Wednesday, January 28, 2009

Digital TV cutover delayed in the US

The US Senate voted unanimously on Monday to delay the deadline to cut over to digital television until 12 June. The House of Representatives is now likely to follow their lead to confirm the delay. The original deadline of 17 February 2009 was set almost a decade ago. However survey company Nielsen Co estimates that over six million households are still without digital cutover boxes. Those affected are mostly poor and rural households who do not have cable or satellite subscriptions. The Senate took the vote after then president-elect Obama urged Congress earlier this month to postpone the date. His team were concerned the government was not doing enough to help those in rural, poor or minority communities to prepare for and navigate the transition despite spending $200 million on an ad campaign explaining the transition.

The issue occurred after the federal program that provides coupons to defray the cost of converter boxes hit a $1.34 billion statutory funding limit on 4 January. The year-long program allowed analogue television owners to receive up to two $40 coupons to buy converter boxes. The program is administered by the National Telecommunications & Information Administration (NTIA) and it proved enormously popular. 25 million households requested 47 million coupons (despite the fact that 2008 Nielsen research showed only 13 million households did not have digital transmission).

Obama’s home state of Hawaii was the first to complete the cutover on 16 January. It went early to avoid the nesting season of the Hawaiian dark-rumped petrel which lives in the television transmitting towers. Authorities made the conversion there with minimal customer outrage. However on the mainland there are still 2.5 million people on the waiting list who won’t get a coupon until either unredeemed coupons are returned or there is an increase in the funding cap. Another four million people may not even be aware of the scheme or the cutoff date. The additional four months will give NTIA time to address the over-extended scheme.

But not everyone in the US is happy with the delayed cutover. The four-month delay will mean local television stations will need to keep their old transmitters turned on resulting in higher power bills and maintenance expenses. Telecommunication companies could also lose millions as they wait to take over the spectrum released by the analogue transmitters. Qualcomm paid $550 million in the government spectrum auction to roll out its MediaFLO mobile TV platform which transmits data to portable devices. Qualcomm COO Len Lauer wrote to Congress pleading for them to stick with the original timetable. He also told Dow Jones the delay “will cost us tens of millions of dollars in extra expense and lost revenue.”

Stephen Conroy and his mandarins in the Australia Federal Broadband, Communications and the Digital Economy Department will be closely watching developments in the US. Here the vested influences of the free-to-air broadcasters succeeded in pushing back the cutover date to 2013. Australia has been slow on the uptake of boxes with only 42 percent cutover (pdf) as of 2007. There was considerable regional variation with 64 percent of Tasmanians cutover to digital compared to only 37 percent in Queensland and South Australia. Critically for the success of the program, 40 percent of people said that digital reception was not an important factor in the choice of a new TV.

Despite the low take-up, there are no plans at this stage to subsidise the cutover. Instead Australia will follow the British staggered-rollout approach (which started in 2007 and goes to 2012). To that end, Conroy set up Digital Australia and hired Andy Townend to lead it in 2007. Townend was formerly the 2IC at Digital UK, the body supervising the British digital switch. However he will have to make do with a budget of $17 million for the next four years, compared with a $488 million budget for Digital UK.

A Conroy spokesman told The Age that the government believes the process will be relatively simple. "For most people, switching to digital will be a relatively straightforward process and we will be supplying information to help people with this as part of our campaign,” he said. However he also admitted poorer sections of society may find it harder to switch and said the Government was considering “several policy options” to address the issue. This is likely to take the form of an education campaign and a help scheme for the elderly and disabled. The rollout begins in the Mildura region of northern Victoria in the first half of 2010.

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