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Upton Predicts Converter Subsidy Is Sufficient

By the time of the transition to DTV in February 2009, only a little more than 20 million sets will need analog-to-digital converter boxes. That is according to Rep. Fred Upton (R-Mich.), former chairman of the House Telecommunications Subcommittee, citing industry predictions.

Before the switch, there will be an industry campaign to educate consumers about the switchover.

The boxes will allow analog-only TVs to receive a signal after the conversion to digital.

If that projection is correct, says Upton, the Republican-backed plan to provide up to $1.5 billion toward the boxes, which would cover 33.5 million sets, will be enough money to cover everyone who needs them.
Citing what he said was "National Association of Broadcasters' data, Upton laid out his case this way. "There are a total of 69 million televisions not connected to cable or satellite, including those in homes that subscribe to cable and satellite. They estimate that after a broadcaster sponsored consumer education campaign, consumers will want subsidized converter boxes for one-third of those televisions. That makes 23 million subsidized converter boxes, well below the 33.5 million subsidized converter boxes that the $1.5 billion coupon program can cover. In fact, I think the initial $990 million will be more than enough to cover the demand for subsidized converter boxes."
The way the DTV transition bill was written, $990 million is set aside for the subsidy, with another $550 million available only if needed."NAB believes no home and no TV set should be disenfranchised from access to local TV signals as a result of the DTV transition," said NAB spokesman Dennis Wharton. "NAB has great respect for Ranking Member Upton, but we still have concerns over whether the $1.5 billion set aside for the NTIA converter box program is sufficient to protect nearly 70 million broadcast-only TV sets that could get disconnected." 
 The issue of the funding has been a hot topic on the Hill, with some Democrats arguing that the program was underfunded and would leave many viewers in the lurch. Many of those Democrats had proposed more than $3 billion for the converter box subsidy.

The Consumer Electronics Association thinks the number of TVs needing the converter boxes will be even smaller, says Upton, with perhaps as few as 8 million needing the $40 coupons to help pay for the sets, which will cost about $60.

That information came in a

House Telecommunications Subcommittee hearing 

on the DTV transition, with Chairman Ed Markey saying the committee was looking for assurances that millions of people would not be losing their over-the-air TV service Feb. 17, 2009.

Some main themes of the hearing were the need for consumer education and whether there was enough funding for that effort, and the need to reclaim spectrum from TV broadcasters after the transition to give to public-safety communications, as well as whether the $1 billion in funding for interoperable communications for first responders was enough. One of the witnesses was the mother of a 9/11 victim; this put an exclamation point on the need for public-safety spectrum.

The public-safety issue is one that broadcasters, cable and the consumer electronics industry plan to make part of their DTV education campaign, according to NAB's Marcellus Alexander at a DTV forum earlier in the week, after studies showed that was a key concern of consumers.