High-definition set-top boxes are selling too fast:

Verizon appears to be hardest hit. Its delay has been in place for about two weeks and affects customers placing new orders for the equipment, said Verizon spokesman Eric Rabe.

The shortage follows a spike in orders for HD boxes during the holiday season, likely a result of consumers receiving new TV sets as gifts as well as upgrading TV sets in anticipation of the Super Bowl, says Mr. Rabe. The jump in orders likely was aggravated, ironically, by a promotional offer in which Verizon is giving away high-definition TV sets to new FiOS customers. The offer has been so successful the company has renewed it three times.

On February 15th, PFF will be hosting a congressional seminar on the DTV transition.
For more info and to register, click here.

I'm listening to a Webcast of the Senate Commerce Committee's hearing on the Cyren Call proposal.

The idea, put forward by former Nextel Vice Chair Morgan O'Brien, is for Congress to take 30 MHz of (formerly analog TV) spectrum in the 700 MHz band, which is currently scheduled to be auctioned early next, and give it to a "Public Safety Broadband Trust" that would be managed by his new company, Cyren Call. Cyren Call would lease the spectrum to commercial wireless companies, which would build out a nationwide network and use it for commercial services, but public safety agencies would get to use it more or less for free.

Cyren Call has lobbied the plan on the basis that it's needed for public safety interoperability and broadband. Not surprisingly, public safety seems to think it's a great idea too. A study I co-authored (Full disclosure: It was funded by the High Tech DTV Coalition and CEA.) shows the plan isn't likely to work, for lots of reasons. (See http://www.criterioneconomics.com/news/070206.php.)

The thing I found really striking about today's hearing is that Mr. O'Brien came right out and said his real goal here is to create a new cell phone company, which (he argues) would benefit consumers. Did I miss something, or did we just go through a round of much-needed consolidation in the wireless industry? And, if things have changed and we really do need another carrier, what's stopping Cyren Call (or anyone else) from buying the spectrum at the auction?

The history of farming the FCC for free spectrum is long and sordid. Auctions seem to have gotten the problem under control. Hopefully, Mr. O'Brien's laudable candor will help Congress to see the Cyren Call plan for what it is.

Among the corollaries that fall out of the Coase Theorem is that, when property rights are ill-defined or uncertain, commercial transactions cannot take place because no party know what they own and the price system cannot function. It also follows from this corollary that parties will spend a great deal of time, money and effort to define property rights, inevitably in their favor. This modest point came to me last week while reviewing Jim's POP on the fight between cable and content companies over the extent of the Sony fair use principle and it applicability to head-end DVR-like technology.
But it is also a broader point that encompasses many of the current regulatory battles: uncertain property rights preclude private bargaining, but also inspire intense (and socially wasteful) amounts of rentseeking to define the property right. This is net neutrality, this is fair use, it is must carry, this was the unbundling fight surrounding the '96 Act. it is the intercarrier compensation debate; heck, it is a reductive tour de force of all regulatory behavior in the digital space. If property rights are ill-defined, or can be relatively easily re-defined, then parties will invest in getting the government to make these changes.
In the Cablevision case, the "fair use" principle precludes content and cable companies from quickly reaching a licensing deal for this admittedly new way to package and time shift content. In a Coaseian world, if one or the other party had a clear property right, a deal would quickly be struck. (For now, nevermind the productive effects.)

Member companies of the High-Tech DTV Coalition Thursday will be demonstrating digital-to-analog converter boxes, offering briefing materials on the DTV transition and pushing for a date-certain on conversion. This event, open to the public, runs from 9 am to 1 pm in 2322 Rayburn.

The good folks at the High-Tech DTV Coalition have finally gone online, posting a very nice web site full of good stuff. Take a look at www.dtvcoalition.com.

Those who would retain the regulatory status quo of pervasive price regulation have switched epithets in the last year from "monopoly" to "duopoly." A duopoly, we are told, is just as bad because the two firms in the market will cozily divide up markets and share supracompetitive profits.

It appears someone forget the duopolists that this is how the textbooks demand they behave. SBC has again escalated the price wars with cable, offering three free months of TV and high-speed Internet service for defectors from cable.

Senator McCain's DTV bill and today's Tech Daily (subscription required) article on the House DTV bill by Messrs. Upton and Barton both underscore the core sticking point of accomplishing the transition: the size and extent of the subsidy for DTV tuners. The question is familiar to communications policy: the size and nature of the universal service subsidy.

If anybody needed convincing, a new study demonstrates the enormous costs associated with the slow pace of the DTV transition. Coleman Bazelon of Analysis Group (in a study sponsored by Intel)estimates that the 60 MHz of spectrum that would be freed up would yield $20-$24 billion in auction revenues to the government - very similar to the $28 billion estimate recently published by William Zarakas and Dorthy Robyn of the Brattle Group (in a study done for QUALCOMM). More importantly, the Bazelon study finds that the consumer surplus associated with this spectrum - indicative of the very large benefits that would accrue to consumers from the new services that would be produced with the additional spectrum - is 10 to 18 times the auction revenue. Total social benefits, including auction revenues, consumer surplus and public safety benefits, are between $233 billion and $473 billion. Under any criteria, that's real money.

Just to prove regulators need not impose a "fairness" mandate on this blog, I would offer this partial (okay, minimal) rejoinder to my comments yesterday on digital TV. I argued then that we need to put arguably smallish issues like "converter boxes" behind us to free spectrum for innovative services like wireless broadband.

In the course of giving the ether a stern talking to, I suggested that TV was mostly "trivial and titillating." But today on National Public Radio's "Morning Edition" (yes, Virginia, sometimes "market-oriented" people listen to NPR), author Steven Johnson argued that the complexity of plot in modern TV shows like "Alias," "The Sopranos" and "24" may account in part for higher levels of intelligence among viewers in recent years. Johnson contrasted such plot complexity with the formulaic simplicity of shows many of us grew up on: "The Love Boat," the "Dukes of Hazzard" and (eek!) "Joanie Loves Chachi."

I would note, however, that Johnson and I are in agreement to the extent we see some upsides to TV. (I pointed to its power to "educate and inform.") After all, I need some justification for my hours in front of the set -- other than it keeps me occupied while I await the added intelligence Johnson highlights . . .