McCain Transition Bill Details

June 18, 2005

Well, I've had time to go over the McCain bill and I can tell you that I like the House (of Representatives) draft a lot better. The House version is not yet a "bill," but rather a staff discussion draft that will be rewritten and emerge as a "bill" when there is general consensus within the Representive Barton (chairman) Committee on Energy and Commerce. There will also be another version out of Ted Stevens' Senate Commerce Committee. That is probably also taking its time developing a committee consensus. The McCain bill did not have to take the committee route and went faster. All three bills will have to be reconciled and combined into one by this fall.

The stated purpose of the McCain bill is "To expedite the transition to digital television while helping consumers to continue to use their analog televisions." After reading the bill, you could also add "to make sure that American consumers buy a lot more analog TVs before analog broadcasts are shut down."

I'll talk about that in a bit.

First, the bill thankfully would end analog broadcasts on December 31, 2008--the same date as the Barton draft bill. At this point, having certainty on the hard analog shut-down date is absolutely essential. If the upcoming Stevens bill (Senate Commerce Committee) were to even hint at another date, the whole transition would be thrown into disarray.

Other provisions in the McCain bill:

Digital channel assignment

The FCC would be required to complete its assignment of digital channels to TV stations by December 31, 2006 (and complete any reconsideration by July 31, 2007). [The FCC's own current schedule calls for that action by August 2006.]

Radio frequency spectrum auctions

These auctions would be held no later than April 1, 2008. This is for the spectrum to be recovered from TV stations after the shut-off of analog broadcasts. The auction would exclude frequencies reserved for public safety use.

Digital-to-analog converter boxes

These would be procured by the government and distributed free to "eligible persons" beginning between January 1 and July 1, 2008. Eligible persons would have to submit an application to the FCC to get a converter box; they would have to rely exclusively on an analog TV and over-the-air broadcasts for all their programming, and would have to be in a household with an income no greater than twice the poverty level.

The bill would require the FCC to study the geographic location of eligible persons by TV market area, and to consider the use of broadcast studios to distribute the boxes, possibly in partnership with grocery and electronics stores, and post offices. The bill also would require the FCC to assess its own ability and that of broadcasters to develop an education program to inform the public about the government's free converter box program.

The bill would authorize $468 million for the program, including just $5 million for its administration. [Good luck! Note that McCain has put much of the onus of distributing these converter boxes on the broadcasters, while allowing the consumer electronics industry to keep making and selling analog-only TVs well into 2008.]

Consumer education

The bill requires the FCC to "engage" in a "public outreach program" to educate about the analog deadline and consumer options after the termination analog broadcasts. [No specifics are mentioned. The FCC already considers its digital TV web site to be a public outreach program.]

The McCain bill would also require the FCC, within 90 days after the legislation becomes law, to develop and distribute to all consumers seeking to purchase a TV set a brochure describing options, incuding information on how to get a digital TV signal, the difference between "digital" and "high-definition" signals and TVs, and a statement that current TVs are not obsolete and will continue to work if connected to either a digital-to-analog converter or cable/satellite service. [No clues about how to identify "consumers seeking to purchase a TV set" were provided, nor would language be required explaining the lower video quality inherent in digital-to-analog conversion.]

The bill would require labels 180 days after enactment [around mid-2006, a year from now--late if you ask me] for sets unable to receive and display digital broadcasts, with the language on the label to be developed by the FCC within 120 days of enactment. [a committee thing]

The language would reflect specified content: the date when analog broadcasts will be shut off, that analog-only sets will not receive digital broadcasts unless connected to a converter box or cable or satellite programming service, and that after the analog shut-off date analog-only sets will continue to display images from other sources (DVD players, video games, VCRs, etc.).

DTV tuner requirements

The McCain bill confirms the digital tuner requirements already set by the FCC for large and mid-size sets, but would require digital tuners for sets between 14" and 25" by March 1, 2007. For sets 13" and smaller, the bill tells the FCC to study the need for a DTV tuner requirement, and says if there is a need, then the FCC should enact such a requirement "not later than July 1, 2008." [It is not clear whether the July 1, 2008 date would be the date the rulemaking is published (enacted) or the date the requirement becomes effective, which would normally be much later than the date of enactment--in this case after analog broadcasts have been shut off.]

[The FCC has already started a rulemaking action for digital tuners in sets 25" and smaller, in which they ask for suggestions for an effective date not later than December 31, 2006. The House draft bill set the date at July 1, 2006. McCain is obviously more sympathetic to the consumer electronics industry's wish for a late July 1, 2007 date. With respect to 13" and smaller sets, the McCain bill seems to consider such small NTSC sets to be disposable--use them for a year or two and then throw them away.]

Digital-to-analog conversion for cable subscribers

The bill requires cable operators to carry local broadcasters' primary digital video signal in its original format "without material degradation" after analog broadcasts are shut down. [This means cable systems would not be required to carry all its digital channels (no multicast must-carry), just the primary one.]

The bill then adds a special-interest exception, allowing cable operators to downconvert the broadcaster's digital/high-definition signal to a standard-definition analog signal anywhere from the cable company's "headend" to the customer's premises, if the cable operator also downconverts signals for each station in the same local market.

This downconversion will be permitted until sometime in 2012, unless the FCC determines that its continuance is necessary for audiences of "foreign-language and religious television broadcast stations" to view those signals.

[If the cable operator elects to convert the signal it its headend, then all of its customers will get the analog signal, even those people having digital sets. The cable operator would be allowed to also provide a digital signal for its customers with digital TVs, but would not be legally required to do so. If the cable company elects to provide digital-to-analog cable boxes for its holdout analog customers, obviously it would only have to send out the one undegraded digital signal to everyone.]

Recycling of television sets

McCain's bill would provide a tax credit for the recycling of electronic waste: a credit of $8 or $15 per unit of qualified waste that is collected from consumer and recycled. This would seem not to apply in states that have their own programs.

The program would last for three years. The bill would direct the EPA to study the feasibility of establishing a nationwide recycling program for electronic waste.

Third-party cable set-top-boxes

The bill would require the FCC to issue quarterly reports on the status of negotiations for the commercial availability of "two-way navigation devices" [a.k.a. interactive non-proprietary cable boxes, and two-way CableCARDs, etc. The FCC-monitored industry "plug & play" negotiations on standards for these things have been crawling along with no end in sight.] The bill would require the FCC to complete action and issue a final decision on this by December 31, 2007.