[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
           STATUS OF THE DTV TRANSITION: 370 DAYS AND COUNTING 
=======================================================================

                                HEARING

                               BEFORE THE

          SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               ----------                              

                           FEBRUARY 13, 2008

                               ----------                              

                           Serial No. 110-88


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov



















          STATUS OF THE DTV TRANSITION: 370 DAYS AND COUNTING




















          STATUS OF THE DTV TRANSITION: 370 DAYS AND COUNTING

=======================================================================

                                HEARING

                               BEFORE THE

          SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 13, 2008

                               __________

                           Serial No. 110-88


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

55-219 PDF                       WASHINGTON : 2010 

For sale by the Superintendent of Documents, U.S. Government Printing 
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                    COMMITTEE ON ENERGY AND COMMERCE

                   JOHN D. DINGELL, Michigan,Chairman

HENRY A. WAXMAN, California          JOE BARTON, Texas
EDWARD J. MARKEY, Massachusetts          Ranking Member
RICK BOUCHER, Virginia               RALPH M. HALL, Texas
EDOLPHUS TOWNS, New York             J. DENNIS HASTERT, Illinois
FRANK PALLONE, Jr., New Jersey       FRED UPTON, Michigan
BART GORDON, Tennessee               CLIFF STEARNS, Florida
BOBBY L. RUSH, Illinois              NATHAN DEAL, Georgia
ANNA G. ESHOO, California            ED WHITFIELD, Kentucky
BART STUPAK, Michigan                BARBARA CUBIN, Wyoming
ELIOT L. ENGEL, New York             JOHN SHIMKUS, Illinois
ALBERT R. WYNN, Maryland             HEATHER WILSON, New Mexico
GENE GREEN, Texas                    JOHN B. SHADEGG, Arizona
DIANA DeGETTE, Colorado              CHARLES W. ``CHIP'' PICKERING, 
    Vice Chairman                    Mississippi
LOIS CAPPS, California               VITO FOSSELLA, New York
MIKE DOYLE, Pennsylvania             STEVE BUYER, Indiana
JANE HARMAN, California              GEORGE RADANOVICH, California
TOM ALLEN, Maine                     JOSEPH R. PITTS, Pennsylvania
JAN SCHAKOWSKY, Illinois             MARY BONO, California
HILDA L. SOLIS, California           GREG WALDEN, Oregon
CHARLES A. GONZALEZ, Texas           LEE TERRY, Nebraska
JAY INSLEE, Washington               MIKE FERGUSON, New Jersey
TAMMY BALDWIN, Wisconsin             MIKE ROGERS, Michigan
MIKE ROSS, Arkansas                  SUE WILKINS MYRICK, North Carolina
DARLENE HOOLEY, Oregon               JOHN SULLIVAN, Oklahoma
ANTHONY D. WEINER, New York          TIM MURPHY, Pennsylvania
JIM MATHESON, Utah                   MICHAEL C. BURGESS, Texas
G.K. BUTTERFIELD, North Carolina     MARSHA BLACKBURN, Tennessee
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana

                                 ______

                           Professional Staff

                  Dennis B. Fitzgibbons,Chief of Staff

                   Gregg A. Rothschild,Chief Counsel

                      Sharon E. Davis,Chief Clerk

                David L. Cavicke,Minority Staff Director

                                  (ii)
          Subcommittee on Telecommunications and the Internet

                EDWARD J. MARKEY, Massachusetts,Chairman
MIKE DOYLE, Pennsylvania             FRED UPTON, Michigan
    Vice Chairman                        Ranking Member
JANE HARMAN, California              J. DENNIS HASTERT, Illinois
CHARLES A. GONZALEZ, Texas           CLIFF STEARNS, Florida
JAY INSLEE, Washington               NATHAN DEAL, Georgia
BARON P. HILL, Indiana               BARBARA CUBIN, Wyoming
RICK BOUCHER, Virginia               JOHN SHIMKUS, Illinois
EDOLPHUS TOWNS, New York             HEATHER WILSON, New Mexico
FRANK PALLONE, Jr., New Jersey       CHARLES W. ``CHIP'' PICKERING, 
BART GORDON, Tennessee                   Mississippi
BOBBY L. RUSH, Illinois              VITO FOSELLA, New York
ANNA G. ESHOO, California            GEORGE RADANOVICH, California
BART STUPAK, Michigan                MARY BONO, California
ELIOT L. ENGEL, New York             GREG WALDEN, Oregon
GENE GREEN, Texas                    LEE TERRY, Nebraska
LOIS CAPPS, California               MIKE FERGUSON, New Jersey
HILDA L. SOLIS, California           JOE BARTON, Texas (ex officio)
JOHN D. DINGELL, Michigan (ex 
    officio)


















                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Edward J. Markey, a Representative in Congress from the 
  State of Massachusetts, opening statement......................     1
Hon. Cliff Stearns, a Representative in Congress from the State 
  of Florida, opening statement..................................     3
Hon. Jane Harman, a Representative in Congress from the State of 
  California, opening statement..................................     4
Hon. Bart Stupak, a Representative in Congress from the State of 
  Michigan, opening statement....................................     5
Hon. Lois Capps, a Representative in Congress from the State of 
  California, opening statement..................................     6
Hon. Hilda Solis, a Representative in Congress from the State of 
  California, opening statement..................................     7
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, opening statement.................................     8
    Prepared statement...........................................     9
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................    10
    Prepared statement...........................................    11
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................    11

                               Witnesses

Kevin J. Martin, Chairman, Federal Communications Commission, 
  Washington, DC.................................................    13
    Prepared statement...........................................    17
    Answers to submitted questions...............................   198
Meredith Baker, Acting Assistant Secretary for Communications and 
  Information, Department of Commerce, Washington, DC............    37
    Prepared statement...........................................    39
    Answers to submitted questions...............................   191
Ronald J. Bruno, President, Community Broadcasters Association, 
  President, Bruno-Goodworth Network, Inc., Pittsburgh, 
  Pennsylvania...................................................    68
    Prepared statement...........................................    70
    Answers to submitted questions...............................   194
Kyle McSlarrow, President and CEO, National Cable & 
  Telecommunications Association, Washington, DC.................    71
    Prepared statement...........................................    73
    Answers to submitted questions...............................   316
David K. Rehr, President and CEO, National Association of 
  Broadcasters, Washington, DC...................................    79
    Prepared statement...........................................    81
    Answers to submitted questions...............................   320
Chris Murray, Senior Counsel, Consumers Union, Washington, DC....   113
    Prepared statement...........................................   115
Tom Romeo, Director, Federal Services, Global Business Service, 
  IBM Corporation, Bethesda, Maryland............................   119
    Prepared statement...........................................   120
Laurance Harris, Vice President of Merchandising, RadioShack, 
  Fort Worth, Texas..............................................   122
    Prepared statement...........................................   124
Mark Jackson, President, Echostar Technologies Corporation, 
  Englewood, Colorado............................................   134
    Prepared statement...........................................   135
    Answers to submitted questions...............................   318

                           Submitted Material

Graph entitled ``Coupon Statistics''.............................   146
LPTV station list................................................   152
Coupon Eligible Converter Boxes (CECB), list of..................   189


          STATUS OF THE DTV TRANSITION: 370 DAYS AND COUNTING

                      WEDNESDAY, FEBRUARY 13, 2008

              House of Representatives,    
         Subcommittee on Telecommunications
                                  and the Internet,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:30 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Edward J. 
Markey (chairman) presiding.
    Members present: Representatives Markey, Harman, Gonzalez, 
Inslee, Boucher, Eshoo, Stupak, Green, Capps, Solis, Dingell 
(ex officio), Stearns, Upton, Deal, Shimkus, Walden, Terry, 
Barton (ex officio), and Blackburn.
    Staff present: Amy Levine, Mark Seifert,Tim Powderly, 
Maureen Flood, Colin Crowell, David Vogel, Philip Murphy, Neil 
Fried, Courtney Reinhard, and Garrett Golding.

OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF MASSACHUSETTS

    Mr. Markey. Good morning, ladies and gentleman, and before 
I start I just want to note for the members that last night 
Congressman Pickering and I introduced legislation to preserve 
Internet freedom for consumers and innovators. It is a bill 
which enshrines the broad principles of openness and 
safeguarding the Internet's vital role in our economy. It tasks 
the FCC with conducting an assessment of broadband practices 
and consumer rights including public hearings and a report back 
to Congress. We would welcome members who wish to co-sponsor to 
join us in this bipartisan initiative.
    Today we are 370 days away from a significant milestone in 
the history of television. This morning's hearing will give us 
an important status check on our progress towards a successful 
consumer friendly transition. The government's coupon program 
has begun and already this year some 2.5 million consumers have 
requested coupons toward the purchase of converter boxes valued 
at roughly $190 million. Retailers are stocking such converter 
boxes on shelves for coupon redemption imminently. The 
broadcasting cable industries have stepped up to air public 
service announcements and engage in consumer outreach as well. 
The details of the national plan to effectuate this transition 
were embodied in a budget act in the last Congress and were not 
endorsed by many members on the Democratic side of the aisle, 
including myself and Chairman Dingell.
    Nevertheless, we are committed to trying to make this plan 
work. Toward that goal, this subcommittee intends to continue 
vigorous oversight of the DTV transition and to work closely 
with our Republican colleagues to insure success. Today there 
are several issues at the moment that merit our attention. 
First, we are eager to be reassured that the converter box 
program and redemption process is working smoothly. Second, 
because the signal characteristics of digital transmission and 
the anticipated geographic coverage area for individual 
broadcasters are different than for analog television many 
consumers may not receive the digital version of channels they 
currently receive after the switch.
    It is important to know how many such households will be 
affected by this and the extent to which households may need to 
adjust or acquire antennas to receive digital signals. Third, 
there are hundreds of low power television stations and 
thousands of translators that will not be converting to digital 
in February of next year. It is still unclear how many 
communities and how many television households will be affected 
by this. In addition, only a small percentage of the approved 
converter boxes permit the so-called pass through of the analog 
signals so that consumers can easily see both digital and 
analog television in markets where some broadcasters will 
convert and others won't. It is vital to insure that steps are 
taken by the FCC and the NTIA to coordinate on these matters 
with the affected industries so that the consumer education and 
outreach efforts effectively guards against widespread consumer 
confusion in these communities.
    And finally I want to commend several major retailers for 
taking action to limit consumer confusion. It has been my 
concern that analog only televisions remains on the shelves of 
major retailers and could result in consumers unwittingly 
purchasing a TV set due to need additional equipment in little 
over one year. Best Buy has already voluntarily removed its 
analog inventory from the shelves, and RadioShack is poised to 
do so by March 1. In addition, I have this announcement to read 
from Wal-Mart today. ``Although retailers are not prohibited 
from selling TVs with an analog tuner, Wal-Mart believes it is 
important consistent with congressional concern and counsel 
from Chairman Markey to remove the very small number of TVs 
with an analog tuner from our inventory. This is consistent 
with Wal-Mart's early commitment to the NTIA converter box 
program and to otherwise facilitating transition to all digital 
television broadcasting. We are currently working with return 
centers and the Wal-Mart Foundation to determine the best way 
to handle the remaining inventory, which was extremely small, 
approximately 1/10th of 1 percent of existing television 
inventory.'' This statement is effective as of yesterday, so I 
want to commend Wal-Mart, Best Buy, RadioShack, and other 
retailers who are taking this welcome step.
    And I urge all retailers to take the same step and to take 
it immediately so the consumers are not misled that the 
television set, the analog television set, that they may be 
buying will work next year without additional help. Again, we 
have many issues to discuss and examine, and I want to thank 
all of our witnesses for their willingness to attend this 
hearing, and I look forward to their testimony. And now I will 
turn and recognize the ranking member of the Telecommunications 
and the Internet Subcommittee, the gentleman from Florida, my 
good friend, Mr. Stearns.

 OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Mr. Stearns. Thank you, Mr. Chairman, and I am pleased to 
be here as the ranking member and I always look forward to 
working with you. I hope with this net neutrality bill that you 
adopted will have many hearings to vet the language so we can 
all understand how it is enshrined. So we will look forward to 
that. I think by setting the date of February 17, 2009, as the 
date for full power broadcasters to transmit exclusively the 
digital format, the DTV legislation gave industry I think the 
needed incentives to prepare for the transition. And I think 
the results, as you briefly mentioned, are working well. With 
over a year to go manufacturers have already designed 37 
coupon-eligible converter boxes. The NTIA has certified 250 
retailers with a total of 15,000 stores ready to accept these 
coupons.
    Consumers have requested almost 5 million coupons 
suggesting awareness is not necessarily a big problem. The 
National Telecommunication and Information Administration will 
start sending coupons to consumers next week, and RadioShack, 
Best Buy, Circuit City, and Wal-Mart have already announced 
they are ready to accept them. A Consumer Electronics 
Association survey of 2,000 U.S. adults indicates consumer 
awareness of the transition has grown 80 percent since the year 
2006. According to the CEA survey, the joint educational 
efforts of government and the private sector are working, and 
the digital television transition will be a success. CEA's 
research revealed that the top sources consumers are using to 
learn about the transition includes television, about 72 
percent, family and friends, about 40 percent, and the Internet 
about 25 percent. This shows that the educational campaigns by 
the industry and the government are working indeed.
    The National Association of Broadcasters has spent more 
than $1 billion on a comprehensive consumer education drive. 
Included in their campaign are public service announcement in 
both English and Spanish, DTV messages running across 
programming on local stations, and a media blitz to promote the 
DTV transition. Cable operators have launched a $200 million 
public education campaign and committed to carrying both the 
analog and digital signals of both a full power commercial must 
carry broadcasters for 3 years to help smooth the DTV 
transition. My colleagues, these examples demonstrate that a 
market based approach works. All these groups and many others 
should be commended for their efforts. The benefits of the DTV 
transition extends far beyond that of clearer pictures and more 
choices about what program to watch.
    The real benefits will come from what is done with the 
radio spectrum once the TV broadcasters are cleared including 
providing public safety with the resources they need to insure 
reliable, interoperable communications now and into the future. 
Although the number of people using over the air signal is 
decreasing there still needs to be in place a system to help 
consumers who may wish to use analog television with over the 
air antennas after the transition. The DTV legislation gives 
the NTIA up to $1.5 billion for a digital to analog converter 
box program. The statute directs DTIA to use $990 million to 
enable U.S. households to request up to 2 $40 coupons for use 
towards purchase of converter boxes. If the NTIA certifies to 
Congress as the program progresses that it needs more money 
there is available another $510 million.
    So it is important that we don't make any rash changes 
today. Doing so will only recreate the uncertainty that was 
delaying the transition in the first place and preventing us 
from clearing spectrum for public safety in advance wireless 
service, the third generation. For example, low power 
broadcasters are now demanding that NTIA require all converter 
boxes to include an analog pass through and that the FCC give 
them must carry rights. Neither is necessary. There are already 
4 coupon-eligible converter box with low power pass through 
features and there is more on the way. The market is taking 
care of this. Changing the box requirements now by contrast 
could lead retailers and manufacturers to withdraw from the 
program altogether, and expanding must carry could force 
programming off of cable system right as we are going through 
this very delicate transition.
    We are much better off keeping the current course and 
assessing as we move along. Wholesale changes could put the 
transition in jeopardy, and I don't think any one of us want 
that. These are important issues, Mr. Chairman. We thank you 
for this hearing, and I look forward to hearing from our 
witnesses.
    Mr. Markey. I thank the gentleman. The chair recognizes the 
gentlelady from California, Ms. Harman.
    Ms. Harman. Thank you, Mr. Chairman. I see a former 
colleague of ours, Ron Klink, in the audience, and I thought I 
would acknowledge him. And I thank you for holding this hearing 
on what I believe is a critical subject. I would like to 
address a few comments to Chairman Martin. Good morning.
    Mr. Martin. Good morning.

