FOR IMMEDIATE RELEASE
December 19, 2005

Budget Agreement Loads Billions in Costs on Consumers

Consumer group says digital TV agreement will render millions of TV sets unworkable

Washington, D.C.—Consumers Union today said the digital television transition provisions in the final House/Senate budget agreement loads more than $2 billion in direct out-of-pocket costs on consumers. The digital television transition will bring in more than $10 billion for the U.S. treasury through the auction of public airwaves, but allocates less than $1.4 billion to compensate consumers for the costs of the transition.

“The consumer compensation program established in this program is unworkable, unfair and unacceptable to consumers,” said Jeannine Kenney of Consumers Union. “It provides only a fraction of the funds needed to compensate consumers for the costs of a digital transition they never asked for. And by requiring consumers to jump through restrictive hoops to request vouchers, those who most need compensation will be the least likely to receive it.”

The legislation compensates consumers for only up to $1.4 billion of the estimated $3.5 billion in total consumer costs for the purchase of converter boxes required to keep otherwise perfectly good television sets working after the transition. The funding provides $40 vouchers to partially offset the costs of the converter boxes, but covers costs for fewer than half of the households that will require them.

Four in ten households own a total of up to 80 million televisions that will require the converter boxes expected to cost $60 or more each. Many of these households include minorities, the elderly and low income families. And because the bill does not authorize cable companies to convert broadcast digital signals to analog, tens of millions of cable customers are unlikely to receive local broadcasts without expensive digital cable boxes.

Kenney noted that the bill sets aside only $5 million for consumer education. “Consumers will have no idea what’s coming and what they need to do to prepare for it, making it likely that tens of millions of televisions sets will go black on February 17, 2009.”

Contact: Jeannine Kenney, 202.462.6262, ext. 1118