Bush Proposes Legislation to Compensate Broadcasters for Digital TV Transition and Spectrum Auction

Bush To Propose Legislation on TV Move To Digital

WASHINGTON (Reuters) - President Bush will propose legislation that will encourage television broadcasters to move to digital signals by ensuring they are "fairly compensated," according to his 2002 budget released Monday.

The move is designed to clear analog airwaves that in turn will be auctioned by the Federal Communications Commission to wireless companies that want the spectrum to offer advanced telecommunications services to consumers.

The FCC is slated in September to auction the airwaves held by the broadcasters occupying channels 60-69 but the proposed budget gives the agency until September 2004 to complete the auction. The sale was to have been completed last year.

The auction has been delayed numerous times because broadcasters do not have to move to digital signals until the end of 2006 or when the penetration rate for digital television in the United States hits 85 percent, whichever comes later.

Digital televisions have not sold as quickly as hoped due to high costs and together that has created uncertainty about when the airwaves would become available for use by the wireless operators, depressing estimates for the auction.

The administration also proposed the FCC draw up rules that would charge the television broadcasters $198 million a year for using the analog signals annually until they return the spectrum. Past attempts to impose fees have failed in Congress.

"The legislation will promote clearing the spectrum in channels 60-69 for new wireless services in a manner that ensures incumbent broadcasters are fairly compensated," Bush's 2002 budget said.

The budget did not provide any details on what exactly the legislation would say or when it would be sent to Congress for consideration. The proposal originally emerged in early March when the president sent Congress an outline of his budget.

The FCC is also supposed to auction the airwaves used by broadcasters occupying channels 52-59 by next fall but Bush's budget proposed extending the timeline to September 2006.

"As a result of the increased certainty about how and when the spectrum in channels 60-69 will become available and shifting the deadlines for both auctions closer to when the spectrum is expected to be available, revenues for these auctions are expected to increase by $7.5 billion," the budget said.

Paxson Communications Corp. and a group of broadcasters have petitioned the FCC to delay the auction until January 2002 as they work to come up with a compensation plan to clear the airwaves.