BROOKE GLADSTONE: This is On the Media. I'm Brooke Gladstone.
BOB GARFIELD: And I'm Bob Garfield. When technology and regulation converge, things can get expensive -- and weird. For instance, in 1997, Congress enacted legislation for the federal government to re-claim the analog broadcast spectrum, now allocated to TV, to be sold off to telecom companies for wireless phones and broadband. Broadcasters were, in turn, mandated to convert to all-digital broadcasts -- a conversion that will cost them at least 15 billion dollars. Now the FCC has proposed speeding up that process, even though most consumers get their TV through cable or satellite and never use their over-the-air TV tuners at all, and even though TV distribution through broadband may render the 15 billion dollar digital broadcast infrastructure instantly obsolete. And whose lobbying led to this situation? Broadcasters. Joining me now to sort this all out is Tom Hazlett, senior fellow at the Manhattan Institute for Policy Research and former Federal Communications Commission chief economist. Tom, welcome back to our little slice of the spectrum.
TOM HAZLETT: [LAUGHS] Thank you.
BOB GARFIELD: Well, it sounds like a win-win-win-lose situation. [LAUGHTER] Win, because the, the government gets revenue from selling off these parts of the analog spectrum. Win, because the economy will benefit, and consumers will benefit from the services that are sold over this air space. Win, because those who do have HDTV will be able to get far more vivid television broadcasts, and lose, because if you're in the broadcasting business you have to spend between 15 and 20 billion dollars to build out the digital broadcasting system.
TOM HAZLETT: And at the end of that day, the broadcasters will have spent a lot of money to broadcast into the ether, and not many people are out there waiting for those digital signals. You know, the fact is that 90 percent of households get their signals in a different way now -- cable or satellite -- and so, this is a very heavy expenditure that's in essence being mandated by the government both for new digital TV transmitters -- the station expenditure -- and the new rules that are going into effect starting this year that new TV sets are going to have to have the capability to receive off-the-air digital signals. Consumers who pay more for TV sets because of that mandate might want to question the fact that they're paying for a vestigial organ, because they - in, in most cases, simply plug those TV sets into cable or satellite connections and never use that digital tuner.
BOB GARFIELD: If you believe, as I do, that over the air distribution of television programs is a dying business, that in the next five to ten or, say, 15 years at the most, is simply not going to exist, isn't there a special level of unfairness to foot broadcasters for the bill for equipment that they're, you know, very quickly going to have no use for anyway?
TOM HAZLETT: I think that that's assuredly correct, but you, you've got to remember the central irony, and that is that this whole rulemaking comes from broadcaster pleas that the very valuable radio spectrum allocated to analog TV broadcasting in the 1940s and '50s could not be shifted out to other uses in the 1980s, and in fact the broadcasters claim that it had to be saved for high definition programming to go out through the broadcast mode. Now, they're being stuck with the bill for that policy.
BOB GARFIELD: So in the end, how will this affect you and me? Oh, well -- I withdraw that question. I know how it's going to affect you. You're going to - you're going to dine out on this for-- [LAUGHTER] for the next ten years. But how's it going to affect me?
TOM HAZLETT: There's a tremendous opportunity out there for wireless technologies to provide not only voice service, and the popularity of mobile phones now used by 163 million U.S. subscribers is testimony to how important that sector has become, but the great opportunity in high speed internet connections via wireless with the re-allocation of airwaves to invigorate that market opportunity, I think that not only can you access the internet on a mobile basis at a very low cost and with very high performance, but that you might just be getting over-the-air television in a new form, the IP form. The internet-connected video product may well re-emerge, but it'll look a lot different than the old analog broadcasting system that's, in fact, still with us today.
BOB GARFIELD: Well, Tom, once again -- thank you very much.
TOM HAZLETT: Thank you.
BOB GARFIELD: Tom Hazlett is a senior fellow at the Manhattan Institute for Policy Research. [MUSIC]