Editorial: Bush’s TV fees are out of tune with industry

Feb 18, 2002  •  Post A Comment

President Bush’s 2003 budget does the entire television business a disservice. Specifically, his proposal to hit broadcasters who haven’t given up their analog spectrum by 2007 with a combined $500 million in annual fees is a wrongheaded approach that, if Congress were to implement it, would do far more harm than good.
The proposal looks like an Enron-style accounting gimmick from the Bush team designed to add future “revenue” to the federal budget in 2007 and help lessen the projected deficit for that year. However, it is bad business for broadcasters. If digital isn’t ready for prime time by 2007, TV stations that will need to keep their analog transmitters running-just to maintain their already dwindling audience share-would face millions in fines.
The Bush administration shouldn’t impose these fines based solely on the 2007 target, which appears increasingly unlikely to be met. What about pegging fees to the number of digital sets sold, or to the percentage of TV viewers who have them, as has been previously suggested?
It’s already 2002, and buying a digital TV set isn’t exactly on every American’s to-do list. How much do the sets costs? Thousands. How many does the average Circuit City carry? Only a few. Are the separately sold tuners available? Who knows?
By putting the burden on stations alone, the administration puts the entire television industry at risk. Those millions that may be demanded by the federal government won’t be available to buy programming-digital or otherwise-nor will they be there to upgrade transmitters, studio equipment or antenna arrays.
And what if the digital TV set isn’t available at a moderate price by 2007? The decline in audience share could hurt America’s broadcasters more than any of the other costs associated with converting to digital.
The digital TV revolution won’t get much past the first shot until all issues regarding transmission standards are resolved. While 8VSB has been chosen over COFDM, there is still talk of improving the standard to make indoor reception better. With this unsettled, no manufacturer is going to be excited about producing inexpensive digital TVs. Once the Advanced Television Systems Committee nails down 8VSB’s final specs, we’ll be that much closer to actually starting the clock on the digital transition.
Memo to George W. Bush: When the $200 digital TV set is a reality, then start demanding that spectrum be returned. Until then, balance your budget some other way.
With any luck, Congress will kill this proposal, as it has previous attempts by this administration and by the Clinton White House to levy similar fees. It’s just not a good idea to add to the considerable list of problems already facing America’s broadcasters.