Possible DTV delay exposes divide

The two biggest telco TV providers in the U.S. seem to be split on whether or not the federally mandated Feb. 17 digital TV transition should be delayed, as President-elect Barack Obama suggested. Both AT&T and Verizon Communications have 700 Mhz spectrum licenses, which they can't use until broadcasters vacate the spectrum, but AT&T said delaying the DTV transition is worth it if the act ensures a smoother transition, while Verizon said a further delay will only cause more confusion and make the transition worse.

The key to the difference of opinion may be that Verizon took the step over several months to migrate FiOS TV to digital broadcasts in all of its markets, while AT&T's U-verse IPTV service was all-digital from the beginning. Verizon probably doesn't want its recent additional investment in its migration to have been a wasted act of assertiveness.

It is unlikely that postponing the transition for 90 days or so will change anyone's future plans for the 700 Mhz spectrum, though 700 Mhz license owners have every right to be mad about a possible delay, since the federal government might have not looked kindly on them had they requested delays in building out their spectrum properties. Perhaps during the delay-if it happens--the federal government can figure out what to do about the 700 Mhz D block spectrum that had been set aside for a national public safety initiative.

Ultimately, if Congress chooses to impose the delay, we can all blame it on a lack of funding and vision for what was needed to administer the program. With DTV transition TV commercials nearly constant at this point, it might be hard to believe that anyone isn't ready, but last-minute shopping certainly does seem to be part of human nature. In recent weeks, there has been a run on federal coupons for digital converter boxes, which exposed the transition program's funding weakness.

It may have also exposed an industry's aloofness to the feelings of consumers. I was at CES 2009 last week when rumblings of a possible DTV transition delay were first heard, and the initial reaction of many show attendees seemed to be shock (not to be confused with surprise) and dismay that the government would get cold feet at this point. Yet, while the transition is obvious to anyone who would be attending that trade show, the lack of general readiness for the transition may remind both new and old entrants in the TV services market that not all consumers have a high-tech early-adopter mindset. The truth may be that the types of customers that aren't ready for the transition are low-spending customers that telco TV players and high-end consumer electronics makers would rather avoid. But, when it comes to the DTV transition, we're all in this together, whether you like to or not.

-Dan

For more:
- CNN Money has this Dow Jones wire story

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