  OPENING STATEMENT OF HON. JANE HARMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Harman. Chairman Martin, your appearances before this 
subcommittee give many of us the chance on a regular basis to 
tell you what you are doing wrong but today I thought we might 
acknowledge or I would like to acknowledge what you are doing 
right. This 700 megahertz auction began on time. It has largely 
succeeded. And the open access conditions that many of us 
argued for have stuck. Congratulations. Though the D block, 
which the commission set aside for a nationwide public safety 
network has not yet sold and likely will not, something that 
troubles me greatly, I still think we should applaud you for 
your boldness in pursuing a multi-faceted plan and that 
applause obviously extends to the other members of the 
commission. But as the ranking member just said, and as you 
know I agree, the point of the DTV transition is not converter 
boxes. The point of it is to satisfy a 6-year quest for a 
nationwide public safety broadband network that gives us true 
interoperable communications for emergency responders.
    That need has been apparent since 9/11, maybe even before 
9/11, and we are not much closer to meeting that need now than 
we were six years ago. As I often say, we have a regional 
operability but we do not have national interoperability, and 
we won't have it until this spectrum becomes available. I think 
a public-private partnership using 700 megahertz spectrum is 
still our best hope. I think that the failure of the D block 
auction if it has failed or if it does fail does not signal the 
failure of the public-private partnership concept. If the 
auction ends without a D block winner, I hope that you and we 
will not only meet informally but then we will have a series of 
hearings which the chairman has said he will hold to review 
next steps and to come up quickly with a new plan D. Do I have 
that right? Not a plan B, a plan D.
    Mr. Markey. D for do over.
    Ms. Harman. That is the chairman's humor. D for do over. 
OK. Whatever we come up with, a new plan to reach true 
interoperability by the appropriate deadline. The goal should 
be a new option with a new set of rules that addresses the 
faults of the current auction but protects public safety's 
needs. I think we should, as I said, get on with this quickly 
once we determine for certain what the future, if any, is of 
the D block part of the auction. The DTV transition must yield 
a solution to first responders emergency communications needs, 
not just the budget converter boxes. A nationwide solution is 
long overdue. We still have time to get it right, and I urge us 
to get it right. Thank you, Mr. Chairman, I yield back.
    Mr. Markey. The gentlelady's time has expired. The chair 
recognizes the gentleman from Texas, Mr. Gonzalez.
    Mr. Gonzalez. Waive opening.
    Mr. Markey. The chair recognizes the gentleman from 
Virginia, Mr. Boucher. The chair recognizes the gentleman from 
Michigan, Mr. Stupak.

  OPENING STATEMENT OF HON. BART STUPAK, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Stupak. Thank you, Mr. Chairman, for holding this 
hearing, and thank you for attending the O&I hearing yesterday 
afternoon. You added to it. Thank you. 370 days from now 
America will officially stop all of its analog broadcasts for 
full power television stations but approximately 2,100 low 
power television stations and 4,700 translator stations will 
still be broadcast in analog. Many parts of America will be 
receiving their over the air signals in both analog and 
digital. This information has not been clearly provided to the 
American public. Many don't even know that there will be 
stations that still broadcast in analog, let alone that they 
need to purchase a specific converter box with an analog pass 
through or they will lose channels.
    Out of the 35 converter boxes available on the market only 
3 carry this essential component so this makes effective 
consumer education even more important. Until the morning of 
this hearing if you want to the National Telecommunications and 
Information Administration's DTV coupon web site and clicked on 
the link entitled questions about low power translator stations 
you viewed a 1-page with 1 sentence stating that ``information 
about the impact of the digital transition on low power 
stations coming soon.'' Conveniently thought I checked and now 
it has some low power TV information and several options for 
consumers. This is unacceptable. 1.6 million Americans have 
already signed up for coupons on this web site, and a valuable 
opportunity to provide them with key information was missed.
    Ms. Baker, as head of the NTIA I want to know what you will 
do in order to improve consumer education. Many of those who 
will be affected will come from rural districts like mine but 
many will also come from urban districts. I look forward to 
learning how you plan to inform my constituents that many of 
them will need an analog pass through converter box, not just a 
converter box but a pass through converter box. Chairman 
Martin, you recently circulated some proposals to be addressed 
by the FCC later this month regarding satellite providers, and 
I wanted to focus on one of them, Liberty Media's acquisition 
of News Corp's stake in DirecTV.
    In 2004 News Corp acquired DirecTV and pledged to provide 
local into local carriage in all 210 designated market areas by 
2008. Commissioner Adelstein at the time called News Corp 
pledge to provide universal local to local a sham. Sadly 
enough, the News Corp efforts to sell their share of DirecTV we 
are seeing his prediction come true. Satellite subscribers in 
rural America are tired of being ignored. I urge the FCC to 
work towards insuring rural television markets are created 
equally to their urban counterparts. It is time for Congress 
and the FCC to look at a hard date for mandatory local to local 
carriage in all 210 designated market areas.
    I am quite tired of hearing pledges that go unfulfilled. 
Mr. Chairman, thank you again for holding this hearing. I look 
forward to the testimony of the witnesses as there are some 
very important issues we must discuss. Thank you, Mr. Chairman.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentlelady from California, Ms. Capps.

   OPENING STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Capps. I will be brief, Mr. Chairman. I want to thank 
you for holding this hearing, and thank you also for your 
vigilant oversight of the DTV transition which has resulted in 
a greater focus on consumer concerns and a greater 
understanding of the challenges we face as we move ahead. 
Today's hearing promises to be a bit more technical in nature. 
We will talk about class C television stations, analog pass 
through, and the technical specs of converter boxes. And I look 
forward to the testimony of our witnesses and our conversation 
with them. During this discussion it is my hope we keep sight 
of the reason we are transitioning to digital television and 
the reason we are all here today in the interest of the 
American people. Even as we move toward a single digital signal 
over our public air waves, we are sending mixed signals to 
consumers about how they can continue to receive the same local 
and cultural content.
    I am particularly concerned about my Spanish-speaking 
constituents, many of whom enjoy Spanish language channels 
brought to them via translator or low power stations. These 
folks may be completely shut out during this transition so I 
look forward to this testimony, as I said, and the proposals 
that Chairman Martin and Acting Assistant Secretary Baker will 
bring us to further discussion about how we can avoid this kind 
of break down, how will we streamline this transition for low 
power television stations. I want to also hear more about how 
and where converter boxes will be made available, some of which 
had already come from our chairman, what labeling procedures 
make the best sense for all kinds of consumers. So thank you, 
Chairman Markey, and to our witnesses today. I yield back.
    Mr. Markey. The gentlelady's time has expired. The chair 
recognizes the gentlelady from California, Ms. Solis.

