Chairman Stevens Speaks in Opposition to the McCain Amendment to Change the Digital Transition Hard Date

November 2, 2005

Washington, D.C. – Senate Commerce, Science, and Transportation Committee Chairman Ted Stevens (R-Alaska) today spoke in support of the Committee-approved Digital Transition and Public Safety Act of 2005 and in opposition to an amendment offered by Senator John McCain (R-Ariz.) that would change the bill’s digital television transition date from April 7, 2009, to April 7, 2008.

Stevens argued that changing the date would put the transition date too close to the auction date, thereby causing logistical problems for the transition. In addition, he noted that it would impose increased costs on consumers. Senator Stevens’ made the following remarks in arguing against the McCain amendment:

I come to speak in opposition to the McCain amendment, which puts what we call the hard date (for the transition to digital television) only two months after the January 28, 2008 auction required by the bill. That's when the auction will commence. It's too soon to move immediately to a hard date in April. The auction could take weeks to conduct and even after it ends, there are several months necessary for the FCC to decide to whom to award the final licenses. Without the licenses, new wireless providers cannot build their systems, so a tremendous amount of spectrum would not be in use during that period of time.

Importantly, the auction proceeds will not be available until the final licenses are issued. That would mean that consumers would face having their analog TVs shut off before the converter box program could be implemented, as is suggested by our bill. American consumers will have to pay more to watch television if this amendment is adopted because the analog cutoff date that Senator McCain’s amendment requires is premature.

Now, the General Accounting Office and the Consumers Union estimate there are 20 million U.S. television households that rely upon over-the-air reception for their televisions. This is analog broadcast. The broadcasting systems are ready to convert, but we cannot get this done until we have the converter sets so that they can continue to watch their TVs. Their old sets will not respond to the converted signal. The over-the-air reliant households disproportionately represent America's most vulnerable people – they’re the low-income senior citizens. Forty-three percent of the Latino households rely solely upon this analog television, and in African-American households it’s 22 percent.

We have picked this date based upon the recommendations of the Congressional Budget Office, to maximize the return from the sale of the spectrum. It is this money that is necessary. That's why this portion of the bill raises money. To the extent that the money is not used for these consumer boxes, a provision in our bill requires all money not used, that is raised by this spectrum go to reduce the deficit. So this is a major deficit-reduction concept.

Having the hard date in 2009 is going to raise more money. We need that additional money to add the interoperability portions to the Reconciliation bill before us. The April 7, 2008 date is simply too close, as I said in the beginning, to the auction date of January 28. There has to be time between the auction date and the hard date in order to ensure that the communications capability is there, that the set-top boxes will be there, and that the portion of the television spectrum reserved for first responders is going to be the first made available. But by moving this date we do not make it available any sooner because of the time delay that will take place after the auction on January 28. It's just not possible, not physically possible, to have a hard date that close to the auction date because of the time necessary to really compute the value of these offers, to go through the process of accepting the high bids, and have the bidders bring forth the money to assure that they're sound. The whole concept of this bill has been to maximize the return and to really assure that those people who have analog sets will not be cut off from the television services they have by virtue of the hard date that's set.

The House date is December 31 of 2008. Ours is April of 2009. We moved it there to get away from the Christmas season, to get away from things like the Superbowl and other things. The longer it goes, the longer people will buy new digital-ready televisions and will not have to rely upon the set-top boxes that will be purchased by this money. Our accommodation is that if we can get this bill passed this year, we'll have Christmas 2006, 2007, and 2008 before we get to the point where we have to buy these set-top boxes. The more digital sets that are sold to new purchasers, the less it will cost to buy these boxes.

So, I do hope that the Senate will see the wisdom in what we've done. We're working closely with the House Members on this. We believe we'll reach an accommodation on the time and it will be a 2009 date. I urge the Senate not to adopt the McCain Amendment because it will destroy the process we are in – a very calculated process of ensuring that the auctions take place and that following the auctions there is enough time to satisfy the goal of raising money in order to get the transition through.

I don't know if anyone else wanted to speak in opposition to the McCain Amendment, but I urge the Senate not to adopt it.