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4 out of 10 homes could be forced to pay for DTV transition

June 29, 2005

4 out of 10 households could be forced to pay for the digital television transition, new survey finds
CU/CFA survey estimates 80 million over-the-air TV sets still in use

WASHINGTON, DC – Consumers Union, nonprofit publishers of Consumer Reports, and the Consumer Federation of America today released survey results showing 39 percent of American households have at least one television relying solely on over-the-air broadcasting. This means, without a converter box estimated to cost $50 or more, those TVs will go dark following any federally mandated hard date for the transition to digital television.
Currently, Congress is considering legislation to require a firm deadline for the transition to digital-only television broadcasting which will eliminate analog signals that most televisions sets are designed to receive. Unless those sets are connected to cable or satellite services, they will stop receiving broadcasts after the final transition.
Congress is also debating whether and how much to compensate consumers who must buy converter boxes to prevent their televisions from going dark. Estimates on the number of televisions that will need converter boxes have varied greatly. Electronics industry groups estimate the number as low as 33 million, while consumer groups, the National Association of Broadcasters, and the Government Accountability Office estimate the number to be 65 million or more.
“Combining our research findings on the number of sets with a Government Accountability Office estimate of a cost of at lest $50 per tuner suggests that the direct costs to consumers for the government-mandated transition to digital-only broadcasting could be $3.5 billion or more,” said Mark Cooper, Research Director for the Consumer Federation of America. “As Congress weighs what, if any, compensation to provide consumers for rendering their televisions useless under the transition, they should rely on estimates that have consistently found as many as 70 million or more affected television sets. Anything less will understate the true impact on consumers and leave them footing the bill.”
Prompting Congress’ sudden attention to a hard date for the transition to digital television is the desire to raise revenues by auctioning the analog spectrum broadcasters are currently using which will be freed up following the transition. This auction, expected to be dominated by the giant telecommunication companies, could generate $10 billion or more.
“Consumers will already have to bear the inconvenience of acquiring new equipment to keep their otherwise perfectly good TVs working,” said Gene Kimmelman, Public Policy Director for Consumers Union. “They shouldn’t also have to fork over $50 per set. Since Congress is expected to raise more than $10 billion from the spectrum auction, why shouldn’t that money first be used to help consumers with the cost of keeping their TVs working? The first rule Congress must abide by is do no harm to consumers.”
Additional findings by the CU/CFA survey include:

  • Over-the-air-only households: 15% of U.S. TV-viewing households, or 16 million households, rely solely on over-the-air broadcasting for their television viewing. After the transition, these households will have no access to television broadcasting unless they buy converter boxes.
  • Over-the-air-only television sets that will go dark post-transition:
    • Totals: 42 million households, or 39 percent of all TV-viewing households, rely on a total of over 80 million over-the-air-only television sets that will go dark without a converter box post-transition.
    • OTA-only households (those without cable or satellite service) own over 35 million sets that are used to view over-the-air broadcasts.
    • Cable households own over 25 million sets that are not connected to the subscription service but which are used to view over-the-air broadcasts.
    • Satellite households own 20 million sets that are not connected to the subscription service but which are used to view over-the-air broadcasts.

A complete copy of the report, “Estimating the Consumer Costs of the Federally Mandated Digital TV Transition,” and more information on the digital television transition can be found at www.HearUsNow.org.
Contact: Mark Cooper, CFA 301-807-1623
Matt Hartwig, CU 202-462-6262