The Morning Report
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San Diego’s Qualcomm is looking like the biggest loser in this week’s decision by the U.S. House of Representatives to delay the nationwide changeover to digital television until June. The chip-making giant was among a few companies that shelled out hundreds of millions to buy up analog spectrum space that will be freed up when broadcasters go digital, which Congress is requiring to happen this year.
The switch will not affect most people, because most have televisions with digital tuners. However, there are still millions of people with old analog televisions that get their signal over the air via set-top antennas, or rabbit ears.
Originally, the switch was supposed to happen Feb. 17. But Congress got cold feet after it became apparent that millions of analog television owners — most of whom are both elderly and poor — weren’t ready for the transition. The House vote on Wednesday to delay the switch until June 12 followed a Senate bill that was passed last week. President Obama is also in favor of the delay.
The Street.com, via Dow Jones Newswires, last week quoted Qualcomm Chief Operating Officer Len Lauer saying that “the delay will cost us tens of millions of dollars in extra expense and lost revenue.” I called Qualcomm on Thursday to get more specifics, and was told that the company wasn’t giving out any. It did, however, provide a statement that points out that television stations can still voluntarily make the switch, meaning that company’s potential losses may not be as much as Lauer thought they would be last week.
Here is the statement:
We are disappointed with the passage of legislation extending the DTV transition date to June 12th. Due to the investments we made, we were ready for a February 17th transition to provide our innovative FLO TV service nationwide immediately. We are encouraged that several Congressmen and Senators who supported the delay stated that this would be a one-time delay only. In light of the fact that the legislation, as amended and finally passed by Congress, allows TV stations to transition voluntarily between now and June 12th, we cannot determine the specific impact of the final bill’s passage on our MediaFLO business.
I’ll be keeping an eye on this story. One thing I am curious about is whether there are other San Diego companies (suppliers to Qualcomm, etc.) that might be adversely affected by this. If you know of any, or anything else about the situation, please e-mail me at: firstname.lastname@example.org.