NTIA: DTV Coupon Funds Could Run Out Before Analog Shutoff

National Telecommunications and Information Administration to Congress: Funding for DTV-to-analog converter-box-coupon program could dry up in January.

By John Eggerton -- Broadcasting & Cable, 9/18/2008 7:06:00 PM

The administration's digital-TV-to-analog converter-box-coupon program could well run out of funds to process those coupons by the end of January unless Congress frees up more money. That would be 17 days short of the DTV-transition date and almost seven weeks short of the March 31 end date for applying for the coupons.

That shortfall could be a problem if there is an anticipated spike of coupon requests from procrastinators as the Feb. 17, 2009, date nears.

That timetable came from acting National Telecommunications and Information Administration chief Meredith Attwell Baker in a letter to Congress (click here to see the full letter). The NTIA is the Department of Commerce agency overseeing the converter-box-subsidy program.

"NTIA has placed orders with IBM to distribute up to 44.5 million coupons," Baker said in the letter. "Assuming steady demand and an increase for the months of November, December and January, as well as a redemption rate consistent with that realized to date [49%], NTIA estimates that the coupon program will be able to honor requests for 44.5 million coupons through the end of January 2009 within existing administrative funds."

She added the caveat that there may be cost savings of up to $6 million that could add several weeks to that end-of-January date.

Baker was responding to a series of questions from House Commerce Committee chairman John Dingell (D-Mich.) and Telecommunications & Internet Subcommittee chairman Ed Markey (D-Mass.), which came after the NTIA last week asked Congress for access to an additional $7 million to issue coupons with money freed up by the fact that only about one-half of the coupons sent out to date were redeemed.

The same pair also asked Baker to outline her plans for dealing with a coupon-request spike beyond asking for more funds.

The legislators also asked why the NTIA did not indicate in a July 25 letter to them -- also related to any potential shortfall of funds -- that the NTIA might ask for more funds. Baker responded Thursday that the NTIA gave Congress as much of a heads-up as it could at the time.

In testimony at a June Energy & Commerce Committee hearing, she wrote, an NTIA witness indicated that “the program currently has limited administrative funds to distribute additional numbers of coupons that might be issued from the return funds.” Baker said the reason why the NTIA could not provide more details in its July 25 letter about what that request might entail was because it was in "procurement-sensitive" negotiations with IBM, which subcontracted the coupon program, on sending out additional coupons and "could not state with certainty that the agency might need additional administrative funds or provide an estimate of the additional amount the coupon program might need."