Cable TV, satellite to gain in switch

NEW YORK -- TV's big switch from analog to digital broadcasts will be complete in just one year, on Feb. 17, 2009, and many consumers are puzzling over how the shift will affect them: Do they need a new converter box, a new TV, a better antenna?

But it's pretty clear which businesses stand to gain.

Cable and satellite TV companies could see a wave of new subscribers as people with antennas pass on buying new TV sets or hooking up converter boxes to their old ones.

Local stations are already using some of the extra capacity digital broadcasting frees up by launching auxiliary TV channels with weather, traffic and they're looking for ways to bring regular programming to portable devices.

The Federal Communications Commission began the switch many years ago to free up a large chunk of U.S. airwaves, which the government is in the process of auctioning off, a process that will net billions of dollars for public coffers. Making all UHF broadcast spectrum above channel 52 available will allow for powerful new wireless services, and possibly for a new network for public safety officials to use during disasters.

Most U.S. TV stations already broadcast digital signals as well as analog. What's happening a year from Sunday is they'll switch off the analog signals. No one with cable or satellite service will be affected, nor will anyone who gets stations over the air with a newer TV with a digital tuner.

Those who will be affected are the 13 million or so households that get TV broadcasts exclusively over the air and have a TV more than a few years old -- or even a newer TV that's relatively small. Also affected are TVs not connected to cable, even if a home has cable.

A Nielsen Co. study released Friday found that 16.8 percent of all U.S. households have at least one analog television set that would not work following the switch. And Hispanics are nearly twice as likely as whites to be without TV reception.

Affected households can get a digital converter box, buy a new television or sign up for cable or satellite service or one of the newer cable-like services being offered by phone companies.

A government-sponsored program on Friday began sending out coupons worth $40 each to any U.S. household that requests them to subsidize buying a box. Each household is entitled to two coupons for the boxes, which are just coming into stores now, start at $40 or $50, making this option easy and practically free.

The government says it has funds for 33 million coupons. To get one, go to www.dtv2009.gov. or call 1 (888) DTV-2009.

All TVs being sold today have digital tuners, which are sometimes called ATSC tuners, after the technical standard used to make them (the analog standard was known as NTSC). If your current TV is less than a year old, the initials "DTV" appear somewhere on its front, or its screen is rectangular, you're probably OK. If you still have the owner's manual, check there whether the tuner is digital.

The switch could give an economic boost to retailers and manufacturers, who would benefit from selling converter boxes and new TVs. And cable providers could get a boost over the next year or two from consumers who sign up for new service rather than deal with the other options.

According to a report Sanford C. Bernstein & Co. released Friday, an estimated 1.4 million households will likely switch to pay TV service as a result of the digital TV transition -- enough to significantly lift the growth rates for the cable industry in 2009, compared to recent years.

Chris Murray, senior counsel for Consumers Union, says his organization is watching that pay TV operators don't take advantage of confusion over the digital transition to push people into buying cable to view digital TV broadcasts. It isn't necessary.

So far he hasn't seen any abusive behavior, but he said: "We want the folks in the marketplace to know that we're watching."

Converter-box coupons are coming to mailboxes everywhere

Coupons days are here for owners of outdated analog televisions.

The federal government said Friday it will begin mailing out $40 coupons next week to consumers to help pay for converter boxes that will save their analog sets from becoming obsolete.

TV viewers who get their programming over an antenna and are not connected to cable or satellite will need a converter box when full-power broadcast stations begin transmitting digital-only signals in February 2009. An estimated 13 million to 21 million U.S. households are in the analog-set set.

The National Telecommunications and Information Administration agency is overseeing the $1.5 billion coupon program to subsidize converter-box costs, estimated to run between $40 and $70. More than 2.6 million households have requested nearly 5 million coupons since Jan. 1, the agency said.

More than 9,700 stores, including those operated by Wal-Mart Stores Inc., Best Buy Co. Inc., Circuit City Stores Inc., Target Corp. and RadioShack Corp., will be selling the special equipment in all 50 states, Puerto Rico and the U.S. Virgin Islands.

Consumers have 90 days to use the coupons, which resemble plastic gift cards, or they expire.

The expiration date comes too quickly for many on Capitol Hill, who are sure to hear from constituents tangled in the transition.

About 20 House Democratic lawmakers on Tuesday sent a letter to the NTIA to allow consumers with expired coupons to reapply for new ones. An agency spokesman said NTIA will have a better understanding of the coupon program in the coming months and will work with congressional staff to examine the expiration issue.

Every household, regardless of whether it needs a box, is eligible to receive two coupons. Initially, $990 million will be used to pay for coupons and cover administrative costs, which are capped at $110 million. An additional $510 million could be allocated, but those coupons are reserved for households that only have over-the-air television.

Consumers can apply online at www.dtv2009.gov or call the 24-hour hot line, 1-888-DTV-2009 (1-888-388-2009). They can also fax a coupon application to 1-877-DTV-4ME2 (1-877-388-4632) or mail one to P.O. Box 2000, Portland, OR 97208-2000. The program expires March 31, 2009.

Questions and answers about the digital TV transition

What's happening and why?

Stopping the waveform analog broadcasts will free up a huge amount of airwaves, which the government is auctioning off for use in advanced wireless services. There's also a drive to use some of the spectrum for a network that can be used in emergency situations by public safety officials.

Is this going to affect me?

If you have cable or satellite TV, only extra sets that are not hooked up will be affected. If you get TV only over the air -- a situation affecting about 13 million U.S. households -- your TV might not work come Feb. 18, 2009. All new TVs sold today have digital tuners, sometimes called "ATSC" tuners after the technical standard they use. "NTSC" is the old standard.

What can I do?

For most people, the cheapest way to handle the transition is to get $40 government coupons to cover most or all the cost of a converter box for each of your older TVs. There is a limit of two coupons per household, available at http://www.dtv2009.gov or by calling 1-888-DTV-2009 (1-888-388-2009).

Who stands to gain?

Cable and satellite TV companies could get another 1.4 million new subscribers, estimates Sanford C. Bernstein & Co., enough to give the industry a measurable boost the next two years. Another $1.7 billion worth of new TVs could be sold as part of the transition, along with some $1.4 billion in converter boxes.