Hearing of House Subcommittee on Telecommunications and the Internet: The Role of Technology in Achieving a Hard Deadline for the Dtv Transition
HEARING OF HOUSE SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET: THE ROLE OF TECHNOLOGY IN ACHIEVING A HARD DEADLINE FOR THE DTV TRANSITION
February 17, 2005
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Mr. Markey. Thank you, Mr. Chairman. Thank you very much for helping us to explore these issues today.
Today's hearing will explore issues related to ending analog television broadcasting in the United States. I think for public policy discussion we can safely assume that the analog era will end on a date certain. This is largely because budgetary interests will force a hard date for shutting down the analog signal in order to obtain proceeds from any auctions for licenses to use frequencies that the broadcast industry vacates.
The question remains which date should be chosen. My feeling is that the date should be driven not by budgetary considerations but rather by our telecommunications policy goals. We must be mindful that television penetration in the United States exceeds telephone penetration. The Government Accountability Office will report to us this morning that some 21 million households in the United States rely exclusively upon free over-the-air analog broadcasting. On average, American consumers also have multiple television sets in their households, and today, all over the country, consumers will be walking into a store and, rather than buying a DTV set, they will buy yet another analog TV set, and these TV sets typically last 15 to 20 years longer, not 18 months, like an Ipod, 15 to 20 years. Ipod automatically goes broke in 18 months. Isn't that something? That is the new technology. The old technology lasts for 15 to 20 years.
There is little debate that getting the analog TV spectrum backed soon can offer consumers and taxpayers alike important public and economic benefits. More importantly, even freeing up the upper portion of the broadcast spectrum for our public safety would be a significant public interest achievement that has also eluded the Federal Communications Commission for several years. At its core, the DTV transition represents a government-driven policy, not a purely market-driven phenomenon, and it is therefore imperative that government create the conditions and environment for policy success. In that context, any transition plan that abruptly cuts off analog television service must come only after consumers have been adequately informed of the impending shut off of service. Moreover, it should only occur after the government has fully implemented a program to effectively identify individuals who may warrant a subsidy to buy needed equipment so that they do not lose TV reception in their household. And in considering a timetable for this proposed--for this purpose, we must remember that neither the FCC nor the Commerce Department has any experience in administering this type of program.
Finally, a date certain shut off of the analog television feed should arrive only after consumers have had sufficient time to make the purchases they need to continue receiving television broadcasts in the digital TV era. Another intricate component of any early and less costly date certain shut off of the analog signal is the notion that cable operators will take the digital signals of broadcasters and down-convert such signals to analog. In other words, millions of cable consumers would receive their local TV broadcasters in analog format rather than in digital format in order to bring the DTV transition to a more rapid conclusion.
I believe we have to have a discussion of the consumer impact of down-converting a broadcaster's signal. Over the next couple of years, millions of consumers will make investments in digital television equipment. And millions more may be induced to make such purchases if the government is advertising that it is ending the analog TV era on a certain date. If we permit the down-conversion of the quality of the broadcaster's signal in order to end up--in order to end the DTV transition early, will there be any policy of up-conversion of that signal back to its original digital format further down the road so that all cable consumers eventually get to see the digital quality picture the broadcaster is delivering to the cable operator on the new digital set that this committee will have advised all consumers to have purchased although they are now watching an analog set in the digital era in--oh, God, is it going to be confusing.
These are important issues that the subcommittee must understand so that we can explain it to our constituents. And we appreciate all of the expert testimony that we are going to hear today, because Congress is a stimulating--is a stimulus-response institution, and there is nothing more stimulating than millions of consumers who will demand to know why they can't see their favorite programming this coming Sunday. There could never--I can't even imagine the issue that could match it in its intensity if this committee mishandles this issue.
I yield back the balance of my time.
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Mr. Markey. Thank you, Mr. Chairman.
Mr. Goldstein, I know this isn't the subject of today's hearings, but who are these families that are totally dependent upon free, over-the-air broadcasting? Can you break down for us their demographic profile?
