For our purposes, the key thing to remember is that you can enjoy the benefits of DTV without owning a fancy flat-screen HDTV. That's because digital signals are a lot less sensitive to interference than analog signals. Many people subscribe to cable only because they live in areas that don't get great over-the-air reception. For these people—folks who don't care for the Food Network or Bravo and who get enough of Jon and Kate at the checkout line—DTV is a godsend. If you've got an old TV, just buy a digital converter box, which should cost just $10 or so after you redeem your $40 government coupon.
You'll also need an antenna. If you've got one already, use that. Even though many antennas now being sold claim to be specially made to receive digital broadcasts, there is no such thing as an HDTV antenna, and any old one should work fine. (If you're buying a new one, check out these reviews, and don't spend more than $50.) What matters more than the kind of antenna you choose is where you put it—in general, outdoors beats indoors, the higher the better. Connect the antenna to your converter box, connect the box to your TV, and voilà —you're getting TV for free! And, if you do have one of those fancy new HDTVs, your picture will be fantastic—you'll be watching the tube in exactly the same high-def resolution you'd get if you subscribed to cable or satellite.
Now, your channel lineup depends on where you live and where you put your antenna. Check out TVFool.com's signal analyzer to get an idea of which stations come in where you live. Many people report surprisingly good results. When I plugged an antenna in to the TV in my San Francisco apartment, I was able to receive my local ABC, NBC, CBS, FOX, and PBS stations, whereas in the old days I'd get only snow. (The picture wasn't perfect: I would occasionally see some slight ghosting, and the picture would sometimes freeze completely. Once I repositioned my antenna, things looked better.) Because digital signals require less space than old analog signals, you'll also notice that many stations now feature one or more "subchannels"—I can choose from three different programs on my PBS affiliate, for instance.
Of course, your mileage may vary. Some people report getting worse reception after their local stations switched to digital. In the old days, if you lived at the edge of a station's broadcast area you might have gotten a picture that was snowy but still watchable. A weak digital signal, by contrast, resembles what you see when you play a scratched DVD—the picture freezes up, compression artifacts crowd the screen, and sometimes the whole thing just goes blank. As a result, some people in rural areas could find themselves without any watchable signals at all.
Many of these people crowd online forums to complain about the new regime. "Why fix something that wasn't broken!?" is the standard refrain. And you've got to feel for them; suddenly, by government mandate, they've lost access to the nation's favorite pastime. But while the story is sad, it's not tragic. Some people who were previously getting snowy TV will now get nothing at all. Meanwhile, the rest of us will get better Internet and better free TV. In allocating a public good like the airwaves, the government has to make trade-offs. I'd say this is a pretty good one.
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