FCC's Martin: DTV Converter-Box Subsidy May Dry Up

FCC Chairman Kevin Martin tells Congress that NTIA estimates on DTV-to-analog converter box coupon program may be off.

FCC Chairman Kevin Martin has told Capitol Hill he is concerned that the DTV-to-analog converter box coupon subsidy program could run out of money before it runs out of requests for the $40 coupons, suggesting the calculations of the government agency responsible for administering the program may be off.

In letters to House Energy & Commerce Committee Chairman John Dingell (D-MI) and Telecommunications & Internet Subcommittee Chairman Ed Markey (D-MA) first reported by Multichannel News' Ted Hearn, Martin says he is "increasingly concerned about the funding of the program," which has $1.5 billion to work with.

The program is overseen by the National Telecommunications and Information Administration. NTIA has also said the program might run out of funds, but that was part of a request for money to be moved from funding coupons to paying for processing them.  

NTIA got the additional administrative funds from Congress, but has not said it expects to run out of money to fund the coupons.

In his letter he suggested NTIA could have underestimated the number of coupons it will need. He pointed, in part, to NTIA's estimation, "based on data from Nielsen," that there were only 13.7 thousand over-the-air-only (OTA) households in Wilmington, N.C., where the plug on analog TV was pulled Sept. 8.

Martin says that as of Sept. 30, there were 19.1 thousand requests from Wilmington houses that identified themselves as over-the-air-only. Extrapolating that to the rest of the country, he said, instead of 14 million OTA households, as has been projected by NTIA, there could be 19.5 million.

NTIA also predicted that the current 49% redemption rate for coupons would remain steady, even as requests for coupons rose toward the Feb. 17, 2009 transition date. But Martin says recent trends suggest that rate will rise. Add to that the addition of nursing homes and post office boxes to the rolls of eligible households, and "it is difficult to predict whether the converter box program is adequately funded," wrote Martin.