Washington, D.C. – During debate today on the Senate’s Budget Reconciliation Act, Senate Commerce, Science, and Transportation Committee Chairman Ted Stevens (R-Alaska) opposed an amendment offered by Senator John Ensign (R-Nev.) which would divert $2 billion from a converter box subsidy program contained in the Commerce Committee-approved Digital Transition and Public Safety Act of 2005.

Stevens stated that reallocating the funds would negatively impact consumers. He made the following remarks on the Senate floor in arguing against the Ensign amendment:

Our Committee worked hard on this bill. The portion of this bill concerning the amount of $3 billion associated with the converter box fund was derived based on an estimate of the problems that exist in a so-called analog world. There's an estimated 73 million analog TV sets that are not connected to cable or satellite.

Our reconciliation measure ends all analog broadcasts on April 7, 2009. By that date, all televisions that rely on antennas have to be equipped with a digital-to-analog converter box. We call that the set-top box. The cost to the consumers to purchase these converter boxes is estimated to be $3 billion. This amendment would cut that to $1 billion. That is not enough to meet the problem of these 73 million analog sets. But I call the attention of the Senate to the fact that there is a difference between the House approach and the Senate approach. The House would use a voucher system and the House estimates that there are fewer sets than our estimate of 73 million. We believe that by using the hard date of April 2009, we'll raise a considerable amount of additional money than with a date closer to the present day. The impact of this later date is that we have three periods where television sets are bought in great quantities, in the Christmas period.

To the extent that those analog sets are retired by digital-ready televisions, we will not need the money. This $3 billion is up to $3 billion. We don't automatically appropriate $3 billion. This merely makes available the estimate of $3 billion and earmarks it, but I call attention to the Senate once more to the fact that money not spent is earmarked in this bill to go to deficit reduction. It is not going anywhere else. There are specific items. There will be some amendments offered here, and I specifically refer to page 94, line 10 where it states that amounts unexpended, unobligated at the conclusion of the program shall be used for the program described in paragraph three, which is in fact the basic debt reduction system.

There are some other complications here that I've gone into before. One of them is that we ought to be able to take this bill to the House for conference and work out with them the best way to deal with these set-top boxes. One of the great problems is there's currently a range of estimates, as Senator Ensign has mentioned, from $40 to $60. Well if it's $60, we don't have enough money. If it's $40, we have a little bit left over and it will automatically go to debt reduction.

I personally think that we have some problems that will be mentioned here on the floor soon and those are the problems of the areas that were devastated by Katrina, Rita and Wilma. The problem there is that the televisions were destroyed altogether. And, it may well be that the costs in those areas are going to be substantially more than the cost of the set-top boxes. We have to decide that. Someone has to decide to what extent and where the money will come from to help the people who are not able to buy their television sets, and are not able to replace them. Will FEMA do it? Are there other agencies that are going to do it? I think you'll hear on the floor that some of that money will be reserved for that. I would personally support that because I think that this is a fund that is designed to make sure that we stay connected with these people. One of the real problems about devastated areas, and having lived in an area devastated one time by a monstrous earthquake, I can tell you, it's hard to stay in touch without the local news, without television, without connection to the outside world.

There are a series of items held in reserve in our bill. There is $200 million for converting low-power television stations and television translators. There's $250 million for emergency communications. There is $1 billion for interoperability and $250 million for the national alert system, of which $50 million is for the tsunami warning system. There is $200 million coastal vulnerability problems. And, we have $250 million to fund Senator Burns’ Enhanced E-911 Act. But, after that the provision states if the proceeds of auction exceed the sums of payments under all of those, that amount has to go to deficit reduction. But, again, it's an estimate. I appeal to the Senate to let us go to conference and work this out. I favor putting as much money as possible into debt reduction, but I also believe there are some people who are going to have to have help in these disaster areas beyond the monies we’ve provided these other systems. That argument is going to come here to the floor. And I support the concept of using a portion of that. We're not spending the money. We're authorizing expenditures up to this amount, and what is not expended for those programs will go to debt reduction. That's important for the Senate to remember.

The National Association of Broadcasters, who are providing service to these analog sets now oppose this amendment and furthermore I oppose it for the main reason that we are bringing into this country enormous supplies of what are called digital television sets now, but they're not digital-ready. They're still analog in effect. We wanted to put on this bill a provision that said, “you cannot bring into this country or manufacture in this country a set from a certain date -- say, 90 days from now -- that is not digital-ready, that cannot really operate without a converter box.” The difficulty is, consumers are buying thousands and thousands and thousands and in the millions now of sets believing that they're ready, but they're not ready. They're digital, but they're not digital-ready. They will not operate without a converter chip or converter box. Under the circumstances, we rely on an estimate of 73 million sets. Now, it is an argument: how many converter boxes should there be? Every set that's out there needs a converter box to operate. I'm told by my staff that 20 million sets are sold annually. More than half of them are analog. But some of these sets are in the bedrooms of the elderly. They're in elderly care centers. Every room has a little set. Now, who are we to say that there are sets out there that don't get converter boxes? That may be determined at a later date by the Congress in a bill we have to bring forward, such as a new communications bill. But, for now, we have to rely upon the estimate that we have at least 73 million sets out there that need a converter box.

So, that is where the $3 billion came from. And, again, I thank my friend from Nevada for his kind comments, but we have to operate on the basis of dealing with the worst case scenario in terms of providing money. We have done that. The worst case we can face is $3 billion. So we've authorized up to $3 billion. To the extent it's not used for 911, not used for interoperability, not used for first responders, not used for disaster areas, it will go toward deficit reduction. So, our Committee has raised far more than was requested of us and that’s the problem. We have the luxury of an estimate that says that the spectrum auction will bring in $10 billion and that may be conservative. Many people tell me that once we reach our hard date for digital transition, the demand for the spectrum will be so large that we can’t even estimate the amount of money that is going to be there. So, $3 billion is not out of hand. I urge my friend from Nevada to realize that we're not appropriating the money, we're saying up to $3 billion. And, I urge the Senate not to change that now. Let us go to the House. Let us work with the best available information. Let us try to get this bill back to the Senate as a Conference Report before this year ends. If we don't do it and get a separate amendment that limits the future production of analog or less-than-digital-ready sets, this demand for money is going to go up. All the new sets that are being bought now that are not digital-ready and will need a converter box.