Analog fees proposed

Feb 10, 2003  •  Post A Comment

President George W. Bush last week proposed to sock broadcasters with $500 million in spectrum fees that commercial TV stations would have to pay annually until they return their analog channels to the government.
Under the proposal, which was included in the president’s federal budget for fiscal 2004, stations would have to start paying the levies in 2007 and keep paying them each year thereafter until they switch to digital.
Once broadcasters relinquish their analog channels, they would be exempted from further payments.
The White House said the legislative proposal’s purpose is “to facilitate clearing of the analog television broadcast spectrum and provide taxpayers some compensation for use of this scarce resource.”
Under the White House plan, it would be up to the Federal Communications Commission to determine exactly how much each station would have to pay.
But assuming that each of the nation’s 1,338 commercial stations shouldered an equal part of the burden, the annual assessment would be $374,000 per station.
“This tax would be devastating to the financial health of local TV stations,” said one industry source, on condition of anonymity.
The industry has derailed similar proposals during the past several years, in part on the argument that forcing the DTV transition would leave in the lurch many consumers who don’t want to abandon their analog sets.
“Congress has wisely rejected spectrum taxes on broadcasters for the past several years because lawmakers recognize the timetable for the transition to digital television will be determined by consumer acceptance and not by arbitrary government dictates,” said Eddie Fritz, president and CEO of the National Association of Broadcasters.
But key lawmakers, including Sen. John McCain, R-Ariz., have been making clear their interest in accelerating the transition to retrieve one of the two channels that each broadcaster now has to help make the switch to DTV transmission.
“He [Sen. McCain] believes we need to look at creative ways of getting the spectrum back, and maybe this is something we should look at,” said a spokeswoman for the lawmaker.
But Rep. Billy Tauzin, R-La., who chairs the House Energy and Commerce Committee, has a different plan.
“Like the president, we want to see the analog spectrum returned by broadcasters as quickly as possible,” said Ken Johnson, Rep. Tauzin’s spokesman. “But Chairman Tauzin is not convinced a squatter’s fee is the best answer. There’s a very good possibility that we will address the analog give-back and a timetable for it in our DTV legislation, which will be introduced this spring.”
The president also vowed last week to propose legislation authorizing the FCC to impose spectrum fees that aren’t tied to the DTV transition, with those assessments expected to come on line as soon as 2005.
The White House said the fees could be assessed for all spectrum that wasn’t acquired through auctions, with the fees based on “public-interest and spectrum-management principles.”