With just weeks to go before broadcasters are scheduled to replace analog television transmissions with digital programming, businesses and emergency response agencies are suffering from a bad dose of reality TV. They're facing millions of dollars in losses if Congress agrees to a request from the Obama Administration to hastily pass a law delaying the Feb. 17 transition.
First responders say they've invested hundreds of millions purchasing two-way radios and installing other wireless communications that will operate on the freed spectrum in big cities. Many are now awaiting that spectrum so they can use the new equipment. They argue that if a natural disaster or other emergency occurs before the transition, the delay could cost lives.
"We're sympathetic to the concerns, but what about all the people who've done what they're supposed to do?" says Richard Mirgon, the incoming president of the Association of Public-Safety Communications Officials. "Public safety needs that spectrum so it can provide critical services in densely populated areas."
In a Jan. 9 letter to President Obama, four leading public safety organizations, including law enforcement, fire, and emergency medical personnel, asked that any delay include exemptions that would give them the spectrum by the original February deadline. The public safety plea for an exemption may be hard to meet. Many stations in the markets that are making the digital TV transition must switch on digital and free up the analog spectrum at the same time.
Bill Would Extend Converter Box Program
The House and Senate this week were expected to take up committee bills that would delay the transition nearly four months, until June 12. Nearly 8 million households, mostly low-income and elderly, could lose their programming if the current deadline holds. Lawmakers say a delay will give them extra time to refill the coffers for a federal coupon program that heavily subsidizes the cost of special TV-signal converter boxes.
No one wants to be blamed for consumer ire if the transition goes badly. The switch was originally scheduled in mid-February to avoid riling sports fans who will be tuning into the Super Bowl. But emergency response providers and wireless companies argue they should get the spectrum as promised. The government raised roughly $19 billion by auctioning the analog spectrum off to AT&T Wireless (T), Verizon Communications (VZ), and other companies. It also set aside a 700 Mhz block to modernize emergency services.
Critics say a delay will make many suffer for a relatively few tardy consumers who aren't prepared for the transition. Consumers with old televisions can use converter boxes to turn the new digital signals into analog ones that their televisions can display. Households were able to request two coupons each, and snapped up more than they needed. The Federal Communications Commission estimates about 13 million coupons have not been redeemed, but the government cannot distribute more until they expire 90 days from the time they were mailed out.
President Obama has requested an additional $650 million worth of coupons be allocated as part of his federal bailout plan. Even with more money, federal regulators say they expect about 4% of U.S. households will ignore warnings about the switch until it's too late.
Broadcasters Are Eager to Ditch Analog
Broadcasters are bracing for the worst. The industry, which is suffering from a sharp decline in television advertising, has invested more than $5 billion over the past decade to purchase new digital TV equipment.
Nearly 93% of the 1,760 so-called full-power stations already are broadcasting digital TV but would be forced to continue sending analog signals. They've been looking forward to relinquishing expensive leases on analog transmission towers in February.
An extension of the deadline also would force some stations to pay up to $20,000 a month in extra utility bills, a broadcast industry executive says. "It will cost broadcasters money because they have contracts and have already made preparations," says Andrew Setos, president of engineering for Twentieth Century Fox.
With Kenji Hall in Las Vegas.
Edwards is a correspondent in BusinessWeek's San Francisco bureau.