Order Code RL31260
CRS Report for Congress
Received through the CRS Web
Digital Television:
An Overview
Updated January 6, 2006
Lennard G. Kruger
Specialist in Science and Technology
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

Digital Television: An Overview
Summary
Digital television (DTV) is a new television service representing the most
significant development in television technology since the advent of color television
in the 1950s. DTV can provide sharper pictures, a wider screen, CD-quality sound,
better color rendition, and other new services currently being developed. The
nationwide deployment of digital television is a complex and multifaceted enterprise.
A successful deployment requires: the development by content providers of
compelling digital programming; the delivery of digital signals to consumers by
broadcast television stations, as well as cable and satellite television systems; and the
widespread purchase and adoption by consumers of digital television equipment.
The Telecommunications Act of 1996 (P.L. 104-104) provided that initial
eligibility for any DTV licenses issued by the Federal Communications Commission
(FCC) should be limited to existing broadcasters. Because DTV signals cannot be
received through the existing analog television broadcasting system, the FCC decided
to phase in DTV over a period of years, so that consumers would not have to
immediately purchase new digital television sets or converters. Thus, broadcasters
were given new spectrum for digital signals, while retaining their existing spectrum
for analog transmission so that they can simultaneously transmit analog and digital
signals to their broadcasting market areas.
Congress and the FCC set a target date of December 31, 2006 for broadcasters
to cease broadcasting their analog signals and return their existing analog television
spectrum to be auctioned for commercial services (such as broadband) or used for
public safety communications. However, the Balanced Budget Act of 1997 (P.L.
105-33) allows a station to delay the return of its analog spectrum if 15% or more of
the television households in its market do not subscribe to a multi-channel digital
service and do not have digital television sets or converters. Given the slower-than-
expected pace at which digital televisions have been introduced into American
homes, few, if any, observers believe that the goal of digital televisions in 85% of
American homes by 2006 will be reached, with the result that — under current law
— television stations will continue to broadcast both analog and digital signals past
the 2006 deadline. The key issue for Congress and the FCC is: what steps, if any,
should be taken by government to further facilitate a timely, efficient, and equitable
transition to digital television?
A key issue in the Congressional debate is addressing the millions of American
over-the-air households whose existing analog televisions will require converter
boxes in order to receive digital signals, if and when the analog signal is turned off.
The FY2005 budget reconciliation bill contains a provision on the digital television
transition. The conference agreement on the Deficit Reduction Act of 2005 (S. 1932;
H.Rept. 109-362) sets the digital transition deadline at February 17, 2009, and
allocates up to $1.5 billion for a digital-to-analog converter box program.

This report will be updated as events warrant.

Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
What Is Digital Television? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Role of Congress and the FCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Status of the DTV Buildout . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Creation of Digital Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Delivery of Digital Signals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Broadcasting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Satellite . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Cable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Consumer Purchase of DTV Products . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Policy Issues Surrounding the Digital Transition . . . . . . . . . . . . . . . . . . . . . 9
Activities in the 108th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Activities and Issues in the 109th Congress . . . . . . . . . . . . . . . . . . . . . . . . . 13
Addressing Over-the-Air TV Households . . . . . . . . . . . . . . . . . . . . . . 14
Cable Carriage of Digital Multicasts and Downconverted Signals . . . 16
Earlier Transition Deadline for Public Safety Spectrum . . . . . . . . . . . 16
House Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Digital Television Transition Act of 2005 . . . . . . . . . . . . . . . . . . 17
DTV Transition Deadline . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Auction of Recovered Spectrum . . . . . . . . . . . . . . . . . . . . . 18
Digital-to-Analog Converter Box Program . . . . . . . . . . . . . 18
Other Expenditures of Auction Receipts . . . . . . . . . . . . . . . 18
Consumer Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Preserving and Expediting Tuner Mandates . . . . . . . . . . . . 19
Digital-to-Analog Conversion and “Must Carry” . . . . . . . . 19
Senate Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
S. 1932: Digital Transition and Public Safety Act of 2005 . . . . 19
Conference Report on S. 1932: Deficit Reduction Act of 2005 . . . . . 20
Appendix 1. Background on Selected Policy Issues Related to the Digital Television
Transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Digital “Must Carry” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Mandating Digital Tuners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Copyright Protection Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Broadcast Flag . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Analog Hole . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Cable/DTV Interoperability Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Digital Conversion of Public Broadcasting Stations . . . . . . . . . . . . . . . . . . 32
Satellite Television and “Digital White Areas” . . . . . . . . . . . . . . . . . . . . . . 35
Low Power TV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Fees for Ancillary or Supplemental Services . . . . . . . . . . . . . . . . . . . . . . . 37
Public Interest Obligations of DTV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Tower Siting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Appendix 2. Legislation in the 109th Congress Related to Digital Television . . 41

Digital Television: An Overview
Most Recent Developments
The FY2005 budget reconciliation bill contains a provision on the digital
television transition. The final version of Title III of the Deficit Reduction Act of
2005 (S. 1932) sets the digital transition deadline at February 17, 2009, and allocates
up to $1.5 billion for a digital-to-analog converter box program to be administered
by the Department of Commerce.

The conference agreement on the Deficit Reduction Act of 2005 (S. 1932;
H.Rept. 109-362) was approved by the House on December 19, 2005, and approved
by the Senate on December 21, 2005. However, because the Senate removed three
provisions from the conference report (provisions not related to digital television),
S. 1932 must again be approved by the House before final enactment. The House is
expected to again consider the budget bill conference report early in the second
session of the 109th Congress.
What Is Digital Television?
Digital television (DTV) is a new television service representing the most
significant development in television technology since the advent of color television
in the 1950s. DTV can provide sharper pictures, a wider screen, CD-quality sound,
better color rendition, multiple video programming or a single program of high
definition television (HDTV), and other new services currently being developed.
DTV can be HDTV, or the simultaneous transmission of multiple programs of
standard definition television (SDTV), which is a lesser quality picture than HDTV
but significantly better than today’s television.
The rationale often cited for the digital transition is that aside from offering
superior broadcast quality to consumers, DTV will allow over-the-air broadcasters
to offer the same kinds of digitally-based services (such as pay-per-view) currently
offered by cable and satellite television providers. Additionally, it is argued that
digital television uses the radiofrequency spectrum more efficiently than traditional
analog television, thereby conserving a scarce resource (bandwidth) that can be used
for other wireless applications.
There are three major components of DTV service that must be present in order
for consumers to enjoy a fully realized “high definition” television viewing
experience. First, digital programming must be available. Digital programming is
content produced with digital cameras and other digital production equipment. Such
equipment is distinct from what is currently used to produce conventional analog
programming. Second, digital programming must be delivered to the consumer via
a digital signal. Digital signals can be broadcast over the airwaves (requiring new
transmission towers or DTV antennas on existing towers), transmitted by cable or

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satellite television technology, or delivered by a prerecorded source such as a digital
video disc (DVD).1 And third, consumers must have a digital television product
capable of receiving the digital signal and displaying digital programming on their
television screens. To receive digital broadcast signals, consumers can buy digital
monitors accompanied with a set-top converter box (a digital tuner),2 or alternatively,
an integrated digital television with digital tuning capability already built in.
Role of Congress and the FCC
Congress and the Federal Communications Commission (FCC) have played
major roles in the development of DTV. Starting in 1987, the FCC launched a
decade-long series of proceedings exploring the potential and feasibility of a
transition from conventional analog televisions to advanced television systems.
While the original term used to describe the new television system was high
definition television (HDTV), the FCC used a broader term — advanced television
(ATV) — referring to any television technology that provides improved audio and
video quality. After it became clear that ATV would be using digital signal
transmission, the FCC began (in 1995) to use the term DTV (synonymous with ATV)
to describe the new service more accurately.
In December 1996, after lengthy debate between television manufacturers,
broadcasters, and computer firms, the FCC adopted a standard for DTV signal
transmission based on recommendations of the Advanced Television System
Committee (ATSC).3 The ATSC standard allows for 18 different video formats, of
which four have subsequently been adopted for commercial use.4
Meanwhile, the Telecommunications Act of 1996 (P.L. 104-104) provided that
initial eligibility for any DTV licenses issued by the FCC should be limited to
existing broadcasters. Broadcasters would be issued DTV licenses while at the same
time retaining their existing analog licenses during the transition from analog to
digital television. The act provided that broadcasters must eventually return either
their existing analog channel or the new digital channel. Also in the 104th Congress,
a major debate took place over whether to direct the FCC to conduct auctions for the
spectrum allocated for DTV. The FCC estimated the commercial value of the DTV
1 At present, commercially available DVD technology does not deliver digital high
definition programming.
2 Set-top converter boxes can also be used to enable conventional analog televisions to
receive digital signals over the air. However, analog televisions hooked up to digital tuners
cannot display high definition pictures.
3 FCC Fourth Report and Order In the Matter of Advanced Television Systems and Their
Impact on Existing Television Service
, MM Docket No. 87-268, FCC 96-493, released
December 27, 1996.
4 Four video formats are being used commercially by U.S. television producers and
manufacturers. These four formats are described by the number of lines they produce per
each picture frame, and whether they use interlaced (i) or progressive (p) scanning
techniques. These are: 480i and 480p (suitable for SDTV broadcasts), and 720p and 1080i
(HDTV). The progressive scan video format is more compatible with PC displays, while
the interlaced scan is more compatible with analog television receivers.

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spectrum to be between $11 billion to $70 billion. No legislation was enacted,
however, and the FCC did not obtain the authority to auction the DTV licenses.
In 1997, the FCC adopted rules5 to implement the Telecommunications Act, and
granted DTV licenses to some 1600 full power incumbent television broadcasters.6
The DTV licenses consist of 6 megahertz (MHZ) of unused spectrum within the VHF
and UHF frequency bands. Because DTV signals cannot be received through the
existing analog television broadcasting system (known as NTSC7) the FCC decided
to phase in DTV over a period of years, so that consumers would not have to
immediately purchase new digital television sets or converters. Thus, broadcasters
were given 6 MHZ of new spectrum for digital signals, while retaining their existing
6 MHZ for analog transmission so that they can simultaneously transmit NTSC and
DTV signals to their broadcasting market areas.8 The simultaneous broadcasting
(“simulcasting”) of the same programs in both digital and analog modes was intended
to allow viewers who have not yet purchased DTV sets or converters to continue to
receive television programming during the transition to DTV.
The ruling required television stations receiving the DTV licenses to build their
DTV facilities according to a schedule determined by the size of their markets. The
FCC has granted extensions to licensees unable to meet the schedule due to
unforeseeable or uncontrollable circumstances, such as an inability to secure tower
locations for new antennas.
The FCC set a target date of 2006 for broadcasters to cease broadcasting the
analog signal and return their existing analog television spectrum licenses to be
5 FCC Fifth Report and Order In the Matter of Advanced Television Systems and Their
Impact on Existing Television Service
, MM Docket No. 87-268, FCC 97-116, released April
21, 1997.
6 A provision in the Public Health Security and Bioterrorism Preparedness and Response Act
of 2002 (P.L. 107-188, H.R. 3448, H.Rept. 107-481) addresses the digital conversion of full
power television stations that received their analog licenses after the FCC allocated digital
spectrum to existing analog stations in 1997. Section 531 requires the FCC to allot a digital
channel to any requesting full-power television station that had an application pending for
an analog television station construction permit as of October 24, 1991, and which had its
application granted after April 3, 1997. Any station receiving digital spectrum under this
provision is required to complete construction of its digital facility within 18 months,
without the possibility of an extension. Stations are also prohibited from operating an
analog signal on its designated digital channel. The bill’s conference report states that this
provision will allow recent broadcast licensees to foster a digital audience during the
transition period to digital television without having to terminate analog service, and that
without this change, those stations would be denied the flexibility to operate an analog and
a digital facility simultaneously in the near term, especially in major markets.
7 The National Television Systems Committee (NTSC) was the industry group that
developed the currently used U.S. television standards. For a discussion of the difference
between analog and digital signals, see CRS Report 96-401, Telecommunications Signal
Transmission: Analog vs. Digital
, by Richard M. Nunno.
8 Using digital technology, the DTV frequencies can be placed in the vacant portion of the
same spectrum band currently allocated for analog (NTSC) television without interfering
with analog television broadcasts.

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auctioned for other commercial purposes. During the 105th Congress, the Balanced
Budget Act of 1997 (P.L. 105-33) made the 2006 reversion date statutory, providing
that a “broadcast license that authorizes analog television service may not be renewed
to authorize such service for a period that extends beyond December 31, 2006.”
However, the act requires the FCC to grant extensions for reclaiming the analog
television licenses in the year 2006 from stations in television markets where any one
of the following three conditions exist:
! if one or more of the television stations affiliated with the four
national networks are not broadcasting a digital television signal;
! if digital-to-analog converter technology is not generally available
in the market of the licensee; or
! if at least 15% of the television households in the market served by
the station do not subscribe to a digital “multi-channel video
programming distributor” (including cable or satellite services) and
do not have digital TV sets or converters.
The FCC continues to monitor the status of the DTV conversion of both
commercial and noncommercial broadcast stations. On October 11, 2001, FCC
Chairman Michael Powell announced the creation of an FCC Digital Television
(DTV) Task Force to review the ongoing transition to DTV, and to make
recommendations on how to facilitate the transition and promote the rapid recovery
of broadcast spectrum for other uses.
The FCC is issuing periodic progress reports on the DTV buildout,9 and has the
option of granting deadline extensions to broadcasters. On November 8, 2001, the
FCC announced it would modify a number of its DTV transition rules, in order to
facilitate and speed the DTV transition. The changes permit stations to initially build
lower-powered (and less expensive) DTV facilities, while retaining their option to
expand their coverage area as the digital transition progresses. Meanwhile, the FCC
declined to issue a blanket extension of remaining DTV construction deadlines.
However, the FCC will consider, in limited circumstances, individual requests for
extensions due to financial hardship.
On April 4, 2002, FCC Chairman Michael Powell submitted, to the Chairmen
of the House Energy and Commerce Committee and the Senate Commerce, Science,
and Transportation, a proposal for voluntary industry actions to speed the digital
television transition.
On August 8, 2002, the FCC announced actions intended to further encourage
the roll-out of DTVs by the December 31, 2006 target completion date. Specifically,
the FCC adopted a Second Report and Order and Second Memorandum Opinion and
Order (FCC 02-230) which requires television receivers and receiving equipment
(such as VCRs and DVD players/recorders) to include DTV reception capability (see
section in this report, “Mandating Digital Tuners” for further details).
9 The most recent progress report is contained in: Second Report and Order and Second
Memorandum and Order,
MM Docket No. 00-39, August 9, 2002, FCC 02-230, 41 p.

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On September 10, 2003, the FCC adopted a Second Report and Order which
adopts, with certain modifications, an agreement between the cable and consumer
electronics industries ensuring the compatibility between cable systems and
commercial electronics devices (see section in this report, “Cable/DTV
Interoperability Standards.”
On November 4, 2003, the FCC adopted a Report and Order and Further Notice
of Proposed Rulemaking (FCC 03-273) which gives broadcasters the option of
inserting a “broadcast flag” into their over-the-air broadcast transmissions (see
section in this report, “Copyright Protection Technology” for further information).
On January 27, 2003, the FCC initiated its Second Periodic Review of the DTV
transition. The Notice of Proposed Rulemaking (FCC 03-8) seeks comment on a
number of issues related to the DTV conversion.10 Included in the NPRM is the issue
of how the FCC will determine whether 85% of American households have access
to digital signals by 2006. The NPRM also reopens the issue of public interest
obligations of DTV broadcasters.
On August 4, 2004, the FCC adopted a Report and Order (FCC-04-192) which
implements several steps identified in the Second Periodic Review. These include
commencing an open channel election process, establishing deadlines for
broadcasters to increase power, and resolving outstanding operational issues.11
On October 4, 2004, the FCC announced a DTV consumer education initiative.
The FCC announced a new website — [http://www.dtv.gov] — which is intended as
a comprehensive source of information for consumers on the DTV transition.
Status of the DTV Buildout
The nationwide buildout of digital television is a complex and multifaceted
enterprise. A successful buildout requires: the development by content providers of
compelling digital programming; the delivery of digital signals to consumers by
broadcast television stations, as well as cable and satellite television systems; and the
widespread purchase and adoption by consumers of digital television equipment.

Creation of Digital Programming. Digital programming is created with
digital cameras and other digital production equipment. Digital content tends to favor
more “visual” types of programming — such as sports events or movies — which
take full advantage of the high-definition viewing experience. Currently, the amount
of available digital programming is limited, but gradually becoming more
widespread. Among broadcast networks, CBS produces the largest amount, with
digital high-definition broadcasts available in all of its prime time scripted
entertainment series, as well as many of its national sports broadcasts. ABC is
10 See Notice of Proposed Rulemaking, Second Periodic Review of the Commission’s Rules
and Policies Affecting the Conversion to Digital Television
, MB Docket No. 03-15, FCC
03-8, Jan. 27, 2003.
11 FCC News Release, “FCC Takes Next Steps to Promote Digital TV Transition,” August
4, 2004.

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offering HDTV broadcasts in nearly all of its prime time schedule and in some of its
sports broadcasts. PBS has also been active, producing digital programming as well
as offering multicasts over digital channels in some local markets. NBC and FOX are
offering digital programming as well (although not necessarily in high definition),
and FOX plans to transmit at least 50% of its prime time schedule in HDTV by the
2004-2005 season. Cable networks producing (or planning to produce) digital
programming include HBO, Showtime, A&E, Discovery, ESPN, Bravo, Cinemax,
HDNet, In Demand, and Madison Square Garden.12
Two factors generally inhibit content providers from accelerating the production
of digital programming. First, because relatively few households have digital
televisions, networks have a diminished incentive to invest the money to produce
digital content. Some digital programming is being produced by networks in
sponsorship/partnership with consumer electronics companies who manufacture
digital televisions. Second, content providers (e.g. networks and movie studios) are
reluctant to provide digital programming until a digital copyright standard is in place
(see discussion below, under “Issues”).


Delivery of Digital Signals. Currently, there are three ways digital
programming is being delivered to consumers. Digital signals are: 1) broadcast over
the airwaves; 2) transmitted over channels provided by satellite television systems;
and 3) provided via digital cable service in a growing number of markets.

Broadcasting. According to the National Association of Broadcasters (NAB),
as of January 6, 2006, there were 1,550 stations (both commercial and public)
broadcasting digital signals in 211 markets.13 This represents about 91% of the
nation’s approximately 1,700 full-power television stations. The 211 markets
currently receiving digital transmissions cover over 99% of U.S. TV households.
Television stations must construct new facilities and purchase new equipment in
order to transmit digital signals. According to NAB, costs range from $8-$10 million
to fully convert a station to digital operation.14 NAB estimates that the total cost of
the transition for broadcasters is $10 to $16 billion.15 16
12 Cable & Telecommunications Overview, 2001, June 2001, National Cable Television
Association.
13 For latest statistics, see [http://www.nab.org/newsroom/issues/digitaltv/dtvstations.asp].
14 Testimony of Ben Tucker, Chairman of NAB Television Board, in: U.S. Congress,
House, “Digital Television: A Private Sector Perspective on the Transition,” Hearing Before
the Committee on Energy and Commerce, Subcommittee on Telecommunications and the
Internet, March 15, 2001, 107th Cong., 1st Sess., p. 72.
15 Testimony of Edward O. Fritts, NAB President and Chief Executive Officer, before the
House Committee on Energy and Commerce, Subcommittee on Telecommunications and
the Internet, June 2, 2004.
16 Some critics dispute the validity of these cost estimates. See Snider, J.H., Speak Softly
and Carry A Big Stick: How Local TV Broadcasters Exert Political Power
, iUniverse, Inc.,
New York, pp. 331-345.

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As of October 3, 2005, the FCC has granted a construction permit or license to
1,695 stations, about 98.4% of the total number of DTV allotments.17 Approximately
three-quarters of the 1,240 full-power commercial stations did not meet the May 1,
2002 conversion deadline. A total of 843 commercial stations requested from the
FCC an extension of the May 2002 deadline in order to complete construction of
their DTV facilities. So far, 772 have been granted and 71 have been admonished.
Of those stations granted extensions, 602 filed requests for second extensions. Of
this number, 535 extension requests have been granted, 67 have been dismissed, and
the rest remain pending. A third extension was requested by 141 stations; 104
extensions were granted, action was deferred for 30 satellite stations, and 7 stations
were admonished. Meanwhile, 214 noncommercial educational stations requested
extension of the May 1, 2003 buildout deadline. The FCC has granted all of those
extension requests; 134 stations filed for second extensions with 129 granted.18
Satellite. Satellite television is currently provided to over 22 million American
households. Two major companies offer direct broadcast satellite (DBS) television
service in the United States: Echostar’s DISH Network and Hughes’ DirecTV.
Hughes and Echostar offer eight and nine high definition channels, respectively.
Neither service offers local high definition broadcast channels in most markets.
Satellite TV customers need added equipment (a slightly bigger satellite dish and
either a set-top box or built-in satellite HDTV reception capability) in order to
receive high-definition programming on their digital televisions.
Cable. Initially, cable companies had been reluctant to carry channels of digital
and high definition programming (thereby displacing some existing channel
offerings) until more consumers have the digital television equipment necessary to
view digital programming (see discussion of “must carry” below).19 Also there are
copyright, standards, and interoperability issues between the cable system and DTV
sets that must be resolved (see “copyright and standards” below).
The reluctance of cable companies to carry digital programming has changed,
however, as cable providers in many markets have begun to implement plans to carry
digital or high-definition channels. On May 1, 2002, the nation’s top ten cable
companies pledged to implement FCC Chairman Powell’s voluntary plan, which
calls on cable operators to carry digital signals of up to five broadcast or other digital
programming services by January 1, 2003.20 According to the National Cable &
17 See [http://www.fcc.gov/mb/video/files/dtvsum.html].
18 Ibid.
19 Many cable (and both DBS commercial services) are “digital.” However, “digital
cable”generally refers to technology which converts analog programming to a digital signal
which is transmitted to the consumer and then converted back to analog form for television
viewing. “Digital cable” allows cable companies to provide more channels, as well as high
speed (broadband) Internet service. However, the “digital” signals transmitted over cable
systems use different digital standards than the DTV standard used by broadcasters and
current DTV sets; therefore current digital cable services currently cannot be directly
received by DTV sets.
20 McConnell, Bill, “Cable Takes the High-Def High Road,” Broadcasting & Cable, May
(continued...)

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Telecommunications Association (NCTA), as of January 2005, consumers in 184
(out of 210) local TV markets can now receive a package of HDTV services from
their cable operator. Cable systems providing HDTV pass 92 million U.S. television
households (out of a total 108 million) and reach all 100 of the biggest TV markets.21

Consumer Purchase of DTV Products. DTV products are now available
from several manufacturers that offer varying features and technical characteristics.
Currently, most consumers who purchase DTV products are purchasing digital
television monitors, available at prices ranging from about $500 to $1,000, depending
on screen size and other features. Digital monitors are primarily being used by
consumers to watch DVDs,22 regular analog television, and digital programming over
a cable or satellite television system. A digital monitor must be coupled with a set-
top digital receiver or tuner (costing in the range of $300 to $500) in order to receive
digital broadcast signals.23 An integrated DTV, which contains a built-in digital
tuner, is sold at prices ranging from about $1,000 to $10,000. Over the past several
years, prices for DTV monitors and receivers have dropped markedly. As the market
for DTVs expands, prices are expected to decrease further.24
According to the Consumer Electronics Association (CEA), DTV shipments
(from suppliers to retail outlets) totaled 7.3 million units in 2004, a 63% increase
over 2003. The total number of DTV products sold since 1998 stands at 11.7
million. Additionally, approximately 1.2 million over-the-air digital television tuners
(either stand-alone set-top boxes or integrated within the DTV set) have been sold,
factory to dealer, since 1998.25 While growth has occurred, the penetration of DTVs
into the American home remains relatively small, with approximately 13% of the 110
20 (...continued)
6, 2002, pp. 54-60.
21 National Cable & Telecommunications Association, “Cable’s HDTV Deployment,”
January 2005, available at [http://www.ncta.com/images/HDTVkit-Deploy-final2.pdf].
22 Commercially available DVD technology does not yet support digital programming.
However, current DVDs viewed over a DTV provide a significantly higher quality picture
than DVDs viewed over regular analog televisions.
23 Many consumers are asking whether their current analog TV sets will become obsolete
with the advent of DTV. Consumers can continue to use analog TV sets until the
broadcasters return the analog TV licenses to the FCC, after which, a set-top digital
converter box could be used to enable the analog TV set to receive the DTV signal. Digital
converters, however, will only enable the display of pictures comparable in quality to
existing sets. They will not provide HDTV-quality images, or other new services that may
come with DTV.
24 Testimony of David Arlin, Thomson Multimedia Inc. on behalf of the Consumer
Electronics Association, in: U.S. Congress, House, “Digital Television: A Private Sector
Perspective on the Transition,” Hearing Before the Committee on Energy and Commerce,
Subcommittee on Telecommunications and the Internet, March 15, 2001, 107th Cong., 1st
Sess., p. 47.
25 Consumer Electronics Association, Press Release, “CEA Reports Consumer Electronics
Sales Jump 11 Percent in 2004,” January 5, 2005, available at
[http://www.ce.org/Press/CurrentNews/press_release_detail.asp?id=10650].

CRS-9
million American households having DTVs,26 and about 2% having the ability to
receive digital over-the-air signals.27
Policy Issues Surrounding the Digital Transition
The goal of the FCC and Congress is to complete the transition to DTV as
quickly as possible, so that NTSC (analog) spectrum can be reclaimed and
reallocated for other purposes. Some of the NTSC spectrum will be auctioned for
commercial wireless services, and some of it will be used for new public safety
services (the FCC has already designated some of the analog TV spectrum for public
safety use).28
The current target date for broadcasters to return analog spectrum is December
31, 2006. However, the Balanced Budget Act of 1997 allows a station to delay the
return of the analog spectrum if 15% or more of the television households in its
market do not subscribe to a multi-channel digital service and do not have digital
television sets or converters. Given the slower-than-expected pace that digital
televisions have been introduced into American homes, few, if any, observers believe
that the goal of digital televisions in 85% of American homes by 2006 will be
reached.29 Thus, some observers are concerned that if digital television does not
sufficiently penetrate American homes in the near future, the analog spectrum will
not be reclaimed, and broadcasters will keep both analog and digital television
spectrum licenses indefinitely, thereby preventing spectrum from being available for
commercial wireless services and public safety applications (for example, police and
firefighter radio communications).

While the nation’s transition to digital television is proceeding, industry analysts
believe that widespread adoption of DTVs by consumers will not be achieved by
2006, and that — under current law — television stations will continue to broadcast
both analog and digital signals past the 2006 deadline. The key issue for Congress
and the FCC is: what steps, if any, should be taken by government to further
facilitate a timely, efficient, and equitable transition to digital television? To address
this question, Congress and the FCC must confront a highly complex policy
landscape, involving different industries, technologies, and interests, including
content providers, commercial and noncommercial television broadcasters, cable and
satellite television providers, consumer electronics manufacturers and retailers, and
consumers.
26 Consumer Electronics Association, “Household Penetration of CE Products Soars in
2005,” Press Release, May 17, 2005.
27 Snider, J.H., Speak Softly and Carry A Big Stick: How Local TV Broadcasters Exert
Political Power
, iUniverse, Inc., New York, p. 582.
28 See CRS Report RL32622, Public Safety, Interoperability, and the Transition to Digital
Television
, by Linda K. Moore.
29 Historically, consumer electronics products take many years to be adopted. Since its
introduction in 1953, color television took roughly 25 years to enter 85% of American
homes. The video cassette recorder (VCR) took 15 years to reach 85% of homes.

