Why is the U.S. Government Sending Out $1 Billion of Vouchers to Its Citizens?

Get ready for affordable Internet service in 2009. Why? Earlier this year, the United States conducted a government auction to split up blocks of prime telecommunication space to the highest bidders -- high speed Internet service providers Verizon & ATT, and the Internet powerhouse Google.

What is this all about? Well, clever marketing has focused attention on an impending switch in 2009 from analog broadcasting to digital broadcasting, which will render your old TV useless. This is not really true, as long as you are already hooked up to cable or satellite broadcasting service. These services make use of digital receivers, which will pick up the digital signal just as they already do. In addition, the government is supplying its citizens with $40 vouchers (as long as they submit a simple application), so they can easily purchase a digital converter box for their old TV. (Furthermore, this voucher is available for everyone while supplies last, not just people who own old TVs.)

So, why is the government going to all trouble of mandating a switch to digital broadcasting, and why is it willing to send out $1 dollars worth of vouchers?

The reason why is simple. The government is making money in the long run.

How?

It is auctioning off newly-free spectrum space, which has been used in the past to broadcast a bulky analog signal. Since analog is being replaced by the less-space-devouring digital signal, this spectrum space is now up for grabs. Some of the most powerful companies in the world have paid hand-over-fist to secure rights to this space.

So, how does this translate to a lower bill on your Internet service? Well, not only do telecommunications companies end up with more space to broadcast with, but this newly-available space is also prime spectrum property. It will allow winning bidders to broadcast even further and with more strength than they have been able to in the past, cutting down on certain costs.

By providing rebates, these companies will be able to lure new customers away from traditional providers. Additionally, hardware providers will be poised to win, since customers will be motivated to buy upgrades in their computers, cellphones, and televisions in order to best experience this enhanced and more available service.

So, while your TV may not go black in 2009, it probably will be able to pick up more affordable cable or satellite service soon. In fact, within 10 years, the government is hoping to spur free Internet service providers to give high-speed Internet access to 95 percent of the nation's population.

Just imagine where your money will go if you don't need to pay an Internet bill every month? Maybe to pay $25 per gallon gas prices?