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House Digital TV Transition Hearing

March 29, 2007

The hearing happened and I was not pleasantly surprised. It was a bust.

The Subcommittee on Telecommunications and the Internet is chaired by Ed Markey (D-MA); ranking minority member is Fred Upton (R-MI). There are 33 members of Congress on this subcommittee of the Energy and Commerce Committee.

The focus, as much of it as was actually on the transition to digital TV, was on the government's subsidy program for digital-to-analog converter boxes (and that was pretty much a repeat of last week's hearing on NTIA oversight by the same subcommittee; I'll present informaton from both hearings here).

Much of the time was taken up by political archery, either attacking (by Democrats) or defending (by Republicans) the provisions included in the DTV Transition Act. That legislation has been around for about fifteen months but apparently still is being argued. It was surprising that a number of members did not seem to be familiar with the provisions in that statute.

One member did not know when the end of the transition was, but that is representative of the American public. From polling data presented, of the 40% of respondents who claimed to know about the transition to a new TV standard, only 1% to 3% knew the end of the transition was February 17, 2009.

It is no surprise then, that there was a lot of discussion about the need to educate the public. The number of members who seemed to be serious about making sure that happened could be counted in the fingers of one hand (with some left over). Most seemed quite happy to rely on industry assurances that they were properly motivated to educate consumers all by themselves (with some financial assistance from the government). No mandates needed or desired.

Other important issues that will cause difficulties either were not discussed or were only touched on in passing. For example, how cable subscribers will get digital programming after the end of the transition was not discussed, except in a troubling aside.

Cable

To wit: Rick Boucher (D-VA) asked Time-Warner's Brit if cable subscribers with analog TVs would still get an analog cable signal after the end of the transition. Brit said yes. Boucher then asked if people with digital TVs would get digital/HD programming after the transition. Brit said people subscribing to higher-cost digital tiers would get HD included in that price. Boucher then asked if subscribers of all tiers (including basic) would get digital/HD programming for the standard basic price. Brit waffled, said they hadn't "addressed" that issue (ha!) and added that his "guess is there aren't many of those people," i.e. people who subscribe to basic cable service who would want HD.

That's what they're doing now: limiting digital HD service to the higher cost tiers. If you have an HDTV and want basic cable, all you will get it standard definition analog. It seems clear that Time Warner intends to entend that policy beyond the end of the transition when digital/HD will be the U.S. "standard," but not the cable industry's.

Notwithstanding Time-Warner's intentions, there my be some smaller cable companies electing to provide only downconverted analog programming to all of their customers for some time after the transition, until most have bought digital TVs.

Greg Walden (R-OR) said in his opening statement that HD signals should be passed through cable in undegraded form, but there was no further discussion.

Interoperable radios

Those are for first responders. This topic took up a lot of time in the hearing, and revealed many members' priorities (not on the DTV transition). When the transition is finished, first responders (fire, police, etc.) will get 24 MHz of spectrum for radio communications equipment, especially equipment that is interoperable with other agencies (something that did not work at all during and after the World Trade Center attack and during the aftermath of hurricane Katrina.

Jane Harman (D-CA) raised the specter of near-simultaneous terrorist attacks all over the country (another 9/11) and suggested in highly emotional terms that the transition should be treated as a public safety program. The DTV legislation allotted $1 billion toward facilitating interoperable radio communications for first responders. State and local governments apparently have never been able to give their public safety departments radios that would work for more than one department.

Harman was disappointed that the transition was postponed once (from end-2006) and warned that before February 2009 we could have bigger disasters, "so sober up everybody."

Marsha Blackburn (R-TN) dismissed problems relating to the actual DTV transition as "solvable;" the focus of Congress should therefore be to ensure first responders get new interoperable communications systems.

Dennis Hastert (R-IL) put himself firmly in the first responder camp, making plain his level of personal commitment to a new high-definition TV standard by bragging that the only TV in his Washington townhouse was very old and black and white (with rabbit ears).

Converter boxes - what's happening

The NTIA held a bidders conference this past Monday for companies interested in running the program for the government. The RFP (Request for Proposals) was released a week or so ago. Bids are due on April 30, and the NTIA will announce its selection for the turnkey program vendor on August 15. The program is supposed to be up and running January 1, 2008. Tricky, that will be.

Several manufacturers say they will have boxes ready either by "January 1," by "January," or by "early 2008." But Vitelli would not commit Best Buy to stocking converter boxes in all of their stores as of January 1 (or even later).

NTIA said that if boxes are not readily available on January 1, they will not send out coupons to requestors so as not to start the three-month clock ticking (limit to use the coupons before they expire).

Boxes will retail for about $60.

Members who said more money was needed for coupons claimed that 70 million analog TVs were out there ready to go dark (this appeared to be the 2005 number); others said CEA and FCC estimates for the number of coupons needed by early 2009 were around 21.8 million, which could be covered by the first allotment of $990 million.

Public education?

