• by Wayne Friedman , October 18, 2005

Two TV and media research groups warn that the Federal government's push for digital television by the year 2009 will wreak havoc with TV customers.

Research companies Points North Group and Horowitz Associates say a proposed U.S. Senate digital TV bill, which would terminate analog TV service in 2009, could mean a backlash from consumers. The researchers say 55 percent of TV homes, which have cable, have no digital signal--and have no intention of getting it.

In U.S. homes, while the primary TV set may be connected to a digital set-top box, second and third TV sets in the home don't have digital set-top boxes. Instead, those TVs get cable signals directly from coaxial cables that run into homes. The research group says this represents about 67 percent--or 180 million television sets--in the United States.

"Who is going to pay for the extra box that you are going to need?" asks Stewart Wolpin, senior analyst of Points North Group. "Will the cable company be forced to give you a box?"

The bipartisan bill was conceived because of emergency facilities that failed in the wake of the 9/11 tragedies. Federal administrators are pushing to give all analog TV signals--ones that broadcasters currently use--to these emergency services because this spectrum is more robust, and won't fail in times of emergencies.

This was designed in reaction to the events that occurred on 9/11, when radio signals were too weak to alert emergency workers--which would have directed them to quickly exit crumbling World Trade Center buildings. Digital signals will be given free to the private sector. But Wolpin says not all broadcasters are ready to spend the money to abandon analog and switch to digital--especially in a short three-year time span, according to the bill's time frame.

From a point of view where Republicans typically let the marketplace decide, this bill baffles analysts. "It's surprising the Republican administration is forcing these changes," said Wolpin. The bill has a lot of weight behind it because of its bipartisan effort. The bill's sponsors are Sen. Daniel Inouye (D-Hawaii) and Sen. Ted Stevens (R-Alaska). The bill also has major support from Sen. John McCain (R-Arizona).

Cable operators could be adding to the confusion. Right now, 25 percent of cable subscribers have digital set-top boxes, said Wolpin. But while cable operators claim digital is the future, he says, companies are still giving customers analog set-top boxes. Says Wolpin: "It stuns me, from a business point of view, that they are still doing this."