Lobbyists turned on, tuned in to digital-TV deadline

The usually sleepy August recess has become prime time for digital-television lobbyists, who are jockeying for position before lawmakers use the budget reconciliation process to issue instructions for the shutdown of the nation’s analog airwaves.
The usually sleepy August recess has become prime time for digital-television lobbyists, who are jockeying for position before lawmakers use the budget reconciliation process to issue instructions for the shutdown of the nation’s analog airwaves.

Lawmakers soon will finalize the end of 2008 as a deadline for U.S. broadcasters to begin transmitting exclusively digital signals, and that “hard date” will bring an auction of excess digital spectrum that could net as much as $10 billion in new government revenue. Wireless and Internet companies have joined lawmakers in salivating over the potential profit from that auction after last week’s Federal Communications Commission (FCC) ruling that consolidates phone companies’ power over existing broadband lines.
patrick g. ryan
Sen. Olympia Snowe (R-Maine)

“When we talk about competition in the broadband marketplace, it would be good to have a level playing field between cable and DSL” connections, said Nick Kolovos, a digital-TV lobbyist for the Information Technology Industry Council (ITI). “It would be even better to have the spectrum released and have a third player as well.”

Rural interest groups also are wrangling in the digital-TV debate, seeking more government aid to preserve service in areas where residents will not be able to afford pricey digital converter boxes or replacements for their analog sets. The rural-dominated Senate Commerce Committee is likely to sympathize with their demands, homing in on a bill introduced just before recess by Sen. Olympia Snowe (R-Maine).

“We don’t know who’s going to make the boxes or what they’re going to cost — therefore, it’s sort of hard to get policymakers to say yes or no to who they’re going to assist,” said Larry Mitchell, CEO of the American Corn Growers Association. Mitchell is lobbying for a hefty subsidy through the Coalition for a Smart Digital TV Transition, whose other members include several unions of the AFL-CIO and the affiliates of three major broadcast networks.

Snowe’s bill provides digital-transition breathing room and $100 million from the spectrum auction to assist low-power TV stations that must transmit a steady signal to send public-safety information to rural households. During the crucial month remaining before he must submit budget-reconciliation instructions, Commerce Committee Chairman Ted Stevens (R-Alaska) could cherry-pick potential provisions from Snowe’s proposal as well as a broader digital-TV bill from Sen. John McCain (R-Ariz.).

House Energy and Commerce Committee Chairman Joe Barton (R-Texas), meanwhile, has signaled his support for a subsidy program along the lines of McCain’s suggested $500 million, with aid going only to those households with income lower than twice the poverty line. Mitchell’s coalition, however, points to a Government Accountability Office (GAO) report that says converter boxes for only the neediest analog TV owners could cost as much as $2 billion.

Manuel Mirabal, chairman of the Hispanic Telecommunications and Technology Partnership, works alongside Mitchell and said he was taken aback when the FCC called him in to solicit ideas on how to mount a public education campaign for low-income minority viewers on converting to digital TV.

The agency is “at a loss for dealing with bilingual education,” Mirabal said. “No one’s talking about giving the FCC extra money for the amount of public outreach that’s going to be necessary.”

Broadcast lobbyists are growing more confident that they can entice the Senate to include in its plans some version of digital multicast must-carry, the mandate that cable channels beam a free digital version of local broadcast content that piggybacks on their main signals. The FCC voted 3-2 to reject must-carry rules earlier this year, falling in line with a strong pitch from former Chairman Michael Powell and dealing a blow to the National Association of Broadcasters (NAB).

“Politicians don’t like to give one side of an issue all the bad news,” said Greg Rohde, an assistant Commerce Department secretary during President Bush’s first term who founded telecommunications lobbying firm e-Copernicus. “They like to take some and give some. I could see broadcasters saying, ‘Well, if you’re going to force us to go through the financial strain of converting [to digital], we want something back for it.’”

A spokeswoman for Stevens pointed to his remarks after the Commerce Committee’s last digital-TV hearing. The chairman gave the NAB, which this week welcomed back the potent lobbying dollars of Disney/ABC to its ranks, reason to rejoice by saying that “there ought to be more than at least one entity carried under must-carry.”

“This is probably the top priority of TV broadcasters right now,” said NAB spokesman Dennis Wharton. The NAB will bring groups of local station officials to lobby members personally during the week of Sept. 6 about the importance of must-carry to hard-to-reach minority and rural audiences, which Wharton said “some of the cable companies make fun [of] or mock.”

The NAB also seized upon the GAO report in its digital-TV battles with the Consumer Electronics Association (CEA), which represents manufacturers of TVs and other technological devices and recently hired the House leadership-connected team at Alexander Strategy Group to take on its telecommunications lobbying. The CEA resisted the FCC’s order to add digital tuners to all TV sets earlier than planned while downplaying the number of U.S. viewers reliant on free analog signals, estimated by the GAO at 19 percent of all households.

Lobbyists see Barton as a much harder sell on must-carry, but the certainty of the “hard date” and the imminent Sept. 16 budget-reconciliation deadline make their jobs easier and telecom-industry players much happier.

“It’s more the certainty than the date” itself, Kolovos said, though late 2008 is at the far edge of ITI’s window of support. “Once there’s certainty, you can have investment for companies. They know they can produce products that’ll work in this spectrum.”