Couch Potato Subsidies

TV goes digital.


The first duty of government is to secure our fundamental rights. No doubt that is why the Senate agreed in November to spend up to $3 billion retrofitting old television sets to guarantee that every man, woman, and child in these United States would be able to enjoy high-quality digital broadcasts of Desperate Housewives.

Sen. John Ensign (R-Nev.) had initially proposed an amendment limiting the subsidy to a paltry $1 billion, but a spokesman later told the Associated Press that the senator had decided to withdraw it, on the grounds that money saved would just be spent on other projects. The cash will buy converter boxes for sets that would otherwise stop receiving signals in early 2009, when night falls on the age of analog broadcast TV.

That year is the deadline for broadcasters to complete the transition to digital television–a task that requires them to give at least $10 billion worth of analog frequencies to the government. Don't worry that they've lost out on the deal: The digital spectrum Congress gave them in exchange, way back in 1996, was then valued at $70 billion.

In a country where some 85 percent of TV-owning households already travel to the vast wasteland over cable or satellite, why has the government spent almost two decades steering highly valuable spectral real estate to such an inefficient use? Thomas W. Hazlett, who served as chief economist at the Federal Communications Commission in the early '90s, calls over-the-air TV broadcasts "a vestigial organ that is massively costly to the country not to be using for things like mobile phones and wireless Internet." Under a system of genuine property rights in spectrum, he suggests, broadcast frequencies would be sold off for those more valuable uses.?