  OPENING STATEMENT OF HON. HILDA SOLIS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Solis. Thank you, Mr. Chairman, and good morning. Thank 
you also for being here, Commissioner Martin, and Ms. Baker. I 
want to thank the witnesses for being here that will also be 
testifying. With just more than a year left before our full 
power broadcast television stations transition to digital we 
are learning about the new challenges and must work very hard 
to address all of these issues. I am particularly concerned, as 
you know, about the DTV transition along the U.S.-Mexican 
border. With ample analog Spanish language programming 
originating in Mexico it is still available. After the 
transition along the border low cable and satellite penetration 
and language barriers could leave thousands and thousands of 
households behind in DTV transition.
    That is why I am introducing the DTV Border Fix Act to 
provide full power broadcasters within 50 miles of the U.S.-
Mexican border the opportunity to continue analog broadcasts 
for 5 years after the DTV transition. The bill insures that 
border area viewers will continue to receive emergency 
information and use over the U.S. television broadcast system. 
The bill is limited in scope and would work in cooperation with 
the FCC so that such broadcasts do not interfere with the 
public interest or spectrum auctions.
    I also have concerns about the challenges facing low power 
TV and how the need for analog pass through boxes can be met 
for both low power TV and the border region. We need to work 
together, both the government and the private sector, to make 
sure that the right boxes are stocked in appropriate areas. In 
addition, I am concerned about potential problems existing over 
the air antennas receiving digital television signals. If 
consumers are to receive fewer channels in digital and even if 
the picture quality is superior as compared to analog services 
because of inadequate antennas consumers may be less inclined 
to transition to DTV and feel they need to subscribe to cable 
or satellite service.
    We must make sure that all consumers regardless of their 
income level continue to receive expected services, so I look 
forward to hearing your testimony, and again want to hear 
comments regarding the transition that will occur along the 
U.S.-Mexican border because I really do believe that we are 
going to disenfranchise a very large population. And with that, 
I yield back the balance of my time.
    Mr. Markey. The gentlelady's time has expired. The chair 
recognizes the chairman of the full committee, the gentleman 
from Michigan, Mr. Dingell.

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Dingell. Mr. Chairman, I thank you for your kindness. I 
commend you for holding this meeting, which is an important 
one, on a very important subject, and I commend you for the 
vigor with which you are going into this matter. I want to 
begin by welcoming Meredith Baker, who is the new acting head 
of NTIA. I want to say that I appreciate her willingness to 
work with the Congress and her leadership and her effort to 
help achieve a successful transition on digital TV service. 
This is very important, and quite frankly it represents 
something of a welcome change in some of the policies we have 
seen from this Administration, so congratulations and welcome.
    Mr. Chairman, today we address an issue that is soon going 
to affect millions of American households, and I commend you 
for your leadership and vigorousness in this matter. I refer to 
the digital TV, or DTV, transition. We are just a little over a 
year away from the end of the transition, at which time a lot 
of television sets around the country are going to go dark, and 
much remains to be done. Consumers must be properly educated, 
and they are not. Both the Federal Communications Commission 
and a number of industries stand to benefit handsomely from 
this matter and they all have responsibilities of the most 
serious sort with regard to these matters. As February 17, 2009 
nears, we must learn of new steps that must be taken, and I 
note that time is running short and the American consuming 
public has little appreciation of what lies before them.
    The FCC has recently requested $20 million for DTV consumer 
education in fiscal year 2009. I still find this amount, 
however, woefully short and inadequate for an educational 
campaign that is to reach some 300 million Americans. Chairman 
Martin has also circulated an order regarding consumer 
education in response to a letter sent by you, Mr. Chairman, 
and by me. I commend you for moving forward on this important 
matter, and I look forward to the cooperation and assistance of 
Chairman Martin and to hearing from and seeing vigorous agency 
action on this question. This week, Mr. Chairman, you and I, 
joined by 19 of our colleagues, sent a letter to NTIA 
concerning reissuing converter box coupons to consumers whose 
original coupons have expired.
    This 90-day coupon expiration date is cause for concern 
because consumers might not be able to find stores with boxes 
in stock before the coupons expire. I understand, Ms. Baker, 
NTIA, along with their vendor, IBM, are working to resolve this 
problem, and I thank them for their efforts.
    We must be mindful of the situation confronting low power 
broadcasters. Only full power broadcasters are required to 
transition to digital next year. Low power and translator 
stations may take more time. This means that in some markets 
some stations will be broadcasting only in digital after 
February 17, 2009, while other stations will continue to 
broadcast in analog. This could lead to some very serious 
complications and complexities.
    The potential for confusion here appears high for those 
consumers that acquire a digital converter box and then are not 
able to receive analog channels. This has the potential for 
more mischief and confusion. I want to applaud those 
manufacturers who have included an analog pass through feature 
in their converter boxes to address this problem, as well as 
those who are in the process of adding this feature. I urge 
NTIA to quickly approve these boxes. I also expect low power 
and translator stations to do their part to educate their 
viewers about the need to purchase a converter box with analog 
pass through capabilities, and of course we need those kinds of 
boxes at an early time. Finally, some of the biggest 
beneficiaries of the DTV transition are the nation's retailers. 
The converter box coupon campaign and program will plow more 
than $1 billion into the stores of eligible retailers.
    Some consumers will choose to buy new televisions instead 
of converter boxes and many will purchase other items, such as 
CDs or video games, while they are in the store using coupons. 
For retailers, the DTV transition will certainly be profitable. 
I therefore urge the industry to be vigorous in its efforts to 
properly educate consumers. I am told as of yesterday that Wal-
Mart no longer has analog only televisions on its shelves, and 
last year Best Buy pulled all analog stock from its stores. 
RadioShack has agreed to ship converter boxes to consumers free 
of charge and remove all analog sets from its stores by March 
1. I applaud these decisions. They are pro-consumer. I thank 
you, Mr. Chairman, for your leadership in this matter, and I 
look forward to the testimony today. Thank you. I yield back 
the balance of my time.
    [The prepared statement of Mr. Dingell follows:]

