Topic: Government Regulation
Analog to Digital - A High-Resolution Picture of Another Dirty Game Analysis of effect of FCC's forced conversion of broadcast TV signals from analog to digital, and overview of how the effects are a recurrent theme.by Lonnie Dalton
(libertarian)
Thursday, July 31, 2008
As many of you know, the FCC has established a date (Feb. 17, 2009) after which no analog TV signals may be broadcast (except for "low-power" or "translator" stations). Ask yourself this... what harm would it do to continue to broadcast programs in the same way they've always been broadcast, should a station choose? Do you think that the FCC won't be able to monitor the broadcasts? Please. Much (all?) of the enforcement is initiated via an external complaint, so how much all-seeing all-knowing "monitoring" do they do for regulation purposes to begin with? Additionally, much of the content on the analog signal would be the same content as on the digital signal, merely simulcast on both.
So why in the world does the FCC think it is necessary to establish such a deadline? They say it's so more content can be provided (MORE content?!) and so the frequencies are freed up for emergency responders. This is a new hybrid of the "it's for the kids ploy." I didn't realize that emergency responders weren't communicating? They also are going to auction off frequencies that will be freed up.
In reality there is no need for a hard deadline - the marketplace demands technical improvements over time, and as they become feasible such improvements get instituted. The FCC could put frequencies to different uses as conversion to digital progresses and stations abandon their analog frequencies. It is one thing to say that at some point as new technologies appear the FCC should have some say in approving particular technical standards (although even that you could say the market could sort out, a la VHS vs Beta), but it is quite another to say that the FCC should set artificial obsoletion dates.
So the next question is, is the hard deadline itself objectively harmful? It is, and as you understand the effects of such harm, the actions of the servient FCC start to make more sense, and perhaps your eyes finally open regarding big government and regulatory agencies in general.
What if you're a low-income family in rural America. The cost of living is cheap, but $300 (a conservative price for a new TV) is a significant amount of money at any given time. You have a TV that is fifteen years old, because you figure if it isn't broke, don't pay to replace it. You don't have cable because you don't figure you need the extra expense (if you have cable or satellite, you don't need the conversion or a digital TV - you'll just lose out on the enhanced quality). Yet, here comes this mandatory change on broadcast TV signals, and now either you HAVE to get a new TV or you have to get a converter (or pay for cable, which is what you were avoiding to begin with). You HAVE to spend $40 to continue free TV service and you're probably now on schedule to spend $300 or so on a new TV soon enough. Multiply $40 to $300 times say 22 million for those households that still watch analog TV over-the-air. That's a lot of money that has to be spent that otherwise could be phased in, or avoided altogether for a long time.
But ALAS Roaring Across the Plain to Save Us From The Evil Black-Hatted Horde, It's... the Black-Hatted Horde?
"Oh Lonnie, but haven't you heard you can get those converter boxes for free?" you say. That's funny, I see they cost $40 or so apiece, so how you mean free? Oh yeah.. that's right, as a response to the government imposed mandate to digital, the government is providing coupons for converter boxes. That's right, not only does the mandate inherently help the profits of TV manufacturers (oh, and converter box manufacturers), but now it's government subsidized to make it more palatable. The stores that sell the boxes send the $40 coupons into the government to get them redeemed. They SAY that the coupons will actually be paid for by frequency auction receipts, but then again, the government says that there's a Social Security Trust Fund too, so without looking into it further, I don't accept the claim on its face. OH yeah, in order to get your "discounted" taxpayer subsidized converter box, you of course first have to submit your personal information to another federal database.
I said it is also possible that the money spent for the conversion could have otherwise been avoided for a long time? Well yes - for many broadcast station owners even after they spend the money to phase in a digital signal, it makes sense to continue to simulcast on analog. There is a natural overlap. The analog equipment is already there, so they're just continuing to use it. And as the local station monitors the percentage of viewers in the area who have digital TVs or converters, they can make decisions on when and if to shut off that analog signal. If in a poor Appalachia town nearly no one is buying a digital TV or a converter, that means the local stations may be in no hurry whatsoever to shut off analog (or to even turn on digital to begin with). And that's okay, because that is where the marketplace is. We still have HAM radios, don't we?
Here's the other part of the equation. To the extent there are smaller broadcast station owners, they're not working with hundreds of millions of dollars. Heck, maybe they're barely turning a profit. They can't get the kind of loans that the big owners can. Most of their consumer constituency is perfectly fine with analog signals figuring eventually their station will catch up with the big boys. For the stations away from the cities, those viewers would just consider it a slight inconvenience of living in a rural area (a la how some people even in 2008 "put up" with dial-up). Yet the federal government in the form of the FCC, with officials most of whom haven't been in a town populated by less than a 100,000 people in years, is forcing this small broadcast station owner to expend likely several million dollars or more. Of course, as the market gets proliferated with digital broadcasting, even this small owner very much has the incentive to catch up, for fear of losing his viewers. But what if now is not a good time for the station owner to have to absorb such an expense? What if, say hypothetically (ahem), the economy is way down and he needs to just suffer through for now? If that is the situation, but he is not ALLOWED the FREEDOM to do the WISE thing financially because the government is FORCING an expensive change on him, then what?
Maybe the station owner decides he has to get a big loan to "go digital." For some owners, it might be a loan that really stretches his credit and so it is under less-than-ideal terms. Well, hell, in Washington who cares, right? I mean, if it enriches the banks, then it can't be a bad thing, right (and if it doesn't, we'll bail 'em out anyway)? Oh yes, and we all know that becoming even more of a debtor nation is precisely the cure for our national ills.