As always, everyone talked about the need for education, but neither government nor industry action has been forthcoming. There were good education provisions in the House version of the DTV transition legislation in 2005, but those were stripped out by senior senators who were conveniently unwilling to waive a Senate procedural rule. (Noting that the TV industry has consistently opposed mandatory DTV education programs.)

One bill would have mandated, among other things, TV station public service announcements twice a day, part of their public service obligations (in exchange for free use of broadcast frequencies).

A new DTV education bill has been drafted in the Committee, but it has gone nowhere, probably because it doesn't actually require any education of consumers. H.R. 608: there might be a hearing on it in the future, and perhaps some changes.

For the most part, committee members seemed happy enough to accept industry/witness assurances of good intent to educate the public.

For its part, this is what the industry is planning, according to the witnesses:

John Taylor, VP, Public Affairs & Communications, LG Electronics, representing TV manufacturers: He says the industry has started a "vibrant" education effort, that already has attained a "tremendous amount of momentum" (they have set up a web site). (Note: TV makers, broadcasters, and the cable industry have joined to form a transition education coalition.) He mentioned the TV industry's voluntary labeling program for analog TV sets, and suggested that addressed the need for education, but waffled when asked if manufacturers actually displayed warning labels on analog TVs. He said LG put labels on its analog-only TVs, but quickly qualified that there were very few models by that time. (I never saw any labels, and he did not say where the labels were, perhaps on the box. Panasonic made a similar claim to the FCC last year, but as it turned out, they had discontinued all their analog TVs before the labels were to have gone on.)

James Yager, CEO of the Barrington Broadcasting Co., representing TV broadcasters: Broadcasters are taking the education challenge "very seriously." They have conducted market research and focus groups. They are planning a DTV "road show." The industry coalition has created a web site. They will start to air public service announcements in 2008, but declined to say how many. He says it would be hard to start earlier--that would create consumer "confusion," since the converter box program will not start until next year. He said starting an DTV transition education program as early as this May would cause "tremendous confusion," and he didn't want to create "panic." He suggests that the government set up and staff a 1-800 number.

It should be noted that 10% of broadcast stations are still not broadcasting a digital signal, and a much larger percentage still lack the equipment to pass through high definition pogramming (they downconvert). I can see why they don't want consumers to know about the transition until next year.

Glenn Brit, President and CEO of Time Warner, representing you know who: He said they were encouraging their customers to move to HD, that most were not yet digital. He said they would train their employees "as the transition date grows closer." I guess that means consumers should wait to ask their questions.

Michael Vitelli, Senior Vice President of Best Buy, representing TV retailers: He said they also had a web site, and cited figures about the number of times that people visited Best Buys before making TV purchases, even if they ultimately bought elsewhere. He said their sales people educate consumers (that's scary), and that Best Buy eschews educational signs in favor of "human interaction." They have not yet trained their sales people about digital-to-analog converter boxes - "when the timing is right." In the meantime, I guess if a customer has a question about using their analog set after the transition, they can tell them to buy a new digital TV.

Outreach programs

This is a big mystery to me, but a lot of people are talking about it, and the FCC is supposed to be running some kind of committee to advise on how best to reach all of these disadvantaged people who will not otherwise learn about the digital TV transition. The Democrats and a number of lobbying groups say the available funds are too little and many, many, many more millions are needed.

Among them was one of the witnesses, Alex Nogales, President and CEO of National Hispanic Media Coalition, representing minority TV station operators and viewers. He suggested, among other things, reaching Hispanic TV viewers through radio ads. Hey, I said, What about TV spots?

He said the best way to educate minorities, older, and lower-income people was through "community-based organizations" (CBOs-another acronym). He said "We have to invest monies to make sure that CBOs are involved." I guess most CBOs depend on government funding to pay their salaries.

In a Broadcasting & Cable article earlier this week about a Consumer Electronics Association forum on the transition, CEA head Shapiro reportedly said the CEA won't take hat in hand and hit up Congress for more money than the $5 million already allocated to the NTIA. "We don't have a position whether there is enough money," Shapiro said. "We will not ask for additional money." He noted that some companies might.

In the same article, it was reported that the ever-begging-and-not-shy-about-it John Lawson, president of the Association of Public Television Stations called the $5 million grossly inadequate. PBS had asked for $86 million. "We think the government needs to do its part as a major stakeholder in the success of the transition and invest a little bit more in outreach."

"We are exploring some options with the Hill," said Lawson.

Perhaps why many Democrats in the hearing kept saying they needed more money.

The NTIA in another hearing last week said they did not intend to buy TV ads, but rather intended to rely on the industry to do the educating. That seemed to be the refrain at this hearing--the industry knows how to do this better than we do so we'll just let them take care of it. And, the consumer is the TV industry's customer; the industry would be foolish to disenfranchise them. So what is the consumer going to do if broadcasters don't properly and promptly educate them about the transition? Stop watching TV?

There were a couple of skeptical committee members, but that's a small minority.

You can watch the archived webcast of the hearing by going to this page and click on the appropriate link. You'll need Windows Media Player and a broadband connection. You can stream it or download the whole thing as a video file.