January 11, 2009

The January 26th decision made by the ever-so-knowledgeable U.S. Senate to delay the complete transition to DTV is yet another example of the lack of leadership, and a Federal Communications Commission. that continues to be the poodle lap-dog of the U.S. Congress. The decision -- to delay until June 12th -- has been made because the Obama administration and the Democratic congress seem to be convinced that it is to the benefit of the remaining Americans who have not yet converted. So, on Feb.17, all of the planning, expense, and efforts that broadcasters have painfully undertaken will continue to be unrequited. These broadcasters will still have to operate their analog operations and that means additional costs that they were not planning to incur. This ludicrous decision will be especially difficult for PBS, which estimates the cost of the delay at $22 million.

And the rationale? Nielsen's estimates are that 6.5 million U.S. households that receive analog signals do not have DTV tuner-enabled sets, don't have satellite or cable, and don't have converter boxes. Because the two-per-household converter coupons have run out (hey, that program reached its limit at only $134 billion -- yes, that's billion folks), the good old new administration thinks that something magical is going to happen within the next four months. And just exactly what rabbit is going to be pulled out of the hat? Okay, the expired coupons have freed up some cash and new coupons will go out. And do we really believe the 6.5 million number? At what point does this end? Will it really be June 12th? Or will it be like that old Robin Williams skit where he says, "I dare you to cross this line in the sand?" Guy crosses the line. "Uh, well, what I meant was cross THIS line."

You know, the fact is that some people may say, "Well, it's only another four months and the thing will really be turned off." But what should really bother you is the constant drumbeat of things appearing to have deadlines that really do not. Let's remember that -- on the whole -- for long-form programming, the networks have not -- thus far -- been seeing any substantive compensation for their transition to HD. Each day of having to operate on both analog and digital means wasted opportunities. The ability to really monetize high definition content and digital services requires personnel and capital. Keeping the analog advertising option open only ultimately serves to delay compensation for the capital expenditures incurred for the transition. And what exactly is the magical number? What does the purported number of 6.5 million people have to be whittled down to for the Congress to say, "Okay, we're really going to turn it off now, folks."

The statement by Jay Rockefeller, who is the Senate Commerce Committee Chairman, is ridiculous. And, I quote: "I firmly believe that our nation is not yet ready to make this transition at this time." OK, exactly, when would the right time be? The notion that the committee will allow broadcast stations to make the switch earlier than June also doesn't make sense. I can imagine those conversations:

"Hey, we just shut it down."

"Great, good for you, not us. We're waiting."

"Hey, do you know who is still operating both analog and digital?"

"In fact, I don't. Hey, I know, let's establish a Web site where broadcasters can tell us what they're doing and then we'll figure out a way to tell the American public."

So, when you come right down to it, what we have is yet another misguided attempt to change the rules when progress demands that we stick to the deadline.

When will they learn?

by Tom Ohanian
Tom Ohanian is Chief Strategy Officer, Signiant Corp. Tom was on the founding team of Avid Technology and is an Academy Awards and two-time Emmy recipient.
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