Obama Transition Dominates Discussion at Tech Expo

Published February 1, 2009

LAS VEGAS (January 9) — Tech experts at the Consumer Electronics Show, the largest annual technology exposition in the world, said the as-yet unknown regulatory agenda of a Democrat-dominated Washington is leaving the technology industry and consumers in limbo.

That concern was exemplified by President Barack Obama’s call to delay the February 17 transition to universal digital television broadcasting—an announcement that caught many industry insiders by surprise on Day Two of the electronics show. The broadcasting industry and federal agencies have spent almost two years preparing to meet the deadline.

Congress allocated $1.5 billion to fund a public-awareness campaign and voucher program giving Americans without cable or satellite TV up to $80 to purchase converter boxes for the new digital signal. As of 2006 just 14 percent of the approximately 116 million U.S. households lacked cable or satellite TV, according to the Federal Communications Commission.

Lack of Funds Cited

The incoming Obama administration said it asked for the delay—which Congress would have to approve—because there was no guarantee TV viewers who needed vouchers could get them in time to purchase converter boxes.

Gary Shapiro, president and CEO of the Consumer Electronics Association, urged keeping the transition on schedule, noting “nearly 100 percent of consumers” are aware of the signal switch deadline.

“Tens of millions of Americans have already taken action based on the firm transition date,” Shapiro said in a statement released during the show. “Moving the date would require starting a massive education effort from scratch. Should Congress find it necessary, they can put much more coupons into circulation—a much better solution than causing massive consumer confusion and uncertainty.”

Others Urge No Delay

Calls to keep the digital TV switch on schedule spanned the ideological spectrum during panel discussions at the CES, making allies of groups often at odds.

“I don’t often praise broadcasters, but I’ll praise them now,” said Gigi Sohn, president and cofounder of Washington, DC-based Public Knowledge, a group that often opposes technology companies’ agenda. “There will definitely be little old ladies who might not be getting their TV. But there will be 10 days of a kerfuffle and it will probably be over.”

John Taylor, vice president of public affairs and communications for LG Electronics USA, said moving the deadline would confuse both consumers and the industry.

“The hard date that we’ve been anticipating has given us a lot of certainty,” Taylor said. “We need certainty as manufacturers and retailers. If [Congress] moves the date, we hope it only happens once—and it’s got to be a certain date. That works best for the marketplace, and also works best for the consumer.”

Uncertainty Rules the Show

Policy-oriented panel discussions at the CES, no matter what the topic, focused more on questions than answers—the result of few having insights into Obama’s regulatory plans.

On “net neutrality”—proposals for government to force Internet traffic management decisions on the broadband market—experts on the pro-regulatory side seemed to see Obama and the Democrats as allies.
“It’s pretty apparent that the new president supports openness and net neutrality,” Sohn said. “Net neutrality and regulatory parity is now going to be part of the conversation.”

But Jim Harper, director of information policy studies at the Washington, DC-based Cato Institute, argued for less regulation. He warned against encouraging federal bureaucrats to institute rules on complex matters such as Web traffic management.

“Do you want the FCC to be doing the engineering [of broadband networks]? That’s what we’re talking about if the FCC gets the authority” to impose net neutrality, Harper said. He said the telecom industry already manages broadband traffic fairly, in response to market forces.

“We know what the results of laissez-faire have been,” Sohn countered. “And it hasn’t been great. I don’t know how in this day and age we can just parrot the line that the market will make it work.”

Urging Broadband Stimulus

Many tech experts at CES panels were hopeful Obama would include investment in broadband deployment in his early 2009 economic stimulus package. Few, however, could define what such a plan would entail—either in cost or how the government would build new broadband lines.

“There will be terrific ideas coming out of this stimulus package,” said Markham Erickson, executive director of Washington, DC-based NetCoalition, an advocacy group that often defends big Internet corporations. “But there has to be some strings attached. It seems like there is no political will for blank checks. There will have to be policy strings.”

Harper, however, said the federal government is already racking up enough debt—and shouldn’t be in the business of attaching “strings” that distort the broadband market.

“[Obama’s proposed] $800 billion package amounts to $8,000 per family in the United States. It will just add to the national debt and will topple our currency in several years,” Harper said.

Debating Trade’s Role

Another star of the CES panel discussion circuit was Susan Schwab, who at the time of the show was finishing out her last weeks as the Bush administration’s U.S. Trade Representative.

She said she was “anxious” about the anti-free-trade statements Obama made as a presidential candidate, but was “somewhat optimistic” his protectionist stance would fade as he settled into the White House.
“Technology and trade have something in common,” Schwab said. “There is something of a leap of faith that is required before you know the benefits. You have to make [a leap] at the front end in research and development in technology where you don’t know exactly when it will pay off.

“That’s the same when it comes to opening markets—including technology markets,” Schwab said. “There will be a payoff, but you don’t know exactly when that payoff will take place.”

James G. Lakely ([email protected]) is a research fellow at The Heartland Institute and managing editor of Infotech & Telecom News.