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SAN DIEGO – Isidro Diaz surfs channels on his old TV about three hours a night in the trailer he rents for $350 a month. Come Tuesday, his limited choice of programs will be much more limited.

Although the government delayed the mandatory shutdown of analog TV signals by four months to give people with older TVs more time to prepare, that’s small comfort to Diaz and other people who live in cities where some broadcasters are switching to all-digital broadcasts Tuesday, as they had originally planned.

Because it is costly to keep broadcasting analog signals, nearly 500 stations said they would make the transition Tuesday rather than June 12. The Federal Communications Commission told 123 stations they might have to reconsider, so no city loses all its analog network broadcasts, and many stations have agreed. But still there will be an odd patchwork of programming for millions of Americans who rely on analog TV signals.

To deal with the change, they need a digital converter box or a new TV with a digital tuner, or cable or satellite service.

The Leadership Conference on Civil Rights, a coalition of 200 advocacy groups, has digital TV assistance centers in seven metropolitan areas — Atlanta, Detroit, San Antonio, San Francisco, Seattle, Portland, Ore., and St. Paul, Minn. — to answer questions, demonstrate converter boxes and sometimes send out house calls.

In San Diego, the nation’s eighth-largest city, the ABC, CBS, Fox and CW affiliates plan to end analog broadcasts Tuesday.

Diaz, a 63-year-old Mexican immigrant who was laid off a month ago by a garden nursery that paid $10 an hour, figures he will eventually muster $200 for a digital television; the least expensive model on Best Buy Co.’s Web site costs $130.

He recently shopped at an electronics store for a digital converter box for the $40 used Sony TV he bought from a newspaper classified ad four years ago. But the $60 converter box didn’t seem worth it because he can get a new TV for a little more.

Subscribing to cable or satellite TV is out of the question.

“There’s no work right now, $40 a month is very difficult,” Diaz said while scarfing a dinner of beef tacos at a stand in San Diego’s Barrio Logan neighborhood.

The Obama administration sought the delay in the analog TV shutdown after the government ran out of money for the $40 coupons that subsidize digital converter boxes. The program has a waiting list of 4 million coupons; each household can get up to two.

According to research firm MRI, 17.7 percent of Americans live in households with only over-the-air TV. The Nielsen Co. said last week that more than 5.8 million U.S. households, or 5.1 percent of all homes, were not ready for the analog shutdown.

However, officials at stations that plan to make the switch Tuesday believe that the transition will mainly go smoothly, and that the delay will confuse consumers.

“They’ve had two years to get ready is our feeling,” said Larry Patton, general manager of KSWO-TV, an ABC affiliate in Lawton, Okla. “We feel there’s always going to be a few people who are going to wake up on the morning of Feb. 17, or June 17, or whenever it is, and not be ready.”

Bryan Frye, marketing director at KAKE-TV, the ABC station in Wichita, Kan., said he was half-joking when he described fears about the analog shutdown as “a little like Y2K.”

“We are going to pull out all the stops, we are going to have everybody on board, you know, full alert,” Frye said. “It is going to happen and everybody is going to go, `Hmmm, OK.’”

In Jackson, Miss., Ashley Lewis, 25, said she has visited an older neighbor several times to help with her digital converter box. Lewis bought a new antenna Thursday for the neighbor, thinking that might make the box work better. In most cases digital signals, which are more efficient, come in better than analog, but some older antennas aren’t well suited.

“She can barely walk,” Lewis said. “Her knees are so bad sometimes and she is on a fixed income, and I don’t think it is fair for elderly people.”

A Radio Shack store in Casper, Wyo., where the ABC and CBS stations switch next week, has found that the converter boxes confuse some consumers, said assistant store manager Dorothy Durda.

“Normally, they come in and we draw them a little diagram or whatever of how to do it and that seems to fix their problem for them,” Durda said.

Major San Diego stations have twice flashed warnings to TV screens on analog signals, telling anyone who sees the message to call a toll-free number for more information, said Jeff Block, manager of KGTV-TV, an ABC affiliate.

