Apocalypse February!

Where will you be when the (TV) world comes to an end??!!

Apocalypse February!
Illustration by Doug Potter

Judging by the reaction in some circles, on the scale of media disasters, the nationwide transition to digital television ranks somewhere between the apocalypse and the cancellation of Star Trek. TV service will be ripped from poor minority communities. Millions of outdated TV sets will be dumped into landfills, creating ecological ruin. Families will be cut off forever from American Idol, prompting mass hysteria.

Hoping to ease some of the confusion, a few weeks ago the city of Austin hosted a meeting in an East Austin community center to warn people about the upcoming switch, which is often described as the biggest technology leap for television since the advent of color. Only about 30 people showed up, but organizer Chip Rosenthal is eager to schedule more events like it. "We're really concerned that people in Austin know that change is coming," said Rosenthal, chairman of the Austin Community Technology & Telecommunications Commission.

"Concern" and "confusion" are words often associated with the government-orchestrated plan to force the United States into the age of digital television – the result of two decades of controversy, accusations, and intensive lobbying, with billions of dollars at stake. With more than eight months to go before the mandatory switch, critics are already calling the plan an unnecessary and expensive boondoggle.

Some, like Rosenthal, fear the mandated transition will only screw the people who need help the most – the elderly and poor. "I'm glad to see technology moving forward," Rosenthal said. "But I don't want the modernization done on the backs of the people who can least afford it."


We Know Nothing

In fact, here's all you need to know about the end of analog television, set to occur at 12mid Feb. 17, 2009 – if you're one of the 86% of Austinites who use a cable or satellite service, or already own a television set with a digital tuner, you won't have to do anything.

Zip. Nada.

For everyone else – residents of the estimated 83,000 households in Austin using antennas to receive TV signals – on Feb. 18, when stations turn off their traditional analog transmitters and begin broadcasting only a digital signal, their old TV sets, in terms of watching television, will be as useful as a toaster. Unless, however, they buy a converter box to receive digital signals, in which case their old TV sets will work just fine.

It sounds simple enough. But recent studies suggest the public has no idea what's going on, despite months of intensive advertising and public awareness campaigns. A recent study by the Consumers Union, the nonprofit publisher of Consumer Reports magazine, found that 58% of people believe all televisions will need a converter box to function (wrong), 48% believe that only digital televisions will work after 2009 (wrong), and 24% believe they will have to throw away their old TV sets (wrong). The education plan "simply isn't working," said Joel Kelsey, policy analyst with Consumers Union. A recent study by the Government Accountability Office seemed to concur, concluding that "despite efforts by the public and private sectors and ongoing coordination, we found that no comprehensive plan for the transition exists."

The centerpiece of the digital TV transition is a coupon program, administered by the National Telecommunications and Information Administration, designed to help people buy converter boxes (see "Cheat Sheet"). Every household can ask for one or two coupons worth $40 each to buy converter boxes, which cost anywhere from $40 to $70.

But there have been problems from the start. For one, evidence suggests people don't realize that the coupons – limited to two per household – expire after 90 days and can't be reissued. By mid-May, 13 million coupons were issued, but only about 1.2 million had been redeemed, raising concerns that the first movers may not be aware of the expiration date. An NTIA spokesman said consumers are likely waiting for new converter boxes to become available, but boxes with extra features have been slow to show up in stores.

The biggest concern, however, is that the coupons won't end up in the hands of people who actually need them. The Government Accountability Office found that 48% of households that rely on over-the-air broadcasts have incomes of less than $30,000. But many owners of analog sets are in the mid- to high-income tax brackets, and they will simply use the coupons to upgrade the old clunker in the bedroom. Of the initial coupons redeemed, the NTIA says, only about 50% were used by households that rely on over-the-air broadcasts for television.

The plan is capped at 33.5 million coupons – which some fear won't cover the number of analog sets in homes, which has been estimated at anywhere between 25 million and 36 million. Once the 33.5 million coupons are redeemed, that will be it. Everyone who still wants a box will have to pay for it themselves. The coupons are being distributed on a first-come, first-served basis. After the first two-thirds of the coupons are redeemed, the last third will be set aside for households who only use over-the-air broadcasts.

"We believe we have enough funding for the program," said Todd Sedmak, a spokesman for the NTIA. But many are skeptical that the program will reach the elderly and poor, who are most likely to miss slick TV commercials. Minorities are also affected at a disproportional rate. Studies show that cities with the largest groups of households relying on over-the-air broadcasts – such as Houston, where 22.8% still use antennas, and Dallas, with 22.4% – also tend to have large minority populations. Legislators are already moving to address other issues overlooked by the digital transition blueprint. For one, it turns out nursing homes often aren't eligible for coupons. And most post office box customers are ineligible as well, because of concerns that people will use multiple addresses to abuse the system and hoard coupons as the date for the transition grows closer.


Selling the Spectrum

It can be argued that the plan to move the nation into the digital TV world was never about consumers. The deal was included in a deficit reduction bill, approved by the Senate, 51-50, in 2005. Vice President Dick Cheney cast the deciding vote for the package, which was primarily focused on the administration's effort to "restrain federal spending."

Beyond promising to "leave more money in the pockets" of ordinary people, Cheney's vote effectively settled a dispute raging for years over how to move the television industry into the modern Digital Age. Although a nonissue to the typical consumer, it was one of the most important issues of the generation for broadcasters, television manufacturers, cable companies, and wireless providers – all renowned for their powerful Washington lobbying efforts.

What $19.6 billion worth of air looks like: The bulk of the radio frequencies used by broadcast television – represented by the solid black portions of the continuous spectrum pictured above – sold at auction this year for almost twice as much as predicted in 2005. Other portions of the spectrum are devoted to uses as varied as space research and aeronautical radionavigation.
What $19.6 billion worth of air looks like: The bulk of the radio frequencies used by broadcast television – represented by the solid black portions of the continuous spectrum pictured above – sold at auction this year for almost twice as much as predicted in 2005. Other portions of the spectrum are devoted to uses as varied as space research and aeronautical radionavigation.

In most cases, the government would simply let natural market forces take their course. As broadcasters began offering digital services, consumers would buy more digital TVs, when they could afford them.

But there were other forces at work. Mobile companies like Verizon Wireless and AT&T were salivating over the frequencies currently used by the television broadcasters, which the wireless companies wanted to use for their next generation of phone and Internet services. The frequencies would become available once the television stations switched off their analog broadcasts and went all-digital. Auctioning off the old spectrum could raise $10 billion, analysts estimated in 2005. (In fact, earlier this year the bulk of the spectrum sold for $19.6 billion.)

But the broadcasters were dragging their feet. The Federal Communications Commission essentially gave the broadcasters the frequency spectrum for digital broadcasts in 1996 in exchange for agreeing to give up the analog spectrum. For the broadcasters, a switch to digital television would allow them to offer a bevy of new services – multiple channels, pay-per-view, high-definition channels – but they weren't eager to abandon the old analog spectrum to new competitors, especially if it meant losing a chunk of the audience still using analog sets. Again and again the broadcasters were given deadlines to go all-digital, and over and over again they lobbied for delays, hoping to win concessions from the government in exchange for abandoning the old spectrum.


Cheap Info, Fast Scams

After years of delays and deregulation, the FCC and the Bush administration were eager to break the impasse and use the spectrum to raise money. Under their direction, the push for digital television morphed into a national security issue. Plans called for a small portion of the spectrum to be used for police and firefighter communications, a pet issue in the wake of the September 11 terrorist attacks. The language inserted into the deficit-reduction bill was labeled "Dig­it­al Television Transition and Public Safety."

The first round of spectrum auctions earlier this year raised $19.6 billion, almost twice original estimates, which government officials hailed as a huge success. But there was one twist: Nobody made a minimum bid on the spectrum set aside for public safety. The war on terror would have to wait.

Of the $19.6 billion raised so far, about $1 billion will go to public safety and communications, and another $1.5 billion will cover the coupon plan. According to the language of the deficit-reduction bill, more than $7 billion from the auction will automatically go into the government general fund, as befitting a deficit-reduction measure. Sedmak, of the NTIA, said he isn't sure what will happen to the extra $10 billion-plus raised from the first auction, but it is likely headed into the general fund, where it will be picked over by legislators.

