Summary

Paxson Communications and other TV broadcasters are lobbying the White House to make compensation tax-free as an incentive to vacate analog spectrum and transition to digital airwaves. Lowell Paxson warned that without financial relief, broadcasters will not clear the spectrum until 2006 or until the 85 percent household penetration threshold is met.

Source document circa 2001 preserved as-is

Sunday, April 29, 2001

Broadcasters ask for digital tax break
By Reuters April 26, 2001, 1:00 p.m. PT

LAS VEGAS--Paxson Communications and other TV broadcasters are asking the White House to waive certain taxes as a further sweetener to encourage a switch from analog to digital airwaves.

The U.S. government wants the broadcasters to make the move so they can auction the airwaves to companies launching advanced mobile services. Lowell Paxson, head of the company that owns 17 stations, said this week that he has met with White House officials three times recently to discuss the transition to digital and will go to Washington with other industry executives on Monday to further discuss the issue.

"They want us to clear the spectrum; we're trying to clear it, and the truth of the matter is if they don't give us (compensation), we're not going to clear" it until 2006 or when the 85 percent threshold is met, Paxson said in an interview at the National Association of Broadcasters convention here this week.

Paxson added that he has gotten more than 60 percent of the broadcasters occupying the spectrum to support his plan.

Paxson said he and other broadcasters will meet next week with officials at the Office of Management and Budget at the White House and with officials from the Federal Communications Commission to discuss the digital transition rules the agency is formulating.

"They're (the White House) interested in whether or not the compensation we get should be tax free," Paxson said. "What we're saying is why don't you be nice to us and do this."

The FCC, which will auction the vacated spectrum, has encouraged broadcasters and wireless companies to voluntarily work out incentives to move broadcasters to digital spectrum.

Broadcasters occupying channels 52 to 69 are supposed to be making the transition to digital airwaves by the end of 2006 or when televisions that can receive the new signals penetrate 85 percent of the U.S. market, or whichever comes later.

However, few believe that the 2006 date is realistic especially since the new TV sets cost thousands of dollars, which has depressed sales, giving the broadcasters little incentive to switch if no one can see their programs.

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