WASHINGTON-The chairman of the House Commerce Committee said last week he wants his committee to consider a “Berlin” subsidy plan to end the transition to digital TV so broadcasters can return spectrum to be auctioned.
“We have a date of Dec. 31, 2006, or when digital TV reaches 85 percent. That `or’ could take forever, so one way to do it is to use the Berlin model. It is something that we are looking at. We haven’t run all of the traps with the industry groups nor do we have all of the votes on the committee but it certainly is an option,” Rep. Joe Barton (R-Texas) told RCR Wireless News outside of a hearing on the DTV transition. “I do think it is a fair judgement that from a federal budget standpoint, it would be in the best interest of the taxpayers of this country to have this transition occur sooner rather than later, and we have a date in law that says it can occur by Dec. 31, 2006. I am going to pursue all options to see if we can make it occur on that date.”
Recently, the German city of Berlin converted to digital TV, and the government subsidized digital set-top boxes so subscribers could continue to receive their favorite shows.
Barton said he believes that digital set-top boxes will cost $50 if purchased in large quantities, and they could be paid for using auction revenues.
When questioned about whether Congress could pass a Berlin-style subsidy program by the end of 2006, Barton expressed confidence that it could.
“I have been around here a while, and I know the way the House works, and I know the way the committee works, and I am always at a loss about whether the Senate ever works, but we are having this hearing today. And the FCC staff has this proposal, and when it was first put out, it took a lot of slings and arrows. It has been out there for a while and people are beginning to think maybe it is not such a bad idea so we are holding a hearing on it, so we might as well put on the table” the Berlin subsidy program, said Barton.
Later, Rep. Fred Upton (R-Mich.), chairman of the House telecommunications subcommittee, said his panel will hold a hearing on the Berlin subsidy program in July.
With the 2006 date fast approaching and the budget deficit growing, congressional budgeteers have again started to look to spectrum auctions to fill the gap. TV broadcasters got their spectrum free.
“From a federal budget standpoint, 2006 is preferable to 2008 because whatever the number is for a new spectrum auction, it is a big number, and in the era of $300 billion deficits that is something the committee and the president has to look at,” said Barton.
The Senate Commerce Committee is expected to hold a hearing Wednesday on the DTV transition. Chairman John McCain (R-Ariz.) has been a consistent critic of the free spectrum broadcasters received to help with the DTV transition.
TV broadcasters were given an extra channel (6 megahertz) of spectrum to convert to digital. After the transition, that spectrum is to be auctioned, with 24 megahertz being set aside for public safety. A guard band of 6 megahertz has already been auctioned to band managers, but the remainder of the spectrum has yet to be auctioned.
The broadcasters must give back their extra spectrum by Dec. 31, 2006, or when 85 percent of the homes in their viewing areas are capable of receiving digital signals, whichever is later.
The purpose of last week’s hearing was to examine a proposal by the FCC’s Media Bureau that would count digital cable and local-into-local satellite subscribers toward that 85 percent. In addition, in 2008, broadcasters could choose to have the cable carry its digital signal under the must-carry obligations. These viewers would also count toward the 85 percent.
The Media Bureau proposal gets at the heart of the relationship between broadcasters and cable operators. It would allow broadcasters in October 2008 to elect to have their entire digital signals carried by cable operators instead of the current rule, which requires cable operators to carry only broadcasters’ analog signals. The cable company then would choose whether to broadcast only in digital and require its customers to obtain (either through purchase or giveaway) a digital set-top box or to download the broadcaster’s digital signal into an analog signal.
Barton’s suggestion of a Berlin subsidy program would fit here by giving set-top boxes, which currently cost as much as some TVs, to low-income households that do not subscribe to either satellite or digital cable.
Either way, the broadcaster would be broadcasting in digital and “85 percent” of the homes in its market would be capable of receiving a digital signal, requiring the broadcaster to give back its analog signal as of Jan. 1, 2009.
At the beginning of the hearing, Rep. Edward Markey (D-Mass.) expressed concern about the FCC’s Media Bureau plan to set a hard date of 2009 for the DTV transition.
Markey’s skepticism mirrored the testimony of the National Association of Broadcasters, which called the Media Bureau’s proposal premature.