Or, maybe the station owner doesn't get a loan. Maybe this is the (unnecessary and arbitrary, dictatorial) straw that breaks the camel's back, and they sell. Now there is one less station owned by someone in the community. One less station intimately connected with that community.
A LONG ASIDE ON THIS EFFECT
In this day and age we have a 24-hour news cycle, yet even the serious news channels routinely force feed the populace the Celebri-ganda* of superficial rich blondes instead of focusing on important fundamental problems with our government and society. When one sees that, it makes you wonder why.
Of course there are multiple factors to consider, but one of them to ponder is whether they focus on such twaddle because they are not truly independent. A 2004 book by a dean at the UC-Berkeley Graduate School of Journalism chronicles the monopolization of media - by 1983 50 companies owned nearly all of the media sources in the United States, and the biggest media merger was a $340 million dollar deal involving Gannet; now those media sources (including magazines, movie companies, daily newspapers, radio and TV stations, et cetera) are almost entirely owned by just FIVE corporations and the biggest merger is over FIVE-HUNDRED TIMES the size of the Gannett deal, assuming no larger one since the book was published (AOL's 2001 $182 Billion acquisition of Time Warner).
The point is not to argue how big is too big or the proper scope of regulation, but there is no argument that a media outlet is less likely to cover unflattering facts and stories about its owner or its owner's products, all things being equal. The same book cites a survey by the American Society of Newspaper Editors in which 33% of editors admitted they would not feel free to run a story that was damaging to their parent firm. One could assume fairly confidently that a media outlet is also more likely to cover facts and stories about its owner or its owners products in an affirmatively positive (or promotional) way. When ownership is still distributed quite broadly, that is not much of a factor, but today owners of media are also companies that provide countless consumer products and companies that have large government contracts.
There can be little doubt that a hypothetical media that as a whole is owned by thousands of companies is inherently more independent than a media that as a whole is overwhelmingly owned by just five companies. Independence is freedom... freedom to cover a story without hesitation about Product A or Potential Shady Deal B or Ridiculously Extravagant Government Contract C because it seems like a helluva promising story. Dependence is when you find that promising story involves your owners... and... well... maybe you move on, or you don't pursue it as hard, or after pursuing it you don't include all the most damaging facts, or don't follow it up. It's your BOSS after all, and personal income is helpful.
I'm very much of a libertarian (see "true conservative") mindset, so don't crucify me on this one - recall that pointing out societal factors is not the same thing as insisting government do something about them. Here it is not that I want the government to "make things better." Rather, I'm pointing out that they're doing something at which they're quite adept - they've expressly made things worse by imposing an unnecessary mandate with ill effects including likely further concentration of media ownership that would make the media even less free, independent, and objective.
The Big Picture
This next point is the key to understanding that government regulatory agencies, while they may provide some oversight, have an undeniable partnership that is overwhelmingly advantageous to the giants of an industry. Could "big media" foresee and consider that forcing this advancement to digital broadcast signals could result in further centralization of ownership? Of course they could, and of course they have. As in ANY industry, the big media with its big ownership is the segment of the industry that has the most ability to lobby government. Let's say that you're a large firm that is doing well financially, and you realize that your competition might be hurt (or even devastated) financially by being forced to incorporate some mandate. But on your own authority, you cannot implement mandates. Might you lobby a regulatory agency that such a mandate was necessary for the sake of "advancement" or "safety" or "standardization" or "documentation?"
While it may seem slimy to some knowing the ulterior motives, objectively it can be couched to the unsophisticated as being quite reasonable, and it certainly is a winning argument in the board room ("we feel that we can survive such a mandate quite well and it is the way the industry is headed anyway, and even better, it could really hurt our competitor Company B, so we're working our hardest to get it through as quickly as possible before Company B has a chance to recover from its financial doldrums.")
Even when it doesn't hurt a major competitor, these mandates can be the result of a consensus among the giants of the industry without regard to the realities of the smaller players.
This is what big government does, ladies and gentleman. It overwhelmingly allows GiantCorp to insist that MomAndPop Inc. comply with regulations and changes that GiantCorp can afford and absorb, on GiantCorp's timetable, whether MomAndPop Inc. can afford it or not. GiantCorp pays Washington lobbyists hundreds of thousands of dollars. MomAndPop have never BEEN to Washington, and just want to be left alone to make a decent living honestly providing quality products and services.
This is not in essence a bashing of big business. Rather it is an attempt to dispel the myth that the federal regulatory state provides "fairness," when instead it provides a mechanism by which big players can and do actively slant the playing field in their favor, often at the expense of grassroots entrepreneurialism, broad ownership and innovation. Hey, if the mechanism was available to you and you had the means to affect it to benefit the bottom line and competitive advantage of your corporation, you'd do it too. And so it is the mechanism that is faulty.
Conclusion
If you're not thinking (and most aren't), the process of changing TV signals from analog to digital would seem to be the LAST place to look to gain global insight about the our system. I mean it's as American as apple pie, right? It's about cool, clean, vivid images on your screen; bragging rights; and better playoff parties, right?
The fact that this so easily-ignored and overlooked mandate illustrates the wrong-headedness of bullying Washington policies and shows the entire story of the special interest mess that are federal regulatory agencies is an indication of how insiduous such questionable and manipulative maneuverings in Washington are.
* my newly-coined term, unless someone's beat me to it I don't know about
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The views expressed in this
article are those of Lonnie Dalton only and do not represent
the views of Nolan Chart, LLC or its affiliates. Lonnie Dalton is
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