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Consumers Union was able to successfully fend off an amendment during a recent battle in the Senate to stick consumers with the costs of the digital television transition.

But there is still a tough fight ahead: the House of Representatives is about to consider legislation that will leave consumers footing the bill for the digital transition.

And then the Senate and House will have to work out their differences in and come up with a final bill.  We need your help to continue letting Congress know that consumers should not bear the burden of this mandated transition.

WHY THE HOUSE DIGITAL TELEVISION TRANSITION ACT FAILS CONSUMERS

• The draft provides only $830 million for consumer compensation, allowing distribution of only 21 million vouchers to possibly only 10.5 million households (at 2 vouchers per household).
• With up to 40 million households requiring converter boxes, the draft leaves up to 30 million households and up to 60 million televisions in the dark.
• The draft not only sharply restricts funding, it requires consumers to request converter box vouchers before they receive one, an unnecessary burden on consumers.
• Because voucher requests can be made on-line and are available on a first-come, first-served basis, the most disadvantaged households without Internet access are the least likely to receive the vouchers before funding runs out. 
• The draft provides no assurances that even those consumers who do receive $40 vouchers will not pay excessive out-of-pocket costs at the retail level.  The costs of the converter boxes are not capped, leaving consumers vulnerable to excessive prices. 

WHY COMPENSATE CONSUMERS?

• Full funding for consumer compensation should be a priority in digital television transition legislation.  Without an effective consumer assistance and education program, the hard date for the digital transition will be in  jeopardy and auction revenues will be depressed;
• Consumers will be less likely to purchase converter boxes, creating pressure to further delay the final transition date for lack of consumer adoption;
• Auction bids may be depressed if those bidding suspect the hard date will be delayed because consumer issues have not been resolved.
• Compensation for converter boxes is not a subsidy nor is it a government funded technology upgrade: the boxes merely allow analog sets to continue displaying analog images.
• Because the digital transition is a government-mandate, rather than market-driven transition, consumers shouldn’t be required to cover the costs of the converter boxes required to facilitate it. By and large, consumers haven't demanded digital television; they shouldn’t have to pay for it.
• TV sets that rely on over-the-air broadcasting can last for decades but tens of millions of them will go black after the government-mandated transition to digital television unless they: (1) are connected to cable or satellite or (2) are connected to an expensive converter box.
• Direct out-of-pocket costs imposed on consumers who own over-the-air reliant televisions requiring converter boxes are estimated at more than $3.5 billion.
• Spectrum auctions will raise at least $10 billion, more than enough revenue to satisfy reconciliation instructions and compensate consumers for the loss of their working television sets.

WHO NEEDS COMPENSATION?

• Four in ten households will be affected by the transition.  Up to 80 million over-the-air-reliant sets will require converter boxes to continue functioning after the digital transition.
• Up to 19 percent, or roughly 21 million American households, rely exclusively on over-the-air, free television.
• 24 percent of satellite or cable homes own and watch television on at least 1 additional over-the-air set unconnected to pay-TV. Together, these households have an estimated 45 million TV sets that will require converter boxes to continue functioning.
• 48 percent of households that rely solely on over-the-air television have incomes under $30,000.
• 43 percent of Spanish-speaking households rely exclusively on over-the-air television.
• 8 million households with at least one person over 50 years of age watch over-the-air television exclusively.

Sources:  Digital Broadcast Television Transition: Estimated Cost of Supporting Set-Top Boxes to Help Advance the DTV Transition, GAO-05-258T, February 17, 2005; Consumers Union/Consumer Federation Of America, Estimating Consumer Costs of a Federally Mandated Digital TV Transition: Consumer Survey Results, June 29, 2005; Testimony of Manuel Abud, Vice President and General Manager, KVEA-TV, Los Angeles, (Telemundo) before the Senate Commerce Committee, July 12, 2005.