CRS-10
The following sections in this report — on activities and issues in the 108th and
109th Congresses — discuss issues that are primary considerations in the current
Congressional debate on the digital television transition. Additionally, Appendix 1
provides background information on a complex array of policy issues related to the
digital television transition. These include digital “must carry,” mandating digital
tuners, copyright protection technology, cable/DTV interoperability, digital
conversion of public broadcasting stations, digital conversion of low power television
stations, public interest obligations of DTV broadcasters, and others.
Activities in the 108th Congress
A number of bills were introduced into the 108th Congress, relating in some way
to digital television. Some have urged Congress to require broadcasters to return the
analog spectrum on “a date certain.” Under this approach, spectrum would be freed
up for other uses. Among legislation in the 108th Congress, the HERO Act (H.R.
1425 and within 9/11 Commission omnibus bills H.R. 5024, H.R. 5040, and S. 2774)
would have prohibited any delay in reassigning the 24 MHZ for public safety
purposes, and required those frequencies to be operational by January 1, 2007.
During March and April 2004, another digital transition proposal was informally
circulated by the Media Bureau of the FCC.30 Under this proposal, the transition
deadline would be moved from 2006 to 2009. Cable and satellite providers would
be required to carry a broadcaster’s digital signal only, but could — if the broadcaster
so chooses — down-convert the digital signal to an analog signal that cable or
satellite customers could watch on their analog televisions. Under this scenario,
according to the Media Bureau proposal, cable and satellite TV households watching
down-converted digital signals on their analog sets would be counted toward the 85%
statutory threshold required in order for broadcasters to return to the government their
valuable analog spectrum, which can then be auctioned and/or assigned for other
purposes.
The commercial broadcasting industry expressed strong opposition to the
Media Bureau’s proposal.31 According to the commercial broadcasters, the proposal
would discourage the development of digital television services (such as HDTV and
multicasting) and remove the incentive for consumers to purchase DTVs.
Additionally, they argue, if analog spectrum is reclaimed under the Media Bureau
proposal, TV households that are exclusively “over-the-air” — many of whom are
economically disadvantaged — would lose their television service altogether unless
they purchased DTVs, converter boxes, or cable or satellite television subscriptions.
In response to these criticisms, Kenneth Ferree, former head of the Media Bureau,
argues that the development of digital services will not be adversely impacted
because market forces will ensure that popular stations will likely be carried by cable
and satellite TV providers in both digital and analog form by 2009. Additionally,
30 The Media Bureau’s digital transition proposal has not yet been released as a formal
document.
31 Written Ex Parte Submission in MB Docket Nos. 03-15 & 98-120, April 15, 2004,
A v a i l a b l e a t [ h t t p : / / w w w . n a b . o r g / N e w s r o o m / P r e s s R e l / F i l i n g s /
LetterReFerreePlan041504.pdf].

CRS-11
suggests Ferree, economically disadvantaged over-the-air households could receive
federal subsidies (derived from reclaimed spectrum auction proceeds, for example)
for purchasing converter boxes, thereby ensuring that these households will continue
to receive television service.32
During the summer of 2004, Congress held three hearings on the digital
television transition. On June 2, 2004, the House Energy and Commerce Committee,
Subcommittee on Telecommunications and the Internet, held a hearing on the Ferree
proposal — “Advancing the DTV Transition: An Examination of the FCC Media
Bureau Proposal.” A June 9, 2004 hearing held by the Senate Committee on
Commerce, Science and Transportation — entitled, “Completing the Digital
Television Transition,” — also examined the Ferree proposal and other digital
transition issues including the possibility of consumer subsidies for converter boxes.
Finally, the House Subcommittee on Telecommunications and the Internet held
another hearing on July 21, 2004, looking specifically at lessons learned from Berlin,
Germany, which successfully underwent a transition to digital television in 2003.
The hearing, entitled, “The Digital Television Transition: What We Can Learn from
Berlin,” featured the release of a General Accountability Office (GAO) report
entitled, German DTV Transition Differs From U.S. Transition in Many Respects,
but Certain Key Challenges Are Similar
. The GAO identified three elements
responsible for Berlin’s successful digital transition: implementing extensive
consumer education, providing subsidies to low-income households for converter
boxes, and setting a near-term, widely recognized shut-off date for analog TV
service.33
On July 22, 2004, the National Commission on Terrorist Attacks Upon the
United States (the 9/11 Commission) released its final report. The Commission
recommended that Congress support legislation “which provides for the expedited
and increased assignment of radio spectrum for public safety purposes.” In response
to this recommendation, on September 21, 2004, Senator John McCain introduced
S. 2820, the SAVE LIVES Act. S. 2820 would change the digital transition deadline
from December 31, 2006 to December 31, 2008. Spectrum for public safety would
be freed for use by first responders, and other spectrum would be available for
commercial uses. Proceeds from the auctioning of commercial spectrum would be
credited to a Digital Transition Consumer Assistance Fund. The Fund would be used
to establish a $1 billion digital transition program, administered by the Secretary of
Commerce, which would subsidize consumers who continue to rely exclusively on
over-the-air broadcasts with analog televisions. The program would give priority to
low-income households, and would provide assistance for purchasing digital-to-
analog converter boxes or other technologies which would allow consumers to
continue receiving television signals.
32 Boliek, Brooks, “Feds: No analog TV by ‘09,” Hollywood Reporter, April 15, 2004.
33 See U.S. General Accountability Office, German DTV Transition Differs From U.S.
Transition in Many Respects, but Certain Key Challenges Are Similar
, GAO-04-926T, July
21, 2004. 22 p.

CRS-12
S. 2820 also required labeling of analog televisions (with the label stating it is
unable to receive digital signals without a converter box), directs the Department of
Commerce (in consultation with the FCC) to submit a report to Congress
recommending a consumer education program on the digital transition, and requires
the FCC to issue final decisions on its proceedings regarding DTV must-carry and
public interest obligations.
During the September 22, 2004 markup of S. 2820 in the Senate Committee on
Commerce, Science and Transportation, an amendment was offered by Senator
Conrad Burns which sets a digital transition deadline (December 31, 2007) only for
spectrum that has been designated for public safety, and provides that the FCC may
waive the deadline in a given market “to the extent necessary to avoid consumer
disruption while ensuring the ability of relevant public safety entities to use such
frequencies.” The Burns amendment was subsequently adopted by the Committee.

On September 29, 2004, Senator McCain offered a modified version of S. 2820
as an amendment to the National Intelligence Reform Act of 2004 (S. 2845). As in
Committee, Senator Burns offered a modifying amendment to the McCain
amendment. At the request of Senator McCain, the Senate approved by unanimous
consent the McCain amendment as modified by the Burns amendment. The final
version adopted into S. 2845 sets the digital transition deadline of December 31,
2007 only for spectrum that has been designated for public safety. Language
regarding the FCC’s authority to waive the deadline to avoid consumer disruption
was modified to read: “only if all relevant public safety entities are able to use such
frequencies free of interference by December 31, 2007, or are otherwise able to
resolve interference issues with relevant broadcast licensee by mutual agreement.”34
The Senate passed S. 2845 on October 6, 2004. Other provisions of S. 2820 relevant
to digital television are retained within the Senate-passed version of S. 2845.
However, the sections regarding the Digital Transition Consumer Assistance fund
and the $1 billion in consumer digital transition subsidies are moot, because the
legislation limits the digital transition deadline only to public safety spectrum and
does not authorize auctions of commercial spectrum currently used for analog
television broadcasts. Also, labeling requirements would only go into effect if the
FCC acts to set a hard deadline for the return of analog spectrum.
The House-passed version of S. 2845 (passed on October 16, 2004) contained
a nonbinding provision (Section 5011) expressing the “sense of the Congress” that
the 85% penetration test should be eliminated and that broadcasters should be
required to cease analog transmissions by December 31, 2006 in order that analog
spectrum can be returned for public safety and commercial uses. The conference
report version of S. 2845 contained a digital television provision similar to the House
language. Section 7501 states that it is the sense of Congress that “Congress must
act to pass legislation in the first session of the 109th Congress that establishes a
comprehensive approach to the timely return of analog broadcast spectrum as early
as December 31, 2006” and that any delay in the adoption of such legislation will
“delay the ability of public safety entities to begin planning to use this needed
34 For more information on this issue, see CRS Report RL32622, Public Safety,
Interoperability and the Transition to Digital Television
, by Linda K. Moore.

CRS-13
spectrum.” The Intelligence Reform and Terrorism Prevention Act of 2004 (P.L.
108-458) was signed into law on December 17, 2004.
Activities and Issues in the 109th Congress
The 109th Congress is debating when and how a “hard date” for the DTV
transition should be implemented, thereby freeing reclaimed analog spectrum. Policy
questions include should the existing statutory digital transition deadline of
December 31, 2006 be implemented by modifying or removing the 85% digital
penetration threshold requirement, or would a later and redefined transition deadline
be more appropriate? Should the reclaiming of analog spectrum for public safety
uses be singularly designated, or should it be included as part of a comprehensive
approach to returning all of the analog spectrum? Appendix 2 in this report provides
a listing of DTV-related legislation introduced into the 109th Congress.
Aside from ensuring that consumers enjoy the benefits of digital television,
reclaiming the analog spectrum is a prime motivation in the desire of Congress and
the FCC to complete the digital transition as soon as possible. A portion of
reclaimed analog spectrum will be allocated for first responder communications,
while the rest will be auctioned to the private sector for development and use of
innovative telecommunications technologies such as wireless broadband.
Budgetary considerations are also an important factor. Auctioning the analog
spectrum would raise revenues in the billions of dollars. Estimates of possible
auction revenues vary, from $10 billion35 to $28 billion36 to $50 billion.37 All or part
of these auction proceeds could be used to reduce the federal budget deficit.38
Currently, there are three major issues that Congress is considering as it
develops legislation related to the DTV transition. These are: addressing over-the-air
analog TV households, the extent to which cable systems should be required to carry
digital multicasts and downconverted signals of broadcasters, and whether an earlier
transition deadline is necessary in the wake of Hurricane Katrina.
35 Congressional Budget Office Cost Estimate, Digital Transition and Public Safety Act of
2005, October 24, 2005. CBO estimates revenue of $12.5 billion from auction of spectrum
vacated by analog broadcasters over the period 2006-2010. However, CBO estimates that
offering this new spectrum for auction will lower anticipated receipts by $2.5 billion for
other spectrum already authorized for auction under current law. Thus, auctioning spectrum
released by the digital transition would increase net spectrum auction receipts by $10
billion.
36 The Brattle Group, “700 MHZ Band Spectrum Auction Could Yield $28 B, Analysis
Says,” Press Release, May 18, 2005.
37 Snider, J.H. and Michael Calabrese, New America Foundation, Speeding the DTV
Transition
, Spectrum Series Issue Brief #15, May 2004, p. 3.
38 For more information on this issue, see CRS Report RS22306, Spectrum Auctions and
Deficit Reduction: FY2006 Budget Reconciliation
, by Linda K. Moore and Lennard G.
Kruger.

CRS-14
Addressing Over-the-Air TV Households. A key issue debate is
addressing the millions of American over-the-air households whose existing analog
televisions will require converter boxes in order to receive digital signals — if and
when the analog signal is turned off. According to the National Association of
Broadcasters, there are currently 280.5 million analog televisions in United States.
Of these, 73 million rely on over-the-air broadcasting.39
Many policymakers are asking whether should some form of financial assistance
(subsidies or tax credits, for example) should be provided by the federal government
to enable over-the-air households to purchase converter boxes or digital televisions.
Should such assistance be provided to low-income households exclusively or to all
households? Should subsidies, if warranted, be financed by proceeds garnered by
auctioning the analog spectrum? And finally, how much funding would a subsidy
program require, and how much revenue is likely to be raised by auctioning the
commercial portion of the reclaimed analog spectrum?

At the request of the House Committee on Energy and Commerce, the
Government Accountability Office (GAO) conducted a television characteristics
survey involving 2,471 randomly selected American households. Based on the
survey, GAO found that 19% or 21 million households rely exclusively on over-the-
air television; 57% or 64 million households rely on cable; and 19% or 22 million
have a subscription to DBS (satellite) television. Additionally, GAO found that low-
income, non-White, and Hispanic households are more likely to rely on over-the-air
television broadcasting.40
GAO estimated that if a subsidy were needed only for over-the-air households,
the cost could range from about $460 million to $2 billion, depending on the cost of
the set-top box (from $50 to $100 per box) and whether subsidy recipients are limited
to low-income households. Under this scenario, GAO is assuming that cable and
satellite providers would convert broadcasters’ digital signals to analog at the “head-
end,” such that cable and satellite TV consumers with analog sets would be able to
receive the signal without a converter box.
Under a different scenario, GAO assumed that cable and satellite providers
would deliver high-definition signals to the home, thereby requiring consumers with
analog sets to purchase converter boxes. GAO estimated that if subsidies were
available to cable and satellite subscribers as well as to over-the-air households, the
cost would range from $1.8 billion to over $10 billion, again depending on the cost
of the converter box and the use of means testing. The GAO estimate assumes a
subsidy for one converter box per household — it should be noted that the vast
39 Comments of the National Association of Broadcasters and the Association for Maximum
Service Television, Inc. before the Federal Communications Commission, In the Matter of
Over-The-Air Broadcast Television Viewers
, MB Docket No. 04-210, August 11, 2004.
40 See U.S. Government Accountability Office, Testimony before the Subcommittee on
Telecommunications and the Internet, Committee on Energy and Commerce, House of
Representatives, Digital Broadcast Television Transition: Estimated Cost of Supporting Set-
Top Boxes to Help Advance the DTV Transition
, February 17, 2005. Available at
[http://www.gao.gov/new.items/d05258t.pdf].

