Market Insight

US ASO date up in the air

January 29, 2009

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The US Senate has voted to postpone the FCC-overseen transition from analogue to digital terrestrial TV (DTT) broadcast. Although analogue-switch-off (ASO) is currently scheduled for 17 February 2009, the Senate advises that exclusive DTT broadcast should occur no sooner than 12 June 2009. However with just 60 per cent support, the House of Representatives has failed to pass the bill with the required two-thirds majority for expedited procedures. The date could still be pushed back if the bill is reintroduced under normal procedures and receives simple-majority support, which it has already gained. With broadcasters continuing analogue transmissions, repurposing previously auctioned bandwidth reclaimed from ASO will also be delayed. This delay flies in the face of the Consumer Electronics Association's (CEA) desire to retain the original mid-February date.


The Senate passed the bill amidst legislator reference to a purportedly large number of Americans still unprepared for the transition. Though the National Telecommunications and Information Administration (NTIA) has been issuing vouchers to subsidize the purchase of DTT set-top converter boxes, there nonetheless remain analogue television sets that have not been converted, and will be unable to decode DTT broadcasts. The number of these non-outfitted TVs should be quantified.

There are currently 315m television sets in the United States. Of these, 257m sets receive pay-TV programming and will be unaffected by the transition, leaving 58m sets dependent upon terrestrial signals. Controlling for the number of TV sets with integrated DTT tuners, 40m sets depend upon an analogue terrestrial signal. A total 47m converter vouchers have been requested, and given that 18m have been redeemed, a further 22m television still require conversion. Of those 22m, a scant 4.6m, or 1.5 per cent of all US televisions, constitute the primary television in the home. The increasing prevalence of online content suggests that the remaining 17.4m secondary TVs may not necessarily need conversion.

The delay also has implications for local and national broadcasters who must continue to operate both analogue and digital networks, and for telecom operators who purchased and intended to use blocks of the reclaimed UHF band. Although the major TV networks have been simultaneously broadcasting in analogue and digital for the past year, they will continue to incur the marginal cost of sustained analogue transmission for an additional four months.

For AT&T and Verizon, winners of large portions of bandwidth in the FCC's UHF auction, the delay will retard their development of wireless broadband services, coverage expansion, and the introduction of wireless IPTV. For Cox Communications and Dish Network, both of whom also acquired portions of the 700 MHz band, the delay will slow their introduction of mobile TV services, and for Cox in particular, the launch of wireless broadband or other multiplay offerings.

Given the low incidence of non-outfitted primary televisions, and the delay's ramifications for US telecom operators, TV broadcasters, and providers of digital television content, commitment to the 17 February date does not seem particularly premature.


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