In thinking about the Federal Government’s $1.3 billion spent so far on coupons for digital TV tuners, it occurred to me that at $40 per coupon, $1 billion+ was an awful lot of conversion boxes. Dividing the $1.3 billion by $40, we find that the government has apparently handed out 32.5 million coupons.
http://www.connectmycable.com/resources/cable-vs-satellite.html says that 85 percent of U.S. households had cable or satellite TV in 2006. Is it believable that the remaining 15 percent of U.S. households figured out that this government hand-out program exists, took the trouble to fill out the Web forms or paperwork to get their coupons, and brought home a converter box to uglify their homes?
If it is not believable, might there be some enterprising retailers out there who are delivering fictitious converter boxes to fictitious consumers?
[Note that this analysis is slightly oversimplified. A house could have cable TV in the living room and an analog TV with rabbit ears on the kitchen counter. The government might be wasting some of the $1.3 billion on administrative costs rather than putting it all into coupons (the newspaper articles on this subject aren’t clear on whether the budget was $1.3 billion in coupons or $1.3 billion in total for the program).]
[As a second aside, can anyone think of a greater waste of government money? Regardless of how much was raised from selling the recovered spectrum, why would we choose to spend it on these converter boxes? Wouldn’t $1.3 billion in extra scientific research have been more likely to give the U.S. economy a boost?]
Regarding waste: the payments to consumers make more sense if you look at the spectrum reallocation as a kind of taking by eminent domain. The government took spectrum that was being used (whether productively or not) by a huge number of people and then reallocated it. Much of it was sold it to others for commercial use.
I agree with your assessment that a lot of what’s on commercial TV isn’t worth watching. And the spectrum reallocation makes sense from an efficiency perspective. But the fact remains that a whole lot of people are having their equipment rendered less useful as a result of a governmental action made at least partially for commercial purposes. It seems reasonable that the people whose gear was devalued by government action should be offered some compensation, and the coupon program looks like an attempt to do just that.
The real miracle here is that any of the money wound up in the hands of individual citizens, rather than being directed to support the transition costs of commercial broadcasters.
My understanding was that a large portion of that 1.3 billion was for public education…basically advertisting the fact that the transition was taking place…all those billboards and television adds aren’t free.
can anyone think of a greater waste of government money?
The Community-Based Abstinence Education Program. Read more about it here.
Reassigning the spectrum is most certainly not a taking. That spectrum is collective property that was being squatted by TV stations who never paid rent for it. The situation more closely resembles how politically connected oil and timber companies plunder state or Indian land for a pittance.
The numbers look suspicious to me too, especially since I ordered two but used only one. Hence, the coupon that expired must have gone to someone else, do we not expect? By the way, the box works like a charm. Seeing the improvements brought by digital to my 6-year old box just might push me toward a new set.
Why watch broadcast any? Well, it’s there. Too, there are several other reasons which I’ll not belabor.
Let me just say that in many of the hinterlands within our large country there are those whose main source of information can be this old box of ours. Actually, I would propose that even within the environs of the great city of Boston I could find a whole bunch with the supposed ‘antiquated’ means.
By the way, I would expect that a reader would know that it is more reasonable to not assume that this note implies any luddite-ish tendency than to try to scorch my hide (to wit, the go-around about Lawrence and Liberal).
I am not a scam expert—a police detective or whoever—but I did help some friends get a couple of the converter box coupons. The basic requirement is 2 coupons per household, which is identified by the street address. When you request the coupon on-line, the system checks to see if coupons have been ordered for that address. It must be a street address, not a PO box, although there is some provision for people who don’t receive mail at home.
I think there’s also checking at the retailer level, that store can’t redeem coupons in excess of boxes sold. Someplace there may be a Bernie Madoff of the TV business who just had to steal a few dollars, but I don’t think the system would allow a large-scale scam.