CRS-15
majority of television households have more than one over-the-air analog television.
Each analog television set would need its own converter box to be able to receive a
digital signal.
The GAO cost estimates also do not include the cost of implementing a subsidy
program, nor do they take into account what form a subsidy might take, be it a
voucher, tax credit, rebate, government supplied equipment, or other means. On May
26, 2005, GAO testified before the House Energy and Commerce Committee on the
administrative challenges that could arise in implementing a subsidy for DTV
equipment.41
Other organizations have offered differing estimates of the impact of the digital
transition. The Consumer Electronics Association (CEA) has estimated that 11.5%
of all television sets in the U.S. are used to view over-the-air programming, and that
12% of the 110 million U.S. TV households currently do not receive broadcast
signals through cable or satellite. CEA projects — assuming a December 31, 2008
analog cut-off date — that only 6.8% of TV households would lose their primary
video signal by that future date.42
On the other hand, in June 2005 the Consumers Union and the Consumer
Federation of America issued a joint study43 estimating that approximately 16 million
households would lose all TV reception when analog signals are cut off. Based on
an estimate of a $50 price to purchase a converter box, the report concluded that “the
direct government-imposed costs on consumers to preserve the usefulness of [analog
television sets] would be $3.5 billion or more.”
The FCC estimates that 15% of TV households are exclusively over-the-air.44
The FCC has discussed two possible scenarios for a switch-over from analog to
digital television service. One scenario is a simultaneous end of analog service,
whereby all analog television service is terminated on a date certain, either
nationwide or on a market-by-market basis. The other scenario is an analog “fade to
black” approach, in which analog broadcasting would be phased out gradually. This
could involve a “lifeline” approach, where a limited number of analog television
41 See U.S. Government Accountability Office, Testimony before the Subcommittee on
Telecommunications and the Internet, Committee on Energy and Commerce, House of
Representatives, Digital Broadcast Television Transition: Several Challenges Could Arise
in Administering a Subsidy Program for DTV Equipment
, May 26, 2005. Available at
[http://www.gao.gov/new.items/d05623t.pdf].
42 Statement of Gary Shapiro, President and CEO, Consumer Electronics Association, before
the House Committee on Energy and Commerce, Subcommittee on Telecommunications and
the Internet, May 26, 2005. Available at [http://energycommerce.house.gov/108/
Hearings/05262005hearing1533/Shapiro.pdf].
43 Estimating Consumer Costs of a Federally-Mandated Digital TV Transition, Consumers
Union and Consumer Federation of America, June 29, 2005at
[http://www.hearusnow.org/fileadmin/sitecontent/DTV_Survey_Report-Final_6-29-05.pdf].
44 FCC, Annual Assessment of the Status of Competition in the Market for the Delivery of
Video Programming
, Report FCC 05-13, MB Docket No. 04-227, released February 4, 2005.

CRS-16
stations would continue to operate, or a “700 MHZ reclamation” approach, where
stations occupying channels 52-69 would be cleared first.45
Cable Carriage of Digital Multicasts and Downconverted Signals.
Digital multicasting refers to the ability of broadcasters to divide their 6 MHZ of
digital spectrum into separate and discrete streams of content. Thus, for example,
a broadcaster could transmit alternate channels of programming — such as weather,
news, or foreign language, for example — in addition to its primary digital video
broadcast. On February 10, 2005, the FCC affirmed its prior decision that cable
operators are not required to carry more than a single digital programming stream
from any particular broadcaster. At issue is whether cable operators should be
required by legislation to carry any or all additional multicasted channels transmitted
by commercial broadcasters. Commercial broadcasters argue that their incentive to
develop additional digital programming streams is diminished if they have no
guarantee that cable systems will carry that programming. Cable providers counter
that their decision whether or not to carry additional programming streams from a
broadcaster should be dictated by the market, rather than mandated.
A related issue is the extent to which cable providers may be permitted or
required to carry downconverted analog signals after the digital transition takes place.
Many cable households will likely continue to use analog televisions which cannot
receive a digital signal. Cable companies might offer converter boxes to these
customers. As an alternative, it is possible that cable providers might seek authority
from Congress to “downconvert” the digital signal of selected local broadcast stations
to analog format. To serve customers with digital televisions, cable providers would
continue to provide digital signals as well (in other words, “dual carriage”). Under
this scenario, a key issue is whether (and if so, how) Congress should mandate which
local broadcast stations would receive the benefit of “dual carriage” to cable
customers.
Earlier Transition Deadline for Public Safety Spectrum. During the
summer months of 2005, consensus formed among Congressional committee
members and most DTV stakeholders that the DTV transition deadline should be set
sometime in 2009. However, concerns over first responder communications
interoperability during Hurricane Katrina have led to calls for an earlier transition
deadline, particularly for spectrum assigned for public safety communications (within
the channels 60-69 range).46 On September 14, 2005, the former 9/11
Commissioners issued a report on the status of the 9/11 Commission
Recommendations. The report, notes that “pending legislation before Congress
would compel the return of the analog broadcast spectrum and its reallocation,
including for public safety purposes, on various dates.” The report recommends that
“Congress should use the reconciliation process, or another legislative vehicle, to
45 FCC, Media Bureau Staff Report Concerning Over-The-Air Broadcast Television Viewers,
MB Docket No. 04-210, February 28, 2005, pp. 14-16.
46 Clark, Drew, “Hurricane Stirs Up Telecom and DTV Bills,” Technology Daily, September
14, 2005.

CRS-17
mandate this reallocation by the earliest possible date.”47 H.R. 1646 (the HERO Act),
introduced by Representative Harmon on April 14, 2005, would reallocate public
safety spectrum currently occupied by television broadcasters no later than January
1, 2007. For more information on this issue, see CRS Report RL32622, Public
Safety, Interoperability, and the Transition to Digital Television
, by Linda K. Moore.
House Activities. On February 17, 2005, the House Energy and Commerce
Committee, Subcommittee on Telecommunications and the Internet, held the first of
a series of hearings on the digital transition. At the February 17th hearing, entitled,
“The Role of Technology in Achieving a Hard Deadline for the DTV Transition,”
witnesses discussed the need for a hard deadline and the possible costs of subsidizing
over-the-air analog viewers. Other issues discussed at the February 17th hearing
included whether labels warning of a possible analog signal shut-off should be
required on new analog televisions purchased by consumers. Another key issue
discussed was whether digital signals should be converted at the cable and satellite
providers’ head-end, or — alternatively — at the subscriber’s home.
A second hearing, entitled, “Preparing Consumers for the End of the Digital
Transition,” was held by the House Subcommittee on Telecommunications and the
Internet on March 10, 2005. Witnesses spoke to the importance of educating retailers
and consumers about the digital transition, and argued that raising public awareness
is difficult without a certain transition deadline.
On May 26, 2005 the House Energy and Commerce Committee held a hearing
on staff draft DTV legislation. Committee Chairman Joe Barton cited the importance
of meeting budget reconciliation targets as a key factor in the Committee’s movement
of legislation to hasten the DTV transition and raise revenues from auctioning the
analog spectrum. While most (but not all) Committee Members and witnesses
agreed with the setting of a hard 2008/2009 deadline for the digital transition, there
was disagreement over the need for — as well as the size, scope, and mechanics of
— a subsidy program for digital-to-analog converter boxes funded with a portion of
analog spectrum auction proceeds.
Digital Television Transition Act of 2005. On October 27, 2005, the
House Energy and Commerce Committee approved the Digital Television Transition
Act of 2005 as part of its submission to the House FY2006 budget reconciliation bill.
The legislation sets a “hard” DTV transition deadline of December 31, 2008. CBO
estimated $10 billion in net receipts from auctioning vacated spectrum currently
being used by broadcasters.48 The legislation would allocate a portion of auction
proceeds as follows: $990 million for a digital-to-analog converter box program,
$500 million for public safety interoperable communications grants, $30 million for
a New York City 9/11 digital transition fund, and $3 million to assist digital
conversion of low-power television stations. Remaining auction proceeds would be
transferred to the Treasury for budget deficit reduction. The Digital Television
47 9/11 Public Discourse Project, Report on the Status of 9/11 Commission
Recommendations
, September 14, 2005, available at [http://www.9-11pdp.org/].
48 Congressional Budget Office Cost Estimate, Reconciliation Recommendations of the
House Committee on Energy and Commerce, October 31, 2005, p. 12.

CRS-18
Transition Act of 2005 does not contain language addressing the multicast must-carry
issue, nor does it address other DTV issues such as the broadcast flag or DTV public
interest obligations.
On November 3, 2005, the House Budget Committee reported the Deficit
Reduction Act of 2005. Subtitle D (sections 3401-3413) is the Digital Television
Transition Act of 2005. On November 18, 2005, the House passed the Deficit
Reduction Act of 2005 (H.R. 4241). The following is a summary of major
provisions.
DTV Transition Deadline. The legislation would shift the deadline for the
DTV transition from December 31, 2006 to December 31, 2008. As of January 1,
2009, analog spectrum in the range of channels 52 through 69 would be recovered,
and analog television service that is broadcast over the air would cease. The
December 31, 2008 deadline would be a hard deadline — the legislation repeals the
provision in current law allowing broadcasters to retain their analog spectrum
indefinitely if 15% or more of television households are unable to receive digital
signals. The legislation also directs the FCC to release final digital channel
assignments to all full-power broadcast television stations by December 31, 2006,
and to issue six month status reports on coordinating digital allotments with Canada
and Mexico.
Auction of Recovered Spectrum. The legislation directs the FCC to conduct
auctions for the licenses of recovered analog spectrum reclaimed from analog
television service. Auctions will commence no later than January 7, 2008, and the
FCC shall deposit auction proceeds no later than June 30, 2008. Recovered analog
spectrum is defined as between channels 52 and 69 inclusive (698 through 806
MHZ). This auction authority does not apply to analog spectrum to be made available
for public safety services, nor does it apply to spectrum auctioned prior to the date
of enactment of the legislation.
Digital-to-Analog Converter Box Program. The legislation directs that $990
million from auction proceeds be placed in a “Digital Television Conversion Fund.”
This Fund will be used by the National Telecommunications and Information
Administration (NTIA) of the Department of Commerce to establish a digital-to-
analog converter box program. Under this program, U.S. households may request up
to two coupons worth $40 each to be applied toward the purchase of digital-to-analog
converter boxes. Coupons may be requested between January 1, 2008 and January
31, 2009. Retailers participating in the program would be required to undergo a
certification process in order to be reimbursed by the Department of Commerce.
Other Expenditures of Auction Receipts. The legislation directs that $500
million be deposited in a “Public Safety Interoperable Communications Fund,” which
would be used by NTIA to establish a grant program to assist public safety agencies
in the acquisition of, deployment of, or training for use of interoperable
communications systems. The legislation directs that $30 million be deposited in a
“NYC 9/11 Digital Transition Fund,” which will reimburse New York City television
broadcasters for costs incurred in the design and deployment of a temporary DTV
broadcast system which will provide DTV service until a permanent facility is
constructed. Finally, the legislation directs $3 million into a “Low-Power Digital-to-

CRS-19
Analog Conversion Fund” which will be used to compensate low power television
stations (including Class A, translator, or booster television stations) for the cost of
a digital-to-analog conversion device.
Consumer Education. The legislation would require manufacturers to put
warning labels on analog televisions that inform consumers that such televisions will
not be able to receive broadcast programming after the digital transition unless
connected to a digital tuner, a digital-to-analog converter box, or cable, satellite or
other multichannel video services. Similar warnings are required to be posted in
stores by retailers, and run as public service announcements by broadcasters and
cable and satellite providers. Finally, the FCC and the NTIA are required to engage
in a public outreach program to educate consumers about the deadline for termination
of analog television broadcasting and the options consumers have after such
termination to continue to receive broadcast programming.
Preserving and Expediting Tuner Mandates. The legislation would move
up the deadline by which all televisions with screens of 13 to 24 inches must contain
built-in digital tuners. The FCC’s current deadline is July 1, 2007; the draft
legislation would set an earlier deadline of March 1, 2007. Additionally, the draft
legislation prohibits the FCC from further revising its existing schedule for
mandatory DTV reception capability.
Digital-to-Analog Conversion and “Must Carry”. The legislation requires
cable operators (with capacities over 550 MHZ) and satellite television providers to
offer to their customers broadcaster signals in both digital and analog formats for five
years after the transition. The legislation, which allows cable and satellite providers
to convert broadcaster signals at the “head-end,” would permit these providers to
convert digital broadcasts to a standard definition format (which occupies less
bandwidth than a high definition signal) if they so choose.
Senate Activities. On July 12, 2005, the Senate Commerce, Science and
Transportation Committee held a hearing on the DTV transition. While consensus
emerged on the need for a “hard” deadline for digital conversion, there was
considerable disagreement among witnesses over the issue of cable and satellite
carriage of multicast broadcast programming and whether Congress should mandate
which local broadcast stations might receive “dual carriage” (both digital and analog
signals) by cable providers.
S. 1932: Digital Transition and Public Safety Act of 2005. On October
20, 2005, the Senate Commerce, Science and Transportation Committee approved
DTV legislative language intended for the Senate’s budget reconciliation bill.
Entitled the Digital Transition and Public Safety Act of 2005, the legislation would
set a “hard” deadline of April 7, 2009 for the digital conversion.
The legislation extends the FCC’s auction authority to September 30, 2009, and
directs the FCC to commence auctions of the licenses for recovered analog spectrum
on January 28, 2008. Auction proceeds would be deposited into a “Digital Transition
and Public Safety Fund.” The Secretary of Commerce is directed to transfer $5
billion from the Fund to the general fund of the Treasury on October 2, 2009.
Remaining money in the Fund would be distributed by the Department of Commerce

CRS-20
for a number of purposes, including $3 billion for a program to assist consumers in
the purchase of converter boxes, $200 million for a program to assist the digital
conversion of low-power and translator television stations, $1.25 billion for a
program to facilitate emergency communications, $250 million for a program to
implement the ENHANCE 911 Act of 2004, $200 million for a program to provide
assistance to coastal States and Indian tribes affected by hurricanes and other natural
disasters, and $15 million to be made available under certain conditions to the
Department of Transportation’s essential air service program.
Because the legislation was designed specifically for the budget reconciliation
process, no specifics are included on how the converter box subsidy program would
be framed or administered. The legislation also does not contain language on the
issues of cable carriage of multicasted digital signals and downconverted analog
signals. It is anticipated that a separate DTV bill (not attached to the budget
reconciliation) may be introduced in the future to address those and other issues not
directly related to the budget reconciliation process.
On October 26, 2005, the Senate Budget Committee reported S. 1932, the
Deficit Reduction Omnibus Reconciliation Act of 2005. Title III of S. 1932 is the
Digital Transition and Public Safety Act of 2005 as approved by the Senate
Commerce, Science and Transportation Committee.
During Senate consideration of S. 1932 on November 2, 2005, amendments
were introduced by Senator Ensign to reduce funding for converter boxes from $3
billion to $1 billion, and by Senator McCain to move forward the transition deadline
from April 7, 2009 to April 7, 2008. The Ensign amendment was withdrawn and the
McCain amendment was defeated. The Senate passed S. 1932 on November 4, 2005.

