Feds Tapped Out of DTV Coupons

A December surge in demand for converter box coupons sends lawmakers and public officials scrambling after the National Telecommunications and Information Administration reports funding for the $1.34 billion digital converter box program is exhausted.

The Feb. 17 digital television transition took another stumbling turn this week when the NTIA (National Telecommunications and Information Administration) announced that funding for the $1.34 billion digital converter box coupon program has been exhausted, at least for now. The NTIA said consumers still seeking a coupon would be placed on a waiting list as expired, but unredeemed, coupons become available.

Under the program, consumers can order up to two of the $40 coupons per household to help offset the cost of a digital converter box, generally priced at about $90. Only one coupon per box can be used. The converter boxes are only needed for televisions that are not connected to cable or satellite receivers. Without a digital converter box or a cable or satellite receiver, consumers will find themselves without television reception.

According to a Nielsen Company survey conducted a year ago, 14.3 million U.S. households solely rely on over-the-air broadcasts. The NTIA said that based on consumer self-reporting, 12.6 million households that rely on over-the-air television have requested coupons.

As of Jan. 4, though, more than 24 million households have requested approximately 46 million coupons with about 18 million coupons actually having been redeemed. To date, 52.5 percent of coupons requested have been redeemed and more than 13 million coupons have expired.

Apparently, households with cable and satellite connections but with additional televisions in the primary residence or in second homes have requested the coupons although an NTIA spokesman told eWEEK the agency "does not have the funding for that type of survey." Others have blamed consumer confusion over the digital conversion prompted people who didn't need the coupons to order them anyway.

Acting NTIA Administrator Meredith Attwell Baker said in a statement, "Households need to consider all of their options and act now to be prepared for the February 17 transition to digital television. We are working with Congress, the incoming administration and other stakeholders to ensure everyone is prepared for the transition and no one is left in the dark."

U.S. Rep. Ed Markey (D-Mass.), chairman of the House Telecommunications and the Internet Subcommittee, said Dec. 24, "The expected surge in consumer demand for converter box coupons is occurring and the fact that NTIA now projects it will have to delay or possibly deny the issuance of converter box coupons to consumers without additional funding is of great concern."

Markey predicted "it is becoming increasingly clear that at minimum Congress may need to quickly pass additional funding for the converter box program in early January to prevent any delay in coupon availability or issuance."

Joining Markey in his concern over the digital converter box program is Sen. Jay Rockefeller (D-WVA), the incoming chairman of the Senate Commerce and Science Committee.

"While there are claims that hundreds of millions of private-sector dollars have been spent making Americans aware of the DTV transition, it seems that most Americans have no idea what it really is even if they have heard of it," Rockefeller said on the floor of the Senate Nov. 20. "New surveys suggest more consumers are growing aware of the transition, but consumers overall remain confused about what steps they need to take to prepare. Consumer Reports magazine has found that 63 percent of Americans have major misconceptions about what steps they need to take to prepare."

Rockefeller drafted a bill that President Bush signed on Dec. 29 granting a 30-day continuation of analog signals to help educate consumers to understand what steps they need to take to restore their television signals. For those who somehow missed all the advertising about the DTV, their screens won't turn to snow. Instead, the analog signal will be a continuous loop of how to get a converter box interspersed with any necessary public announcements about weather and other emergencies.

"At present, most experts agree that the transition will unleash a massive amount of consumer confusion. And when people are cut off from their televisions, it is not just a matter of convenience; it is a matter of public safety," Rockefeller said. "We simply cannot stand by and let people lose access to emergency alerts and public safety communications."

The Digital Television Transition and Public Safety Act of 2005 requires full-power television stations to cease analog broadcasts and switch to digital after Feb. 17. The Act authorized NTIA to create the TV Converter Box Coupon Program, which is funded from the proceeds of last year's 700 MHz auction.