May 26, 2005

(WASHINGTON, D.C.) – Consumer groups today called on Congress to ensure Americans are not footing the bill for the cost of transitioning their televisions to a digital broadcast signal, which is estimated to cost at least $50 per each analog TV in households without cable or satellite, or require the purchase of new digital-ready TVs.

“The transition to all-digital television broadcasts can only be supported if consumers are not made to pay the more than $2 billion cost to ensure their TV’s still receive over-the-air broadcasts,” said Gene Kimmelman, senior director of public policy for Consumers Union. Kimmelman testified today before the House Energy and Commerce Subcommittee on Telecommunications and the Internet.

Congress is moving forward on legislation that would set a firm date for television broadcasters to switch from the current analog signal to an all-digital signal. As a result, Americans who rely on over-the-air broadcasts may see their sets go blank if they do not have the proper technology to receive and/or convert the digital signal. To receive a digital signal, consumers will have to subscribe to a satellite or cable service, purchase a digital-ready television, or buy a set-top converter box estimated to cost at least $50 a piece.

“If done correctly, the transition to a digital signal could lower the cost of high-speed Internet access for consumers, and result in more competition and diversity in all media,” Kimmelman said. “If done incorrectly, the transition will be a substantial out-of-pocket burden to consumers, further limit broadcast diversity in a community, and undercut cell phone competition.”

As legislation moves forward with the transition to a digital television signal, Consumers Union urges Congress to consider four vital consumer issues:

• Providing a full consumer subsidy for those whose television will go blank after the transition. Twenty-one million households rely solely on over-the-air broadcasts for their television needs. Millions more Americans, unaware of the looming transition, are buying traditional analog television sets because they are cheaper. Congress should set up a subsidy for those households that own televisions capable of receiving only the current signal.
• After the transition, set aside part of the old airwaves for unlicensed use. Congress should set aside part of the old airwaves, or spectrum, for unlicensed uses allowing communities to establish local wireless networks and provide more locally relevant news and information. Such wireless systems, set up by localities and nonprofits, provide high-speed Internet access to all residents at a reasonable, and lower, cost than current high-speed Internet services.
• Limit further consolidation of media ownership in communities. Following the transition, broadcasters will retain spectrum allowing them to broadcast up to six additional digital signals. Congress should reserve part of this additional spectrum for more diverse and independent sources of local news and information.
• The auction of the old airwaves should promote competition. After the transition, Congress will auction off the old airwaves to generate revenue for the Federal Treasury. The airwaves auctioned off should be reserved for new and smaller companies to provide competition to the traditional giants, like AT&T, resulting in more choices at lower prices for consumers.

To read Kimmelman complete testimony, go to Consumers Union’s media issues website, www.HearUsNow.org.

For more information contact: Matt Hartwig, 202-462-6262