Mr. Goldstein. Yes, I can, to some extent. The--we found that 19 percent of over-the-air viewers was--the population we are talking about, of the total, it is about 21 million. We found that on average they had about 2.1 televisions where cable and DBS viewers had about 2.7. We also found that about 48 percent of over-the-air viewers had incomes under $30,000 compared to about 29 percent----
Mr. Markey. Under what?
Mr. Goldstein. $30,000.
Mr. Markey. So 48 percent of these viewers are--have an income under $30,000 a year.
Mr. Goldstein. Yes, sir. About 6 percent of them had incomes over $100,000. 23 percent of non-white households rely on over-the-air----
Mr. Markey. What is that? I am sorry.
Mr. Goldstein. 23 percent----
Mr. Markey. Okay.
Mr. Goldstein. [continuing] of non-white households rely on over-the-air, and 28 percent of Hispanic households relied on over-the-air. Those are the figures I have with me today. There are others we could certainly provide.
Mr. Markey. Now, if when we put together the new government subsidy program, what would be the privacy issues that ould exist in terms of identifying who these people are and making sure they get the--those--how would--we could use the cable lists to know who doesn't subscribe to cable just by knowing who gets cable. How would we work that out to ensure that we only gave the new government subsidy program over to people who had exclusively free, over-the-air as their means of receiving a signal?
Mr. Goldstein. Congressman, we are working on a much larger report for this committee for July that will get at a lot of the issues of administration and how you might administer this program, the kinds of ways in which you could conceive----
Mr. Markey. We don't really have until July. Could you give us a preliminary sense of how we would handle those issues right now?
Mr. Goldstein. At this point, all I can really tell you is that it--clearly, there are complications to it if you are going to--depending on the kind of list you might use, if you used the cable and satellite lists to try and discern, you know, who does not receive it. My understanding is you can't use census data. It is pretty unclear to us right now exactly how you would proceed. It is problematic.
Mr. Markey. So there would be competitive issues. The cable and the----
Mr. Goldstein. Absolutely.
Mr. Markey. [continuing] satellite industry might not want to give us the names of the people who subscribe so we could give the money to the people who don't subscribe. You have privacy issues----
Mr. Goldstein. Yes, sir.
Mr. Markey. [continuing] in terms of the people whose names--that they would give us in terms of who does subscribe and might not want that to be part of a government--part of information, so it does become complicated.
Mr. Goldstein. Yes, it----
Mr. Markey. How much money would it take, in your estimation, to implement a program like that?
Mr. Goldstein. Well, the implementation phase?
Mr. Markey. Yeah, the implementation. How much would it cost?
Mr. Goldstein. We honestly don't know, at this point. In fact, the cost of the implementation--we are actually not looking at how much implementation might cost. We are looking at various options.
Mr. Markey. All right. If it takes until July for you to give us a report as to what the issues are, how long would it take to implement a policy that takes another 6 months just to put together the--and identify the issues much less putting into place an implementation--how long do you think it would take to put an implementation program into----
Mr. Goldstein. To identify the cost?
Mr. Markey. [continuing] effect? To identify cost and then--but I mean for then the Federal Government to put together a program that actually could implement the recommendations which it took you 6 months to put together?
Mr. Goldstein. It would all depend, Congressman, of course on what the Congress or the FCC decided to implement. That is part of the problem here. Until you know exactly what is to be implemented and how that would work, it is really difficult to determine how much it would cost.
Mr. Markey. Yeah. Well, it is a big program, though. There are--you say there are 21 million households in America relying exclusively upon free, over-the-air broadcasting while France, in its totality only has 22 million households. So it is, essentially, the job of figuring out how to have all of France get a subsidy, every single home, and make the conversion, which is no small task for the Federal Government to do in an effective way that doesn't disadvantage, especially the 48 percent that are under $30,000 in income who may have--that is their only source of information. I mean, over $100,000, they are going to have computers in their homes, other means of communication. But here, for the poorest, they are going to have a problem. And our Federal Government, at the end of the day, we do--this committee, we just can't say to those people, ``C'est la vie.'' You know. We would have to have a much more effective and readily available answer than, you know, just, ``I am sorry it didn't work out for you.''
So I thank you for your report. I think this is an invaluable document that outlines--begins to outline the parameters of the dilemma.
Mr. Goldstein. Thank you.
