On July 21, 2004, J.H. Snider of New America Foundation testified before the House of Represenatives Energy and Commerce Committee, Subcommittee on Telecommunications and the Internet. The following is an excerpt from his remarks. The complete transcript is available in the PDF file linked below:

Good morning. My name is Jim Snider, and I'm a senior research fellow at the New America Foundation, a nonpartisan public policy institute here in Washington. Thank you, Mr. Chairman and members of the Subcommittee, for this opportunity to testify today. My comments will focus on the difference between the Berlin and U.S. models for speeding the broadcasters' DTV transition while also ensuring that no American loses access to "free" over-the-air programming. Please see Appendix A, a New America Foundation issue brief co-authored by myself and Michael Calabrese, for a more detailed discussion of this proposal.

There is a general consensus that rapidly completing the broadcasters' digital TV transitionthereby freeing up 108 MHz of "beachfront" spectrum corresponding to TV channels 52-to-69is in the public interest. There is also a general consensus that this transition cannot come at the expense of large numbers of Americans losing access to "free" over-the-air TV. The debate centers on the best means to achieve these two ends: continuing the present producer subsidy model or shifting to the consumer subsidy model illustrated by Berlin.

We believe that the Berlin experience teaches us that the direct consumer subsidy model is a faster and more efficient way to speed the broadcasters' DTV transition than the indirect producer subsidy model employed in the United States. In Berlin, the broadcasters' DTV transition took a total of 18 months and was completed at a cost per capita to taxpayers and consumers only a tiny fraction of the lagging transition in the United States.

The underlying reason the consumer subsidy model has proven to be so much more efficient is that it directly addresses the problem that is slowing the broadcasters' DTV transition: the slow rate of consumer purchase of devices that can receive broadcast DTV signals over-the-air. The producer subsidy model, in contrast, only indirectly deals with that problem. The difference is a bit like encouraging my teenage daughter to finish her chores not by offering her a simple and direct bonus for doing so but by paying all her friends not to distract her, bribing her not to watch TV or use my car, and granting her numerous extensions in the hope that her younger sister, who is compulsively clean, will do the job for her. The complex, indirect approach may indeed get the chores done but not without huge waste.