Public Broadcasters Propose Bill to Return Analog Spectrum, Create Trust Fund

[Dave Farber <dave () farber net>]

Delivered-To: dfarber+ () ux13 sp cs cmu edu
Date: Wed, 03 Mar 2004 14:52:14 -0800
From: Dewayne Hendricks <dewayne () warpspeed com>

[Note:  This item comes from friend Michael Calabrese of NAF.  DLH]

At 13:12 -0500 3/3/04, Michael Calabrese wrote:
> Subject: Public Broadcasters Propose Bill to Return Analog Spectrum, 
> Create Trust Fund
> Date: Wed, 3 Mar 2004 13:12:10 -0500
> From: "Michael Calabrese" <Calabrese () newamerica net>
>
> We thought you'd be interested in the gathering support for an idea 
> promoted over the past couple years by think tanks often at odds on 
> spectrum policy -- New America, Cato, Manhattan Institute -- and which has 
> already been adopted in Berlin, Germany.  The idea is to bring a speedy 
> end to the logjammed DTV transition by earmarking a fraction of future 
> spectrum auction or user fee revenue to subsidize consumer purchase of a 
> converter box allowing stations to transmit in digital only -- and rapidly 
> clear one of the two channels they license for reallocation to public 
> safety and especially both unlicensed (WiFi-type) and licensed (cellular) 
> wireless broadband services.  (A policy paper updating and detailing New 
> America's proposal along these lines will be released shortly.)
>
> As the article below describes, the Association of Public Television 
> Stations (APTS) is already moving ahead with plans to formulate a proposal 
> for an early return of public broadcasters analog television spectrum in 
> return for 1) full digital signal carriage on cable and satellite systems, 
> 2) encouragement of the development of a cheap analog-to-digital converter 
> or set-top box and 3) a trust fund to finance public TV's new digital 
> content that would "motivate consumers to buy set-top boxes." Some 
> pubcasters are aiming at $14 billion for the trust fund to be financed by 
> sale of their analog spectrum. APTS is working with Sen Ernest Hollings 
> (D-SC) and hopes to have legislation introduced by the second half of 
> 2004. There's no illusion of getting a bill passed in the Congress, but 
> hopes of having something to rally a coalition around for next year.
>
> [SOURCE: Communications Daily, AUTHOR: Dinesh Kumar]
>
> March 3, 2004, Wednesday
>
> SECTION: TODAY'S NEWS
>
> LENGTH: 1129 words
>
> HEADLINE: PUBLIC TV DEVELOPING LEGISLATION FOR TRUST FUND THIS YEAR
>
> BODY:
>
> To give a boost to its digital transition strategy of embracing a hard 
> date for turning off analog, public TV is planning to develop legislation 
> with sympathetic members of Congress to create a public broadcasting trust 
> fund from proceeds of the analog spectrum auction. The move follows clear 
> signals from public TV stations that setting up a trust fund was a 
> "prerequisite" for early handover of analog spectrum, Assn. of Public TV 
> (APTS) Pres. John Lawson told us. A draft plan for adopting a hard date 
> for digital-only broadcasting (DOB) has been submitted to the APTS board 
> and to member stations, he said, and "we hope in the first half of this 
> year to present our membership and our board with a pretty comprehensive 
> plan for digital-only broadcasting."
>
> Lawson said Sen. Hollings (D-S.C.) had supported the idea of a trust fund 
> based on the analog spectrum return: "We will continue to work with his 
> staff and the staff of other senators on what that legislation might look 
> like. We hope to have legislation introduced on a bipartisan basis." He 
> said he didn't expect the bill to become law this year, but "if a bill 
> were introduced it would give us something to rally behind and begin 
> building coalitions." A recent online survey of stations had made clear 
> that early analog return would rest on a "series of policy changes that 
> are up to the federal government," he said.
>
> At last month's APTS board meeting, members were generally supportive of 
> the DOB proposal, but they also notified the staff some stations were 
> skeptical the proposal would materialize. "It's hardly a slam dunk," said 
> David Liroff, chief technology officer for the WGBH Education Foundation. 
> But given its promise for cost savings for stations alone, the APTS staff 
> should continue exploring the idea of an early analog switch off, he said. 
> Lawson said about 92% of the stations were for APTS developing a analog 
> switch off plan, though 43% of those said they remain unconvinced about 
> its feasibility. Stations' skepticism was based also on such questions as 
> whether ATSC was an infeasible standard for getting signals to consumers; 
> how expensive digital converter boxes would be for consumers; and whether 