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Mr. Markey. I thank you very much, Mr. Chairman.
We have a dual tuner mandate that the FCC belated put on the books so that we at least end a policy of selling TV sets that the government intends to render obsolete. The dual tuner mandate starts with the larger TV sets and scales down to 13-inch sets with the requirement that these smaller sets have the capability of receiving and displaying digital signals by July 1, 2007. Have you done any analyses that, recognizing that we sell some 30 million TVs annually in the United States, that under the dual tuner mandate, how many of the 21 million households will obtain a dual tuner set under the ordinary course of events, and especially how many would get a new TV on their own with digital capability, especially once the 13-inch mandate arrives in mid-2007?
Mr. Goldstein.
Mr. Goldstein. We haven't done any specific analysis of this issue, Congressman, but I mean, I think just from a--well, one could argue from the extrapolation standpoint if there are, you know, 120 million households and, you know, 25 to 30 million new televisions in, you know, 1/4 of the over-the-air people were to buy a set, you know, in a year, that is a lot of--that is certainly a lot of television sets every year. We haven't done any specific analysis of that point.
Mr. Markey. But what would you think, Mr. Goldstein, though, is the likelihood that if we sell 25 or 30 million sets a year over the next 3 years that x number of consumers in this category will have purchased a new digital TV set or one that is capable of receiving a digital signal and converting it?
Mr. Goldstein. Some certainly will. Obviously, there is a larger than average percentage of them that are of a low-income nature, so it may not be as many as from other categories.
Mr. Markey. So you are saying that it--for many of the poorer people, and that is almost half of all of the people in--that are totally dependent upon free, over-the-air television, that if they had a TV set that was 5 years old, and that is one decision they could make to continue for another 5 or 10 years, and they wouldn't necessarily be going out into the market looking for a new TV set.
Mr. Goldstein. It is true. It is hard to predict, but because there is a--you know, such a substantial number of them who are poor, I think that is a real issue.
Mr. Markey. Okay. Good.
Could I ask each of you just to give us the 30 seconds you want us to remember as we are leaving here today? What is the one core nugget that you want the committee to maintain as we are now moving to--more actively into this area?
Mr. Willner. Good to see you, by the way.
Mr. Willner. Good seeing you, too. Thank you.
I would like the committee to know that the cable industry is prepared to move forward with the digital transition whenever you folks are ready to declare it. A hard date is, I think, important. We don't have a hard date now because there is that caveat of 85 percent and nobody really knows what that 85 percent means, which is one of the reasons why I think the manufacturers aren't really embracing putting dual tuners and digital tuners into television sets. So when you get on with the business of converting the Nation's airwaves to digital, we will be there, and we will be providing service seamlessly to our subscribers the day after.
Mr. Markey. Thank you.
Mr. Yager.
Mr. Yager. I think what I would like you to remember is the impact that any decision this committee makes has on the consumer, your constituents, our viewers, and the impact the digital transition will have on them.
Mr. Markey. Okay. Thank you.
Mr. Kim--Dr. Kim.
Mr. Kim. As a consumer electronics manufacturer point of view, we are very anxious to this transition quickly move on, and we can make television sets available at an affordable price to the consumers.
Mr. Markey. Thank you.
And Mr. Goldstein.
Mr. Goldstein. I think the hearing this morning really showed that there are a tremendous number of issues that have to be grappled with and answered, a lot of policy issues before the committee and the Congress. And the work that we have started to do for you and that we will finish up in the coming months, hopefully, will help you reach those conclusions, and we are happy to continue to take on other work related to this, as the committee wishes.
Mr. Markey. Yes or no: can we get this done by January 1, 2007? Yes or no.
Mr. Goldstein.
Mr. Goldstein. Yes.
Mr. Markey. Dr. Kim.
Mr. Kim. Yes.
Mr. Markey. Mr. Yager.
Mr. Yager. No.
Mr. Markey. Mr. Willner.
Mr. Willner. The yeses have it three to one, sir.
Mr. Markey. I thank you.
And Mr. Yager, I understand your position. I am a Democrat in the House, so I sympathize with you. Thank you.
I thank you, Mr. Chairman.
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