Dole May Unplug TV Reform

11th-hour objection could stall transition to digital

THE quality of what you see on television could be radically altered by a bill pending in Congress. It is designed to bring a far-sharper broadcast picture into American homes, replacing the sometimes-fuzzy lines and static-filled images with an almost exact digital replica - a perfect picture.

But a last-minute political maneuver by Sen. Bob Dole (R) of Kansas threatens to undermine the effort and, in the process, derail the entire Telecommunications Reform Bill, which has taken 10 difficult years to cobble together.

The majority leader and presidential hopeful says he wants to cut "corporate welfare" in the bill to help bring down the federal budget deficit. But industry insiders claim it's a craven political move that could hurt consumers and, in the end, cost the government money.

At the heart of the controversy are six megahertz of broadcast spectrum that are used to send television pictures into your home. Buried in the telecommunications bill is a small section that endorses an almost 10-year-old effort to digitize that signal.

In late 1987, the nation's broadcasters and the Federal Communications Commission (FCC) began looking at ways to make the transition. It was part of an overall strategy to beat the Japanese in digital television technology. And it worked: The US is now at the cutting edge of ADTV (Advanced Digital Television).

The challenge now is to get it to consumers.

"It's a chicken-and-egg problem," says Rep. Thomas Bliley (R) of Virginia, chairman of the House Commerce Committee. "Consumers won't buy advanced televisions, and manufacturers won't make them, until broadcasters offer up a digital signal. And no broadcaster will pay for digital spectrum - not to mention the investment in digital equipment and transmitters - until the audience is there."

In 1992, the FCC adopted a plan that would "loan" broadcasters an additional six megahertz of spectrum for 15 years so they could broadcast their current analog signal simultaneously with the new digital signal. The goal was to facilitate an orderly transition that would allow consumers to switch to digital if and when they are ready. Supporters say the plan will give consumers higher-quality television and spark a manufacturing and retail boom in digital hardware.

The proposal is mentioned in the telecommunications bill with the added proviso that if the FCC decides to go ahead and "loan" the extra spectrum, the broadcasters must return it after the transition to digital is complete.

AFTER the final telecommunications compromise was hammered out, Senator Dole stepped in. He suddenly decided the loan of the spectrum amounts to "corporate welfare." He now insists it should be auctioned off to the highest bidder and the proceeds used to lower the nation's deficit. He's threatened to kill the bill unless it is changed.

"The bottom line is, this spectrum is as much a natural resource as our nation's forests," Dole said in early January. "If someone wants to use our national resources, then we should be fairly compensated."

While they are sympathetic to the goal of cutting the deficit, many of the congressmen, staffers, and industry lobbyists who have worked together closely to craft the difficult and delicate compromise bill are bewildered by Dole's move.

"If they open up the broadcast end to tinker with it," says a lobbyist for one of the country's long-distance telephone companies, "who's to say they can't change the rest of it?"

Dole also infuriated broadcasters. One said the move was pure politics, an effort by the ultimate Washington insider to portray himself as a champion of "the little guy." Another suggested it was Dole's revenge for the poor coverage the network news has given his campaign. Another implied the senator simply doesn't understand the bill or the nation's communications policy.

The policy is designed to guarantee all Americans access to free, over-the-air TV. It grants broadcasters licenses to use the airwaves in exchange for a commitment to public service, such as news and information programming. The language in the telecommunications bill preserves that policy and, they note, does not "give" the spectrum to anyone.

"This is not some new dead-of-night land grab by the television broadcasters," says one broadcast-industry executive. "This notion that we are somehow just rapacious and that we're going to reap a windfall is just ludicrous."

But Dole, who declined to be interviewed for this story, disputes that. He says the broadcast spectrum at issue is worth between $12 billion and $70 billion, and if the broadcasters want to use it to make the transition to digital, they should pay for it now.

The idea has floated around Washington before but has always been overwhelmingly defeated. Sen. John McCain (R) of Arizona is one of its primary advocates.

"We're finding out that spectrum is a lot more valuable than anybody anticipated," Senator McCain says, noting that the FCC had planned to "give away," for $5 million, the last block of satellite broadcast spectrum. Now, in part because of an amendment McCain sponsored, it will be auctioned off. Opening bids are expected to be $100 million-plus.

But broadcast industry executives say that's not a fair comparison. They contend that if the television broadcast spectrum is auctioned off to the highest bidder, it will derail the transition to broadcast digital television - in part, because phone companies like AT&T could bid to use the spectrum for cellular and paging services. That could push the price beyond the means of many local television stations, leaving them with no viable way to change over to digital technology. Broadcasters contend that would leave many Americans with inferior over-the-air, free TV and abort the expected manufacturing boom in digital equipment.

The broadcasters, who make up one of the most powerful lobbies in Washington, are determined to fight. If Dole doesn't back down, many analysts predict the telecommunications bill could be delayed another year, and the transition to digital-broadcast TV could be put off indefinitely.