                   Statement of Hon. John D. Dingell

    Today we again address an issue that will soon affect 
millions of American households--the digital TV (DTV) 
transition. We are just over a year away from the end of the 
transition, and much remains to be done. Consumers must be 
properly educated. Both the Federal Communications Commission 
(FCC) and the several industries that stand to benefit 
handsomely have responsibilities in this regard. As February 
17, 2009, nears, we learn of new steps that must be taken, and 
time is running short.
    The FCC has recently requested $20 million for DTV consumer 
education in fiscal year 2009. I still find this amount, 
however, woefully inadequate for an educational campaign that 
must reach more than 300 million Americans.
    Chairman Martin has also circulated an Order regarding 
consumer education in response to a letter sent by Chairman 
Markey and me. I commend the Chairman for moving forward on 
this important matter and look forward to agency action on this 
question.
    This week, Chairman Markey and I, joined by 19 of our 
colleagues, sent a letter to the National Telecommunications 
and Information Administration (NTIA) concerning reissuing 
converter box coupons to consumers whose original coupons have 
expired. The 90-day coupon expiration date is a cause for 
concern because consumers might be unable to find stores with 
boxes in stock before their coupons expire. I understand that 
Ms. Baker and the NTIA, along with their vendor IBM, are 
working to solve this problem, and I thank them for their 
efforts.
    We must be mindful of the situation confronting low power 
broadcasters. Only full power broadcasters are required to 
transition to digital next year - low power and translator 
stations may take more time. This means that in some markets, 
some stations will be broadcasting only in digital after 
February 17, 2009, while other stations will continue to 
broadcast in analog. The potential for confusion appears high 
for those consumers that acquire a digital converter box and 
then are not able to receive analog channels.
    I applaud those manufacturers who have included an analog 
pass-through feature in their converter boxes to address this 
problem, as well as those who are in the process of adding this 
feature. I urge NTIA to quickly approve these boxes. I also 
expect low power and translator stations to do their part to 
educate their viewers about the need to purchase a converter 
box with analog pass-through capabilities.
    Finally, some of the biggest beneficiaries of the DTV 
transition are the Nation's retailers. The converter box coupon 
program will plow more than one billion dollars into the stores 
of eligible retailers. Some consumers will choose to buy new 
televisions instead of converter boxes, and many will purchase 
other items, such as CDs or video games, while they are in a 
store using their coupons. For retailers, the DTV transition 
will certainly be profitable. I therefore urge the industry to 
be vigorous in its efforts to properly educate consumers. I am 
told that as of yesterday, Wal-Mart no longer has analog-only 
televisions on its shelves, and last year Best Buy pulled all 
analog stock from its stores. Radio Shack has agreed to ship 
converter boxes to consumers free of charge and will remove all 
analog sets from its stores by March 1. I applaud these pro-
consumer decisions.
    Thank you again Mr. Chairman, and I look forward to the 
testimony.
                              ----------                              

    Mr. Markey. Thank you, Mr. Chairman. The chair recognizes 
the gentlelady from California, Ms. Eshoo.

 OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Eshoo. Thank you, Mr. Chairman, for creating another 
excellent opportunity for our subcommittee to assess the 
progress on the digital transition. There are many issues. Of 
course members have raised them, and we know that there are 
still some that are left unresolved as we approach the 2009 
deadline. It is nice to see you, Mr. Klink. I wish you were 
still up here. Today many members are going to be visited by 
their constituent public television stations, and the stations 
are going to express their concern that access to local public 
television stations digital programming is denied to almost 
half of all direct broadcast satellite households. Now that 
represents nearly 12 million households because one major DBS 
provider has failed to negotiate a long-term deal with public 
television.
    Last November I introduced a bill, H.R. 4121, to require 
DBS carriage of public television digital signals, and I am 
pleased that a little more than a month ago DirecTV, the 
Association for Public Television stations, and PBS announced 
that they had reached an agreement whereby DirecTV would carry 
public television stations digital signals. As we move closer 
to February 17, 2009, I think it is unacceptable for any 
household in the country to be denied access to public 
television's digital programming. The American people love PBS, 
and we have done a lot of battles here over the years to help 
protect it so I don't think this is a small item on the agenda. 
I am anxious to hear from Mr. Jackson, who is going to testify 
why EchoStar carries HD programming for all the major 
commercial networks but doesn't provide HD programming produced 
by public television stations.
    And I will have more questions to ask in this particular 
area as well as other questions, so we are moving along. I 
think that there is some progress. I am disturbed most frankly, 
Mr. Chairman, not Chairman Markey but Chairman Martin, about 
the treatment of cable by you. I don't know what cable has done 
to so enrage you but I think we need to have a conversation 
about that because we have important providers throughout the 
country and I think the relationships are really very important 
and I want to hear more about what is so troubling you about 
them. So thank you, Chairman Markey, and I look forward to the 
testimony today.
    [The prepared statement of Ms. Eshoo follows:]

                    Statement of Hon. Anna G. Eshoo

    Mr. Chairman today is another excellent opportunity for 
this Subcommittee to assess our progress on the digital 
transition. There are several issues that are still left 
unresolved as we approach the 2009 deadline.
    Today many Members will be visited by their constituent 
public television stations. The stations will express their 
concern that access to local public television stations' 
digital programming is denied to almost half of all Direct 
Broadcast Satellite (DBS) households - that's nearly 12 million 
households because one major DBS provider has failed to 
negotiate a long term deal with public television.
    Last November, I introduced H.R. 4121 to require DBS 
carriage of public television stations' digital signals. I'm 
very pleased that, a little more than a month later, DlRECTV, 
Association for Public Television Stations (APTS) and PBS 
announced they reached an agreement whereby DIRECTV would carry 
public television stations' digital signals. As we move closer 
to February 17, 2009, it is unacceptable for any household to 
be denied access to public television's digital programming.
    I'm anxious to hear from Mr. Jackson why Echostar carries 
HD programming for all the major commercial networks but does 
not provide HD programming produced by public television 
stations. I'd also like to know the status of the negotiations 
between Echostar and public television stations on signing a 
long term agreement for the carriage of public television's HD 
programming.
    I'm also interested to hear from Mr. Rehr of NAB about what 
commercial11 broadcasters are planning for their multicast 
stations. Right now in my District not one commercial 
broadcaster produces additional content on these extra 
channels, except some who ai the weather radar 24 hours a day, 
but public television stations across the country are using 
their additional channels. In my District KQED has five new 
channels they are broadcasting today. KQED has a channel 
dedicated to children's programming, and another 24 hour 
Spanish language channel.
    I'd like Mr. Rehr to explain why commercial broadcasters 
are not producing content for these extra channels. Why is 
public television able to produce and air this content while 
commercial broadcasters are leaving these channels fallow?
                              ----------                              

    Mr. Markey. I thank the gentlelady. The chair recognizes 
the gentleman from Washington State, Mr. Inslee.
    Mr. Inslee. I will waive, Mr. Chair. Thank you.
    Mr. Markey. The chair recognizes the gentleman from Texas, 
Mr. Green.

