WASHINGTON Market researchers are predicting chaos unless details of a government digital TV transition plan to subsidize converter-box purchases are resolved soon and communicated effectively to consumers who rely solely on broadcast TV.
Market researchers Points North Group and Horowitz Associates will release survey results on Friday (Feb. 3) revealing that only 13 percent of respondents knew that U.S. analog broadcasts would end in three years. Only 23 percent of consumers surveyed were aware that analog sets will go "dark" by a February 2009 transition date unless analog sets are connected to a downconverter box.
The survey, conducted by telephone, reached 500 people in December 2005.
The results underscore the huge logistical task regulators face in setting up a voucher program to provide analog viewers with the converter boxes they will need to receive digital broadcast signals on analog TVs by 2009. The subsidy program was included in a budget bill approved earlier this week by the House that set the hard DTV transition date.
The budget bill creates a $990 million program to subsidize consumer purchases of converter boxes. U.S. households would be entitled to apply for two $40 coupons to buy converter boxes, which are expected to cost between $40 and $60 each. So far, Thomson and LG have expressed interest in supplying converter boxes for the program.
The program will be administered by the National Telecommunications and Information Administration, a Commerce Department agency. The agency must act quickly to work out: eligibility requirements, who will supply converter boxes, how they can be purchased, and how to educate consumers about the coming changes.
"It could be a year before all the details are worked out," said Stewart Wolpin, a senior analyst for Points North (Larchmont, N.Y.). "The message to the government is, 'You'd better get your ducks in a row very, very fast.' "
Among the stumbling blocks to a smooth transition is a battle between broadcasters and cable operators over whether digital signals should be down-convertedsomething the National Association of Broadcasters opposes.
More important, said Wolpin, the consumers most in need of the converter-box subsidiesmostly poor, inner-city residents who rely solely on over-the-air broadcastinghave the least access to information about details of the DTV transition.
The subsidy program will be funded through the sale at auction of spectrum returned by broadcasters. The government wants to use the recovered spectrum for public safety and broadband wireless applications while generating badly needed revenues.
But the market researchers found that U.S. consumers aren't buying that explanation and remain suspicious of government motives in the switch to DTV. Forty-one percent of those surveyed said the transition is designed to sell more new TV and cable services.
Points North estimates that 26 percent of U.S. households with cable have upgraded to digital services. About 15 percent of U.S. households have HDTV receivers, but a large proportion are not connected to digital services.
As a result, said Wolpin, there's a "huge chasm" between U.S. digital haves and have-nots. "There's a big difference between wanting to upgrade [to DTV] and being forced to upgrade."