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Independent Group Seeks Converter Box Alternative

A group of independent cable TV operators has approached Congressional leaders about expanding the DTV converter box program with a proposal to provide free analog cable service for seven years to impacted residents.

The movement, which is called the “Save Our Sets (SOS) Transition Plan Coalition,” ( proposes to encourage multichannel video service providers to offer free analog broadcast TV service to residents that currently rely on over-the-air TV signals.

Providers who elect to participate would offer residents with DTV converter coupons free multichannel analog TV service equipment and installations. They would also provide free local broadcast TV channels converted to analog — the same as those received by residents prior to the transition plus any additional multi-cast broadcast channels — for seven years after the Feb. 17, 2009, transition deadline, when analog broadcasts are to end.

Participating providers would agree to provide free TV service installations to all analog TVs in a home.

In exchange, the program’s advocates seek to have local broadcasters waive their retransmission fees during the seven-year period so that multichannel service providers could serve residents without additional cost burdens.

The group claims to be “a nonpartisan advocacy group dedicated to creating a pro-consumer transition from analog to digital television.”

It is currently comprised of three independent cable companies including Massillon Cable of Ohio, Comporium Communications of South Carolina and Millennium Digital Media of St. Louis.

The group’s next step is to increase its recruitment of additional members, said Bob Gessner, Massillon Cable TV president and point man for SOS.

Members said they are “concerned that millions of Americans will lose access to television in 2009 without substantive improvements in current federal law.”

The plan would preserve “the massive investment U.S. consumers have made in analog TV equipment without impairing the transition to digital broadcasting.”

Backers said it also would preserve consumers’ rights to free over-the-air television without additional costs or monthly fees, the group said.

The group said it “believes the transition to digital television is a positive one, but should be carried out with minimal negative repercussions for America’s households, and that U.S. consumers’ right to continue using their existing sets outweighs some television broadcast owners’ desires for increased revenues.”

The group points out that the federal DTV converter box program will only provide coupons of $40 to cover the cost of set-top boxes that could cost between $60 and $70, requiring some out-of-pocket expense for consumers.

This system would enable the federal program to expand to reach a greater number of impacted residents without additional cost to taxpayers. The plan proposes that participating video providers will return vouchers to the federal government, but will not be reimbursed.

“Thus, the vouchers can either be reissued to other U.S. consumers without an increase in the program’s budget, or be retired with a resulting savings to the federal government.”

However, the proposal is meeting with resistance from representatives of other industries, including the Consumer Electronics Association (CEA).

“Congress has carefully crafted a digital television transition that benefits consumers, public safety and our nation’s economy. This 11th-hour proposal would disrupt billions in investment by manufacturers and broadcasters, risk public safety’s access to sufficient spectrum to save lives and threaten consumer access to innovative new broadband services that the return of analog spectrum will make possible,” stated Jason Oxman, CEA communications VP.

“The nation’s digital television transition is well underway, and it is working. Broadcasters, cable providers and TV manufacturers are working through the DTV Transition Coalition, and with our partners in the government, to ensure a consumer-friendly transition to digital broadcasting.

“We are confident that the small number of Americans who rely on analog over-the-air broadcasts will be fully informed of their options by February of 2009, and no consumer will be left behind because of a lack of information,” said Oxman.

Gessner said his group proposed SOS at this time because “until the NTIA[National Telecommunications and Information Administration] rules [on the converter box coupon program] were published, it was hard to nail that Jell-O to the wall and have a definitive proposal for what should be done. We started working on this before that time, but now that the rules are known we believe that what we see as an augmentation to them is pretty viable.

“There is no interest on our part in delaying the DTV transition,” Gessner continued. “We are not disrupting billions of dollars in investment.”

Similarly, Dennis Wharton, National Association of Broadcasters (NAB) executive VP, said broadcasters would be unwilling to drop their fees for cable carriage.

“NAB believes there is no justification for changing a law that allows broadcasters to negotiate fair compensation from cable operators for our high value, most-watched programming.”

Responding, Gessner told TWICE, “This is not a re-transmission consent issue. It is a DTV transition issue. This is a fair trade-off to make sure consumers can continue to use their analog TV sets to receive broadcast TV signals.

“We’re looking at perhaps 20 million households that could lose their ability to watch television stations. I certainly hope they aren’t saying that those 20 million households are less important than the additional revenue stream that broadcasters want.”

He called broadcasters’ plans to collect revenue for retransmission consent “an opportunity cost. Most broadcasters are not collecting anything for retransmission consent now, but plan to in the future.”

A spokesman for the National Cable and Telecommunications Association (NCTA) said the organization has no comment on the proposal at this time.

Gessner said reaction from Capitol Hill legislators approached with the plan “has been mostly positive. They certainly like the idea that consumers can benefit without any additional expense, but like everything else there is a chicken-and-the-egg problem. They ask, ‘who else is backing this?'”

Mark Palchick, an attorney with Womble Carlyle Sandridge & Rice advising on the program, said a number of legislators who have looked at the plan see it as “the only consumer-based proposal they’ve seen so far. They know there is a train wreck, not about to happen but in process, and they know it’s going to have to be fixed at some point, and this is the only proposal they’ve seen that tries to do that.”