Ad Pushes Digital TV – But Doesn’t Tell The Whole Story

Summary

Telecom companies pushing for a forced conversion to all-digital television broadcasts ran ads in Washington DC and elsewhere highlighting benefits for firemen, police officers, and other “first responders,” who stand to receive improved communications capabilities and gear. The ad calls digital TV a “win-win solution” benefiting both consumers and the emergency responders.

The ad is true as far as it goes, but misleading because it implies that the digital-TV bill taking shape in Congress would have only winners. In fact, there would be losers, too. According to the GAO, an estimated 21 million households now get TV only through a standard, analog TV set, and would be forced either to junk their set and buy a new digital set, or to obtain a new converter that manufacturers estimate will cost about $50.

Also not mentioned is that taxpayers will be asked to contribute up to $3 billion to subsidize the conversion. That money would come from the proceeds expected from auctioning off some of the airwaves now used by TV broadcasters.

The funding of the ad is also something of a mystery. One source told us it was financed by Motorola, which stands to profit from the transition by selling new police, fire and emergency radio equipment. Motorola wouldn’t confirm that, nor would they deny it.

Analysis

The ad as it appeared in Washington DC bore the name of the “High Tech DTV Coalition,” a collection of broadband and telecom companies that stand to profit once the government forces an end to standard, analog TV broadcasts. That is expected to stimulate sales of digital TV sets and free up big swaths of the airwaves for various new telecom ventures, including more broadband wireless services.

Support First Responders

The ad never mentions IBM, Intel, Microsoft, AT&T or other telecom and information technology companies that make up the coalition and stand to profit from the conversion to all-digital television. Instead, it shows police officers and firefighters and says “they need our help.”

It encourages viewers to learn more from a group called Support America’s First Responders, an alliance that includes Motorola and organizations representing firefighters, police, and city and county governments. Its web site urges visitors to write to key members of Congress urging a switch to all-digital TV “as soon as possible.”

The ad is true in two respects. Firefighters, police and other first responders would indeed receive new communication frequencies that advocates say are ideal for “interoperability,” allowing responders from different jurisdictions to talk to each other more easily. It is also true that consumers would eventually get many more choices for wireless broadband communication, and also improved quality of broadcast TV images. But these would come at a price.

The ad misleads by saying that “pending legislation is a win-win solution,” implying that there would be no losers. This is simply false.

Currently the Government Accountability Office estimates that 21 million households still have access to television broadcasts only through standard analog TV sets, using the same basic technology that has been in use since the inception of commercial television broadcasting more than 50 years ago. Legislation now taking shape in the House and Senate would force an end to analog broadcasts, which would make all those sets obsolete – and rather quickly.

Some Losers

Current bills would set a “hard date” for conversion.  A bill approved by a House Committee sets the date at December 31, 2008.  A bill approved by the full Senate sets it at April 7, 2009.  By that time, households that rely on free broadcast television will have to upgrade their televisions, either by buying new digital sets or by obtaining a set-top box converter for their old set (similar to a cable box) which is expected to cost around $50.

Taxpayers will be asked to help, too. Station owners, set makers and consumer groups all have lobbied for government subsidies to help families pay for converters. The Senate has approved a bill containing $3 billion in consumer subsidies, but a House bill that came out of the House Commerce Committee provides less – $990 million.

Overall, the transition is expected to reduce the federal deficit through the auctioning of frequencies that will be given up by TV broadcasters. The frequency auction is expected to bring in at least $10 billion, and some estimate as much as $30 billion. But that sum would of course be reduced by what is spent to subsidize converter boxes for consumers.

Back Story

The digital transition actually has been a subject of legislation for nearly a decade.  In 1997, Congress set a tentative deadline for the transition to occur at the end of 2006. That deadline won’t be met. It was contingent on 85 percent of homes owning sets capable of receiving digital broadcasts, but currently only 4 percent are ready according to the Consumer Electronics Association.

The lack of progress results from a chicken-and-egg problem. TV station owners were hesitant to begin digital broadcasts until homes had sets that could receive them, and manufacturers were hesitant to produce digital televisions until there were digital programs to receive. Current legislative proposals would force the issue with a “hard” deadline for all-digital broadcasting.

Once analog broadcasts end, the airwaves now used for traditional TV channels will become available for other uses. Frequencies currently being used as TV channels 63, 64, 68 and 69 will be given over to public safety.

Police and fire groups actually want those frequencies by the end of next year, but the compromise being worked out with broadcasters, manufacturers and other commercial interests would delay that until the end of 2008 or later.

Republican Sen. John McCain of Arizona proposed an amendment on Nov. 3 that would have freed up the new emergency-broadcast frequencies one year sooner than proposed by the Senate-approved bill, making them available by April 7, 2008. “The only people who are against this amendment are the National Association of Broadcasters,” McCain stated. But the amendment was opposed by Republican Sen. Ted Stevens of Alaska, chairman of the Commerce Committee, who said moving up the date would “end analog broadcasts before the funds are available for the converter box fund.” McCain’s proposal was defeated 69-30.

Who’s Paying?

There may be a bit of deception about who is actually funding this ad.  A version of the ad airing in Washington DC says it is paid for by the High Tech DTV Coalition. However, Yucel Ors of the Support America’s First Responders organization told us he believed Motorola paid for the ad. Motorola officials referred us to their chief lobbyist Bill Anaya, who did not return several calls and emails asking for comment. High Tech DTV Coalition spokesperson Mary Greczyn said any advertising that credited the High Tech DTV Coalition was accurate, but didn’t comment when asked if Motorola had given the coalition the money to run the ad.

Motorola Corp. is not listed as a member of the High Tech DTV Coalition, but is listed as a member of the Support America’s First Responder’s Alliance.

Motorola is a leading supplier of wireless communications for emergency responders and set-top converter boxes for consumer TV reception. For them, the conversion to digital TV really will be “win-win.”

– by Justin Banks & Brooks Jackson

 

Media

Watch High Tech DTV Coalition Ad: “Get the Picture”

 

Sources

“Committee Sets Date for Digital Television Transition,” press release, House Committee on Energy and Commerce, 26 Oct 2005.

“Senate Commerce Committee Approves the Digital Transition and Public Safety Act of 2005,” press release, Senate Committee on Commerce, Science, and Transportation,  20 Oct 2005.

“The Digital TV Transition: A Brief Overview,” CRS Report RS22217 .  Lennard G. Kruger and Linda K. Moore, 12 Aug 2005.

“APCO Supports SAVE LIVES Act of 2005,” press release, Association of Public-Safety Communications Officials, 14 June 2005.

Congressional Record, 3 Nov 2005, S-12308 & S-12309.

“Motorola is the leader in mission critical wireless systems,” Motorola Web site Section on Government and Enterprise.  Viewed on November 11, 2005

“Analysis of an Accelerated Digital Television Transition,” prepared by the Analysis Group, sponsored by Intel Corporation 31 May 2005.

Letter from APCO President Gregory S. Ballentine to the Chairman and Co-Chairman of the Senate Committee on Commerce, Science, and Transportation, 18 October 2005.

“Digital TV: What are We Waiting For?” Erin Biba.  PC World, 23 March 2005.