The end of analog TV

As reported on MSNBC in Michael Roger‘s article, The end of analog TV:

Depending on the outcome of discussions in Congress, television as we know it may end at exactly midnight Dec. 31, 2006.

That?s the date Congress targeted, a decade ago, for the end of analog television broadcasting and a full cutover to a digital format… Back when the legislation was written, New Year?s Eve 2006 probably looked as safely distant as the dark side of the moon. But now that date is right around the corner and Congress and the FCC are struggling mightily to figure out what to do…

The really big question: What will happen to all those old-fashioned television sets we?re still buying when the analog transmitters go off the air? To continue to receive free broadcast television via antenna, you?ll have to buy a digital converter box; cost estimates range from $100 or so in 2006 down to $50 by 2008…

The real problem is the 15 million or so U.S. households whose only television service comes over the air. For these people, predominately lower-income and disproportionately black and Hispanic, the cut-off will be bad news indeed…

Congress can ignore the end-of-2006 cut-off if fewer than 85 percent of households have digital television sets…

Most discussions in Washington contemplate some sort of free or subsidized converters for low-income households, paid for by the government, perhaps with the help of broadcasters or consumer electronics manufacturers…

So let’s think about that:

  • Congress obviously came up with some brilliant legislation in 1996 thinking that all U.S. consumers would either buy a new television that had a built-in digital converter, or buy the separate digital converter. They neglected to recognize the practicality or likelihood of this, nor did they encourage the market to advertise this pending need.
  • They decided they could avoiding the pending shutdown of analog television if “fewer than 85 percent of households have digital television sets [in 2006].” In other words, they are willing to abandon the 15 million households that didn’t decide to (or know they had to) upgrade their old reliable TV.
  • A proposed “fix” to this is for the government to subsidize the purchase of converters for “low-income households” who would be left in the dark. If you’re middle class, you have to buy a new television. If you’re “low-income” the government will give you one. Assuming that 10 million of those 15 million households fall into this category, and that these set-top boxes cost about $100, we’re talking $150 million, not to mention the endless administrative and bureacratic costs. I’d estimate it would cost $300 million to “fix” this problem.
  • That same $300 million is about the Federal tax burden of about 50,000 middle-class families – a drop in the bucket that we call the Federal budget. It’s really not a lot of money to an organization that spends trillions of dollars a year. Maybe it isn’t a bad idea?

What a wonderful world Congress has brought us. They made legislation to bring the wonders of high-definition television to the masses, at a cost of $300 million. Odds are if they did nothing the market would have eventually implemented high-definition television on its own, phased it in without alienating its existing customers, and saved us $300 million. No media company would ever look to abandon 15 million customers. Congress thinks it is no problem to do so – because they can bail themselves out by spending your $300 million. Remember, it’s not the government’s money, it is your money. And that $300 million won’t give anyone high-definition television — it’ll just make sure the same old picture they see today will still be there tomorrow. So why bother?

We can only wonder.

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