Hazlett on the Analog Switchoff

Cite this Article
Joshua D. Wright, Hazlett on the Analog Switchoff, Truth on the Market (March 03, 2009), https://truthonthemarket.com/2009/03/03/hazlett-on-the-analog-switchoff/

Here is my colleague Tom Hazlett in the Financial Times on the silent death of analog broadcasts for a significant fraction of TV stations:

Some 420 TV stations pulled the plug last week, joining another 200 analog stations that had already signed off. What was supposed to cause outrage and panic among TV viewers proved a non-event. Workers at telephone banks set up to deal with frantic callers searching for their favourite TV shows were sent home early. TV Turnoff Goes Smoothly was the headline in markets around the country.

While the FCC was meandering through its 23-year transition, “free TV” died. One hundred million households now pay $600 or so per year to avoid it, subscribing to cable or satellite. Well over 90 per cent of TV viewing takes place in households opting out of broadcast delivery. And for a very small additional investment – no more than $3bn – every last rabbit-eared home in America could join them.  Yet, the US is subsidizing off-air receivers; $1.5bn has been allotted for digital set-top converters (two $40 vouchers per family), and the Obama “stimulus” pumps in $650m more. This is not merely money down the drain. In extending life-support to DTV signals that hog hugely valuable frequencies, consumers lose hundreds of billions worth of wireless service. The bandwidth available to iPhones, Blackberrys and GPhones and other emerging technologies would double were TV air waves to accommodate mobile apps as requested in 1985.

So why don’t these broadcasters just unplug?

First, their licenses mandate that they broadcast TV signals, and they cannot legally sell the air waves used for more valuable services. And second, because their signals continue to reach one key target audience: Congress. Those appreciative entertainment fans reward stations with “must carry” rights forcing cable and satellite operators to provide their subscribers all local channels. The off-air transmission is a side show; gaining free cable carriage the main event.  At think tank forums, wise owls say: “End the charade, hand broadcasters their channel slots on satellite and cable systems, and let valuable TV air waves go to the mobile voice and broadband services that 21st Century America lusts for.”  Superb idea. But broadcasters know that, without off-air stations, their “must carry” rights would quickly evaporate. The government has no justification for appropriating one network for the free ride of a rival.

Not without a cover story, at any rate. The social benefit asserted to reside in“local” TV signals broadcast by stations licensed in the “public interest” – that is the story. It requires a large expenditure on legal fees to fully grasp. But here is the bottom line: the most valuable air waves on God’s Green Earth will continue to be occupied by digital TV signals that few watch and none need, to provide a prop for a cosy deal between policy makers and broadcasters. That is the worst way to use radio spectrum in the Information Age.

Go read the whole thing.