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. Thank you, Mr. Chair, for having this hearing, 
and I hope over the next year we will continue to have these 
hearings and hopefully bring attention to the transition. In 
fact, maybe the folks who are responsible whether it be the 
news media or anyone else maybe we ought to treat the 
transition to DTV like we are seeing the presidential 
primaries. So much coverage on them, a lot more interest than 
in the past, and so for the next year I would hope we would do 
that because none of us want our constituents or your customers 
not to be able to watch TV. We are just over a year away from 
the transition date and there are still many questions and 
preparations and outreach efforts made by various government 
entities involved in the transition.
    Last week Wired News and Technology web site magazine ran 
an article to point out many of the same concerns that the 
subcommittee has been raising over the last year, lack of 
coordinated consumer education program, having consumers apply 
for coupons before converter boxes were on the shelves. The 90-
day expiration date of the coupons are major problems the 
article said, as well as members of the subcommittee have 
raised. Yesterday I joined Chairman Dingell and Chairman Markey 
and several members of our committee in sending a letter to 
Assistant Secretary Baker asking her to address one of these 
issues.
    Currently without boxes widely available it is unclear how 
readily consumers will be able to find an affordable coupon-
eligible box. The 90-day expiration date could be a major 
complication for consumers if there is a disruption in 
production, shipping or stocking these boxes. Additionally, the 
article stated the Best Buy spokesman said their stores are 
only planning to carry one model converter box that sells for 
$59.99. Up selling has been a serious concern. I am afraid 
consumers will not be as prepared as they need to be or as many 
as the government thinks they will when they walk into the 
store looking for a converter box. The letter sent yesterday 
clarifies and under the statute creating these coupon programs 
NTIA can allow households to apply to have expired coupons 
reissued if there are sufficient funds. This would allow 
consumers more flexibility in finding converter boxes and 
address many supply problems that are out of their hands.
    I am concerned, however, that many consumers do not know 
about the program and how to apply for these coupons. Most 
estimates indicate 14 million to 20 million households allowing 
over the air broadcasts, yet according to NTIA stats earlier 
this week only 2.8 million households have applied for the 
coupons. Some households may go ahead and purchase a new set 
with the digital tuner whether than applying for converter box 
coupons but the number of the applications still seem low given 
that the program has been up and running for a month and a 
half, and I think more needs to be done to raise the awareness 
of the program.
    After the hearing last November Congressman Gonzalez and I 
sent a letter to the House Administration Committee, and we 
received certification that as members we can include coupon 
applications in our newsletters to our constituents, which I 
plan to do in one this spring. As far as I am concerned, public 
education is the most critical and least coordinated component 
of the transition, and we are relying too heavily on the 
private sector to address that component along with the 800 
help lines need to be staffed so operators can help consumers 
when they call in. I understand there were problems with the 
Spanish language help line at the FCC earlier this year and I 
hope to hear Chairman Martin explain to us what you have done 
to correct that problem, and I will have some questions later 
on that issue. I thank you and yield back my time.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from Illinois, Mr. Shimkus.
    Mr. Shimkus. Mr. Chairman, I think I feel like Groundhog 
Day, our fourth or fifth DTV hearing, so I think I will just 
yield back and wait for the testimony. I was just being a 
little jovial, Mr. Chairman.
    Mr. Markey. No, it is Groundhog Day, and we are going to 
have Groundhog Day over and over again on this transition 
because the consequences of not getting it right are 
catastrophic. So all time for opening statements from members 
has expired. So we turn to our panel, and we welcome them to 
the subcommittee. We welcome you back, Chairman Martin. You 
have been a frequent guest before us over the last year. We 
thank you for that. And we congratulate you, Ms. Baker, for 
your promotion, and congratulations to you and thank you for 
joining this team to insure that this transition occurs on time 
and without a glitch, so we thank you both. Chairman Martin, 
the last time you were here I said that you were the Tom Brady 
of the transition. I would like to now say I would like you to 
be the Eli Manning of the transition, and my hope is that we 
can put a plan in place that will work. Whenever you are 
comfortable, please begin.

STATEMENT OF KEVIN J. MARTIN, CHAIRMAN, FEDERAL COMMUNICATIONS 
                  COMMISSION, WASHINGTON, D.C.

