It’s the season for bailouts and the digital television switch program is the latest to ask for a little help.
Broadcasters are set to switch to digital transmission starting Feb. 17 but many consumers could be left out in the cold as funding for converter box coupons that can make analog TV sets digital-ready could fall short.
"The expected surge in consumer demand for
converter box coupons is occurring and the fact that NTIA now projects it will
have to delay or possibly deny the issuance of converter box coupons to
consumers without additional funding is of great concern," says Congressman Ed Markey in a statement.
Congress may need to "quickly" pass additional funding for the
converter box program in early January, says Markey.
That means up to $330 million more in funding to sustain the converter box coupon program, estimates the National Telecommunications and Information Administration.
The coupon program has already been an expensive one. About $1.34 billion has been ear marked so far.
The converter boxes that can make analog TV sets digital ready can cost up between $40 and $80. But a government-issued $40 coupon (limit of two for each household) can subsidize almost all or most of the cost.
NTIA expects to receive about 60 million coupon requests by March 31, 2009. However, the current level of funding can support only about 50.5 million coupons.
When funding runs out, the program will hold out on issuing further coupons, says the agency. "NTIA realizes that this would likely result in consumer confusion and dissatisfaction with the program," it said in a letter to Congressman Markey.
There are an estimated 300 million TVs in the U.S., of which about 70 million use antennas and require a converter box to switch to DTV. Till date, nearly 43 million converter box coupons have been distributed.
But some analysts such as Scott Wallsten, senior fellow at the think-tank Technology Policy Institute, say the additional funding is a drag.
"All that the coupon program has done is it has set a floor on the price of the boxes," he says. "The best thing to happen will be for it to go away, in which case prices of the converter box will fall."
Wallsten estimates that converter boxes could be $20 to $35 cheaper than their current prices if there was no coupon subsidy and that the current structure is tilted to benefit retailers rather than consumers.
Still Congress may well agree to the additional funds, says Wallsten.
"The real reason for this program is because Congress is terrified that their constituents will wake up on Feb. 17 to find their TV not working and complain," he says. "If Congress thinks $330 million will stop the complaining they will fund it."
Photo: Converter Box (trekkyandy/Flickr)
