The Price of Bread and Circuses

I remember almost exactly when broadcast television went 24-hour.  It was in the mid-‘60s, when every large US city lived in dread of riots.  Nobody actually said it (not that I knew of, anyway) but it suddenly seemed like a very good idea to give people—especially poor people—something to do at home all night.


I mention this because, when the 700 MHz band of the US wireless spectrum was auctioned off last January, reassigning most of what is now the “free” broadcast TV bandwidth for sale to commercial wireless providers, Congress suddenly realized that this could leave the poorest Americans without access to television.  And that this might be a bad idea.


So the federal legislation provided that manufacturer make analog-to-digital converter boxes available to the general public for access to the new digital frequencies.  And, to temper the impact on the downscale consumer, the government would use some of the proceeds of the bandwidth auction to provide every consumer with coupons for purchase of these boxes.


Most of us have already received our two coupons per household, each worth $40.00.  The manufacturers of the boxes have, of course, promptly raised the price of each box by—guess what!–$40.00.


Let’s go through this choreography again, more slowly.  The government has taken the portion of the public airwaves, which have always been held to belong to the American people since the first federal Communications Act in 1934 (since revised and amended in 1996), and reassigned it to private wireless carriers. It has then auctioned it off at outrageously low prices to those carriers. Then it has used a minuscule portion of the proceeds of that fire sale as a subsidy to electronics manufacturers, passing it briefly through the hands of the consumer first.


Which, of course, leaves the consumer with precisely the same resources she had before for purchase of a converter necessary for her continued reception of “free” television.


This pattern, of governmental vouchers passing through the consumer’s hands to benefit the providers of some favored services, is nothing new.  It’s how Medicare works, for instance.  American seniors now spend slightly more on medical care out of their own pockets, both in inflation-adjusted dollars and in proportion of their income, than they did before the establishment of Medicare.


Indeed, the practice goes back at least as far as 18th-century England, when the Poor Law authorities supplemented the meager earnings of factory workers in order to enable the factories to pay less than a subsistence wage.  Current TANF regulations have much the same effect—now that welfare recipients are required to work, their benefits serve mainly to supplement below-subsistence wages, to the benefit of the employer, who can afford to hire people who do not present the inconveniences of homelessness, without paying them enough to afford housing.


Anyway, that’s Part One of the problem.  Part Two is, what happens to people who can’t afford the cost of converter boxes?  Will “the market” drive that cost back down to $40.00, which is probably more than the actual production cost?  Will a hot secondary market emerge in stolen and pirated boxes?  Or will the poorest of the poor, suddenly deprived of the anodyne that has kept them off the streets, rise up in revolt, as their betters had anticipated 40+ years ago?  Watch this space.


Red Emma

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: