Transition in Trouble: Costs and Burdens to Many Communities and Viewers are Excessive or Overwhelming

Transition in Trouble

Costs and Burdens to Many Communities and Viewers are Excessive or Overwhelming

For many households, particularly those in LCCR communities, the costs and burdens of the digital transition have been vastly underestimated and pose a serious threat to its success.

For example, the unique characteristics of digital broadcasting may mean that an older television that received an adequate picture of an analog broadcast channel may receive no picture whatsoever of the same channel broadcast digitally, even with a converter box attached. Centris, a leading market research firm, found

serious ‘gaps' in digital TV signal coverage across the country. Coverage that millions of households will rely upon once analog signals are switched off exactly one year from now. "We predict that digital TV signal coverage will be more limited than currently anticipated. An issue that, until now, has been completely overlooked by the FCC and governing bodies, and could have serious - and costly - implications for millions of consumers," says David Klein, Executive Vice President of Centris.⁴⁷

These digital gaps are not confined to sparsely populated rural areas; rather, according to Centris, millions of viewers in New York, Los Angeles, Boston and other major metro areas will experience digital gaps in coverage.

There are two possible fixes for the loss of digital television in these circumstances: a consumer must either purchase a new, more powerful television antenna or subscribe to a cable, satellite, or telecom video service provider. Both options are costly, neither will be reimbursed by the government, and both most likely place at risk those who can afford it least - the 21 million households that rely exclusively on over-the-air television. Says Klein of Centris, "Consumers are being urged to purchase equipment that may or may not work when they bring it home - never before has such an important transition been conducted on a trial and error basis. The reality is, if consumers want guaranteed ‘free' TV, they will have to pay for it."⁴⁸

Consumers who bought battery-powered televisions to preserve their lifelines to television service during power failures and public safety emergencies are also going to face higher costs and potentially dangerous situations as a result of the digital transition. Nearly all of those televisions receive only analog signals. No converter box has been made that will easily hook up to these portable televisions, nor does one exist that operates on batteries in the event of a power failure. Says Megan Pollock, a spokeswoman for the Consumer Electronics Association, "We haven't seen a good, quick fix for portable TVs." Many consumers who believe they have a television lifeline during an emergency will have that lifeline cut on February 17, 2009, unless they buy a new digital battery-powered television. Unfortunately, there are only five models on the market, with an average cost of $200.⁴⁹

Cable television subscribers may also bear a substantial cost and burden in the transition to digital television. No doubt this will come as quite a shock to them since, as the Associated Press recently wrote, "(F)or months, TV viewers have been told by government, by industry and by the media that if they already subscribe to cable, there's no need to worry about the coming transition to digital broadcasting."⁵⁰

One shocked cable customer is Doris Spurk, a 63-year-old Florida resident, who recently discovered that as the result of the transition to digital television, her cable company required her to rent a digital cable converter box for $5.95 per month, for each television set in her home, plus pay for a $60 service call to install them. Spurk has five televisions, meaning the digital conversion will increase her cable bill by 75 percent.

"It really ticks us off," Spurk says. "If they are in the right and can do this - charge these prices - then the educational effort that the FCC is doing is really misleading everybody."⁵¹

Spurk is one of the 28 million cable customers who subscribe to analog service - meaning they probably plug their cable wire straight into the back of their set and do not have a set-top box. These customers usually take the lower cost analog cable packages. While the largest cable companies, such as Comcast, are currently accommodating their analog customers by converting digital signals to analog at the "head end" - the cable office - other cable systems are taking advantage of the transition to eliminate analog and turn into more efficient all-digital systems. In the latter situation, such as Ms. Spurk is suffering, the cable companies place a cable digital-to-analog "down-conversion" set-top box on each of their analog subscribers' televisions. This cable converter box is different from and incompatible with the broadcast converter box, and is not covered by the government coupon program.

However, now it is reported that even the largest cable operators, including Comcast, are planning to use down-conversion boxes to move their analog customers to digital.⁵² Whether the companies will pay for the boxes, or force customers like Ms. Spurk to pay for them, is up to each cable operator.⁵³ But even if the cable company provides cable converter boxes to the consumer at no charge, it is likely that the consumer will be forced to do the installation - or order a costly service call from the cable company.

In any event, with cable companies now about to distribute their own converter boxes for their own digital transition, which are not compatible with converter boxes for the over-the-air digital transition, the potential for consumer confusion is exponentially increased. Should this cable industry initiative to go all-digital become widespread, vastly increased resources will need to be devoted to consumer education.

Retailers and video distributors are also helping to raise the cost of the digital transition for consumers in numerous ways. In February 2008, the U.S. Public Interest Research Group (U.S. PIRG) Education Fund conducted "secret shopper" surveys at 132 locations of five of the nation's leading electronics retailers.⁵⁴ U.S. PIRG found numerous examples of attempts to "upsell" consumers to more expensive digital TVs rather than inform them about lower cost converter boxes. Specifically, the study found:

81 percent of the sales staff did not know about or gave out inaccurate information about converter boxes;
78 percent of the sales staff provided inaccurate information about the federal government's coupon program for converter boxes;
42 percent of sales staff provided inaccurate information about the month of the digital transition deadline date; and
20 percent of sales staff tried to upsell surveyors to digital TVs or upscale converter boxes.

Another retailer practice that raises costs to unwary consumers is the sale of analog televisions that do not bear FCC warning labels stating they will not work without a converter box after February 17, 2009. Recently, the FCC fined a number of the nation's largest electronics retailers for this violation of commission rules.⁵⁵ Some of these retailers are now challenging the FCC's authority to levy such fines, which means even this too-little, too-late enforcement mechanism may have to be abandoned.⁵⁶

Cable and satellite operators are also taking advantage of the digital transition to market their services to households that presently rely on over-the-air television with scary headlines on brochures such as this from a seller of Dish Network:

NOTICE!
Are you ready for the Digital TV conversion?
Soon all television stations are converting to a digital signal. You may lose your local channels.⁵⁷

The elderly, the poor, people with disabilities, and those for whom English is not the primary language may be particularly susceptible to these kinds of sales pitches and practices, even though to continue to receive local broadcast channels they may only need to purchase, with the assistance of a government coupon, a converter box.

These communities also bear other added costs and burdens associated with the digital television transition. Many of these households have multiple families, or multiple generations of one family, living under one roof, with multiple televisions. Yet each of these households is limited to just two government coupons. These households are then forced to decide whether to purchase added converter boxes without a coupon, or to subscribe to cable or satellite, or to buy new televisions.

For seniors and persons with disabilities, additional, non-monetary costs may be especially challenging: the difficulties of searching for and purchasing the converter box, potential problems in attaching the converter box to the back of their set, and confusion regarding the transition itself. The installation process may require moving the television to connect the box, which could be difficult for frail or disabled persons, including many older Americans living on their own. Of course, there is also the possibility that the actual connection process required will be difficult for some to master. This can be especially true for communities that do not have the converter box instructions printed in their language or in alternate formats such as large print, Braille, or audiotape.

Clearly, two of the unintended consequences of the digital transition are high costs and excessive burdens on communities, and consumers who can least afford them. It is the responsibility of elected officials to ensure that these communities and consumers are not unfairly and excessively burdened by the nation's transition to digital television. Where the costs and burdens of the digital transition are too great for consumers, we believe it is not too much to ask that the government, which recently received $19 billion in the auction of the spectrum freed up by this transition, assist these viewers.

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47. New Research Sheds Light on Major Glitch in the DTV Transition, Centris Research, February 12, 2008. (Boldface in original.)

48. Id.

49. Portable TVs May Go Dark Under '09 Change, Columbus Dispatch, May 27, 2008.

50. Move to Digital TV Could Cost Some Cable Customers, Associated Press, April 20, 1008.

51. Id.

52. Monitor: Cable's Analog Signal Zappers, Multichannel News, May 10, 2008.

53. Move to Digital TV Could Cost Some Cable Customers, Associated Press, April 20, 1008.

54. Mixed Signals: How TV Retailers Mislead Consumers on the Digital Television (DTV) Transition, U.S. Public Interest Research Group Education Fund, February 2008.

55. Retailers Fined Over Labels for Analog TVs, Associated Press, April 11, 2008.

56. Circuit City Wants Out of Digital Television Fines, Los Angeles Times, May 14, 2008.

57. Brochure advertising Dish Network mailed to the author of this report.