Tuesday, Oct. 25, 2005
Consumer Groups Urge Vote Wednesday to Cover Full Cost of Converter Boxes
(Washington, D.C.) – Citing the 80 million analog television sets owned by consumers that will go dark after the digital TV transition, consumers groups today urged the House Commerce Committee to oppose a measure that would sharply limit funding to keep those TV sets working after the digital transition.
The current House proposal ($830 million) covers only one-fourth of the 42 million American households that rely on over-the-air signals for viewing. Last week, the Senate passed its version of the bill, setting aside $3 billion from the $10 billion raised by the auction of public airwaves to help offset the cost of converter boxes needed to keep those TVs working.
Consumers Union, Consumer Federation of America and US PIRG urged the panel, when it votes Wednesday, to set aside adequate funding from the spectrum auction to fully fund a compensation and education program that ensures consumers won’t be hit in the pocketbook during the DTV transition.
“By compensating consumers, Congress isn’t giving them anything; it merely holds them harmless from a government mandate that would otherwise make their perfectly good personal property virtually useless,” the groups wrote in a letter to the committee.
“No consumer should bear the costs of the digital transition, particularly given the ample funding raised by the spectrum auction,” the groups said. The complete letter is below:
Jeannine Kenney, Susan Herold (202) 462-6262
October 25, 2005
Committee on Energy and Commerce
US House of Representatives
Washington, DC 20515
This week when the House Commerce Committee considers budget reconciliation, you will be asked to vote on legislation that revolutionizes television by rendering inoperable as many as 80 million currently used analog television sets as broadcasters terminate analog transmissions and switch to digital-only signals.
We urge your opposition to the draft Digital Television Transition Act of 2005 because it sharply limits funding required to keep those TV sets operable, leaving millions of American consumers in the dark. We ask instead for your strong support for an alternative, fully funded, consumer compensation and education program that ensures all consumers, including those most vulnerable, are held harmless from the DTV transition.
Consumers paid good money for their TVs with the reasonable expectation that they would receive broadcast signals over their useful electronic life. The $10 billion or more in auction revenue facilitated by the transition is more than enough to fully compensate consumers for the costs they are asked to bear just to keep those TV sets working.
Full compensation for the cost of converter boxes is far from a windfall for consumers. The boxes do not provide for a government-supported technology upgrade; they merely allow consumers’ existing analog sets to continue displaying analog images—something they have a right to expect. Nor is compensation a subsidy. By compensating consumers, Congress isn’t giving them anything; it merely holds them harmless from a government mandate that would otherwise make their perfectly good personal property virtually useless.
The House draft’s inadequate consumer compensation program covers only one-fourth of the some 42 million American households that continue to rely on over-the-air signals for some or all of their television viewing. Together, those households rely on up to 80 million analog TV sets, each of which will require converter boxes to continue functioning after the transition.
By limiting funding for converter box vouchers to just $830 million, the draft covers only 21 million converter boxes and possibly only 10.5 million homes. That funding level fails to cover even the estimated 21 million households (each with two TV sets) that rely solely on over-the-air broadcasts, disproportionately represented by low-income, minority and elderly households. These most vulnerable populations are the least likely to be able to take advantage of the first-come, first served voucher program authorized by the draft. And because the draft authorizes online ordering of vouchers, those households without Internet access will be severely disadvantaged by the program—those better connected will be more able to request the vouchers before federal funding runs out.
The bill also provides no assurances that even those consumers who do receive vouchers will not bear excessive out-of-pocket costs. The bill provides no ceiling on the price of basic converter boxes at retail and little reliable market information exists as to what the actual costs will be. As a result, a $40 voucher may cover only a portion of the actual cost of boxes at retail, leaving consumers vulnerable to excessive out-of-pocket costs.
Moreover, vulnerable populations may require additional services and outreach not included in the draft’s consumer education provisions. For example, the elderly or disabled may require assistance in converter delivery and installation. And non-English speaking consumer may require dual-language educational messages, labeling and information.
Congress should provide full funding for a converter box compensation program that holds all consumers, including vulnerable populations, harmless from the costs of a transition driven not by the marketplace, but by the government. The 21 million households that rely exclusively on over-the-air-broadcasts are not the only ones adversely affected. According to Consumers Union research, another 45 million analog sets are used by cable and satellite households to watch broadcast television. These sets are not connected to their subscriber service and will require converter boxes to continue functioning.
No consumer should bear the costs of the digital transition, particularly giving the ample funding raised by the spectrum auction. We urge you to oppose the inadequate and unfair consumer compensation program in the draft bill and ask for your support for an alternative compensation program that holds all consumers harmless while meeting deficit reduction goals.
Director, Consumer Research
Consumer Federation of America
Consumer Program Director