The federal program to provide free digital TV converters to millions of
Americans took another step forward this week with the approval of the first certified
converter box designed by a major electronics maker.
LG Electronics got the green light for it TV converter design from the
National Telecommunications and Information Administration (NTIA), a U.S.
Department of Commerce agency charged with reviewing and certifying the
digital-to-analog converters. It is the first such design from a major supplier
to pass muster with the agency, paving the way for a new crop of subsidized
devices that will allow conventional analog TVs to receive digital broadcasts.
In late September, another Korean manufacturer, Digital Stream Technology Inc.,
announced that its two converter models, the DigitalSTREAM D2A1D10 and
DigitalSTREAM D2A1D20, had also been approved by the NTIA.
The converters are a key component of the federally mandated DTV
switchover to all-digital TV programming in 2009. At that time, American TV
viewers who rely on over-the-air (OTA) broadcast signals for TV reception will
no longer be able to view local television programming on older analog TVs
without using a digital converter equipped with an ATSC tuner.
Viewers who depend solely on antennas for TV reception are clearly in the
minority, yet their numbers are still significant, according to TV industry
pundits such as Phillip Swann, president of TV Predictions.com. Officials are
estimating that about 20 million U.S. homes receive OTA broadcasts, Swann
says, which amounts to more than 20 percent of all TV viewing households in the
country.
"A lot of homes have analog TVs that are going to need converter boxes
to continue to receive television broadcasts," he said. That means demand
for the digital TV converters will be high -- along with demand for the government-issued $40
coupons that will become available on Jan. 1, 2008.
The coupons for TV converters will be free for the asking to anyone,
regardless of their income level or citizenship status, Swann said. As a
result, he expects the $1.5 billion digital TV subsidy program to become
"a political football," as partisan rhetoric heats up in advance of
the next presidential election.
"There is no income threshold. You could be Rockefeller or an illegal
alien," Swann said. "All you have to do is say, `Give me my TV
converter coupon.'
"One of the concerns is that the people who really need them may not
get them."
Another concern is that the poorest Americans -- who are most likely to rely
on old analog sets and OTA reception, often because they can't afford
subscriptions to cable or satellite TV programming -- will find that the $40
coupons aren't enough. "In most cases, the converters are going to cost $60 to
$70, so you'll still need to shell out $20 to $30 at the store," Swann
said.
The giveaway is not great news for retailers or consumer electronics
manufacturers either, according to Swann. Swann predicts that Wal-Mart will be among major retailers that choose not to carry the products.
"No CE company or retailer is going to make a lot of money on a $50 or
$60 product," Swann says. "They want people to come in and buy TVs
but not these (inexpensive) products."
Since the coupons cannot be used to buy anything else, such as going toward
the purchase of a digital TV with a built-in ATSC tuner, the opportunity to
upgrade coupon holders will be meager, he said.
With some major retailers refusing to participate in the program, and the
political in-fighting and finger pointing that is sure to ensue, "It's
going to be a mess next year," Swann said, "I guarantee that."