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CONTACT: David Fish
May 7, 2004
(202) 289-8928

Gov't Must Speed Transition To Digital TV
SHVIA Changes Would Free Valuable Spectrum, Economist Says

WASHINGTON D.C. - "There is no alternative to government taking the lead and doing it sooner than later" when it comes to completing the transition to digital TV. That is the view of economist Thomas M. Lenard, senior fellow and vice president for research at the Progress & Freedom Foundation. He believes options being floated by Federal Communications Commission Chairman Michael Powell and his media bureau staff and the pending Congressional reauthorization of the Satellite Home Viewer Improvement Act (SHVIA) may provide the means to free-up valuable spectrum now occupied by broadcasters for new, higher-value wireless technologies.

Currently, writes Lenard in a recent CNET article - "No More Delays on Digital TV" - "the process is stalled because, as calculated, it is not likely that the 85 percent trigger [of households able to receive digital broadcasts] will ever be achieved." That trigger is part of the current law, which envisions a 2006 deadline for a DTV transition. "But the transition has foundered on the shoals of a government policy at odds with market reality," he writes "That policy is premised on a transition to free over the-air broadcast TV when, in fact, only 10 percent of viewers receive television this way, and that percentage is declining."

Chairman Powell and his staff propose that satellite and cable viewers be counted toward the 85 percent market trigger if they are able to convert digital signals for their analog sets. Currently, to be counted, consumers would likely need to purchase expensive over-the-air receivers.

According to Lenard, a viable means of affecting a transition to ubiquitous DTV is reauthorization of the Satellite Home Viewer Improvement Act (SHIVA). Passed in 1999, the Act allowed satellite companies to rebroadcast distant analog signals, if the programming is not available locally. Lenard writes that extending this provision to apply to distant digital signals would help the DTV transition by moving viewers to subscription TV and increasing the demand for digital TVs. Moving entirely to subscription TV raises the prospect of "reclaiming the entire amount of spectrum currently reserved for broadcast TV and auctioning it off for other uses." He hopes SHVIA reauthorization and new FCC options "signal a broader discussion of ways to accelerate the digital TV transition." Lenard published a study on the DTV issue earlier this year: "Accelerating The Transition To Digital TV: The Satellite Home Viewer Improvement Act Can Help."

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