Sept. 5 (Bloomberg) -- Maags MacLoch wanted to prepare for the coming transition to digital television. Using a $40 federal subsidy, the Web site designer bought a converter box and hooked it up at her home in the Ozark Mountains.

``It just wouldn't work,'' says MacLoch, 55, who lives in rural northwest Arkansas. The paperback-size RCA box wasn't able to find a digital signal strong enough to produce a picture on her analog TV. ``I'm hoping they'll do something to fix that,'' she said in a telephone interview.

Blank screens like MacLoch's may foreshadow disappointment in millions of U.S. homes as some experts predict the government's $1.5 billion subsidy program won't bring clear digital pictures to all.

Starting Sept. 8, Wilmington, North Carolina, will be a test market for the nationwide switch. In February, major U.S. broadcasters will drop their traditional analog signals and begin transmitting only in digital. The change is designed to open broadcast airwaves for mobile Web devices and better radios for emergency workers.

Some consumers and researchers are at odds with the broadcast industry and government officials about the effectiveness of the program that will subsidize as many as 33.5 million converter boxes before the transition.

Centris, a marketing research company, concluded in a May report that more than half the households relying solely on over-the-air TV may fail to get one or more major network signals after the changeover. Because digital signals are vulnerable to interference, consumers also may need to invest in upgraded antennas, the study said.

Problems Likely

``Doing everything right, you're still very likely to have problems,'' David Klein, executive vice president at Fort Washington, Pennsylvania-based Centris, said in an interview.

Federal Communications Commission Chairman Kevin Martin responded that 5 percent of households that rely on antennas will encounter problems using the boxes.

``Most of the engineers say that if you can receive a clear analog signal with rabbit ears or a clear analog signal with a roof-top antenna, the same antenna should be able to work in a digital context,'' Martin said in an Aug. 18 interview.

Estimates vary on how many U.S. households rely solely on analog TV sets with over-the-air reception. Nielsen Co., which measures television audiences, puts the number at more than 10 million -- almost 9 percent -- of 113 million U.S. households with TV service. Centris estimates 17.4 million. The National Association of Broadcasters says 19.6 million.

70 Million Sets

The move to digital -- which is not the same as high definition -- leaves 70 million TV sets that aren't hooked up to cable or satellite, including those in basements and bedrooms, at risk of losing signals, according to the broadcasters' trade group.

The $1.5 billion federal subsidy will cover fewer than half of those sets. Consumers have requested more than 25 million coupons that provide $40 toward the cost of a converter box, and have redeemed more than 9 million, said Todd Sedmak, a spokesman for the National Telecommunications and Information Administration, which administers the subsidy. Boxes retail for $40 to $70, according to the FCC.

Centris's conclusions are ``baloney,'' said David Donovan, president of the Washington-based Association for Maximum Service Television, a broadcast industry trade association for technology issues. Centris used old data and failed to consider that some stations will boost their digital signals, Donovan said.

`A Perfect Picture'

``You should be able to receive the same number of digital signals that you receive in analog,'' Donovan said. ``In areas where consumers get snow and garbage, they now get a perfect picture.''

The FCC and broadcasters haven't ensured that digital pictures are sufficiently reliable, said Oded Bendov, an electrical engineer who has studied digital signals for more than a decade.

The signals are prone to interference from tall buildings in cities near transmission towers, and from household appliances in fringe areas where signals are weaker, Bendov, president of the Cherry Hill, New Jersey-based TV Transmission Antenna Group, said in an interview.

Tom Crunkilton, 59, a retired insurance executive, can see two TV transmission towers from his Columbus, Ohio, home. Crunkilton doesn't need a converter box because he owns a high- definition digital TV. He experimented with several different indoor antennas. Still, pictures on his 50-inch set are crossed with black lines. At times the sound suddenly drops out.

`It's Useless'

``It's maddening,'' Crunkilton said in an interview. ``If they intended to make that a reliable signal for me and my neighbors, it's useless.''

The TV and cable industries have pledged campaigns worth at least $1.2 billion to publicize the transition. The FCC plans to spend $35 million, said spokesman Robert Kenny. The agency Web site directs people to http://www.dtv2009.gov/ to apply for coupons.

``We're going to get a lift from this,'' Dave Arland, a spokesman for Audiovox Corp., said in an interview. In July, the Hauppauge, New York-based company, which makes converters and antennas under the RCA and Terk names, introduced a series of antennas the size of small pizza boxes designed to capture digital signals.

In North Carolina, where the Wilmington test market will switch to digital at noon on Sept. 8, some TV viewers reported problems after trying the digital boxes, said Steve Volstad, spokesman for UNC-TV, the statewide public television network.

``In general, it's our perception that people need to go with an outside antenna,'' Volstad said.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

Last Updated: September 5, 2008 00:00 EDT