After a warning in December, the toll-free number got 359 calls. A warning in January yielded 510 calls.

Diaz didn’t call the number but said Tuesday’s switch comes as no surprise. The stations he watches have advertised the change for about three months.

He’ll still be able to get Spanish-language news broadcasts, which he watches about three hours each weeknight. And he can still enjoy boxing on Saturday nights and soccer matches on weekends. But starting Tuesday he’ll have a puny selection of English-language programs.  Diaz said he might browse again for TVs this weekend but isn’t sure when he’ll buy one.

“I can wait a little longer,” he said.

PHILADELPHIA – Porter McConnell gave up on pay TV last summer after noticing that monthly rates kept creeping up. Now with no satellite or cable TV, she watches her trusty old TV set with an antenna or she goes online to catch her favorite programs. Once in a while, she buys shows from Apple Inc.’s iTunes service. McConnell also upped her subscription to Netflix Inc.’s movies-by-mail service so she gets two DVDs at a time instead of one, for $15 a month. “Part of it is, I’ve got to economize,” said the 30-year-old Washington, D.C., resident who works at a nonprofit.

McConnell is the kind of consumer who makes cable and satellite TV operators lose sleep. While a weak economy invariably makes people pinch pennies, this is the first time that viewing shows online has become a viable competitor to pay TV, making cutting the cord easier.

Cable operators are starting to notice. Glenn Britt, chief executive of Time Warner Cable Inc., voiced his concern Wednesday in a quarterly earnings discussion with analysts. “We are starting to see the beginning of cord cutting,” he said. “People will choose not to buy subscription video if they can get the same stuff for free.”

It’s tough to pin down how many people actually have given up cable — most of the evidence remains anecdotal — and which customers moved to a competitor.

Still, Time Warner Cable, the nation’s second-largest cable operator, lost 119,000 basic video customers in the fourth quarter, even after excluding subscribers it gave up from the sale of some cable systems. The company also posted slower growth in new digital cable TV, Internet and phone subscribers. More details will emerge as other cable and satellite TV operators report earnings in the coming weeks.

This is not to say that the cable business is in trouble. It’s a mixed picture in this economy. While there will be some people who will completely give up their pay TV service, many folks will keep the subscription but cut back instead on going out to the movies. They also might give up a movie channel or two and buy fewer pay-per-view shows.

But pay TV providers are right to be alarmed. Not only has a flood of TV shows and movies become available online, but the video quality has gotten better. Netflix is expanding its service that lets subscribers stream movies and shows from the Internet at no additional cost. And more and more people have home broadband — 57 percent of American adults, according to the Pew Internet and American Life Project.

Throw in the worst economic slowdown in nearly a century and people question whether they still want to pay for cable or satellite. As of January 2008, the average monthly home cable bill was $84.59, up 21 percent from two years earlier, according to the Federal Communications Commission.

“You’ve got these factors aligning at the right time,” said Bobby Tulsiani, senior analyst at Forrester Research. “This time there is a real, viable alternative” to cable.

To be sure, there can be drawbacks to canceling pay TV. Watching shows on a PC still isn’t as comfortable as watching TV while relaxing on a couch. The quality of Internet video, while improving, still isn’t as good, especially for live events, in which video and audio might not be in sync. While some game consoles, Blu-ray players and other devices enable video to be seamlessly delivered over the Internet to a TV, hooking up a computer to the TV to watch the full gamut of online shows on a big screen can take some technical savvy.

These downsides mattered to 36-year-old Peter Tierney, who lost his job two weeks ago as a Web producer for a New York advertising agency. With a wife and son to support, he called Time Warner Cable to cut his premium Japanese channel and whittle down his $180 monthly cable bill. Tierney ended up saving nearly $70 a month, after Time Warner Cable gave him discounts good for two years and he canceled the premium channel.

“It’s hard for two people to watch shows on the computer at the same time,” Tierney said. “I can’t sit on the comfy couch. I have to go to my desk and sit on my chair.”

Indeed, a Forrester survey to be released in about a month found out that most people aren’t planning to ditch their cable subscriptions soon. But the Internet is coming on strong as a new way to watch video, especially for the younger set.

