Hazlett: The High Cost of "Free" TV

As the nation moves toward a transition from analog broadcasting, policy-makers should use the opportunity to make a leap forward by opening TV bands to new entrants, says Professor Thomas Hazlett, writing for Ars Technica.

Television viewers abandoned the broadcast delivery platform years ago, says Hazlett, and today nearly 90 percent of American homes have gained better reception and wider program choices via their choice of digital over broadcast media.

"This technology transition makes 'free' TV largely irrelevant. Yet, with its World War II-era bandwidth allocation, it continue to lock out loads of pretty amazing new stuff. That makes 'free' TV hugely expensive," Hazlett explains.

Hazlett proposes the government instead contract with a low bidder to deliver broadcast TV to the 14 million unconnected homes in the U.S. at a cost that would be less that the projected $4 billion needed for digital off-air receivers. Television stations would reach all viewers, and TV band would be "free at last, ready to host 21st Century technology and applications," Hazlett says.

A Digital Television Transition to Yesterday: Subsidizing the Killer App of 1952, Ars Technica, November 3, 2008. By Thomas W. Hazlett.

"When analog television screens go blank in the US, an event scheduled for February 17, 2009, political insiders wager on political hysteria. They see Aunt Minnie in Dogpatch freaking when her rabbit-ears cut off, and the Congressman from Dogpatch howling on C-SPAN like it was a FEMA-Katrina hearing. Some 14 million US households are today without cable or satellite; lacking a digital receiver they risk Video Darkness.

"Digital set-top receivers can be deployed, a noble cause for which Congress has set aside $1.5 billion of your tax dollars (limit: two $40 vouchers per family). But that cash outlay doesn't begin to quantify the government's commitment: hundreds of billions of dollars' worth of bandwidth continues to be reserved for over-the-air TV, the Killer App of 1952.

"Radio spectrum is the life blood of the wireless era. Television broadcasting squanders it, crowding out incredibly productive alternatives, including improved voice networks, high-speed Internet access, and a phalanx of Silicon Valley dreams yet unknown. Valued at recent prices in Federal Communications Commission auctions, digital TV frequencies would fetch about $120 billion. Yet, consumer gains are at least ten times higher."

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