If DTV's Busted, So Is the Budget

If DTV's Busted, So Is the Budget

If DTV's Busted, So Is the Budget

Faced with a potential budget-busting loss of $18 billion, Rep. Billy Tauzin (D-Louisiana) has ordered the warring parties responsible for digital television to just get along.

But with numerous issues still unresolved, it's looking unlikely that the infrastructure will be in place when the switch date comes in 2006. That's unacceptable for Congress, which engineered a balanced budget amendment five years ago to reflect billions in anticipated revenue from spectrum auctions for DTV.

Tauzin, frustrated by the lack of consensus on technological issues, said he would craft an omnibus bill that would legislate solutions. He also directed the Federal Communications Commission to begin sorting out some of these issues.


That kind of budgeting is standard practice in Congress; however, representatives have started questioning it.

"Congress has permitted spectrum auctions, intended as an efficient and objective means to licensing spectrum, to become a mere tool for raising revenue," said Sen. Sam Brownback (R-Kansas) during a communications subcommittee meeting in June. The digital television transition, he said, was made because of budgetary needs, not technological needs.

To make financial ends meet, legislators need to raise cash. One way to do that is by selling spectrum. It's been a lucrative business, netting $17 billion since 1994 and another $18 billion expected by 2010 according to the Congressional Budget Office.

Before it can sell that spectrum, Congress has to figure out how to create it. That was simple in the case of digital television.

Television is delivered in an analog signal, which isn't fat enough to deliver DVD-quality picture and sounds. Digital signals hold five times more information, according to a spokeswoman with the Consumer Electronics Association.

Along with its increased size, digital signals are also smaller, giving Congress access to the unused analog signals. It seems to be a slam dunk for digital television. Broadcasters get big, fat pipes. Consumers get better TV. Congress balances the budget.

However, a funny thing happened on the way to the bank: Digital television went to hell. With legislators locked into a finite switch-over date, industries gained bargaining power.

The cable operators want to control the delivery of the digital signal. Broadcasters don't want to pay to upgrade their transmitters. Manufacturers are being forced to include pricey additions to digital sets. Hollywood won't release its content because the digital signals have no security.

With time running out, government officials want to stimulate digital television but the piper needs to be paid in four short years.

That leaves the FCC in the unenviable spot of finding answers that are usually determined by the market while Tauzin continues to craft his legislation.

The first hot-button issue comes on Thursday, when FCC chairman Michael Powell is expected to announce that digital televisions include over-the-air tuners.

The tuners allow anyone who watches TV without cable to receive digital television the old-fashioned way – using rabbit ear antenna. The FCC's controversial stance will force manufacturers to add the $250 tuners to every new digital set, although they will only benefit a small number of people.

The budget crunch has backed the government into a corner, leaving it to make decisions like the over-the-air tuner addition that many question.

"They are left with a 7 percent solution," said Robert Schwartz, a lobbyist for the Home Recording Rights Coalition. "(That) mandates (consumers) purchasing hardware by all the public that will only be used by the 7 percent who rely on broadcast antennas."