Conference Report on S. 1932: Deficit Reduction Act of 2005. The
budget reconciliation conference report on S. 1932 (H.Rept. 109-362) sets the digital
transition deadline at February 17, 2009, and would allocate up to $1.5 billion for a
digital-to-analog converter box program. The conference report was approved by the
House on December 19, 2005, and approved by the Senate on December 21, 2005.
However, because the Senate removed three provisions from the conference report
(provisions not related to digital television), S. 1932 must again be approved by the
House before final enactment. The House is expected to again consider the budget
bill conference report early in the second session of the 109th Congress.
Title III of the conference report (the Digital Television Transition and Public
Safety Act of 2005) directs that after the digital transition deadline of February 17,
2009, full-power television stations will cease analog broadcasts and operate only on
channels 2 through 51. Beginning on January 28, 2008, and ending on June 30,
2008, the FCC (with auction authority extended to 2011) will auction recovered
analog spectrum between channels 52 and 69 (except for channels 63, 64, 68, and 69
which are already designated for public safety). Auction proceeds — most recently
estimated at $12.5 billion by the Congressional Budget Office49 — will be deposited
49 Congressional Budget Office, Cost Estimate for H.R. 2863, DOD Appropriations Act,
(continued...)

CRS-21
in a fund in the U.S. Treasury called the Digital Television Transition and Public
Safety Fund.
On September 30, 2009, $7.363 billion will be transferred from the Digital
Television Transition and Public Safety Fund to the general fund of the Treasury. Of
the funds remaining, $990 million will be made available to the National
Telecommunications and Information Administration (NTIA) to administer a digital-
to-analog converter box program. The $990 million includes up to $100 million for
administrative costs, including up to $5 million for consumer education. Between
January 1, 2008, and March 31, 2009, the program will supply up to two coupons per
requesting household worth $40 each towards the purchase of converter boxes (which
are expected to cost $50 to $60 each). The program may receive additional funding
bringing the total up to $1.5 billion (including up to $160 million for administrative
costs) if NTIA notifies Congress that additional funding is needed.
Other designated uses of auction proceeds are as follows:
! not to exceed $1 billion through FY2010 to establish a grant
program to assist public safety agencies in the acquisition of,
deployment of, or training for use of interoperable communications
systems.
! not to exceed $30 million for FY2007- 2008 to reimburse New York
City television broadcasters for costs incurred in the design and
deployment of a temporary DTV broadcast system which will
provide DTV service until a permanent facility is constructed.
! not to exceed $10 million during FY2008-2009 to compensate low-
power television stations (including Class A, translator, or booster
television stations) for the cost of a digital-to-analog conversion
device in order to convert the digital signals received from their
corresponding full-power television stations and provide analog
signals to their customers.
! not to exceed $65 million during FY2009 to reimburse low-power
television stations for equipment to upgrade stations from analog to
digital in rural communities.
! not to exceed $156 million during FY2007-2012 for a national alert
and tsunami warning program.
! not to exceed $43.5 million to implement the ENHANCE 911 Act
of 2004.
49 (...continued)
2006, December 20, 2005, p. 3, available at [http://www.cbo.gov/ftpdocs/69xx/doc6990/
hr2863.pdf]

CRS-22
! not to exceed $30 million for the essential air service program
administered by the Department of Transportation.
The conference agreement provides for additional supplemental license fees to
be assessed by the FCC in the aggregate amount of $10 million during FY2006.
Additionally, the conferees instruct the FCC to issue a report and order on the digital
television table of channel allotments, and to coordinate those allotments with
Canada and Mexico to resolve any international interference issues.
The conference agreement did not retain the provisions in the House bill on
digital-to-analog conversion and must carry (the “downconversion” issue, which
addresses cable and satellite provision of broadcast signals to analog televisions), nor
were the House provisions on a consumer outreach program retained. Also, like the
previous House and Senate versions, the conference agreement does not contain
language addressing the multicast must-carry issue or other DTV issues such as the
broadcast flag or DTV public interest obligations.


CRS-23
Appendix 1. Background on Selected Policy Issues
Related to the Digital Television Transition
Digital “Must Carry”
Under the “must carry” provisions of the Cable Television Consumer Protection
and Competition Act of 1992, cable TV providers are required to transmit local
analog programs to their customers. This decision was based on the reasoning that
since cable TV has a predominant position in the market, “without mandatory
carriage provisions, the economic viability of local broadcast television and its ability
to produce quality local programming would be jeopardized.”50
The commercial broadcasters (primarily the smaller networks and independent
stations, represented by the Association of Local Television Stations, but also the
National Association of Broadcasters) believe that the same principles and
conclusions of the 1992 Act should apply to DTV services, leading to mandatory
carriage of the DTV programming by cable operators. Broadcasters argue that
because most Americans receive their TV via cable, the carriage of DTV
programming by cable providers is essential for consumers to purchase DTV
receivers.
The cable companies (led by the National Cable Television Association, NCTA)
oppose any “must carry” requirements for cable operator carriage of DTV
programming, arguing that it would be an unlawful taking of their property, and that
they should be able to decide what content they provide on their own networks.
NCTA points out that, unlike the commercial broadcasters who were given free
spectrum licenses for DTV, cable operators must build their own infrastructure to be
able to transmit DTV signals. Cable operators say they will carry commercial
broadcasters’ DTV programming as soon as consumer demand warrants it. Cable
television services provide a finite number of channels to consumers, and any
mandate to provide DTV programming would require cable companies to remove
other non-broadcast channels. Many cable operators are investing in the upgrades
needed to provide DTV, although the video transmission standards adopted by cable
operators may not be the same as those used by the broadcasters. This could mean
that different home equipment may be necessary for cable services than for over-the-
air TV reception. In addition, HDTV programming will require cable operators to
build a more robust transmission (i.e., greater bandwidth) capability than is required
by SDTV, and some cable operators may want to offer SDTV but not HDTV
services. The cable industry also contends that mandating carriage of all DTV
broadcast transmissions will financially devastate many smaller cable operators.
Responding to the debate between the broadcast and cable industries over
whether cable TV providers should be required to transmit DTV programming, in
50 Ibid., p. 5. Satellite television is also subject to must carry requirements. See CRS Report
RS20425, Satellite Television: Historical Information on SHVIA and LOCAL, by Marcia
S. Smith.

CRS-24
July 1998 the FCC initiated a proceeding on the matter.51 On January 22, 2001, the
FCC announced its adoption of rules for cable carriage of digital TV signals. Most
notably, the FCC ruling did not require cable systems to simultaneously carry both
the analog and digital signals (“dual carriage”) of local TV stations. The FCC
tentatively concluded that “such a requirement appears to burden cable operators’
First Amendment interests more than is necessary to further a substantial
governmental interest.”52 While not approving a dual carriage mandate, the FCC did
rule that a digital-only TV station, whether commercial or non-commercial, can
immediately assert its right to carriage on a local cable system. Additionally, a TV
station that returns its analog spectrum and converts to digital operations must be
carried by local cable systems. Cable systems must carry “primary video,” defined
as a “single programming stream and other program-related content.”
The FCC continued to examine the must-carry issue through 2004. Of particular
interest was how must-carry rules would ultimately apply to “digital multicasting,”
which refers to the ability of broadcasters to divide their 6 MHZ of digital spectrum
into separate and discrete streams of content. At issue is whether cable operators
should be required to carry any or all additional multicasted channels transmitted by
commercial broadcasters as part of their 6 MHZ digital allotment.
On January 31, 2005, the National Cable Television Association (NCTA) and
the Association of Public Television Stations (APTS) announced an agreement under
which cable companies would provide dual-carriage (both analog and digital) of at
least one public television station in a market during the transition, as well as
carrying up to four multicasts of public stations after the transition. Under the
agreement, APTS will no longer lobby the FCC or Congress for government must-
carry mandates.
On February 10, 2005, the FCC affirmed its prior decision that cable operators
are not required to carry more than a single digital programming stream from any
particular broadcaster. The FCC also affirmed the previous tentative conclusion not
to impose a dual carriage requirement on cable operators.
Mandating Digital Tuners
Currently, about 2% of American households have purchased DTVs equipped
or accompanied with digital tuners that can receive over-the-air digital broadcast
signals. Some groups (for example, broadcasters) advocate a government mandate
that would require new televisions to contain built-in digital tuners.
A study conducted by Arthur D. Little (and commissioned by the National
Association of Broadcasters and the Association of Maximum Service Television)
estimates that DTV set penetration would reach 75.5% by 2006, if the FCC were to
mandate that all new sets sold after January 1, 2004 have DTV reception capability.
Supporters of a mandate argue that requiring digital tuners would ensure a quicker
51 FCC Notice of Proposed Rule Making on Carriage of Transmissions of Digital Television
Broadcast Stations
, CS Docket No. 98-120, released July 10, 1998.
52 See [http://www.fcc.gov/Bureaus/Cable/News_Releases/2001/nrcb0103.html].

CRS-25
penetration of DTVs into American households, thereby giving digital content
providers and distributors greater incentive to produce and transmit digital content.
Consumer electronics manufacturers and many consumer advocates oppose a
digital tuner mandate, arguing that it would raise prices of television sets beyond the
means of many consumers.53 Opponents also dispute whether a digital tuner mandate
would effectively hasten the DTV transition, since most households currently receive
their primary television service via cable or satellite and therefore may not require an
over-the-air digital reception capability. Finally, they argue that a digital tuner
mandate would constitute an inappropriate, unnecessary, and counterproductive
government intervention into an increasingly dynamic digital television marketplace.
On August 8, 2002, the FCC adopted a phase-in plan requiring most new
television sets to contain digital tuners by 2007. Specifically, the FCC’s Second
Report and Order and Second Memorandum Opinion and Order (FCC 02-230)
requires all television sets with screen sizes of at least 13 inches, and all television
receiving equipment (such as video cassette recorders and DVD players/recorders to
include DTV reception capability according to the following schedule:
Receivers with screen sizes 36 inches and above — 50% of a responsible
party’s units must include DTV tuners effective July 1, 2004; 100% of such units
must include DTV tuners effective July 1, 2005.
Receivers with screen sizes 25 to 35 inches — 50% of a responsible party’s
units must include DTV tuners effective July 1, 2005; 100% of such units must
include DTV tuners effective July 1, 2006.
Receivers with screen sizes 13 to 24 inches — 100% of all such units must
include DTV tuners effective July 1, 2007.
TV Interface Devices VCRs and DVD players/recorders, etc. that receive
broadcast television signals — 100% of all such units must include DTV tuners
effective July 1, 2007.
The FCC’s phase-in plan was opposed by the Consumer Electronics Association
(CEA), consumer groups, and antitax groups. The CEA, citing the “scant percentage
of households relying on over-the-air television reception” argued that the mandate
is a “multi-billion dollar TV tax on American consumers,” and called instead for an
FCC mandate on cable-DTV compatibility standards.54 This position was countered
by the National Association of Broadcasters, who argued that the mandate is
necessary to hasten the DTV transition and ensure the survival of free over-the-air
broadcasting, which NAB says is currently received by roughly one third of all TV
sets in use.55
53 Estimated at an initial cost of $200 per set (see April 6, 2001 Comments of the CEA to
the FCC, MM Docket No. 00-39). This figure is disputed by commercial broadcasters (see
May 7, 2001 Comments of NAB/MSTV/ALTV to the FCC, MM Docket No. 00-39).
54 Consumer Electronics Association, Americans Should Not Be Forced to Buy DTV Over-
the-Air Tuners Says CEA
, Press release, August 8, 2002, available at
[http://www.ce.org/Press/CurrentNews/press_release_detail.asp?id=10012].
55 National Association of Broadcasters, Fact Vs. Myth: The DTV Tuner Integration Debate,
available at [http://www.dtvprofessional.com/2002/08_aug/editorials/nab_dvttuners.htm].

