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February 20, 2004
CONTACT: David Fish
(202) 289-8928

Congress Should Speed
Transition To Digital TV

SHVIA Changes Would Free Valuable Spectrum, Economist Says

WASHINGTON, D.C. - The transition to Digital TV envisioned by Congress in the 1996 Telecommunications Act has "foundered on the shoals of a government policy that is at odds with the reality of where the market is going," writes the author of a new report on the dynamic multi-channel video marketplace. In order to move forward - and to help free-up billions of dollars worth of valuable spectrum now devoted to broadcasting - the report concludes that Congress should consider changes to the Satellite Home Viewer Improvement Act (SHVIA) during this year's reauthorization. A House Judiciary subcommittee will hold a hearing on the matter Tuesday.

In "Accelerating The Transition To Digital TV: The Satellite Home Viewer Improvement Act Can Help," Progress & Freedom Foundation Senior Fellow and VP for Research Thomas M. Lenard maintains the "dominant priority" for legislators in the transition to DTV is to "free up as much spectrum allocated to broadcast TV as possible." This will involve "changing the transition plan at some point," he writes, from the current "government-prescribed course premised on a transition to free over-the-air broadcast DTV." In fact, Lenard writes, "only about 10 percent of the viewing population receives its television this way, and that percentage is declining over time."

There are a number of ways government can right its policy and "speed the transition to DTV," writes Lenard. One of them is for Congress to amend SHVIA during this year's reauthorization. "Policy measures such as extending the distant signal retransmission rights of satellite providers to include digital signals can help complete the migration to MVPD [multi-channel video program distributor, such as cable or satellite] at essentially zero cost." This would help "free up large blocks of valuable spectrum for the many new and innovative wireless technologies that are on the horizon."

Relying in part on a study by Manhattan Institute economist Thomas Hazlett, Lenard calculates that the "social value" of freeing analog spectrum "will consist of at least $14 billion to $127 billion in market value plus an equivalent annual amount of consumer surplus." He maintains that moving from the current "approximately 90-percent subscription viewership to 100 percent raises the prospect of being able to reclaim the entire 402 MHz and auction it off for other, higher-value uses."

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation