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Digital TV $10 Billion Dividend

January 25, 2008 | Ibex Marketing

One of the main reasons for switching from analog to digital broadcast of television signals is that you can send more content over a digital signal than you can over an analog one. (This is also why digital broadcasts are required in order to send out high definition signals.) So all the television stations got new channels for their digital broadcasts, and as of February 17, 2008, their analog channels will become available for other uses.

Some of these frequencies will be used for emergency services communication systems, such as police and fire, but the bulk will be made available for commercial use. Since the airwaves belong to the public, the federal government is auctioning off the licenses for these newly available parts of the radio spectrum. And yesterday marked the starting rounds of the bidding for these frequencies.

How much are these airwaves worth? We won’t know until the bidding is over, but according to a report from Reuters yesterday, the initial rounds neared $3 billion. Experts expect the final total to top $10 billion. Part of this windfall is going to be used to fund the government rebate program for digital TV converters for those who want to keep their old analog television sets and still receive over the air broadcasts when the analog broadcasts stop next year.

As for the new applications of these frequencies, expect to see an explosion of mobile services, ranging from video programming on your cell phone to low-cost broadband wireless Internet connections. This will be an exciting time as we see these new technologies come to market in the coming years.