CRS-26
Subsequently, the agreement between the consumer electronics and cable
industries on a cable-DTV interoperability standard has dampened CEA’s opposition
to the digital tuner mandate, because the circuitry enabling “plug and play”
compatibility between digital televisions and cable systems could be modified to
receive digital over-the-air signals at an incremental cost.56 However, in November
2004, the CEA, along with the Consumer Electronics Retailers Coalition (CERC),
petitioned the FCC to eliminate the deadline of July 1, 2005 for digital tuners in 50%
of televisions in the 25 to 36 inch (mid-sized) screen size range. Alternatively, CEA
and CERC proposed that the digital tuner deadline for all (100%) of televisions in
that size range be moved up from July 1 to March 1, 2006. On February 14, 2005,
the FCC announced a Notice of Proposed Rulemaking to consider whether to adjust
the schedule by which televisions with screen sizes of 25 to 36 inches are required
to contain digital tuners.
On June 9, 2005, the FCC denied the CEA and CERC petition to eliminate the
deadline of July 1, 2005 for 50% of televisions in the 25 to 36 inch screen size range
to have digital tuners. At the same time, the FCC did agree to move up the digital
tuner deadline for mid-size televisions from July 1 to March 1, 2006. The FCC also
proposed to move up the date by which all televisions with screen sizes over 13
inches must have digital tuners, from July 1, 2007 to December 31, 2006; and asked
for comments on whether digital tuner requirements should be extended to
televisions with screen sizes smaller than 13 inches.
On November 3, 2005, the FCC announced its decision to require all sets
(including sets with screen sizes smaller than 13 inches) to contain digital tuners by
March 1, 2007.57
Similarly, the Digital Television Transition Act of 2005, as approved by the
House Energy and Commerce Committee and the House Budget Committee, would
set a deadline of March 1, 2007 by which all televisions with screens of 13 to 24
inches must contain built-in digital tuners. Additionally, the legislation prohibits the
FCC from further revising its existing schedule for mandatory DTV reception
capability.
Copyright Protection Technology
Many content providers (e.g., movie studios and broadcast networks) are
reluctant to provide high quality digital content to DTV owners until they are assured
that interoperability standards and technology licensing agreements are in place to
prevent consumers from making unauthorized copies and Internet transmissions of
digital content. In 1998, five consumer electronics manufacturing companies —
Hitachi, Intel, Matsushita, Sony, and Toshiba — formed an entity called the Digital
Transmission Licensing Administrator (DTLA, also known as “5C”) to license a
56 Clark, Drew, “Electronics Group Shows Flexibility on Digital TV Issue,” National
Journal’s Technology Daily
, January 27, 2003.
57 FCC News Release, “FCC Modifies Digital Tuner Requirements to Advance Digital
Transition,” November 3, 2005, available at [http://hraunfoss.fcc.gov/edocs_public/
attachmatch/DOC-262013A1.pdf].

CRS-27
jointly developed Digital Transmission Content Protection (DTCP) technology.
DTCP is designed to protect audiovisual and audio content against unauthorized
interception or retransmission in the digital home environment.
On July 17, 2001, two major studios — Warner Bros. and Sony Pictures
Entertainment — announced a licensing agreement to adopt DTCP. The agreement
is designed to permit the studios to protect prerecorded media, pay-per-view, and
video-on-demand transmissions against unauthorized copying, and to protect all
content against unauthorized Internet retransmission, while assuring consumers’
ability to continue customary home recording of broadcast and subscription
programming.58
Broadcast Flag.59 While DTCP protects content delivered to the home via
cable or satellite, the technology does not protect over-the-air broadcast content.
Other major studios have been reluctant to sign licensing agreements with DTLA
until broadcast content can also be protected. Additionally, broadcast networks
(ABC, CBS, and Fox) have opposed the 5C standard, arguing that the technology’s
inability to encrypt over-the -air broadcasts will cause high quality content to migrate
toward cable and satellite exclusively. A week after the 5C agreement with Sony
Pictures and Warner Bros. was announced, the five other major studios (Disney,
Paramount, Fox, Universal, and MGM) submitted a proposal to DTLA which would
require digital broadcast content to be encrypted with a “broadcast flag” preventing
Internet distribution or retransmission of digital content broadcast over-the-air. On
June 3, 2002, a group of engineers from the motion picture and technology
industries60 released a detailed “broadcast flag” proposal. While the proposal is
strongly supported by the content industry, the technology industry remains divided,
with some companies supporting and others opposing this particular proposal. Some
consumer groups have also expressed opposition.
Those supporting a broadcast flag (such as the Motion Picture Association of
America and other content providers) argue that the protections against piracy offered
by a broadcast flag are crucial to ensure that content providers make high-value
programming available over the digital airwaves. Supporters also argue that a
broadcast flag will not prevent consumers from making physical copies of DTV
programs, or from distributing such copies within a person’s home digital network.
Opponents of a broadcast flag (many consumer electronics and high tech companies,
as well as consumer groups) assert that because electronic devices will have to be
meet certain specifications in order to process the broadcast flag, the innovation and
functionality of consumer electronics equipment will be adversely affected.
Additionally, they argue, because the broadcast flag would effectively ban any
58 DTLA Press Release, “DTLA, Sony Pictures Entertainment and Warner Bros. Announce
First Studio Licenses for Digital Home Network Technology,” July 17, 2001, see
[http://www.dtcp.com/data/press/DTCP_PRESS_010717.pdf].
59 For more information on the broadcast flag, see CRS Report RS22106, Copyright
Protection of Digital Television: The ‘Broadcast Flag’
, by Angie A. Welborn.
60 The Broadcast Protection Discussion Group (BPDG), a subgroup of the Copy Protection
Technical Working Group (CPTWG).

CRS-28
retransmission not approved by content providers, legitimate consumer rights (e.g.
“Fair Use”) would be compromised.
On August 9, 2002, the FCC issued a notice of proposed rulemaking (FCC 02-
231, MB Docket 02-230) in the matter of digital broadcast copy protection. Noting
that the lack of digital broadcast copy protection is a significant impediment to the
DTV transition, the FCC solicited public comment on whether the FCC can and
should mandate the use of a copy protection mechanism for digital broadcast
television. The comment period closed on February 18, 2003; over 6000 comments
were received, most from individual citizens.
On November 4, 2003, the FCC adopted a rule which gives broadcasters the
option of inserting a “broadcast flag” into their over-the-air broadcast transmissions.
By July 1, 2005, all consumer electronics devices capable of receiving an over-the-air
DTV signal must be manufactured to incorporate content protection technologies that
will limit the redistribution of digital television content when the broadcast flag is
recognized. Before DTV devices can be manufactured, however, content protection
technologies must be approved. The FCC has established an “interim procedure”
whereby parties will certify that their content protection technology meets FCC
criteria. After a period of public comment, the FCC will determine whether or not
to approve that particular technology. The FCC issued a Further Notice of Proposed
Rulemaking
in order to formulate a permanent approval procedure for content
protection technology.61 On August 4, 2004, the FCC adopted a Report and Order
approving thirteen digital output protection technologies and recording methods.62
On February 22, 2005, the U.S. Circuit Court of Appeals for the District of
Columbia heard an appeal filed in March 2004 by consumer groups objecting to the
FCC rule mandating that copy protection technology be included in digital televisions
and related electronics by July 1, 2005. On May 6, 2005, the Court struck down the
FCC’s broadcast flag rules. The Court ruled that the FCC has no authority to
regulate consumers’ use of televisions and other devices which receive broadcast
transmissions. With the FCC’s broadcast flag rule negated by the Courts,
Congressional policymakers are considering whether to introduce legislation
mandating a broadcast flag.
Discussion draft legislation released by the House Committee on the Judiciary,
Subcommittee on Courts, the Internet and Intellectual Property, the Broadcast Flag
Authorization Act, would give the FCC authority to proceed with the broadcast flag
rule. On November 3, 2005, the Committee heard witnesses in support and
opposition to the draft legislation.63
61 FCC Report and Order and Further Notice of Proposed Rulemaking in the Matter of
Digital Broadcast Content Protection
, MB Docket No. 02-230, FCC 03-273, released
November 4, 2003.
62 FCC Order in the Matter of Digital Output Protection Technology and Recording
Method Certifications
, FCC 04-193, released August 12, 2004.
63 House Judiciary Committee, Subcommittee on Courts, the Internet and Intellectual
Property, Oversight Hearing, “Content Protection in the Digital Age: The Broadcast Flag,
(continued...)

CRS-29
Analog Hole. Another copyright protection issue of concern to content
providers is what is commonly referred to as the “analog hole.” In the foreseeable
future, many consumers will continue to use analog televisions. In order to display
the content carried by digital signals, analog televisions will be equipped with a
digital tuner (a set-top box) which converts the signal from digital to analog. At this
point, the digital signal, even if content protected, is converted into an unprotected
analog form which could then be easily converted into a similarly unprotected digital
form subject to the unauthorized copying and Internet transmission the content
providers are seeking to prevent.
Discussion draft legislation released by the House Committee on the Judiciary,
Subcommittee on Courts, the Internet and Intellectual Property, the Analog Content
Protection Act, would require devices (such as digital video recorders or PC-based
tuners) to contain an analog rights signaling mechanism called “CGMS-A plus Veil”
(Analog Copy Generation Management System coupled with the Veil Technologies
Rights Assertion Mark). On November 3, 2005, the Committee heard witnesses in
support and opposition to the draft legislation.64 The draft legislation was the basis
for the Digital Transition Content Security Act of 2005 (H.R. 4569), introduced by
House Judiciary Committee Chairman James Sensenbrenner and Ranking Member
John Conyers on December 16, 2005.
Cable/DTV Interoperability Standards
Interoperability standards between digital televisions and cable systems are
necessary in order for consumers to be able to watch digital programming over their
cable systems. Currently, interoperability is achieved via the proprietary set-top box
leased to the subscriber by the local cable company. Given the absence of a national
interoperability standard, consumers are, at present, unable to purchase DTV
products from consumer electronics stores which can be directly connected to cable
systems without the use of a set-top box. Two separate entities — the consumer
electronics industry (including manufacturers and retailers) and the cable system
operators — have embarked on an often contentious process of determining the
specific technical details of how DTV devices might achieve nation-wide
compatibility and interoperability with cable systems.
Section 304 of the Telecommunications Act of 1996 directed the FCC to adopt
regulations to assure the commercial consumer availability of “navigation devices”
(i.e. set-top boxes, remote control units) without jeopardizing the rights of a cable
provider to protect its signal from theft. Currently, proprietary set-top boxes are
“integrated” with two overall functions: security and navigation (i.e. allowing the
subscriber to flip from channel to channel). A 1998 order adopted by the FCC (FCC
98-116) requires the cable operators to separate the security functions from non-
security functions and to make available (by July 1, 2000) modular security
63 (...continued)
High-Definition Radio, and the Analog Hole.”
64 See: [http://judiciary.house.gov/Oversight.aspx?ID=202]

CRS-30
components to the consumer electronics industry.65 Allowing time for transition, the
FCC would prohibit the sale or lease of new “integrated” boxes as of July 1, 2006.
On February 22, 2000, the Consumer Electronics Association (CEA) and the
National Cable Television Association (NCTA) announced a voluntary agreement
on a set of technical requirements that permit the direct connection of digital
television receivers to cable television systems. In January 2002, CableLabs (a
research organization of the cable industry) published specifications for the
OpenCable Applications Platform (OCAP), which would serve as a uniform
interoperability cable/DTV standard. However, consumer electronics manufacturers
and retailers and the cable industry sharply disagree over the pace and specific
technical details (including copy protection requirements) of how interoperability
should be implemented.
Disagreement over DTV/cable interoperability continues was prominently aired
during the September 25, 2002 House Energy & Commerce Committee hearings on
the digital transition. NCTA argued that proprietary set-top boxes already allow a
seamless DTV/cable interoperability, that there are, therefore, no compatibility
problems between DTVs and cable systems, and that consumers’ inability to
purchase cable-ready DTVs or set-top boxes from consumer electronics stores is not
a critical component of the digital transition. However, regardless of digital
transition issues, the cable industry said it supports the retail availability of cable-
ready DTV products because it is in its own business interest to do so.66 NCTA added
that it has developed the required interoperability standards, and is further advocating
a “DVI connector” on all integrated DTV sets, which would allow consumers to
upgrade and receive advanced interactive services from their cable or satellite
provider.67
An opposing view was expressed at the hearings by consumer electronics
manufacturers and retailers. A spokesperson for the Consumer Electronics Retailers
Coalition (CERC) argued that interoperability standards will be ineffective unless
and until the cable industry’s own proprietary equipment relies on and supports those
same standards. Without that reliance and support, they argued, interoperable DTV
devices manufactured by the consumer electronics industry cannot be competitive (in
65 Also referred to as a Point of Deployment or “POD” module, this would consist of a smart
card that could be inserted into the consumer electronics device to provide the security
required by the cable operator. A “national security interface” is required to ensure that
POD modules from all the different local cable operators would satisfactorily operate in
every device. To manufacture a “POD reliant” device, the manufacturer must sign a POD-
Host Interface License Agreement (“PHILA”).
66 Subscribers of satellite TV (“DBS,” the primary competitor to cable) can use the same
equipment anywhere in the country. This “portability” gives DBS a marketing advantage
over cable.
67 Testimony of Michael Wilner, Vice Chairman and CEO, Insight Communications, and
Chairman, NCTA, before the House Subcommittee on Telecommunications and the Internet,
September 25, 2002.

CRS-31
terms of cost or functionality) with the cable industry’s proprietary equipment.68
Additionally, testimony from a consumer electronics manufacturer stated opposition
to a mandated and ungradable connector on all DTVs, arguing that this equipment
is likely not needed on small and mid-size televisions, and that making such
connectors compatible with future digital technologies is a “daunting, if not
impossible, task.”69
On December 19, 2002, the cable and consumer electronics industries
announced they had reached an agreement on a cable compatibility standard for an
integrated, unidirectional digital cable television receiver. The two industry groups
filed a Memorandum of Understanding (MOU) with the FCC, outlining the
agreement. According to the MOU, the industries will continue to negotiate a
“bidirectional” standard that would enable consumers to receive advanced services
(such as video on demand) without the need for an external navigation device. On
January 7, 2003, the FCC issued a Further Notice of Proposed Rulemaking (FCC 03-
3) which seeks comment on the MOU and proposed FCC rules which would be
necessary to implement the industry agreement. Opposition to the agreement’s
“encoding rules” has been expressed by several organizations, including the Motion
Picture Association of America, makers of personal video recording technology
(TiVo), and consumer groups.
On September 10, 2003, the FCC adopted a Second Report and Order which
adopts, with certain modifications, the MOU agreement between the cable and
consumer electronics industries. The new rules allow for the manufacture of “plug
and play” television sets that will receive one-way digital signals (from the cable
company to the consumer) without the need for a set-top box. However, consumers
will have to obtain from their cable operator a security card (a “POD” or
“CableCARD”) that must be inserted into the TV set. A set-top box will still be
required for two-way services such as video on demand or pay-per-view. The cable
and consumer electronics industry are continuing to negotiate over this issue.
Finally, the Order initiated a subsequent proposed rulemaking (Second Further
Notice of Proposed Rulemaking) which will examine some remaining issues.70
Currently, the cable industry and the consumer electronics industry are in
dispute over the deadline set by the FCC (FCC 98-116) which would prohibit the sale
or lease by cable providers of set-top boxes with integrated security as of July 1,
2006. Under the current FCC rule, after July 1, 2006, the security of the digital signal
will be protected by a CableCARD (supplied by the cable provider) which can be
inserted into the “plug and play” television set, and allow consumers to view
scrambled programming. Cable companies are arguing to the FCC that the July1,
68 Testimony of Alan McCullough, Chairman, President & CEO, Circuit City Stores, Inc.,
representing CERC, before the House Subcommittee on Telecommunications and the
Internet, September 25, 2002.
69 Testimony of Richard M. Lewis, Chief Technology Officer, Zenith Electronics
Corporation, before the House Subcommittee on Telecommunications and the Internet,
September 25, 2002.
70 FCC Press Release, FCC Eases Digital Transition for Consumers, September 10, 2003,
available at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-238850A1.pdf].

