By Paul Gagnon – Director, North American TV Research
The US Senate unanimously voted their approval on Monday of a bill to delay the end of the DTV transition from February 17 to June 12 upon the urging of President Obama. The justification was to allow consumers additional time to prepare for the transition, particularly as the NTIA runs into snags distributing $40 converter box coupons under accounting problems.
However, despite the strong passage in the Senate, the House of Representatives voted down the bill today, failing to achieve the 2/3 majority vote. The delay would have had numerous consequences, both positive and negative. Consumer groups have been arguing that education efforts have been underperforming and that the problems issuing converter box coupons at the last minute leave millions waiting to take action as the deadline fast approaches. On the other hand, companies and government agencies that are waiting to assume ownership of the analog broadcast spectrum would have experienced costly delays in rolling out services. At the same time, TV stations have been anticipating a February 17 end to analog broadcasts and a delay would bring additional costs to maintain both analog and digital broadcasts, though the latest iteration of the DTV delay would allow broadcasters to cease analog broadcasts anytime after February 17.
A further consideration relates to sales of converter boxes and/or digital TVs. A delay would allow consumers more time to wait for coupons and choose a converter box, even though manufacturers of those boxes had been planning on a rapid tail-off in demand after February. But if the transition progresses as planned, the outstanding converter box coupons could leave consumers with a tough decision: wait to get the coupon and purchase a box, or buy a box at full price. Some of those who consider a full price converter box could even choose a digital TV instead as the price difference would be less severe, but I think the impact of a delay would be less significant on sales of TVs given the high premium. Most consumers impacted by the transition would likely choose a converter box or even multi-channel pay TV services instead, both less expensive options.
How will the general public react to all this political maneuvering? As the CEA contends, the certainty of a deadline has a little less weight if it gets delayed and future deadlines will be taken a little less seriously. Sounds like an excellent topic to discuss at our upcoming USFPD Conference which takes place just 2 weeks after the original transition date!