> there would be improvement in antenna performance, he said.
>
> So the plan's success revolves around technical, cost and policy issues, 
> Lawson said. If the govt. wanted an analog switch off, "there's a very 
> clear set of conditions on the table," he said: (1) Ensure carriage of all 
> of PTV's digital signals on cable and satellite. (2) Encourage the 
> development of a cheap analog-to-digital converter or set-top box. (3) Set 
> up a trust fund to finance PTV's new digital content that would "motivate 
> consumers to buy set-top boxes." The money from the fund would also be 
> used to subsidize set- top boxes "for the relatively small group of 
> people... who would need some sort of receiver subsidy," he said.
>
> Lawson wasn't clear about what portion of the analog spectrum auction 
> proceeds should go into the trust fund. However, APTS board member Robert 
> Shuman, CEO of Md. PTV, put the amount at $14 billion. He said his 
> calculation was based on Sen. McCain's (R-Ariz.) estimate the analog 
> spectrum was worth $70 billion. With PTV stations controlling 21% of it, 
> their share should be about $14 billion. Lawson said the valuation of the 
> spectrum was a "crucial" issue, but it was also "up in the air at this 
> point." Experts in the private sector and the govt. he had talked to 
> agreed that the value of the spectrum was unknown because "no one in a 
> position to value it believes that the broadcasters will get off of it 
> anytime soon." They also think that if a section of the broadcast industry 
> came up with a plausible plan to hand over analog spectrum by a date 
> certain, then entrepreneurs would get to work to make use of the property, 
> he said.
>
> PTV also wants to make the case that there's more at stake in the early 
> analog turn-off plan than the auction revenue. The auction proceeds could 
> be significant, Lawson said, "but they are by no means the most important 
> economic consequence of auctioning the spectrum." If the spectrum is freed 
> up for the private sector to develop, it will provide the foundation for 
> an enormous increase in economic activity, he said. As for set-top boxes, 
> he said one vendor had told him that the boxes could be marketed for $69 
> each if sale of one million units was assured. "This should not surprise 
> anyone." He said dozens of vendors were selling inexpensive 
> digital-to-analog converters in Berlin and the U.K. "The bottom line is 
> that there is nothing inherent in the ATSC digital standard that would 
> change the economics we've seen in Europe that mass production makes it 
> pretty cheap for the simple set-top box. It is pretty clear that the 
> economics of producing these boxes are quite favorable in terms of 
> widespread consumer adoption."
>
> The PTV proposal for a public broadcasting trust fund financed by analog 
> spectrum sales appears to have caused apprehension in public radio. NPR 
> Vp-Govt. Relations Michael Riksen told his board that while the idea of 
> creating a trust fund for public broadcasting wasn't new, "using proceeds 
> from the sale of public television's analog spectrum could have an impact 
> on the levels of future congressional appropriations for public 
> broadcasting." Asked to elaborate, Riksen told us that he couldn't make a 
> "meaningful comment," because there wasn't enough information on "even the 
> general nature of the [trust fund] proposal."
>
> Public broadcasters are also seeking mileage from the outrage generated on 
> the Hill by recent incidents as the Super Bowl half-time show. "What 
> happened at the Super Bowl half-time show has really cast into sharp 
> relief the difference between public television programming and what 
> consumers are seeing from some of the commercial medium," said Lawson. He 
> said there were "changed attitudes [toward public broadcasters] even among 
> Republicans" at a recent House Labor-HSS Appropriations Committee hearing 
> on CPB funding (CD Feb 26 p12). NPR officials, who are used to barbs from 
> Republican members about liberal bias and a pro- Palestinian tilt in its 
> Middle East coverage in such hearings, said they were pleasantly surprised 
> by the praise NPR got from both sides of the aisle. "It was terrific to 
> hear to unprompted and unrehearsed comments from the Republicans about NPR 
> and public radio and our international coverage and our focus on rural 
> issues," said Riksen. Acknowledging that the Super Bowl incident and 
> programming on commercial radio had helped to cast NPR and public radio in 
> a fresh light, he cautioned, however, that "good work doesn't necessarily 
> translate into dollars." -- Dinesh Kumar

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