Commerce Committee Chairman Ted Stevens Speaks on DTV Transition at the Association of Maximum Service Television’s Conference

October 5, 2005


WASHINGTON, DC -- Senate Commerce Committee Chairman Ted Stevens (R-Alaska) today addressed participants of the Association of Maximum Service Television’s Digital Television and Consumer Challenge: Bringing it all Home Conference.

Chairman Stevens’ remarks focused on legislation currently being drafted to bring about the nationwide transition to digital television, address the spectrum needs of first responders, and implement a national alert system.

Following is the text of Chairman Stevens’ speech:

Anyway, it’s nice to be with you this morning and I thank you for coming out. I do appreciate the opportunity to be with you. I want you to know that it’s a difficult time to address your group. I do, by the way, congratulate you for the initiation of research to develop converter boxes. I think it’s a very key element of the process we are going through now. We wish you a speedy success.

We initiated the DTV transition back in 1996, as you all know. And, we expected it to be concluded by the end of next year. We now know that that process has dragged on and it’s not possible. And, it will take an Act of Congress now to straighten out this situation.

When I became Chairman of our Committee, Chairman Barton and I, along with our good friends John Dingell and Dan Inouye, met and we agreed to make this our priority on a bicameral basis. That was before (hurricanes) Katrina and Rita. But, I think now there is even more necessity, a greater imperative, to move forward and free up the valuable spectrum that is necessary for first responders who put their lives on the line every day for us and particularly during disasters.

We’ve had, as you know, a series of listening sessions on DTV transition with groups from cable to broadcasters, to the consumer electronics industry, to consumer groups. We’ve tried to listen to as many people who wanted to comment on the process. And, we held an all day hearing on transition in July, addressing issues from multi-casting and dual carriage to set top boxes.

We’ve had discussions with Senator Inouye’s staff and Senator Inouye to determine the minority’s priorities for the bill and we’ve met separately with Members from both sides of our Committee to seek their input. I’ve got to tell you we do not have a bill yet to actually discuss with anyone. We have not released a bill yet to any Member of the Committee. Dan and I are still going over it.

We believe that Katrina underscored the public safety needs for spectrum for interoperability and new services. We believe they should get 24 MHz of prime spectrum in the 700 MHz band as soon as possible. We’ve asked the FCC to tell us what was the earliest date they could complete the regulations and channel assignments for the digital transition. Chairman Kevin Martin said the Commission could complete its work by 2007, but there are other factors that have to be considered.

No digital transition can move forward without these set top boxes and right now, as you know, there are very few on the market. The consumer electronics industry has told us it will take them at least 18 months to engineer, design, and bring to market a reasonably priced set top box.

The vast majority of the sets are bought during the holiday season and during the football playoff season in January every year. And, with a 2009 hard date, there would be three Christmas buying seasons during which Americans will buy digital television sets. The FCC has now mandated that only digital sets with screens over 13 inches will be sold beginning in 2007. That’s a step forward.

The later the hard date is, the more digital televisions people will have bought on their own, and fewer set top boxes, obviously, will be needed. And, the fewer the set top boxes, obviously, the less subsidy will be required. In addition, by providing time for manufacturers to gear up the production lines and achieve economies of scale, the price of the box will likely be less.

We’ve explored the idea of bifurcating the transition to require broadcasters who occupy spectrum designated for public safety to transition first. But after really considering that, a very serious debate, we have concluded that a transition that differed from market to market would be most confusing to consumers. And, after meeting with a wide variety of public safety experts, our Committee learned that in many cases, the devices, particularly radios, which will use the abandoned analog TV spectrum, have not been engineered yet. I’m told manufacturers are reluctant to spend the money to design and build these radios or devices for the spectrum that has not been released for their use. Once a hard date is set, it’s hoped that process will begin in earnest. Some industry experts have told us in our listening sessions that it would be several years before they have such devices or radios to deploy in the field.

After Katrina, it became evident that freeing up spectrum is only half the battle. Interoperability to allow first responders to converse with one another is the most desirable thing to achieve first. Estimates have ranged as high as $15 billion or more to acquire interoperable radio sets. There may be other networking solutions that would achieve the same goals and unite the existing systems of communications into a unified system, but we haven’t been informed of them, if there are.

This, I am sure you know, is most important to the police and fire departments and other first responders around the country. They’ve already spent $60 billion on their communications equipment and we must find a way to incorporate that legacy equipment into a new system or that will be a redundant cost for everyone.

Regardless of the solution, we’ve been told that 50,000 state and local governments across the country need and demand money to help make this transition possible. Recovered spectrum that is likely to be auctioned must meet our reconciliation instructions of raising $4.8 billion. I’m sure you all know that. The Budget Resolution that passed put the duty on our Committee to raise $4.8 billion over the next five-year period. We can anticipate revenue of up to $10 billion, providing that that hard date is where it should be. That should provide the resources we will need to help consumers with set top boxes and accomplish a great many other goals also. The auctioned spectrum will also bring consumers new services like wireless broadband, mobile video, and other possible new approaches.