A grand total of $5 million of the $19.6 billion is designated for public education about the digital transition. "I give the NTIA pretty high marks for mobilizing the limited resources they've been given," said Andrew Jay Schwartzman, president of the Media Access Project. "The problem is they've been given one-tenth the resources they should have been given."

The Bush administration is relying on the private sector to pick up the slack. Station owners, cable companies, and satellite services have promised to devote hundreds of millions of dollars of airtime on education campaigns. Local station KXAN, for example, will devote a half hour on the first Sunday of each month to a 30-minute education piece produced by the National Association of Broadcasters.

"We're getting there," said KXAN General Manager Eric Lassberg, who has been speaking to local groups about the transition. "What I've found is that most people understand what is going to happen. What they don't realize is that if you have cable or satellite, you don't have to do anything."

While not everyone in the private sector got what they wanted, the deal was a windfall for the broadcasters, who not only received the continued use of the spectrum for free but also enlisted the government's backing to subsidize converter-box purchases. The program was also warmly embraced by television manufacturers, who stand to sell more TVs as well as converter boxes. And the wireless industry finally got the chance to buy up more of the coveted spectrum. Even cable and satellite providers stand to benefit from the deal; an estimated 1.4 million households will simply switch to pay services, according to research group Sanford C. Bernstein & Co.

Meanwhile, Consumers Union predicts that even with the coupon program, consumers will end up spending $2 billion out of their pockets to upgrade their TVs or buy converter boxes. After all the negotiations and intrigue, consumer advocates railed against the deal, which they called a multibillion-dollar giveaway to broadcasters. The negotiations were a golden opportunity, they said, to demand more public service or cultural programming from the broadcasters in exchange for use of the spectrum, which may be valued at $50 billion in the open market. "They could have received real value rather than giving it to the broadcasters for free," Schwartzman said.

Other countries are taking different approaches, critics note. In the United King­dom, for example, the government is spending far more on education, even going door to door in some communities. They are also phasing in the transition by regions, easing the shock and allowing a more focused approach to educating communities. "I don't think one date should have been placed on it," said Kelsey of Consumers Union. "It's something that would have happened organically over the years."


Ground Zero: Wilmington

The ramifications of the mandated switch go far beyond a few people losing their rabbit-ear antennae, some say. Environmentalists are cringing at the thought of millions of people throwing out old televisions, which are filled with dangerous toxins. Only one major television manufacturer, Sony, currently offers recycling, environmentalists note, an issue ignored by the digital transition plan.

"TVs are definitely going to landfills unless they create alternatives for consumers," said Robin Schneider, executive director of the Texas Campaign for the Environment. Earlier this year, TCE members dressed as TV zombies at a press conference as part of a nationwide protest of the digital transition. "I can't think of another comparable example where so many products were made obsolete overnight because of a government decision," Schneider said.

There are already signs that the government's reliance on the private sector may be problematic. All new TV sets sold are required to have a digital tuner, but retailers are still trying to unload the old sets. In February, a study by the U.S. Public Interest Research Group found that 80% of retail-sales staffers provided "inaccurate information" about converter boxes and coupons, and 20% tried to "up-sell surveyors to digital TVs or upscale converter boxes." In April, the FCC fined Wal-Mart, Sears, Circuit City, and other retailers a total of $3.9 million for selling analog sets without the mandated labels warning buyers of the upcoming transition that will make the sets outdated.

As the Feb. 17 deadline grows closer, confusion is sure to increase, critics note. As a test, broadcasters in Wilmington, N.C., will shut down their analog signals on Sept. 8, which might provide a barometer of the public's awareness of the digital campaign.

Kelsey, for one, believes government agencies will have to "put [their] hands back on the steering wheel" to take back control and responsibility for the transition. But he doesn't think it will happen. "They don't want to be accused of dropping the ball," he said. "It's become the third rail to avoid at all costs."

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