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2006 deadline should be extended eighteen months, if not eliminated altogether.
Cable providers argue that imposing the ban would divert industry resources from
developing low-cost digital set-top boxes and next-generation network architect
security for cable services. The consumer electronics industry, on the other hand,
argues that if the July 1, 2006 deadline is extended or eliminated, the value of
CableCARD technology to consumers will be diminished, thereby making it more
likely that consumers will not purchase “plug and play” digital sets with integrated
tuners, and continue to opt for sets which rely on the set-top boxes supplied by cable
providers.
Digital Conversion of Public Broadcasting Stations
The FCC set a deadline of May 1, 2003 for public television stations to convert
to digital. Public television consists of 176 licensees operating 357 stations
nationwide. According to the Public Broadcasting Service (PBS), as of March 2005,
307 PBS member stations offer digital broadcast services, covering 94% of U.S.
television households. Unlike commercial broadcasters, public television
broadcasters are not opposed to an early deadline for returning analog spectrum,
provided that a mechanism is put in place which would ensure that converter boxes
are made available to exclusively over-the-air households. Public television stations
also advocate the creation of a trust fund to support the production and distribution
of digital educational content.71 The Digital Opportunity Investment Trust Act (H.R.
2512/S. 1023), introduced in the House and Senate in May 2005, would establish a
Digital Opportunity Investment Trust fund, part of which would provide Public
Television Digital Educational grants to noncommercial educational television
stations.
Public broadcasting stations view digital television as an opportunity to enhance
and expand services to their local communities. For example, public television
stations are using multicast channels to provide programming streams dedicated to
formal and children’s education, workforce development, public affairs and local
issues, and addressing underserved communities. Stations are also conducting pilot
programs, whereby datacasts are used to establish Homeland Security public safety
networks, including public alert systems and closed networks used by public safety
and emergency management agencies.
Raising money for the digital conversion is a challenge for many public
television stations, especially those in small markets. According to the Association
of Public Television Stations (APTS), the total nationwide cost of conversion is $1.7
billion. State governments have provided most of the funding to date, about $476
million, with private sources providing $260 million. The federal government has
provided $221 million.72 Public broadcasters have been seeking a substantial federal
contribution ($699 million over five years) for digital conversion. This funding
would be used to pay for the new equipment and physical infrastructure required for
digital conversion (e.g. transmitters, translators, and production equipment). Public
71 See Comments of the Association of Public Television Stations before the Federal
Communications Commission, MB Docket No. 04-210, August 11, 2004.
72 Communications Daily, May 1, 2003, p. 10.

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stations are seeking this funding from the Public Telecommunications Facilities
Program (PTFP), a grant program administered by the National Telecommunications
and Information Administration (NTIA) at the Department of Commerce.
The PTFP, which has provided matching grants for public broadcasting
equipment for over 35 years, began to fund digital conversion, awarding $15.7
million for 44 digital television conversion projects in FY1999, $18 million for 31
projects in FY2000, $35 million for 52 projects in FY2001, and $36 million for 52
projects in FY2002, $25 million for 56 projects in FY2003, and $9.8 million for 31
projects in FY2004.
For FY2004, the Administration proposed to suspend all grants under the PTFP.
As an alternative, the Administration proposed making $80 million available for the
digital transition from the Corporation for Public Broadcasting’s already enacted
FY2004 funding. The FY2004 CJS bill (H.R. 2799, H.Rept. 108-221), as passed by
the House on July 23, 2003, also provided no funding for PTFP grants. The Senate
version of the FY2004 CJS bill (S. 1585, S.Rept. 108-144), as reported, would
provide $55 million for PTFP. The FY2004 Consolidated Appropriations Act (P.L.
108-199) provided $22 million for PTFP in FY2004.
For FY2005, the Administration again proposed terminating the PTFP. As an
alternative, the Administration proposed funding of $20 million for digital transition
grants for public television stations from within the Corporation for Public
Broadcasting’s already enacted FY2005 funding of $390 million. The House
FY2005 CJS bill (H.R. 4754), as passed, would also terminate the PTFP. The Senate
FY2005 CJS bill (S. 2809) would provide $21.77 million for PTFP. The FY2005
Consolidated Appropriations Act (H.R. 4818/P.L. 108-447) provides $21.77 million
for PTFP.
For FY2006, the Administration again is proposing the termination of the
PTFP. The FY2006 CJS bill (H.R. 2862; H.Rept. 109-118), approved by the House
Appropriations Committee on June 7, 2005, would terminate the PTFP. On June 21,
2005, the Senate Appropriations CJS Subcommittee approved $22 million for PTFP
(S.Rept. 109-88). The Senate passed H.R. 2862 on September 15, 2005. The
conference agreement (H.Rept. 109-272) provides $22 million. H.R. 2862 was
signed by the President on November 22, 2005.
Whereas PTFP grants go for equipment, federal funds from the Corporation for
Public Broadcasting (CPB) are supporting the development and distribution of digital
content. For FY2001, the Labor-HHS-Education Appropriation Act (P.L. 106-554)
appropriated $20 million to CPB for investment in DTV programming and
distribution, but required congressional authorization before it could be released.
The FY2001 Supplemental Appropriations Act (H.R. 2216, P.L. 107-20, signed July
24, 2001) contained language authorizing release of those funds to CPB. For
FY2002, the Administration requested an additional $20 million for CPB for the
purposes of digital conversion. Both House and Senate versions of the FY2002
Labor-HHS-Education appropriation bills (H.R. 3061, H.Rept. 107-229/S. 1536,
S.Rept. 107-84) sought to provide $25 million to CPB for digital conversion. The
House bill would provide the funding pending authorization legislation. The Labor-
HHS conference report (H.Rept. 107-342) provided $25 million for equipment and

CRS-34
facilities to enable public broadcasters to meet the statutory deadline for digital
conversion as proposed by the Senate. The conference agreement did not provide
these funds contingent upon authorization as proposed by the House. The bill was
signed into law (P.L. 107-116) on January 10, 2002.
For FY2003, the 108th Congress, the FY2003 Omnibus Appropriations (P.L.
108-7) provided $48.7 million to CPB for digital conversion. The Administration’s
FY2004 budget proposal requested that $80 million of CPB’s already enacted
FY2004 appropriation be allocated to digital conversion. The House version of the
FY2004 Labor-HHS-Education appropriations bill (H.R. 2660, H.Rept. 108-188), as
passed by the House on July 10, 2003, matched the Administration proposal. The
Senate Labor-HHS-Education appropriations bill (S. 1356, S.Rept. 108-81) provided
an additional $55 million in “new money” for digital conversion in FY2004.
Ultimately, the FY2004 Consolidated Appropriations Act (P.L. 108-199) provided
$50 million in “new money” to CPB specifically for digital conversion.
The FY2005 House Labor-HHS-Education appropriations bill (H.R. 5006,
passed by the House on September 9, 2004) designates up to $20 million for digital
conversion from CPB’s already enacted FY2005 appropriation. The Senate version
of the FY2005 Labor-HHS-Education appropriations bill (S. 2810, reported by the
Senate Appropriations Committee, September 14, 2004) would provide $49.7 million
in “new money” for digital conversion. The FY2005 Consolidated Appropriations
Act (H.R. 4818/P.L. 108-447) provides $39.7 million in “new money” for digital
conversion.
The Administration’s FY2006 budget proposal recommends that $30 million
of CPB’s FY2006 budget (previously appropriated as an advanced appropriation
during the FY2004 budget cycle) be allocated to digital conversion. On June 16,
2005, the House Appropriations Committee approved a bill (H.R. 3010; H.Rept.
109-143) that would rescind $100 million from CPB’s already enacted total FY2006
appropriation (from $400 million to $300 million). H.R. 3010 makes up to $30
million available for digital conversion from CPB’s FY2006 appropriation. H.R.
3010 contains no “new money” for digital conversion. On July 14, 2005, the Senate
Appropriations Committee approved $35 million in “new money” in the FY2006
CPB budget for digital conversion (S.Rept. 109-103). The Senate passed H.R. 3010
on October 27, 2005. The conference agreement (H.Rept. 109-300) provides $30
million for digital conversion.
Additionally, the FY2004 Senate Agriculture Appropriations bill (S. 1427;
S.Rept. 108-107) provided $15 million in public broadcasting system grants (from
the Distance Learning and Telemedicine account of the Rural Utilities Service) to
allow noncommercial stations that serve rural areas to convert from analog to digital
operations. Within the agriculture appropriations section of P.L. 108-199, the
Distance Learning and Telemedicine account of the Rural Utilities Service includes
$14 million in FY2004 to assist digital conversion of rural public television stations.
The FY2005 House Agriculture Appropriations bill (H.R. 4766), as passed,
includes no funding for digital television conversion. The FY2005 Senate
Agriculture Appropriations bill (S. 2803; S.Rept. 108-340), approved by the Senate
Appropriations Committee on September 14, 2004, would provide $13 million for

CRS-35
digital conversion. The FY2005 Consolidated Appropriations Act (H.R. 4818/P.L.
108-447) provides $10 million for public television digital conversion.
For FY2006, the Administration requested no funding for digital conversion
under the Distance Learning and Telemedicine account of the Rural Utilities Service.
The FY2006 House Agriculture Appropriations bill (H.R. 2744), passed on June 8,
2005, includes no funding for digital conversion. The FY2006 Senate Agriculture
Appropriations bill, approved by the Senate Appropriations Committee on June 23,
2005 (S.Rept. 109-92) and passed by the Senate on September 22, 2005 provides $10
million for digital conversion. The Conference Report (H.Rept. 109-255) provides
$5 million for digital conversion. The FY2006 Agriculture Appropriations bill (P.L.
109-97) was signed into law November 10, 2005.
Satellite Television and “Digital White Areas”
Under current law, satellite television providers are permitted to provide distant
network signals (from “out of market” network affiliates) only to subscribers living
in “white areas” — meaning they receive inadequate analog television broadcast
signals from their local broadcasters. Legislation was introduced into the 108th
Congress (H.R. 4501/H.R. 4518/S. 2644) which would explore the possibility of
creating “digital white areas” such that some subscribers may be eligible for distant
network digital signals via their satellite dish if they cannot receive local digital TV
signals. In November 2004, Congress passed the Satellite Home Viewer Extension
and Reauthorization Act (SHVERA) as part of the FY2005 Consolidated
Appropriations Act (H.R. 4818/P.L. 108-447). SHVERA provides limited authority
for satellite companies to offer “distant digital signals” if certain conditions are met.
For more information on this issue, see CRS Report RS21990, Satellite Television
and “Digital White Areas”: Provisions of the 2004 Satellite Home Viewer Extension
and Reauthorization Act
, by Marcia S. Smith.

Low Power TV
Low Power Television (LPTV) was created by the FCC in 1982 to serve rural
areas and individual communities within larger urban areas. LPTV stations may not
exceed 3 kilowatts for VHF channels or 150 kilowatts for UHF channels, and must
not cause interference in the reception of full service television stations. Currently,
there are 2119 LPTV stations in the United States. Concerns have arisen that many
LPTV stations will lose their licenses in the transition to DTV. While the FCC’s
February 1998 modification to its table of allotments for DTV licensees did provide
for some LPTV licensees to be relocated to new frequencies, many would still lose
their licenses under FCC digital transition plans.
To provide some relief for LPTV licensees, the Community Broadcasters
Protection Act of 1999 was enacted as part of the Intellectual Property and
Communications Omnibus Reform Act of 1999 (P.L. 106-113). This law established
a “class A” status to qualifying LPTV licensees, giving them a measure of protection
from full-power TV stations in the transition to DTV. The act directs that class A
licensees be accorded primary status as television broadcasters, prescribes the criteria
LPTV stations must meet to be eligible for class A status, and outlines the

CRS-36
interference protection class A stations must provide to other television stations. To
implement the act, in April 2000, the FCC established rules for class A LPTV
licensees, to facilitate the acquisition of capital for LPTV stations to continue to
provide free, over-the-air programming to their communities.73
In accordance with the 1992 Cable Act (47 USC 534), cable television providers
are required to transmit to their audiences the locally-generated programming of all
full-power TV broadcasters that request carriage, a provision known as “must-carry.”
Under the 1992 act, some LPTV stations are entitled to “must-carry”status if they
meet certain criteria.74 The FCC’s April 2000 ruling did not address the question of
whether class A licensees should be entitled to the “must-carry” provision, as are
full-power broadcast TV stations. A petition filed with the FCC argued that class A
licenses should be granted the same “must-carry” status as full-power broadcasters.
The FCC subsequently ruled that class A stations do not have the same must carry
rights as full service television stations.75
On August 6, 2003 the FCC adopted a Notice of Proposed Rulemaking76 to seek
comment on rules for digital low power television and digital television translator
stations. On September 9, 2004, the FCC adopted rules to allow for the digital
conversion of LPTV and translator stations. While requiring the conversion to digital
operation, the FCC did not set a digital transition deadline for LPTV and translator
stations. The final transition date — on which analog operations will cease — will
be considered in the FCC’s Third DTV periodic review proceeding.77
On July 29, 2005 Senator Snowe introduced the Digital Translator and Low
Power Television Transition Act (S. 1600), which seeks to give low-power stations
adequate time for their transition by establishing a transition deadline of four years
after the hard deadline Congress sets for the full-power digital television transition.
Additionally, S. 1600 would establish a grant program within the National
Telecommunications and Information Administration to defray the cost of upgrading
translators and low power television stations from analog to digital. The grant
73 FCC Report and Order in the Matter of Establishment of Class A Television Service, MM
Docket No. 00-10, FCC 00-115, released April 4, 2000.
74 Those criteria (47 USC 534) include (among other requirements) that the community of
license of the LPTV station has a population not exceeding 35,000, that there is no full-
power TV station licensed to any community within the county or other political subdivision
(of a state) served by the cable system, and that the LPTV station provides the only news
coverage in its community of license.
75 FCC Memorandum Opinion and Order on Reconsideration in the Matter of Establishment
of Class A Television Service,
MM Docket No. 00-10, FCC 01-123, released April 13, 2001.
76 FCC Notice of Proposed Rulemaking in the Matter of Amendment of Parts 73 and 74 of
the Commission’s Rules to Establish Rules for Digital Low Power Television, Television
Translator, and Television Booster Stations and to Amend Rules for Digital Class A
Television Stations
, MB Docket No. 03-185, FCC 03-198, released August 29, 2003.
77 For further information, see [http://hraunfoss.fcc.gov/edocs_public/attachmatch/
DOC-251978A1.pdf].