    Mr. Martin. Thank you. Good morning, Chairman Markey, and 
Ranking Member Stearns, and all the members of the committee. 
Thank you for once again inviting me to be here today to update 
you on the status of the digital transition. A little over one 
year from today all television stations will stop broadcasting 
in analog and only broadcast in digital. This transition will 
be a historic moment in the evolution of television. Television 
viewers will be able to enjoy movie quality picture and sound 
and potentially a wealth of new programming choices. It will 
also allow us to significantly improve public safety 
communications and will usher in a new era of advanced wireless 
services such as widespread deployment of wireless broadband.
    As I have testified previously successful digital 
transition will depend upon minimizing the burdens placed on 
consumers and maximizing their ability to benefit from it. 
Today's hearing is a welcome opportunity to discuss the 
commission's work both in terms of consumer outreach and 
education and the necessary regulatory steps, which we are 
taking so that all Americans can enjoy the benefits of this 
historic digital transition. The commission is working to put 
in place the rules and policies to enable broadcasters to 
technically complete the conversion from analog to digital. 
Last August we adopted the final DTV table of allotments based 
on the channel elections made by all the full power broadcast 
stations. This order provides virtually all, over 99 percent of 
television stations across the country with their final digital 
channel assignments.
    At the end of last year we also concluded our third DTV 
periodic review. In that order the commission established the 
procedures and rules that will guide the broadcasters through 
the end of the transition. We adopted procedures that will 
allow broadcasters to adjust their build out according to their 
needs and the needs of their viewers. Currently more than 95 
percent of full power television stations are broadcasting a 
digital signal. Nearly two-thirds of the full power stations 
will remain on the same channel they are currently using for 
the digital services and most of these stations have already 
completed the construction and already providing full service 
to their viewers.
    We recognize it is important for the commission to 
continually monitor the broadcaster's progress towards the 
transition, and accordingly we required each station to file 
periodic updates on the status of the construction of the post-
transition facility and in fact the first of such updates is 
due next week. The commission has before it an item that would 
enable satellite subscribers to receive digital broadcast 
signals. The pending item clarifies that when broadcasters make 
the transition it is the digital signal that their satellite 
operator must carry. Last fall the commission adopted an order 
that guarantees that all cable customers will be able to watch 
all broadcast stations after the digital transition. 
Specifically, the commission took action to insure that cable 
operators continue to make signals of all broadcast stations 
viewable after the transition as the statute requires.
    These items should help reduce the burden on consumers and 
thereby fostering a smooth transition. The commission's DTV 
related enforcement efforts have focused on protecting 
consumers from unknowingly buying televisions that won't 
receive broadcast stations following the transition. With 
respect to the commission's labeling requirements, the 
commission has as of February 11, today, 2008, inspected 1,829 
retail stores and web sites and issued 316 citations notifying 
those retailers of violations for failing to comply with our 
requirements. We also have 14 NALs with $4 million total 
aggregate pending before the commission.
    In addition to our labeling investigations, we are 
continuing to insure that no manufacturers are importing and 
shipping analog only television receivers. We are also insuring 
that the digital tuners comply with the V-Chip regulations. 
Thanks to information referred to us by you, Mr. Chairman, we 
began investigating allegations that some manufacturers were 
not complying with these V-Chip rules. As a result of these 
investigations, we released an NAL against Funai Corporation 
for $7.7 million and NALs against 9 other manufacturers for 
over $6.5 million are also on circulation.
    The swift enforcement of all these DTV-relates rules is 
critical to protecting consumers and reducing potential 
confusion. Our activities in this area will continue to be a 
priority during the next 12 months. According to data from the 
Consumer Electronics Association and the National Association 
of Broadcasters there has been some success in making consumers 
aware of the transition. Recent surveys published by the NAB 
and Consumers Union found that 79 percent and 64 percent of 
consumers were aware of the transition, respectively.
    While this increased awareness is a step in the right 
direction too many Americans remain confused about what they 
need to do to prepare for it. For instance, the Consumers Union 
reported that 74 percent of consumers have major misconceptions 
about the impact that this conversion will have on them. Now 
that many consumers are aware of the transition, we need to 
focus our efforts and our outreach on sending them a clear and 
consistent message about how to get prepared. At the suggestion 
of Chairman Dingell and Chairman Markey the commission is 
considering a proposal to require the industry to use public 
service announcements, bill inserts, and other techniques to 
educate consumers about the transition. Just last Friday we 
received a proposal from the National Association of 
Broadcasters setting forth alternative actions as a safe harbor 
that broadcasters could take to educate consumers about the 
transition.
    We are currently in the process of evaluating this new 
proposal and hope to finalize this item quickly. In addition to 
our DTV consumer education item, the commission is actively and 
directly promoting consumer awareness of the upcoming 
transition. Nearly every bureau and office of the commission 
has been involved in this effort including our field offices 
around the country. At the suggestion of several other 
commissioners, I have asked the Media Bureau Chief Monica Desai 
and Consumer and Government Affairs Bureau Chief Cathy Seidel 
to jointly lead an intra-agency task force of staff from the 
various bureaus and offices who are primarily working to 
facilitate the DTV transition over the next year.
    We are also utilizing commission staff located around the 
country. FCC field offices and FCC field agents are continuing 
to distribute information at senior centers, libraries, and 
other local venues. They have already distributed information 
to over 3,100 senior and community seniors, made 385 
presentations, and have 106 scheduled in just the days ahead. 
We have also been forging new partnerships and participated in 
media events, attending conferences, and continuing to do 
whatever we can to get the word out. For example, DTV education 
posters will be displayed in all 34,000 post offices around the 
country. The United States Postal Service estimates that an 
average of 9 million people pass through their retail lobbies 
each day.
    We have also secured commitments from 24 states, the 
District of Columbia, and Puerto Rico to display DTV materials 
in 1,100 Department of Motor Vehicle locations. The FCC's 
consumer efforts and outreach continue to place emphasis on 
consumers that receive their television signals over the air on 
those who are hard to reach including senior citizens, non-
English speaking and minority communities, people with 
disabilities, and low income individuals and people living in 
rural areas. We have been taking several specific steps to 
reach each of these groups. For example, the AARP has agreed to 
disseminate digital transition information through its tax aid 
program that makes volunteers available to assist AARP members 
in preparing their taxes. We also know that the Hispanic 
community disproportionately relies on over the air television. 
Of the 15 million broadcast only homes one-third is occupied by 
primarily Spanish-speaking homes.
    The Hispanic Chamber of Commerce and Univision have agreed 
to join the commission in conducting DTV awareness sessions at 
the Hispanic Chamber of Commerce and member chambers in the 10 
biggest cities nationwide which are home to 80 percent of the 
Hispanic population. The first of these sessions will be held 
later this month in Chicago. The commission is also taking 
steps to inform low income consumers about the transition to 
all digital broadcasting. For example, the Department of Health 
and Human Services has made a commitment to assist the FCC in 
disseminating DTV materials through at least 6 of their 
agencies to target populations including low income consumers. 
For example, through their administration for children and 
families they will distribute information through their 
approximately 1,500 Head Start grantees covering more than 
6,000 locations throughout the country.
    And their Health Resources and Services Administration will 
distribute flyers and information through their 4,000 community 
health centers. This morning I am also pleased to announce that 
today the commission's contract and purchasing center were 
awarded a contract at Ketchum. Under this contract Ketchum is 
going to be responsible for assisting the FCC's efforts to 
promote consumer awareness of the DTV transition. Specifically 
in the area of media services Ketchum provides full service 
production of multiple versions of TV and radio PSAs, web 
videos, educational videos, podcasts, and satellite media 
tours. The material developed will be produced in multiple 
languages and formats.
    In addition, Ketchum is planning to support advertising on 
transit systems in 18 cities in over 300 locations. Having 
awarded this contract, we are working with Ketchum to jump 
start our efforts by arranging a satellite media tour next week 
to highlight the switch to digital one year before the 
deadline. We are also asking Ketchum to develop specific plans 
for using grocery stores and other retail outlets frequented by 
our target audiences. Although I believe that a lot of progress 
has been made to facilitate a smooth transition there is 
obviously still more work to be done. For example, one of the 
areas that the commission has recently been spending a lot of 
time on is how to best insure that consumers will continue to 
be able to view low power television stations which are not 
required in transition to digital next year.
    I have proposed a goal of 2012 for all low power stations 
to transition to digital. In the mean time I have asked that 
the leaders of several industry organizations to take voluntary 
steps to help consumers continue to watch all broadcast 
television programming after the transition.
    Mr. Markey. Mr. Chairman, right now you are 4 minutes over 
so if you could reach that summary.
    Mr. Martin. Sure. Certainly the next 12 months will be 
challenging. Nevertheless, it is my hope that through all the 
combined efforts of the government, industry, and consumer 
groups we will reap the rewards of the digital transition and 
the benefits it has to offer, and I look forward to continuing 
to work with this committee and all the members of Congress to 
answer their questions and work to make this a successful 
transition next year.
    [The prepared statement of Mr. Martin follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Markey. Thank you so much. I remember when I was a kid, 
Dick Tracey was my favorite comic strip and he hired this guy, 
Sam Ketchum, to be his assistant and we hope that your hiring 
of Ketchum will help you as well to solve this problem. So our 
next witness in her first appearance before the committee, the 
Honorable Meredith Baker, Acting Assistant Secretary for 
Communications and Information from the Department of Commerce. 
We welcome you, and whenever you feel comfortable please begin.

  STATEMENT OF MEREDITH BAKER, ACTING ASSISTANT SECRETARY FOR 
    COMMUNICATIONS AND INFORMATION, DEPARTMENT OF COMMERCE, 
                        WASHINGTON, D.C.

