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Hearing of House Subcommittee on Telecommunications and the Internet: The Role of Technology in Achieving a Hard Deadline for the Dtv Transition

Location: Washington, DC


February 17, 2005


Ms. Blackburn. Thank you, Mr. Chairman.

And thank you to our panel. I appreciate you all being here, and I appreciate the discussion today.

Mr. Kim, I think I would like to come to you first and ask a question. You mentioned in your response to--I think it was either Mr. Shimkus' or Mr. Terry's question, that you needed a 12 to 16 month lead-time for production of a converter box. And so what I would like to know is if you are currently manufacturing a box. And then we have talked a little bit about what the anticipated cost would be. There are--I have heard you all say $50. I have heard you say $100. And I apologize, I have been in and out of the room just a little bit. What you think the cost would end up being and then the third part of that question would be how you all plan to market and educate on the use of that box. So if you would lay those out for us if you are currently producing what you anticipate, your retail cost being, and then your marketing information education plan.

Mr. Kim. Thank you, ma'am.

We are thinking the cost would be in the range of $60 to $70. That is based upon the volume of tens of millions of units. And that--assuming, also, we need 12 to 18 months lead-time basically to develop and deploy that technology. Okay. Right now, as I showed before, this is current--currently available set-top boxes that decode HD, okay, solutions. But I am proposing within 3 years replacing this box with small, like this. And also, the consumer education is very important to sell our product. And with our salesmen and most of the retail chain, the, you know, staff, we have very--education suggestions throughout the country. And I think that they will talk about our new product to our needy customers in the retail chain. And this is, you know--definitely, we have the program to educate consumers, and we are planning to have this product available if those volumes are available in the right time. But we have to get the lead time as early as possible.

Thank you.

Ms. Blackburn. Thank you.

You know, in my town hall meetings in my District, one of the No. 1 questions that comes up is: ``Is my TV going to be completely dark?'' And ``How much is this going to cost me?'' And I would just suggest to you all that for many of my constituents and the conversations that we have had, they consider the purchase of a top-box another tax that they are having to pay. And so we are sensitive to that issue. And I appreciate your comments. Thank you, sir.

Mr. Yager, we have heard from some of our broadcasters, and they talk a little bit about how they have built out their digital transmission systems. And one of the things they see as being a problem, as we move forward into 2006 and 2007, is the--maybe the ready--readily available or the lack of digital production studios. And I am just curious. Are you seeing this--are other broadcasters seeing this as a problem, that there is a lack on the production end of digital studios?

Mr. Yager. I--Congresswoman, I don't know that there is. I think almost all production equipment sold today is digital. We built 7 years ago, in Quincy, Illinois, which is the 168th market in the country, a total digital facility. It is totally digital. Now it is not high definition, and I want to make that very clear going in. There is a difference between high definition and digital pass-through equipment that we produce. But every news clip we shoot at the three stations we own is now done digitally.

Ms. Blackburn. Okay. Thank you, sir.

Mr. Goldstein, page two of your testimony, you have a comment there, second paragraph, ``While a subsidy for set-top boxes might be one policy option to spur the transition, there are other policies that might do so as well.'' Do you want to elaborate on what you think some of those other policies may be?

Mr. Goldstein. Congresswoman, for the report that we are doing for the committee, we are going into a lot of those issues. For the purposes of today, we were really coming just to set out what the subsidy issues were. We will be prepared to talk about those in more detail as we finish our work.

Ms. Blackburn. Thank you.

I appreciate that, Mr. Chairman. I yield back.


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