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program would be funded from a trust fund derived from proceeds of spectrum
auctions held as a result of the full-power digital television transition.
S. 1932, the Deficit Reduction Omnibus Reconciliation Act of 2005, passed by
the Senate on November 3, 2005, would have allocated $200 million for a
Department of Commerce-administered program to assist the digital conversion of
low-power and translator television stations.
The House budget reconciliation bill, the Deficit Reduction Act of 2005 (H.R.
4241), would have directed $3 million into a “Low-Power Digital-to-Analog
Conversion Fund” which will be used to compensate low-power television stations
(including Class A, translator, or booster television stations) for the cost of a digital-
to-analog conversion device. Television translator stations, in particular, will need
such a device in order to convert the digital signals received from their corresponding
full-power television stations and provide analog signals to their customers. Grants
would be limited to a maximum of $400 per station which requires a digital-to-
analog converter device.
The conference agreement on S. 1932 (H.Rept. 109-362) would provide funding
not to exceed $10 million during FY2008-2009 to compensate low-power television
stations (including Class A, translator, or booster television stations) for the cost of
a digital-to-analog conversion device in order to convert the digital signals received
from their corresponding full-power television stations and provide analog signals
to their customers. In no case shall the compensation for a single digital-to-analog
converter device exceed $1000.
Additionally, funding not to exceed $65 million during FY2009 would be
available to reimburse low-power television stations for equipment to upgrade
stations from analog to digital in rural communities. Both grant programs will be
administered by the National Telecommunications and Information Administration
of the Department of Commerce.
The Conferees clarified that “only full-power stations, not low-power stations
must cease analog broadcasting by February 18, 2009.” Low-power stations may
continue analog broadcasts after that date, subject to future decisions by the FCC on
how to complete the digital transition for low-power stations. The conference report
states that low-power stations (other than Class A stations) may continue
broadcasting above channel 51 subject to FCC decisions “so long as those stations’
use of those channels is secondary to the use of those channels by the auction winners
and public safety officials.”

Fees for Ancillary or Supplemental Services
The Telecommunications Act (P.L. 104-104) states that if a DTV licensee offers
ancillary or supplemental services for which they receive a subscription fee or other
compensation, the FCC “shall establish a program to assess and collect from the
licensee...an annual fee or other schedule or method of payment...” The act further
states that the collection of fees “shall be designed (I) to recover for the public a
portion of the value of the public spectrum resource made available for such

CRS-38
commercial use, and (ii) to avoid unjust enrichment through the method employed
to permit such uses of that resource.”78 Congress is overseeing the FCC’s actions
regarding implementation of this law. Public interest groups have also maintained
pressure on the FCC to establish a fee program, arguing that commercial broadcasters
should compensate the American people for the use of the DTV spectrum, and that
fees should be required out of fairness to those who paid for spectrum at FCC
auctions (such as licensees for personal communications services).
In November 1998, the FCC adopted rules to require broadcasters to pay 5% of
their gross revenues from ancillary or supplementary uses of DTV spectrum for
which they charge subscription fees or other specified compensation.79 These
include subscription video, software distribution, data transmissions, teletext,
interactive materials, aural messages, paging services, and audio signals. Home
shopping channels and “infomercials” are not subject to fees because the FCC did not
consider them new services. The FCC has initiated a separate proceeding to
determine how much non-commercial stations can use the DTV spectrum for
revenue-generating services, and whether they should have to pay spectrum fees.
Some consumer groups say that the FCC’s spectrum fees are not heavy enough on
commercial broadcasters, arguing that most revenue will come from home shopping
and infomercials. They also warn that public broadcasters should not be over-
regulated, arguing that too heavy a burden placed on public broadcasters could impair
their long-term viability.
On October 11, 2002, the FCC ruled that noncommercial stations are required
to use their entire digital capacity primarily for nonprofit, noncommercial,
educational broadcast services. However, the FCC also ruled that the statutory
prohibition against advertising on noncommercial broadcasts does not apply to any
ancillary or supplementary services presented on an excess DTV channels that does
not constitute broadcasting. The FCC further ruled that public stations must pay a
fee of five percent of gross revenues generated by ancillary or supplementary services
provided on their DTV service.80
Public Interest Obligations of DTV
Broadcasters In March 1997, President Clinton established an Advisory
Committee on Public Interest Obligations of DTV Broadcasters, to make
recommendations on how DTV licensees should compensate the public for their
licenses. Committee members were selected from government, the broadcasting
industry, academia, and consumer interest organizations. After a series of public
meetings in 1997 and 1998, the Committee submitted a set of recommendations to
78 The Budget Resolution of 1997 (H.Con.Res.84) included a provision requiring
broadcasters to pay a spectrum usage fee of $2 billion over five years. Broadcasters strongly
opposed that provision, however, and it was not included in the Budget Act of 1997.
79 FCC Report and Order on Fees for Ancillary or Supplementary Use of Digital Television
Spectrum
, MM Docket No. 97-247, released November 19, 1998.
80 FCC Report and Order in the Matter of Ancillary or Supplementary Use of Digital
Television Capacity by Noncommercial Licensees
, MM Docket No. 98-203, FCC 01-306,
released October 17, 2001.

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Vice President Gore in December 1998. The recommendations consist of mostly
voluntary actions by broadcasters, including providing five minutes per night of air
time for candidate-centered discourse in the 30 days prior to an election. Some panel
members wanted to recommend mandating the free air time as well as other
Committee proposals. The White House referred the report to the FCC, which on
December 15, 1999, opened a Notice of Inquiry (NOI) proceeding to solicit public
comment on public interest obligations of TV broadcasters as they transition to DTV
(MM Docket No. 99-360).
After reviewing public comment, the FCC, in September 2000, issued the DTV
Public Interest Form Notice of Proposed Rulemaking (NPRM) which sought to
require television broadcasters (both digital and analog) to disclose on a quarterly
standardized form how they are serving the public interest. Also in September 2000,
the FCC issued the Children’s DTV Public Interest NPRM (MM Docket No. 00-
167), which focused on the obligation of broadcasters to provide educational and
informational programming for children, and the requirement that licensees limit
advertising in children’s programs. The FCC has not yet issued any decisions in
those proceedings. Given the significant amount of time that has passed, the Second
Periodic Review of FCC rules and policies affecting DTV conversion, issued on
January 27, 2003, has asked for further comment on the public interest obligation
issue.81 On August 4, 2004, the FCC adopted a Report and Order (FCC-04-192)
which implements several steps identified in the Second Periodic Review. However,
no action was taken regarding public interest obligations.
On September 9, 2004, the FCC adopted a Report and Order82 addressing
children’s programming obligations for digital television broadcasters. The FCC
issued guidelines on the obligation to provide educational programming for children
and the requirement that children are protected from excessive and inappropriate
commercial messages. Specifically, the Order increases the required amount of core
educational programming proportionally to the amount of increased free video
programming offered by the broadcaster on multicast channels. Regarding
commercial limitations, the Order concludes that commercial limits apply to all
digital programming directed at children 12 and under, whether the programming is
provided on a free or pay multicast channel.83
Two bills introduced into the 109th Congress address the issue of public interest
obligations of DTV broadcasters. H.R. 2359, introduced on May 12, 2005 by
Representative Watson, would establish minimum public interest requirements for
multicast digital television channels. S. 616, introduced on May 12, 2005 by Senator
Rockefeller, requires broadcasters providing digital television multicasts to increase
educational and informational programming for children.
81 NPRM, Second Periodic Review of the Commission’s Rules and Policies Affecting the
Conversion to Digital Television
, pp. 39-42.
82 Report and Order and Further Notice of Proposed Rulemaking in the Matter of Children’s
Television Obligations of Digital Television Broadcasters
, MM Docket No. 00-167, FCC
04-221, released November 23, 2004, 54 pages.
83 For more information see [http://hraunfoss.fcc.gov/edocs_public/attachmatch/
DOC-251972A1.pdf].

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Tower Siting
One obstacle to the broadcasters’ ability to offer DTV services is the opposition
from state and local communities over the building of new signal transmission
towers.84 In most cases, DTV antennas can be built on top of existing towers used
for analog TV broadcasting. If new towers are required, however, they must be
constructed before the stations can transmit DTV signals. In August 1997, the FCC
released an NPRM (FCC 97-182) to consider the preemption of state and local
zoning restrictions on the siting, placement, and construction of DTV broadcasting
facilities. In its January 18, 2001 Report and Order, the FCC concluded that “while
some stations are facing problems with tower availability and/or local zoning issues,
such problems do not seem to be widespread at this time.”85 The FCC will continue
to monitor the situation and intends to work with the involved parties as problems
arise.
84 For more information on DTV tower siting, see [http://www.fcc.gov/mb/policy/dtv/].
85 FCC Report and Order and Further Notice of Proposed Rulemaking In the Matter of
Review of the Commission’s Rules and Policies Affecting the Conversion to Digital
Television
, MM Docket No. 00-39, FCC 01-24, p. 37.

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Appendix 2. Legislation in the 109th Congress
Related to Digital Television
H.R. 1646 (Harmon). Homeland Emergency Operations Response Act.
Prohibits any delay in reassigning 24 MHZ in the upper 700 MHZ band (currently
occupied by television broadcasters) for public safety purposes, and requires those
frequencies to be operational by January 1, 2007. Introduced April 14, 2005; referred
to Committee on Energy & Commerce.
H.R. 2354 (Sensenbrenner). TV Consumer Choice Act. Prohibits the FCC
from requiring digital tuners in television receivers. Introduced May 12, 2005;
referred to Committee on Energy and Commerce.
H.R. 2359 (Watson). Digital Television Accountability and Governance
Enhancement Act of 2005 (DTV-AGE Act). Establishes minimum public interest
requirements for multicast digital television channels. Introduced May 12, 2005;
referred to Committee on Energy and Commerce.
H.R. 2512 (Regula). Digital Opportunity Investment Trust Act. Establishes
a Digital Opportunity Investment Trust fund, part of which would provide Public
Television Digital Educational grants to noncommercial educational television
stations. Introduced May 19, 2005; referred to Committee on Energy and Commerce
and to Committee on Education and the Workforce.
H.R. 3032 (Gene Green). TV Truth Act of 2005. Requires manufacturers and
retailers to provide disclosure to consumers that analog televisions will no longer
receive broadcast transmissions after the public broadcast spectrum changes to
digital. Introduced June 22, 2005; referred to Committee on Energy and Commerce.

H.R. 4569 (Sensenbrenner). Digital Transition Content Security Act of 2005.
Requires certain analog conversion devices to preserve digital content security
measures. Introduced December 16, 2005; referred to Committee on Judiciary.
S. 616 (Rockefeller). Indecent and Gratuitous and Excessively Violent
Programming and Control Act of 2005. Requires broadcasters providing digital
television multicasts to increase educational and informational programming for
children. Introduced March 14, 2005; referred to Committee on Commerce, Science,
and Transportation.
S. 1023 (Dodd). Digital Opportunity Investment Trust Act. Establishes a
Digital Opportunity Investment Trust fund, part of which would provide Public
Television Digital Educational grants to noncommercial educational television
stations. Introduced May 12, 2005; referred to Committee on Health, Education,
Labor, and Pensions.
S. 1268 (McCain). Spectrum Availability for Emergency Response and Law
Enforcement to Improve Vital Emergency Services Act (SAVE LIVES Act).
Designates digital transition date as December 31, 2008, and authorize $468 million
— drawn from spectrum auction proceeds — to supply digital-to-analog converter

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boxes to over-the-air households with incomes not exceeding 200% of the poverty
level. Introduced June 20, 2005; referred to Committee on Commerce, Science and
Transportation.
S. 1600 (Snowe). Digital Translator and Low Power Television Transition Act.
Amends the Communications Act of 1934 to ensure full access to digital television
in areas served by low-power television. Introduced July 29, 2005; referred to
Committee on Commerce, Science and Transportation.
S. 1932 (Gregg). Deficit Reduction Omnibus Reconciliation Act of 2005. Title
III is the Digital Transition and Public Safety Act of 2005, which sets a digital
transition deadline of February 17, 2009, and allocates up to $1.5 billion for a
program to assist consumers in the purchase of converter boxes. Passed Senate,
November 3, 2005. House agreed to conference report (H.Rept. 109-362), December
19, 2005. Senate agreed to conference report, December 21, 2005.