The whole TV conversion thing is a strange exercise, trying to get the masses of people on board by a certain cutoff date. Multiple things are happening at once. The cable operators are converting to digital cable. It has no necessary connection to digital signals over the air, but the cable companies are playing on the confusion, rather than hiring an MIT graduate to lay out the facts. My son has a computer-based TV for receiving digital broadcast using our antenna in the attic. He is full of knowledge gleaned from the web as to how it all works. But we were recently surprised by some of the details.
After the changeover, some stations will change their frequency. Oddly enough, that part is transparent to the user, because digital channel numbers get mapped to frequency by some lookup table. Statements are sometimes made that digital stations will be stronger or on more optimal frequencies after February. That may be, but here in the DC area, only 2 stations will still be sending in the VHF band. Most will be in the UHF.
When we get the digital signal, it’s wonderful. High-def is beautiful. Not all digital TV is high-def though. With all this stuff going on, you won’t find many regular Joes who understand it.
There is a whole new technology of electronically steerable antennas. Of course the military has used them, but now there’s a standard for communication between a smart antenna and the converter box or TV. A web search finds that some of the converter boxes meet that standard, but few TVs can do the antenna steering at this time. So the special converter-boxes are leading edge. Will the smart antennas catch on? Will the TV salesmen be able to explain them? Stay tuned.
http://en.wikipedia.org/wiki/Coupon-eligible_converter_box
http://en.wikipedia.org/wiki/CEA-909
Our main TV has cable (basic – get it almost for free because we want Comcast internet service and get a $10/month discount for two services) but we have two older TVs that are used almost entirely for video but for about $10 each ($50 for converter – $40 coupon) it seems worth it to keep them usable for broadcasts.
I was at Wal-Mart today and noticed that they had Magnavox converters for $50. But they also had Magnavox DVD players for $30. Seems reasonable to me that the converter would be less expensive to build since it lacks moving parts.
It might have a limited run – there’s only going to be X converters sold but that limited run is tens of thousands of units if not hundreds of thousands.
The net effect of the coupon would seem to be a floor on the price of the converters. You’re not going to see Wal-Mart selling them for $30 or $20 since $40 is “free” to consumers.
I think something like 2% of US households don’t have a TV at all (they claim). Must be either philosophical or no electricity, since it seems like anybody could find a free set somewhere. So that is another ~3 million households that wouldn’t need the coupon.
We live in the country and rely on over the air signals. No cable down our dirt road, and the household only has a 50% interest in satellite tv w/monthly costs.
Our coupons came before the converter boxes were available, and had to be re-issued. I bought one, but it is still in the box since we ended up getting a hdtv. (we have a second tv that it will connect eventually, unless we come up with another hdtv) I was disappointed that the converter box program specifically limited certain features. I was hoping for a USB out, so I could use it with a computer.
If the coupon would have been good for $40 off a hdtv, I probably would have gone that route now that less expensive tv’s are on the shelf.
If some retailer found a way to scam the system, it seems like lots of work for little profit. I’m pretty sure the converters will be available for $20 by the Fall.
The main reason, I think, that congress approved the almost free converters is probably the panic of broadcasters and their advertisers in the possibility of losing 5 or 10 or more percent of their viewers in a single day.( Corporate interests almost always have better and more organized access to Congress than the individual voters). News reports and indeed the incoming administration seem to have realized that a large number of people have no idea that their rabbit ears will go deaf in February despite all that’s being spent on the ad campaigns. Certainly, to the companies that are probably the driving force behind this, 80 dollars of taxpayer money per household is a small price to pay to keep up the number of viewers and soap/beer/snack/soda buyers.
The ‘scam’ will get worse. In February, count on the cable providers killing off all analog programming to push people into Digital channels that they charge more for. Why else would cable providers be advertising about the digital conversion which won’t effect their subscribers, on the cable-only networks.
The next issue will arise in April. I early adopted a winter or so ago. The quality is great in the winter, indoor antenna. During the spring when leaves grow and get wet, and through the fall, the attenuation and variableness of the signal cause by weather doesn’t make for as reliable a signal.
You heard it here first, or perhaps I’m wrong.