The DTV transition delay could end up costing over $500 million
by Ben Drawbaugh 
posted Feb 6th 2009 at 3:28PM
Earlier this week the powers that be voted to delay the DTV transition by four months to give more time for 5.8 million Americans to get ready. Part of the reason that many weren't ready though is that there weren't enough converter box coupons to go around -- something we all knew would happen a year ago. The cost to give every one of these people a coupon would've been about $232 million; but even if we would've gave them all two, it still would've been cheaper than the cost of a four month delay. Keep in mind that we're not mathematicians -- we did a few quick calculations and if you only include the costs we're aware of, this thing will cost us over $500 million. This doesn't include all the extra converter box coupons that are still needed. Our math is pretty simple, you take the 8,839 TV stations in America, times $10,000 per month to run the extra transmitter -- never mind the carbon footprint -- multiple it times four months and you're at over $353 million. But unfortunately that isn't all the money that's on the table. Now we admit we have no idea how much the delay will cost the winners of the spectrum auction, but if you just calculate the amount of interest on $20 billion dollars the government expects to receive, even at a low 3 percent for four months, and you get $200 million -- and that isn't even compounded. But hey how can you put a price on America's real favorite past time? Although the real kick in the head is that even after four months, we fully expect there will still be 2 million people that are not ready.
Reader Comments (Page 1 of 1)
JP White @ Feb 7th 2009 7:02PM
I agree about the waste of time and money this article raises. But do we really think that the 4 month delay will reduce the unready from 5.8 Million to 2 million? That's awful optimistic IMHO.
JP
Craig @ Feb 6th 2009 4:12PM
Also a good point to add is that people had 18 months to buy these convertor boxes and they are not sold out all across the US. But why are so many people not ready, cause they're just waiting for the government to pay for the box for them, why should the government have to pay for them?
They're $40... I dont think it's unfair to ask people to spend $40 to keep getting free tv... including over the air HD. It basically works out to $2 a month since those horribly annoying commercials started.
DJ Jenkins @ Feb 6th 2009 4:16PM
Great way to lower spending in this terrible economy, Congress (this was sarcasm, FYI)
Le Big Mac @ Feb 6th 2009 4:40PM
We're getting pretty close to the point where it will be cheaper just to buy these 5M laggards a cheap digital tv so they've got zero to b*tch about.
squiggleslash @ Feb 6th 2009 4:18PM
Interest rates are almost nothing right now.
As far as the "electricity" thing goes, you're kind of assuming that
1. Every single NTSC channel is going to stay on the air. They're not, large numbers of channels are going to switch off their NTSC channels anyway.
2. That there are no NTSC channels on air right now that are being transmitted without a sister ATSC channel. I know four local stations in my area are sharing a single ATSC multiplex, and will switch to at least two independent ATSC stations (WTCN, WTVX) once the transition is over. They're not saving any electricity by switching over.
I'm not saying that the delay isn't causing some money to be spent that otherwise wouldn't be, but, hey, if the aim is to save money, why bother with a digital transition in the first place? It'd be cheaper to cancel the whole thing and stick with NTSC. People who want the country to go digital should, perhaps, be a little quiet on the "This is costing us money!" front.
Jack @ Feb 6th 2009 4:39PM
Actually, you are wrong about "It'd be cheaper to cancel the whole thing and stick with NTSC." It requires less power to cover the same viewing area with an ATSC signal than an NTSC signal.
So moving everything to ATSC would save $ over staying NTSC.
BOGY @ Feb 6th 2009 4:22PM
Good job hussein - waste more money
Brad @ Feb 6th 2009 4:33PM
I sincerely hope that a majority of TV stations just say "F--- it!" and make the switch this month...
gt1racer47 @ Feb 6th 2009 4:55PM
This $500 million dollar paint job was bound to happen since the Dtv delay legislation was announced in jaunary
Rich @ Feb 6th 2009 6:49PM
Half a billion dollars so that
a) 5.8 million people who have had a minimum of three years of awareness, and eighteen months to get ready...but haven't...can wait another four months before getting off their ass to get a converter box.
b) so congress can serve their own self interest by, avoiding difficult decision making and taking the easy way out (delaying the inevitable), and by shifting the blame to broadcasters when billy jo bubba's screen goes snowy and he can't watch the latest adventures in inbreeding on Jerry Springer. Television is, afterall, a god given constituional right. Isn't it?
c) create even more confusion around the whole conversion process with some stations turning their analog off next week, and others doing so at any point between March and June.
