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NTIA Converter Box Rule Moves Nation Closer to Digital Transition

Monday, March 12, 2007

Consumer Group Says NTIA Converter Box Rule
Moves Nation Closer to Digital Transition

But NTIA and Congress Must Do More to Hold Consumers Harmless

Washington, D.C. ― Consumers Union said the National Telecommunications & Information Administration’s (NTIA) decision today to make digital-to-analog converter box coupons initially available to any household with an analog television set that is unconnected to cable or satellite service will ease the digital transition. The decision partially reverses a prior proposal to restrict eligibility to households relying solely on over-the-air TV.
“We’re pleased NTIA has adopted rules that better comply with the law by making all consumers with unconnected analog sets eligible for the initial phase of the coupon program,” said Jeannine Kenney, senior policy analyst for Consumers Union, publisher of Consumer Reports®. “But whether NTIA can lawfully restrict eligibility in the second phase is questionable. NTIA would better serve over-the-air households by targeting educational outreach to them, ensuring not just that coupons are available to them, but also that they are aware of the transition and know how to access and use the coupon program.”
But, Kenney said, the underlying coupon program authorized by Congress is deeply flawed and puts the final transition in jeopardy.
The DTV converter box coupon program was authorized by the 2005 Deficit Reduction Act, which set a final date of February 17, 2009 for the digital transition, requiring return of a portion of the airwaves currently used by broadcasters to simulcast analog and digital signals. The law required that the returned airwaves be auctioned, bringing in an estimated $10 billion to the federal treasury. Congress provided just under $1.4 billion of that amount for converter box coupons worth $40 to any requesting household, enough to provide coupons for just 35 million analog TV sets ― or about half the number expected to need the boxes. Additionally, the authorized program makes coupons available only during a narrow three-month window during 2008, nearly a year before the transition. The coupons expire within three-months of issuance.
Despite Congressional direction to make all households eligible for the coupons, last year, NTIA proposed that coupon eligibility be restricted solely to households relying on only over-the-air television, excluding sets in cable and satellite households that were unconnected to the subscription service and need converter boxes. Today, NTIA partially reversed course by making all households eligible for the coupons during the first phase of the program, and restricting eligibility solely to over-the-air households in the second phase.
“Although NTIA’s announcement today is welcome news for many households, the upshot is that the program is not only under-funded, but is also intentionally difficult for consumers to use,” Kenney said. “Unless Congress revisits the structure and funding of the coupon program, the digital transition will be not just an annoyance to consumers, it will be a financial burden as well, undermining the likelihood that the 2009 transition deadline will be met.”
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Contact: Jeannine Kenney, 202-462-6262