Washington

NTIA Concerned About DTV Coupons, Converter-Box Supply

FCC, NTIA respond to questions from Rep. Ed Markey (D-Mass.) regarding status of DTV transition 12/26/2008 09:16:00 AM Eastern

Related: The DTV Countdown – Complete Coverage of the DTV Transition

The FCC says it should be able to handle calls about the DTV transition, but only with industry help. The National Telecommunications & Information Association (NTIA), meanwhile, says it may need up to $330 million more in funding to ensure no slippage or stoppage in distribution of its $40 DTV-to-analog converter box coupons.

In addition, NTIA says there could be a shortfall of up to 2.5 million converter boxes given current supply and anticipated demand.

Those sobering assessments came in responses to questions put to FCC Chairman Kevin Martin and acting NTIA head Meredith Attwell Baker from Rep. Ed Markey (D-Mass.) regarding the status of the DTV transition.

Markey said he would go over the responses but was already bracing for a cash infusion. “I will carefully review these responses," he said Friday, "but 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.”

The FCC has told Congress it plans to spend about $10 million on in-house and outsourced call centers to handle viewer questions/problems during the final days of the DTV transition, saying that will help operators handle an estimated 350,000 calls per day during the week of Feb. 15-21.

But the FCC said that would not be enough money or operators to handle the expected flood of calls. Even if it allocated all $20 million Congress recently gave it for the transition, it would not be enough, said the FCC.

Martin said that additional resources from broadcasters, cable companies, states and others will be "critical," but that those efforts, combined with the FCC's, should be sufficient to handle viewer questions without any more money from Congress. But he did say he would welcome any additional funds Congress wanted to give the FCC.

Martin confirmed that government and industry representatives, including President-elect Barack Obama's transition team, had been meeting to discuss the call centers and other issues.

NTIA's Baker also was asked for her take on the transition, particularly whether there would be enough money to hand out all the DTV-to-analog converter box coupons that would be requested.

She said that with an anticipated 60%-65% redemption rate for the coupons and the $1.34 billion cap on funds, NTIA would run out of money for coupons and administration costs in January, perhaps as early as the first week. The agency then would have to wait until more coupons expired before sending out more. She conceded that would not be good. "Once the obligation ceiling is reached," she told Markey, "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."

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.

As to converter box availability, Baker said that demand could outpace supply by 2.5 million if additional coupons were distributed, but also said retailers have "generally kept pace" with demand and "would work to ensure inventory is available if additional coupons are to be distributed."

For Martin's answers to all Markey's questions, click here.

For Baker's full response, click here.

September
October