Tulsiani noted that the success of Hulu.com, a joint venture NBC and Fox that officially launched last year and offers free TV shows and movies, has attracted other entrants. Perhaps to hedge its bets, Philadelphia-based Comcast Corp. — the nation’s largest cable company — runs a similar site called Fancast.com, while full TV episodes now are available through the networks’ Web sites. YouTube made deals last November to carry full shows in an alliance with CBS and MGM.

This is what worries Time Warner Cable’s Britt. He warned that if cable networks keep moving content online for free, it would hurt them and cable operators like Time Warner. Because with fewer subscribers, cable operators will pay less money to programmers for the right to air their content.

But the networks’ hands largely are tied. People are illegally swapping files of shows and movies over the Internet already, so the networks might as well make money off it with advertising and take some control over their content.

While cable and satellite TV companies worry about any consumers cutting service, it would appear younger people pose the biggest threat, given the wide generation gap in online TV viewing. About 72 percent of people ages 18 to 29 have watched a video online, compared to 34 percent of people ages 50 to 64, according to Pew.

Consider Thomas Senger and his family. The 23-year-old security officer decided not to get cable recently after moving out of his parents’ house and into his own apartment in Bayonne, N.J. He doesn’t watch that much TV anyway and prefers playing video games or viewing DVDs with friends.

“It’s pointless to pay for something that I watch over the Internet,” he said.

But that’s not an option for his grandparents, who don’t know how to use a computer and watch a lot of TV. His parents are more savvy about the Internet, but not enough to change their viewing habits. Senger said his mother likes to watch the QVC shopping channel live. She and his stepfather also watch TV while eating dinner — a tough proposition over a PC screen. “Both of them will still need TV,” Senger said.

Civil rights leaders and the National Association of Broadcasters are praising the decision of Congress to postpone the digital television transition, but the four-month delay isn’t so popular with some in the technology and electronics fields.

“Enough already – throw the damn switch,” said Buckingham’s Peter Putman. He’s a communications and electronics consultant who runs www.HDTVexpert.com, a Web site that covers the industry.

February 17 was to have been the day that broadcasters would stop sending analog signals and shift to an all-digital format. The transition wouldn’t have impacted viewers who subscribe to a paid television service or those who’ve bought digital-ready televisions within the last few years.

The rest – viewers using rabbit years on older televisions – were encouraged to use government-issued coupons to buy signal converter boxes for their TVs so the sets would work after the changeover. Due to a funding shortfall, there’s a waiting list for the $40 coupons.

Media research group The Nielsen Co. estimated two weeks ago that more than 6.5 million U.S. households weren’t ready for the switch to digital. On Wednesday, the U.S. House opted to postpone the change. The Senate passed a similar measure last week and President Barack Obama has said he would sign off on the delay.

“This train needs to leave the station,” said Putman, who said many of the people who aren’t ready now won’t be ready in June either. “No matter what, some people are still going to show up at the station with their luggage and find out the train has left.”

Putman pointed out that the transition was first supposed to occur in 2005.

“People had all the time in the world to do it,” he said. “It’s just procrastination. People are never going to be 100 percent ready.”

According to Nielsen, the Philadelphia region is 87 percent ready. That’s not enough, some say.

Bucks County Congressman Patrick Murphy, D-8, reported Wednesday that 2,590 eighth district residents are on the coupon waiting list.

“With almost 2,600 people in our district just waiting for a coupon, we need to clear up the confusion and help more families afford the change to digital television,” he said in a statement. “With families and businesses across our community struggling in this economy, helping prepare for this transition is the least we can do.”
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The Leadership Conference on Civil Rights applauded the delay and the National Association of Broadcasters pledged to provide new television spots announcing the June 12 transition date.

“The legislation passed by Congress provides more time for Americans to prepare for the DTV transition and will allow more time for the government to fix the coupon program,” NAB President David Rehr said in a statement.

