TV stations lobby vs. digital law

[Gregg Lengling]

http://www.bizjournals.com/milwaukee/stories/2005/04/18/newscolumn1.html

Back when television shows began appearing "in color" during the 1960s, TV viewers who owned a black-and-white TV sets could still watch the shows that were in color like "Bonanza" and "Walt Disney's Wonderful World of Color." Owners of black-and-whites just couldn't see the shows in all their colorful splendor.


Four decades later, the television industry, at the direction of Congress, is preparing for a more radical transition to digital-only broadcasts that could make obsolete the conventional color TV. Television sets that receive traditional analog signals will not be able to pick up digital stations without a decoder that can translate the picture from digital to analog.

The management of local television stations in Milwaukee and throughout the country see that policy as crazy and are lobbying Congress for an extension of a Dec. 31, 2006, turn-off date for analog television. A group from the Wisconsin Broadcasters Association, including Milwaukee TV executives, listed the deadline as their top concern during their annual March visit with members of the state's congressional delegation in Washington, D.C.

"We don't want to disenfranchise our viewers," said Jim Hall, general manager of Milwaukee CBS affiliate WDJT-TV (Channel 58) and a Wisconsin Broadcasters Association board member.

TV station executives believe that when they stop broadcasting in analog, viewers who don't own the new digital TV sets or decoders will call and complain to stations, not their representatives to Congress. While some members of Congress are pushing to hold firm on the 2006 deadline, others are willing to revisit the issue, which is probably wise, given Americans' love of television.

"The potential for consumer revolt is enormous should Congress turn off these TVs," said Dennis Wharton, a spokesman for the National Association of Broadcasters in Washington, D.C.

Neither revolt nor panic is likely to be necessary in the foreseeable future, however.

First, the political fallout from essentially taking away millions of Americans' ability to watch TV is nearly unfathomable. While some in Congress are trying to force TV broadcasters and manufacturers to speed up the pace of a conversion to higher-quality digital pictures, they're not going to do it at the risk of alienating many of their TV-viewing constituents.

Secondly, the Telecommunications Act of 1996 that set the 2006 deadline also provides a major exception to the law. The act states that TV stations in a given broadcast market, such as metropolitan Milwaukee, must continue analog broadcasting until 85 percent of the households in that market own at least one TV set that can receive digital transmissions. Today, that figure stands at 3 to 4 percent nationally, Wharton said.

Budget motive
The main motive of Congress in forcing the digital transition is financial.

When the Telecom Act was enacted, TV broadcasters agreed to begin broadcasting a digital signal along with their traditional analog signal. All the major Milwaukee stations have complied with that in recent years, at a cost of $3 million to $6 million per station for digital equipment and installation.


The next step is for TV stations to relinquish the analog broadcasting frequencies and allow Congress to auction them off to wireless firms. The proceeds are expected to be in the billions of dollars, providing budget relief at a time when the federal government is running huge deficits.

All this makes shopping for a new TV a complicated endeavor. Retailers are advertising only digital and high-definition TV -- "plasma" and "flat screen" are the hot products -- and featuring them on their showroom floors. Just a few analog sets are still available. Sales staff frequently inform consumers of the pending disappearance of analog TV, even if the deadline is a moving target.

Ben Tuck, a sales manager at Colder's in West Allis, said manufacturers are shipping only a handful of analog sets to retailers in recent months. Electronics manufacturers will be required by federal law to phase out the production of all analog sets after 2007, forcing anyone buying a new TV to go digital.

Digital TV sets cost more than analog TVs for a similar-size screen. For large screen televisions, it can add $100 to the cost, while for 36-inch or smaller screen televisions, it can add $300 to $400. The digital decoders that can be connected to analog TVs cost about $400 now, but the price may drop, Tuck said.

What role do cable and satellite television play on this front? Cable companies and satellite companies are likely to continue sending out analog signals for the foreseeable future. However, 15 percent to 20 percent of the population still receives their TV signal over the air and would lose their ability to watch TV.

Consumers are fairly bewildered at the new digital era, even if they've heard about the congressional digital mandate.

"The difficulty right now is the consumer is sort of out in space," said John Laabs, president of the Wisconsin Broadcasters Association, Madison.

Wharton predicts the actual shutdown of analog broadcasting will happen in several years after enough consumers acquire digital TVs or decoders to satisfy the 85 percent standard.

Rich Kirchen is managing editor of The Business Journal. He can be reached at 414-278-7788 or rkirchen@bizjournals.com.