Bloomberg News

U.S. House Approves Digital TV Deadline of 2008

November 18, 2005

The U.S. House of Representatives approved legislation requiring television broadcasters to switch to digital signals in 2008 and creating a $1 billion subsidy to keep older sets working.

The December 2008 deadline, part of a bill to cut federal spending by $50 billion, is three months earlier than a deadline passed by the Senate last week. The viewer subsidy is one-third the $3 billion included in the Senate measure.

The deadline seeks to ensure that media companies including Viacom Inc. give up their analog airwaves so they can be transferred to local public-safety agencies and sold to Internet and cell-phone companies. Viewers would get clearer images and sound with digital signals, and the sale would net $10 billion for the federal government, the Congressional Budget Office said.

``It is now critical that House and Senate conferees drive these wireless broadband and public-safety benefits home for all Americans,'' said Janice Obuchowski, director of a coalition of technology companies such as Microsoft Corp. (MSFT:US), Dell Inc. (DELL:US) and Intel Corp. (INTC:US) The companies stand to get more business if the deadline becomes law.

The difference in the deadline dates can be bridged in planned meetings between senior House and Senate leaders, Stanford Washington Research Group analyst Paul Gallant said. The gap in the subsidies is more significant and sets up a potential clash between House Republicans led by Joe Barton of Texas and Senate Republicans led by Ted Stevens of Alaska, who is backed by consumer advocates.

Compromise

House and Senate leaders haven't set a date to meet on differences between the bills, and a meeting may be postponed until next year, House Budget Committee spokeswoman Angela Kuck said. Any conference agreement would have to be submitted again to the full House and Senate for votes before being sent to President George W. Bush for his signature.

Stevens said last week that he is willing to go more than halfway to compromise on the consumer subsidy.

``It will probably cost closer to a billion dollars than to three billion,'' he told reporters Nov. 8. ``I think the House is probably closer than we are.''

The subsidy would go to viewers who receive only over-the- air broadcasts on sets with antennas. These viewers wouldn't be able to receive digital signals unless they purchased a converter box, and their sets would go dark once the conversion to digital takes place.

The non-profit Consumers Union, which has backed the Senate bill because the subsidy would go to more viewers, criticized the House for not providing a larger amount.

``The House expects consumers to fork out billions of dollars just to pay to keep their current TV sets working,'' said Consumers Union's Washington co-director Gene Kimmelman.

To contact the reporter on this story: Neil Roland in Washington at nroland@bloomberg.net.

To contact the editor responsible for this story: Emma Moody at emoody@bloomberg.net.


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