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Kneuer Quits NTIA; Low Power Stations; & More

November 11, 2007

John Kneuer, the beleaguered head of the National Telecommunications and Information Administration, is leaving that agency to return to the private sector. This comes after hard questioning in a number of Congressional hearings about exactly when consumers might be able to get their NTIA-administered digital-to-analog converter box coupons.

Never willing to provide a definitive answer, Kneuer's dissembling irritated a number of committee members. Not helping was his assertion that it would be better if no one in government was in charge of the transition.

He will be departing within the next couple of weeks, leaving his deputy in charge until a permanent replacement can be appointed. He presently has no specific job lined up.

Low-power television and translator stations (including Class A broadcast stations) have been exempt from the digital transition--so far. What's surprising is that there are many more of them than there are full-power broadcast TV stations. These low-power stations will be free to continue broadcasting an analog signal past February 17, 2009.

Low-power stations serve small niche markets, either in small towns or limited communities within larger cities. Class A stations are low power stations that have special protections from larger stations by satisfying a number of public interest requirements: broadcast at least 18 hours/day, air a certain amount of locally produced programming (e.g high school sports), broadcast a minimum amount of children's shows, be Emergency Alert System capable, etc. Translator stations get all their programming from a parent station, generally in markets too small to support the cost of a stand-alone TV station.

Although these stations will convert over to digital at some point, the FCC has not yet issued rules for when that might be. Until they do, there will be some confusion and consternation.

We're already seeing it in early reporting on the transition, which usually says all analog broadcasts will be shut-down on February 17, 2009. Not so for all of those low power stations, which serve a lot of people--many in rural areas.

The low-power TV people are pointing that out, saying their viewers will not need a digital-to-analog converter box on February 17, 2009 for their analog TVs.

This, however, presents another problem. The converter box coupon program lets people apply for coupons until March 31, 2009, and gives them 90 days after that to redeem them. Suppose the FCC decides low-power stations must convert to digital sometime in 2010, or 2011? Or what if a low-power station decides to switch over on its own (if that is allowed)?

Those low-power viewers--who were told they would not need a converter box for the transition--will then suddenly find themselves in need of one -- after the $40 coupons are gone. They will then have to pay full price, assuming they can find a retailer still selling the boxes.

If they want to keep their analog set for awhile, it would behoove them to go ahead and buy one of the subsidized converter boxes while the getting is good.

Or else they may have to buy a new digital TV (which might not be so bad).

The government has set up a program to help low-power TV stations pay for a digital-to-analog conversion device that would enable them to convert the incoming digital signal of its corresponding full-power television station to analog format for transmission on the low-power television station's analog channel. If they don't get these things by February 17, 2009, when full-power stations shut off their analog signals, they're going to be off the air.

Pioneer is struggling to keep its plasma TV business going. Low plasma sales were responsible for a substantial drop in operating profits in the last quarter, and last month they said their plasma business would continue to be unprofitable in 2008.

As a result, Pioneer has suspended plans for a new plasma factory, announced last year.

Pioneer has decided to pursue plasma technical performance over market share. It's highly acclaimed plasma sets are apparently too expensive for the mass market, which has been shifting to LCD flat-panels, even in the larger sizes which were once the domain of plasma.

Pioneer is not in any danger of folding, as its car audio and navigation systems are very profitable. And its recent partnership with Sharp gave it a new infusion of cash.

Last Thursday's FCC DTV Consumer Education Workshop focused on the needs of seniors. It was clear from the speakers that many older Americans will need special attention during the remaining fifteen months of the transition. It wasn't clear who might be directing, coordinating and providing the needed assistance.

For most seniors, I'm guessing it will be friends, neighbors, and family.

FCC Chairman Martin outlined some general things the Commission would be doing (using FCC field offices to outreach to senior centers, media contacts, etc.). He made no mention of the FCC's pending consumer education initiative rules (they were not considered at the FCC's October 31 meeting).

Commissioner Adelstein made his usual set of remarks. No plan, and no plan to develop a plan. "We can't just do this in the last couple of months."

Several of the organizations at the meeting made pleas for government funding. A number said what was needed was "boots on the ground." Some said there was a need to go into seniors' homes, while others noted that held risks.

There was a lot of discussion about con-artists using the transition as a pretense for gaining access to seniors' homes, personal identification, bank accounts, and credit cards. Some on the committee naively said the official application would not ask for social security numbers, etc., and members of agencies authorized to enter seniors' home would be subject to background investigations.

Others, more familiar with scammers, pointed out that the bad guys would create their own fake applications and telephone scripts, etc etc. (Or, "We're going to have to rewire your home in order to install a digital TV.")

Cathy Seidel (FCC consumer chief) at one point said after January 1 consumers can request coupons and get the converter boxes, asking the NTIA people in the room "tell me if I'm wrong" -- they didn't. She said boxes would be on the shelves in January. Some surprises on the way.

Oh well.

Until next week . . .