Washington

DTV Converter-Box Program Hits Ceiling

NTIA putting new coupon applications on a waiting list 1/05/2009 09:00:00 AM Eastern

VIDEO: DTV Transition 101 -- The DTV Coupon Program
The National Telecommunications & Information Administration (NTIA) is putting new DTV-to-analog converter box coupon applications on a waiting list, having already run up against its statutory maximum of $1.34 billion funding limit for the program.
That means anyone down that list a ways--there are 103,000 people on it with thousands more added every day--likely won't get their boxes in time for the Feb. 17 transition date.
"On Sunday, Jan. 4, NTIA hit our funding limit," acting NTIA head Meredith Baker told reporters Monday. "Anyone who is requesting funds now will be put on a waiting list and will be mailed coupons on a first-come, first served basis."
That is due to unexpected demand--Baker said the NTIA was expecting spikes in demand that leveled off but instead got, effectively, spikes and more spikes.
The $40 coupons can be used to buy a converter box that allow analog-only over-the-air TV viewers to continue to receive a signal after the transition Feb. 17 date for the ending of full-power analog TV.
Those atop the waiting list--there are currently 103,000 on the list--won't get the coupons until money is freed up from expired coupons, a tally of which is done weekly, according to an NTIA spokesperson. 
Last week, NTIA Baker telegraphed the move in a letter to House Telecommunications & Internet Subcommittee Chairman Ed Markey (D-MA) in which she warned that raising the statutory cap could prevent "queuing up" coupon requests, which would begin once the cap had been reached.

She had said that NTIA could run out of money on hand

to distribute the coupons as early as this week given an anticipated spike in redemption rates.
"Once the [$1.34 billlion] obligation ceiling is reached," she told Markey last week, "the program will hold coupon requests until funds from unredeemed coupons become available for obligation. NTIA realizes that this would likely result in consumer confusion and dissatisfaction with the program."
Baker said Monday she was not sure how long people would have to be on the list, but pointed out that $14 million per week was being freed up in expired coupons.
Markey has suggested Congress may need to move quickly to raise that ceiling and prevent the slow-down or stoppage. A Markey advisor had not returned a call at press time, but the congressman is said to be weighing his legislative options. Rep. Rick Boucher (D-VA), who has been following DTV issues closely told B&C that Congress would need to legislate "pretty quickly" in order to "raise the cap" or take some other step "to make sure the coupon program can continue."
Baker said NTIA was in contact with Congress about the options. Those would include giving NTIA more money or exempting it from a law (the Antideficiency Act, or ADA) that prevents it from spending money to send out coupons until the money comes in from expired coupons. The Bush administration opposes the exemption on general principle--the ADA is gospel to fiscal conservatives points out one Democratic supporter of the exemption option--but Baker said NTIA would do whatever Congress said if it chose to exempt it from the act. But when asked whether she would prefer Congress raise the cap, she would only say NTIA was conferring with Congress about "the multiple options."
But so, far, NTIA has not formally asked Congress for more money, Baker conceded Monday, and would not say whether it would do so. NTIA has been careful to frame its answers on DTV coupon money availability so as not to be in the form of a request, but rather an outline of possible outcomes and options.
According to someone familiar with Markey's current thinking, exempting the ADA is thought to be the easiest short-term fix, with raising the cap something that could happen as well after that.
The Consumer Electronics Association (CEA) urged one or the other. "NTIA should be permitted to mail out coupons immediately," CEA said in a statement, "and we urge Congress to work with NTIA to lift the red tape that is keeping available coupons out of consumers’ mailboxes.”

Currently, NTIA is set up to distribute 51.5 million coupons, but that number could be 60 million by the end of the program March 31, Baker said. If so, even with all the money from expired coupons, NTIA might need some more money.
As to converter box availability for all those viewers with coupons, Baker said that demand could outpace supply by 2.5 million if additional coupons were distributed, but also has said previously retailers have "generally kept pace" with demand and "would work to ensure inventory is available if additional coupons are to be distributed."
Baker also pointed out Monday that people applying now likely won't get their coupons by Feb. 17, which is why she was encouraging viewers to go out and buy a box for at least one set anyway whether or not they had a coupon in hand.
Baker was asked whether if someone did that, then got a coupon after Feb. 17, they could go to a retailer and get their money back in exchange for the coupon. She said not as the law is currently written, but said if Congress wanted to change the law, "we will implement those changes as quickly as possible."

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