Bush signed into law the Deficit Reduction Act of 2005, a bill that contained a law stating that by February 17, 2009, television broadcasters across the country will be required to shut down their analog transmitters. At that point, the frequencies on which those transmitters operate will be transferred back to the government, which will then auction off those frequencies to the highest bidder. Those frequencies will be worth at least $10 billion and probably more, a windfall where much of that money will go directly into the coffers of the US government. That's why this bill is part of the Deficit Reduction Act of 2005, because it's expected that the proceeds from such an auction will help to reduce the federal deficit.

There have been delays in the past for this analog changeover, but those past mandates were issued by the FCC. This time the order to transfer the frequencies has the force of law, where the changeover to digital is now voted into law by the Senate and House of Representatives and signed by the president. Although that carries quite a bit more weight than an FCC order, whether there will be further delays is anyone's guess. However, there is less likelihood of that, since the government stands to gain billions of dollars from the auctioning of these frequencies.

Taking a step back, the move from analog to digital began with the Telecommunications Act of 1996, giving every television broadcaster in the United States a free gift, a second 6MHz piece of spectrum onto which they could broadcast a digital television signal. This was a controversial transfer, since the frequencies that were given away are also ideal for building a broadband communications network. Some critics blame this frequency giveaway for communications problems experienced in the United States?such as shortcomings of broadband cellphone technology?asserting the lack of suitable broadcast spectrum has caused the U.S. to fall behind countries such as Japan and the European Union with their far more sophisticated mobile data services. However, industry experts believe there's plenty of spectrum available now for third-generation data services. It's when these next-generation mobile communications services further expand that things will start getting tight. At the moment, "They have the capacity there," according to Michael Greeson, CEO & Principal Analyst of The Diffusion Group. He adds, "They're going to need more capacity as usage accelerates, and that's why mobile services in particular are another reason for the 2009 mandate."

That multibillion-dollar windfall coming to the United States government won't all go into government coffers, however. The Deficit Reduction Act of 2005 earmarks $1.5 billion of those funds to help some consumers make the jump from analog to digital. The government anticipates problems with numerous consumers receiving their television signals over the air with analog TV sets, who don't have the financial wherewithal to upgrade to a digital television set. To receive digital TV means some consumers will have to pay extra either for set-top boxes, or more-expensive television sets. Said The Diffusion Group's Greeson, "A lot of these people have been using analog TVs for years and really don't see any need to upgrade to digital television or pay the cable provider an extra $10 a month for digital TV service."

However, for those still receiving over-the-air signals with an analog TV set, Congress has provided $1.5 billion as part of that deficit reduction bill, earmarked for buying converter boxes for consumers without access to DTV. At this writing, converter boxes cost about $60, but industry analysts predict that by this changeover in February of 2009, that price will be significantly lower. At the same time, many more consumers will have TV sets capable of receiving the digital signals without a set-top box. The cost of such sets continues to plummet, and they've been on sale for the past six years. By 2009, it will be impossible to buy a new TV set that isn't capable of receiving digital broadcasts. The $1.5 billion will be used by the government to grant up to two $40 coupons per household with analog TVs and no other way to receive the digital TV signals.  The coupons will be available to these consumers starting January 1, 2008 through March 31, 2009, and will expire three months after they are received by the consumer.

 Yet the majority of television viewers won't be affected by this shutdown. That's because
according to The Diffusion Group, there are 55 million US households already receiving digital signals via cable and satellite, roughly half of the 108 million households in the United States right now. Among that half without cable or satellite service, many already have a DTV set that can receive the new signals, but are not feeding them with a digital signal, and continue to use an analog antenna to receive their television broadcasts. Ironically, many consumers can already receive a digital signal but don't know it.

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Related Keywords:broadcasting, public policy, technology, television broadcasters, analog shutdown, February 17, 2009, television receivers, DTV, broadcast flag, unauthorized content


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