Thursday, January 15, 2009

4G war, conflicts of interest loom behind possible DTV delay

Last week, President-elect Barack Obama's call for a delay in the Digital TV transition, long scheduled for February, sent tech and telecom firms into a tizzy. Both Verizon and the Consumer Electronics Association have been pushing back hard against any postponement of the move from analog to digital broadcasting, while AT&T has joined the Consumers Union and several prominent Democratic legislators in supporting the call to give the troubled transition more time. Among those with a vested interest in the debate over a DTV delay is Clearwire, which has been racing to deploy its 4G WiMAX networks ahead of competitors wedded to the LTE standard. And Ars has learned that Clearwire Executive Vice President R. Gerard Salemme has quietly joined the Obama transition team as a key advisor on DTV issues.

The main rationale advanced for pushing back the drop-dead date for analog broadcast is that thecoupon program established to subsidize digital converter boxes for those who rely on over-the-air analog signals has run out of money. Households seeking the $40 vouchers are now being placed on a burgeoning waiting list, and consumer advocates fear that without a delay, millions of older analog sets will go dark in February. Opponents of a delay have argued that changing the date would be "disruptive," upsetting longstanding plans and signaling that companies and consumers need not heed government deadlines.

But the transition will also free up huge swaths of spectrum in the 700MHz band currently in use by analog broadcasters, which the Federal Communications Commission auctioned off last year. As FCC commissioner Robert McDowell noted on a panel at the Consumer Electronics Show in Las Vegas this weekend, "there are companies paying hundreds of billion of dollars to use this spectrum, and they expect the goods to be delivered." 

One of those companies is Verizon, which ponied up nearly $9.4 billion for spectrum it plans to use for its 4G Long-Term Evolution wireless broadband network. In a letter to top members of the House and Senate commerce committees Monday, Verizon CEO Ivan Seidenberg urged members of Congress to resist any delay of the transition, warning that it could impede the company's plans. "Verizon Wireless intends to begin field testing and deployment of LTE this year," wrote Seidenberg. "Deployment of LTE, however, can only be done if we have access to the 700MHz frequencies. Delaying the DTV transition will delay our ability to upgrade those frequencies to 4G broadband for American consumers and have a negative impact on our nation's international competitiveness."

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