Pathetic!
John B @ Feb 6th 2009 7:21PM
Wonderful. $500 wasted because a bunch of cheap-ass, procrastinators were too f**king lazy and cheap to run down to Wal-Mart for a $40 box.
Yeah, thanks a bunch, you pricks.
Signed,
The *OTHER* U.S. Taxpayers
Rich @ Feb 6th 2009 8:51PM
But, but, the government OWES me dammit!
luis @ Feb 6th 2009 10:07PM
I can't believe many people weren't prepared. I order two coupons and received it in two weeks by going online. It's so easy, I even ordered one in late December 08 and got it in time. They should've been prepared.
Rich @ Feb 6th 2009 10:48PM
@Luis
Regardless of what's happening, be it homework for school, analog cut off, project at work, etc. There will always be a percentage of people who procrastinate and continually put offf doing anything until they absolutely HAVE to.
Yeah, people should have been prepared. They've had plenty of time to take the steps necessary to continue getting OTA broadcasts, or switch to some other avenue for programming. Even in the case of those on the waiting list, they can just as easily go to Wally World, or virtually any other consumer electronics dealer locally, or even online to get a box. The cost is minimal...even for poor people. There really is no excuse.
The very most congress should have done is replenish the coupon program to take care of the backlog, then let the cutoff move forward as it was scheduled.
Oh well. It is what it is...
Garst @ Feb 7th 2009 2:08AM
That's $500 million should have been used to fund the coupon. That would have paid for 12.5 million of them. Then they could have left the date. I would have no problem saying "Tough shit!" to the people who wouldn't have received the coupon by the 17 because, well, they were morons for waiting so long to apply for it. As for the people who try to argue that the weather is too bad to put up an antenna, they're dumb asses. Why didn't you put one up last summer when there wasn't any ice? Did you actually thing that this winter wouldn't have any snow and ice and be a balmy 80 degrees? Seriously! The government needs to let natural selection happen, and let idiots have to take care of themselves sometimes. Especially when they have three years to get ready.
Scott D. Bennett @ Feb 7th 2009 12:50PM
It wouldn't have made sense for many people to put up antennas last summer because many stations were and are on temporary channel assignments and power levels. They won't know what they really need until the transition is complete.
I don't think they were expecting 80 degree weather in cold winter climes.
Scott @ Feb 7th 2009 3:58AM
Aren't there about 1,800 full power TV stations in the U.S.? Perhaps 8839 includes all the low power stations that aren't part of the transition? That would cut it down to $72 million.
Still, if it was $500 million, it would have been cheaper for the stations to bail out the coupon program!
Converter @ Feb 7th 2009 3:38AM
One reason some delayed ordering coupons & converting is the coupons expire 90 days after being mailed (& once expired, they could not be replaced) Since consumer electronics usually improves over time, while prices lower... all that together makes it reasonable to wait to order the coupons shortly before the conversion was scheduled.
Since the coupon program ran out of funds, that throws a wrench in the plan to convert.
The public airwaves belong to the public. If the federal government wants to take that away & sell it for other uses, it makes sense to compensate the public for the cost of conversion.
hdscreens @ Feb 7th 2009 9:32AM
Since, Ben Drama oh excuse me Ben Drawbaugh posted this. This number could be exaggerated. Although, it is stupid to have this delay and I know it will cost $$$,$$$,$$$.
dman @ Feb 7th 2009 2:40PM
Why are people concerned with $500 million? It seems that's pocket change these days. $700 billion here, $800 billion there, $500 million is inconsequential with the way Congress has been spending lately! It seems like Congress looks at $500 million the way you or I would look at a penny.
But this is the government we the people asked for, this is the government we the people voted for. If you don't like it, remember this in 2010, and 2012, I know I will. Yes We Can Hope for Change We Can Believe In, it just doesn't look like 2008 is the year it's going to happen...
nathan @ Feb 7th 2009 1:38PM
Just remember: No TV station is required to keep broadcasting in analog. They are choosing the do so. And this "delay" is nothing more than the government allowing them to continue to delay.
Any station that wants to can "go digital" on the original cutover date, save all that money / electricity / carbon footprint.