Senator Inouye and I have worked together for a long time. We have developed a process of being Co-Chairmen. We’ve been in charge of the Defense Appropriations Subcommittee now since 1981 and one of us has been Chairman and the other Ranking Member. We gave that up and just said we’re Co-Chairmen. We’ve approached this Commerce Committee in the same way and we have to do that, I think, to achieve the enactment of the bill this year. At least I hope it’s this year, at least this Congress, we must get this done.

We’ve agreed to allocate a portion of the auction proceeds to a dedicated fund for the purposes that I’ve outlined. And, we know that another issue that Katrina uncovered is the need for a reliable public alert system. Such a system could have notified the public that the levies were breaching and flooding was imminent after Katrina actually passed by New Orleans. It could have provided information on everything from shelters to traffic tie-ups and eliminated much of the suffering and damage that happened down there.

Senators DeMint and Vitter have introduced a bill that Dan and I have cosponsored along with the hurricane Senators to create such a system. It would incorporate the existing NOAA weather radio and emergency alert system run by broadcasters into one seamless network. We’re still working to refine this bill, as I indicated, but it is our intention to provide funding for this new system as a result of the funds that we raise in the spectrum auction.

Last year, Senator Burns led an effort in the Senate to improve our nation’s 911 system. His bill, which passed in 108th Congress, created a grant program to help local governments improve their public safety answering points and all 911 call centers. It’s our intention to provide funds to implement Senator Burns’ bill, the one that became law last year, with funds from spectrum also.

Our converter box program will attempt to ensure that consumers who cannot buy a digital television set will still be able to watch TV with a converter box. And, again, I congratulate your moving forward on that. We hope it will be available for a very small co-payment that will be fundable through use of the spectrum auction funds.

Our Committee will also try to establish an extensive education program to ensure that consumers know what DTV transition is, why it’s taking place, and how it will affect their TV watching, as well as what they need to understand when purchasing new televisions sets.

I think we’re pretty far along in what we’re doing and I do hope that your part of the industry will support us.

We have agreed that we will mark up the bill on October 19th. Because of the Byrd Rule that bans extraneous provisions that are not necessary to raise or spend money in the Reconciliation bill, this bill has to have a companion bill. The bill that we put into Reconciliation bill will have a companion bill that will contain many of the provisions that I’ve mentioned. They cannot be in the Reconciliation bill. But, the passage of both bills is necessary to accomplish our goals. As you can tell it’s going to be a very interesting period between now and Christmas. I think we’ll be here until Christmas.

As our October 19th date to report the bill approaches, I want to call on all of you to meet with us, with members of our joint staff, to finalize the details of these policy goals and give us your opinion of what I’ve outlined here today.

Until we finish those further listening sessions or consultations, I cannot give you more details about our bill. As a matter of fact, as I said in the beginning, we have showed it to no one now, just Dan and I and we have not finished making the decisions that must be made in order to present the bill to the full Committee on the 19th.

We expect to have a bipartisan bill and that’s difficult to do in this field. It reminds me of a Skippy cartoon I saw once. You guys are too young probably to remember Skippy, but we do, don’t we? The Skippy cartoon showed Skippy on his knees, saying a prayer, and then in the second box of the cartoon strip, he was imagining this bully with a club with spikes coming out of it coming after him. And on the first one he said, “God, make me a good boy.” And, then there was a blank on the one where the bully was coming after him. And, then the last one said, “But, God, don’t make me too good, because you know what a tough neighborhood this is.” Now this is a tough neighborhood in our Committee because we have lots of differences of opinion and it’s going to be very difficult to hold this bill as a bipartisan bill; a bill that will help public safety, the American consumer, advance the digital transition, and raise the money we need to accomplish all these goals.

So, I encourage you to help us. I encourage you to help us keep a bipartisan approach to the bill. I encourage you to help us make that hard date in 2009. And, I encourage you to help us convince the Members of the Committee and the Congress that this money that we raise is money that should be used in this system and not diverted to these other very important projects that are necessary in the disaster areas for their recovery. If we pass this bill, the greatest pitfall we face, is that the money, which we estimate to be somewhere around $10 billion if we go to 2009, will be put into that process of recovering from the disasters, a very necessary thing. But, if that money is taken off, the items I’ve mentioned that are absolutely necessary to make this transition a smooth one and one that is important for everyone from public safety, first responders, consumers, the educational system, and we believe that some of the money we raise should be allocated to the disaster-related cost for the industry you represent. We think that we can accomplish all of those if we can keep the money in the Reconciliation bill that’s raised by this spectrum auction, potentially, for its use in the areas that I’ve outlined. I wish I could stay and take questions, but I don’t think that’s proper right now. I do thank you for your support and I thank you for the presentations you’ve made with regard to set top boxes and I thank you for your friendship.