In an effort spearheaded by Sen. John McCain--and based on the shakiest of “market failure” grounds--Congress is contemplating spending $1 billion to force users of analog television to switch to digital (according to Wired News). It helps that the government stands to gain up to $70 billion from auctioning portions of the TV spectrum to wireless companies.
NB: Cato’s Thierer seems to approve of this latest form of wealth redistribution. ... in a nod to subsidy programs in Europe, the legislation would provide $1 billion to help 17.4 million U.S. households without cable, satellite or digital TV tuners pay for equipment that would enable them to go digital.
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Despite the potential backlash, lawmakers are starting to support the idea of a hard deadline that forces consumers off analog. Low-income households would get first priority under the subsidy program contemplated by McCain, but it’s unclear how broadly the program would apply to everyone else.
Some support the subsidy concept. “Every successful rollout of digital (over-the-air TV) has come with a free box,” said Kaufhold. “The model for digital TV in the world has been to give people a free box. The U.S. is starting to fall behind.”
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“Finally, policymakers are starting to understand the serious opportunity cost of using spectrum in this fashion,” said [the Cato Institute’s] Thierer. While low-income households might need subsidies, other consumers might need to bite the digital bullet. “The cost-benefit analysis is very clear,” he said. “The benefits outweigh the costs.”
According to the bill’s text, the subsidy would amount to a small portion of the $30 billion to $70 billion the federal government expects to collect when it auctions off large portions of the analog TV spectrum to wireless companies. (Other estimates, however, have been much smaller.)
