Archive for February 12, 2009

DTV: Some cities planning to go digital aren’t ready yet, say advocates

Old-TVU.S. President Barack Obama officially signed into law the bill which delayed the DTV transition date by roughly four months. But while the new law allows stations to continue analog broadcasts up to June 12, it also allows them to discontinue them as soon as February 17—the original date for the DTV transition. That's raising concern among consumer advocates, including those with Consumers Union, the parent company for Consumer Reports.

Of particular concern are cities where a number of broadcasters are planning to end analog next week, and where there's evidence viewers are notably unprepared for such a shutoff. Our CU colleagues have analyzed the list of stations who have notified the Federal Communications Commission of plans to go all-digital on February 17 against two lists: One of people who have been put on a waiting list to receive the coupons to offset the cost of the DTV converter box, and another on the number of affected households that are ready—and not—for the all-digital TV era.

The upshot? The cities that threaten to be hardest hit on February 17—as in the least prepared for all-digital TV–are Tulsa, OK; Dayton, OH; Milwaukee, Wis; Mobile AL; and Fort Wayne IN. In each of those market areas, says CU, three or more broadcasters are planning to cease analog broadcasts on that day, yet close to 10,000 homes are awaiting coupons, and there are tens of thousands of viewers in total who are unprepared for the switch.

(If you have Adobe acrobat installed, you can download the list of TV stations turning off analog signals in February 17 here. The FCC web site, also has the list available in Excel format, if you have Excel installed.)

CU is calling for the FCC to address these problems over the next few days, as they decide whether to allow the early transitions. As our advocacy colleagues note in their own blog, the FCC has said that how many viewers in a market are prepared for the transition will be considered when deciding whether to grant requests.

The next date on which stations can cease analog broadcasting, again with FCC permission, is March 13.

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Sirius XM: What to do given the recent news

SiriusXMLast week, recently merged Sirius XM mailed some of its subscribers with a “special opportunity” to avoid a price hike on their second satellite radio receivers by prepaying for one, two, or three years of service at the old rates, in advance of the March 11 date when rates will change. This week, in turn, came more news on the woes of the company, including a further drop in its stock price, which is trading at 6 cents today, and a possible bankruptcy filing next week.

Here are some of the questions raised by the offer and the recent news, followed by our advice on what to do in response:

Is the price hike even kosher? Wasn’t holding the line on price increases a condition of the companies’ merger?

Yes—on service to the first radio in your subscription. Because the imminent price hike is to additional radios, it’s allowed, at least under the letter of the merger agreement. After March 11, the cost to Sirius XM subscribers for each additional receiver goes up to per radio from . And listening to Sirius XM over the Internet, which used to be free, will now cost extra a month, for all subscribers.

What if the company indeed goes into bankruptcy?

It depends on the type of bankruptcy they might declare. If Sirius XM does file for bankruptcy, it’s anticipated to be a reorganization under Chapter 11, in which the company is expected to continue to provide service. Of course, it’s possible that the company might at some point file for Chapter 7 liquidation, in which programming and customer service would likely come to an abrupt halt.

What would happen to the subscription I prepaid if the company discontinues service?

If you paid by credit card, you might be able to retrieve your prepayment by disputing the payment. But act quickly; you may have only 60 days after the date the bill was mailed to dispute a charge. Failing that, you could file a claim in bankruptcy court, where, as an unsecured creditor, you would likely receive only pennies on the dollar—if anything—on your prepaid subscription.

What to do?

Our advice:

  • If you’re a current subscriber with multiple radios, think hard before prepaying your subscription. First, consider how much you need and want two or more satellite radios; maybe you should drop the extra one and skip the price hike—and the prepayment decision.
  • If you do prepay, limit your commitment. Prepay for a year, and avoid the two- and three-year offers that are available.
  • If you’re a prospective new satellite subscriber, sign on a month-to-month basis, even if you have to pay a little more for the radio itself (as you might for higher-priced XM or Sirius models costing 0 and up). Also, while a survey a few years back by the Consumer Reports National Research Center showed high satisfaction with satellite-radio service, consider the growing number of free alternatives to it. Those include the likes of free applications that bring the no-cost music-streaming services and to smart phones, which you might then pipe into your car radio or home entertainment system.

—Mike Gikas & Anthony Giorgianni

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