The TV Tax

With the conversion to digital television bogged down in a stalemate among broadcasters, electronics manufacturers and viewers, the Federal Communications Commission has taken decisive action to get things moving. It’s going to tax viewers.

To be precise, the FCC voted last week that within five years all new television sets will come with digital tuners, whether the customer wants one or not. The nation’s existing TVs – 265 million strong – will need one of these tuners added if they’re to take advantage of the full range of wonders offered by digital. The 15 percent that are hooked up to antennas, rather than cable or a satellite dish, will need one if they’re to take advantage of being plugged in.

Currently, these digital tuners cost about $400. Manufacturers say they’ll be down to about $100 by the time this forced shopping spree takes place. The FCC and the broadcasters who lobbied hard for this tax say they’ll cost $16, a number that seems oddly precise for guesswork and that seems to presume a suspension of the law of supply and demand – the law that says a thing tends to cost more when everybody wants one. To figure your tax, multiply the number of TVs you own (yes, every set needs its own tuner) by whatever cost estimate you choose to believe.

This epochal meddling in consumer choice began back in the mid-90s – an innocent time when a cheap set, a pair of rabbit ears and a stomach for commercials got you free TV – and Congress’s passage of the Telecommunications Act of 1996. Spurred by dire warning that the nation was running out of broadcast spectrum, Congress ordered the conversion from spectrum-gobbling analog to digital, a format that uses much less. Congress also figured the freed spectrum could be auctioned off for about $50 billion, speculative income it calculated into that year’s Balanced Budget Act – and this was before anyone had ever heard of Enron. The public would get crystal-clear pictures, CD-quality sound, the ability to watch several programs at once and shopping at the touch of a remote.

Things change in six years. The spectrum crunch isn’t nearly as dire as was predicted – or even a little bit dire, for that matter. The last few spectrum auctions haven’t raised nearly as much was expected. The public isn’t especially interested in watching several programs at once. Despite the fact that more than 85 percent of Americans now have access to digital signals, sales of digital TVs have been a profound consumer flop. The excuse that the $1,500-and-up cost of digital-ready sets (just add $400 tuner) is the leading impediment simply doesn’t fly, given the way Americans love to spend money on gadgets.

And so the stalemate. Broadcasters, already heavily invested in federally mandated digital broadcasting equipment, are reluctant to pour more resources into digital programming until manufacturers make digital sets cheaper and manufacturers don’t want to make sets in numbers sufficient to make them cheaper until people start buying them. And so the FCC’s decisive action. Make people buy them.

Making people buy something they don’t particularly want to solve an overblown spectrum problem and to feed – at least somewhat – the federal treasury is nothing less than a tax. It is time for Congress to take decisive action of its own. Either call it what it is or repeal the law and let people buy, and watch, what they darned well please.