Switching to a more efficient digital broadcasting format is designed to free up additional space for emergency services transmissions and new wireless services. Analog signals are less efficient and consume more bandwidth than digital signals. When the analog signals are gone, it opens up room for additional users.

Montgomery County will be one of them, said Sean Petty, its deputy director of public safety.

“We will ultimately use some of those frequencies to add capacity,” Petty said. “Right now, the system holds about 12 million transmissions per year – we’re running at about 1 million per month. This would allow us to bring more users onto the system and fill in some areas.”

Getting the additional capacity would not happen overnight, but “this sets the process back by the length of the stay.” Still, Petty said, the delay wouldn’t cause a significant problem for the county.

A Verizon Wireless spokesman declined to comment on the delay.

Putman said the delay isn’t even guaranteed to help viewers still using analog systems, since many broadcasters will likely continue with their plans to switch on Feb. 17. The Federal Communications Commission in Washington, D.C., reported Monday that 143 stations have already terminated analog service, another 60 plan to do so before Feb. 17 and 276 more expect to go all-digital on Feb. 17.

“So Congress is really just covering their rear ends,” he said. “Now they can say they voted to extend the deadline [if people complain].”

Executive pay expert Pearl Meyer says the limits may be politically popular, but aren’t very effective at changing management thinking.

(Fortune) — When it comes to executive compensation, Pearl Meyer has seen it all. She started her career more than 30 years ago, at Kraft, founding her own eponymous firm in 1989 and later selling it. Now senior managing director at Steven Hall & Partners, Meyer has the kind of perspective on President Obama’s pay restrictions that can only come from a veteran of the business. In an interview with Fortune’s Jennifer Reingold, she talked about what’s good and bad in it.

Q: Pearl, what do you make of the Obama plan? Will it change the way banks pay their executives?

A: I think it’s clever. It’s well designed from the perspective of the government trying to balance incentives with the need to satisfy the concerns of the public and the Congress. What they are trying to do, I believe — how should I put this delicately — is to meet the expectations of the public. But I don’t know how effective it will be in motivating and retaining the people we need for the long haul.  It sounds very good if you believe that the people who are now in charge were responsible for the disaster. But these disasters were caused by a small segment of the managing population and the problem is proper oversight by senior management, most of which are gone. Now there is a cadre of executives who are going to be punished or penalized for the actions of others. I am concerned that these institutions won’t be able to maintain the quality of their hires.

Q. But what else would they do? Go to other companies that didn’t take TARP funding?

A. Exactly, yes. Right now AIG (AIG, Fortune 500) is hemorrhaging people and they are being grabbed up right and left.

Q: Are there specific elements of the plan that you like or don’t like?

A: Some of these things are very sensible, like don’t redecorate your office. On the other hand, the nonsense about Wells Fargo (WFC, Fortune 500) not being able to have a sales meeting is terrible. It’s business. They’re going to have to have sales conferences and people are going to have to pay for them.

If you really look at it, though, they didn’t really limit executive pay. They limited current cash compensation to $500,000. Continuing to grant restricted stock and other long-term incentives represents an opportunity for long-term wealth accumulation, considering the depressed value of the stock. AIG is now at around $1 a share…if people could get restricted stock at a dollar and bring that company back, they could easily make up for what they’ve lost in cash.

Q: This is not the first time government has tried to limit compensation. What has been the result in other attempts?

A: Ideologically I think that if it was not a quid pro quo [meaning, that this is in return for government funding], it would be a very bad idea. Every time we’ve had regulatory interference with the marketplace, it has boomeranged. I’ve gone all the way back to Nixon’s wage controls. It was a complete failure. There was a limitation of 4% on all salary increases, but before that many companies weren’t giving 4%. After that they all were. And the year after the controls expired, salaries increased 10%.

The same thing happened with the $1 million cap on the tax deductibility on executive salaries. And the limit of 2.99 times salary for the tax deductibility of golden parachutes [severance or change-in-control payments made to executives]. No one was getting that before: The average was 1.5 times. People were coming to me saying, “Mrs. Meyer, why am I only getting 1.5 when the government lets you do 2.99?” It just boomerangs.