    Ms. Baker. Good morning, Mr. Chairman, and members of the 
subcommittee. Thank you for the opportunity to be here before 
you today and to discuss NTIA's successful launch of the TV 
converter box coupon program and our strong commitment to 
continued public education and outreach efforts so that this 
historic and important transition can take place and no 
American television viewer is unprepared on February 18, 2009. 
On January 1 consumers across the nation successfully and 
efficiently began to order coupons by phone, mail, fax, and on 
line. Consumers from every state in the nation applied on the 
first day. By the end of the first week NTIA had received over 
1.1 million requests for 2.1 million coupons. While this 
initial volume was high all systems continued to handle 
requests.
    To date, NTIA has accepted more than 2.4 million household 
requests for more than 4.8 million coupons. Approximately 47 
percent of these households have identified themselves as 
reliant on over the air television. On the average, 64.5 
percent are applying on the web, 34.9 percent by phone, only 
0.5 percent by mail, and .1 percent by fax. The overwhelming 
majority have been able to complete the application process in 
minutes with ease. We have made some adjustments and 
improvements as we learn about consumer experiences. For 
example, we have added more Spanish language operators and a 
Spanish language IBR. Those Spanish and English languages now 
have a wait time of less than 20 seconds for a live operator. 
Interest in the TV converter box program and demand for coupons 
indicate that consumers are becoming increasingly aware of the 
DTV transition and the program.
    Thanks go to NAB, CTA, CEA, and other members of the DTV 
coalition. By our estimate our consumer education efforts have 
attracted upwards of 350 million print and broadcast media 
impressions related to the program since September of last 
year. While we at NTIA have done over 60 interviews since the 
beginning of this year Secretary Gutierrez himself has done 25, 
actually over 25, because he did Good Morning America this 
morning, interviews on the transition in both Spanish and in 
English since January 1. NTIA's consumer education campaign 
focuses on the role of the coupon program during the transition 
and leverages opportunities for partnership, We, with Ketchum, 
which is a good choice by the FCC, have developed a 
comprehensive took kit which is information to make 
participation of partners easy such as flyers, enclosures, and 
sample PSAs.
    NTIA's consumer education partners currently include over 
130 social service and community organizations which serve our 
vulnerable communities, the low income, the seniors, the rural 
residents, the minorities, and the disabled Americans. More 
than 15 Federal agencies have committed to use their existing 
channels to get the word out about the coupon program. Chairman 
Martin outlined some of these. Some other examples are the VA. 
The VA is leveraging their incredible network that touches 24 
million veterans. The Department of Agriculture will distribute 
information with their food stamps program and their school 
lunch program, and HHS will be activating the Administration on 
Aging.
    NTIA has been greatly encouraged by the robust 
participation of manufacturers and retailers in the coupon 
program. As of yesterday we had certified 37 converter boxes 
that meet our specifications. These boxes are priced between 
$40 and $70. We are continuing to review and certify boxes as 
manufacturers come into this program, and we have offered 
expedited recertification for the version 2.0 boxes that are 
submitted with added analog pass through feature. We received 
notices of intent from more than half a dozen manufacturers 
with approved converters that claim to produce a converter box 
with an analog pass through. NTIA will begin mailing coupons to 
consumers next week. They look like this.
    NTIA and IBM have been working closely with participating 
consumer electronics to calibrate the release of the coupon 
with the supply of the converter boxes. The agency has 
certified more than 615 retailers at this point to participate 
in the program which represents 16,000 outlets nationwide. To 
assist these retailers in ordering their inventory NTIA has 
made available on the web as well as to the retailers a number 
of coupons requested by each state within their 3 digit zip 
code. We have also made employee training materials available 
and tested the process in a limited 2 market pilot program. 
When the coupons are mailed next week, we will have 9,000 
retailer locations that will be participating in the program 
throughout all 50 states, Puerto Rico, and the U.S. Virgin 
Islands.
    I would like to thank Wal-Mart, Best Buy, RadioShack, and 
Circuit City for their leadership and participation. These 
stores have completed the certification program. Their 
employees are trained. The converter boxes are in their stores 
and their systems are ready to redeem coupons. More retailers 
will be activated and more boxes will be available in the 
coming weeks. We will carefully monitor and assess the process 
as it rolls out and will take any further necessary actions to 
insure the consumer experience remains favorable with the 
coupon program. I received your letter, Chairman Markey, and 
others of the committee on the issue of the 90-day expiration 
of coupons, and I will be happy to work with you and your staff 
to address this issue. NTIA is aware of concerns that have been 
raised about the impact of the DTV transition of low power and 
translator stations and on residents of nursing homes, and we 
are taking steps to address these matters.
    I would like to than NTIA's staff for their hard work in 
getting this program off to such a successful start. Thank you 
again for the opportunity to testify before you today. I have 
enjoyed working with your staffs and the DTV caucus, and I look 
forward to more collaboration as we work together to make this 
transition successful. I will be happy to answer your 
questions.
    [The prepared statement of Ms. Baker follows:]

                     Statement of Meredith A. Baker

    Mr. Chairman and Members of the Subcommittee, thank you for 
the opportunity to appear before you today to discuss the 
progress made by the National Telecommunications and 
Information Administration (NTIA), Department of Commerce, in 
assisting Americans to prepare for the digital television (DTV) 
transition. In particular, I am pleased to report to you on 
NTIA's successful launch six weeks ago of the Television 
Converter Box Coupon Program (Coupon Program). Although the 
Program is off to a good start, this is only the beginning. In 
this statement, I will share with you the additional steps NTIA 
is taking to implement the Coupon Program and the agency's 
ongoing efforts to expand public education and outreach on the 
DTV transition and the Coupon Program.
    As I indicated, NTIA successfully launched the Coupon 
Program on January 1, 2008. Across the Nation, consumers have 
begun ordering their coupons through one of four convenient 
channels: via a toll-free number (1-888-DTV-2009), online at 
www.DTV2009.gov, by mail or by fax (1-888-DTV-4ME2). The phone 
line is available to consumers 24 hours a day, seven days a 
week, with live agents available at all times and an 
Interactive Voice Response system available for English and 
Spanish-speaking callers. The phone line can accommodate 
requests in more than 150 different languages. There is also a 
special assistance line for the hearing impaired in English and 
Spanish. Braille application forms are also available. To date, 
approximately 65 percent of the requests have been received 
through our Web site, 34 percent through our telephone channel, 
and less than 1 percent of the requests by mail and fax. 
Approximately 89 percent of the household requests are for the 
maximum number of two coupons.
    On January 1, NTIA with its partner IBM took requests from 
over 249,000 applicants requesting 475,000 coupons. Consumers 
from every state in the nation applied on that first day. By 
the end of the first week, NTIA had received over one million 
requests for two million coupons. To date, NTIA has accepted 
more than 2.4 million household requests for more than 4.7 
million coupons, representing 20 percent of the program's base 
funding. Approximately 47 percent of these households 
identified themselves as fully reliant on over-the-air 
television. During this first six weeks, the Coupon Program 
obtained more than 83 million print and broadcast media 
impressions. NTIA's daily efforts working with the media has 
helped generate awareness of the DTV transition and Coupon 
Program. This initial surge of interest in the Program and the 
correspondingly high application rate indicate that consumers 
are becoming increasingly aware of the DTV transition and are 
ready to take action.
    One of the keys to the success of this program is its 
voluntary nature, which has fostered strong public-private 
partnerships. As I have discussed this issue with other federal 
officials, non-profit leaders, and private sector partners, I 
have witnessed their willingness to work together to make the 
transition a success. The industries most directly affected by 
the transition have initiated significant educational efforts 
with real financial commitments to ensure that no household is 
caught unprepared on February 18, 2009. The DTV Coalition is 
also making great strides in educating the American public 
about their options for making the transition.
    As a complement to these efforts, NTIA has instituted a 
proactive consumer education campaign about the role of the 
Coupon Program in the DTV transition, leveraging opportunities 
to partner with consumer groups, community organizations, 
federal agencies, and industry to inform consumers of their 
options. To date, NTIA's consumer education partners include 
over 130 social service and community organizations with ties 
to the senior citizens, rural,, minority, and disabled 
communities as well as a variety of federal agencies with 
direct communications with other constituent groups. NTIA is 
reaching out to trusted institutions, such as the NAACP, AARP, 
and the Native American Journalists Association to reach 
populations most likely to be affected by the transition.
    In addition, information about the Coupon Program is being 
made available in numerous foreign languages - - Spanish, 
French, Chinese, Vietnamese, Korean, Filipino, and Tagalog. On 
December 1, 2007, Secretary of Commerce Carlos M. Gutierrez was 
featured in the first of a series of public service programs 
entitled, "TV Digital...Que Tal?" aired throughout the United 
States and Puerto Rico by the Spanish-language Univision 
Television Network. The program discussed the benefits of 
digital television broadcasting and provided detailed 
information about the need for viewers that rely on over-the-
air broadcasting to obtain digital-to-analog converter boxes to 
continue to use their analog television sets, and how to access 
the Coupon Program to obtain coupons for the purchase of boxes.
    In addition, NTIA hosted a meeting on January 24, 2008 with 
more than 15 other federal agencies, including the Federal 
Communications Commission, the Departments of Veterans Affairs, 
Health and Human Services, Agriculture, and Homeland Security, 
the Administration on Aging, and the Federal Emergency 
Management Agency, to further coordinate federal efforts to 
educate the nation about the February 17, 2009 deadline to 
transition to digital television. During the meeting, NTIA 
outlined its current and upcoming consumer education efforts 
and the agencies discussed their strategies and existing 
communications efforts to raise consumer awareness of the DTV 
transition and the Coupon Program.
    In collaboration with IBM and Ketchum, NTIA has developed a 
comprehensive toolkit of information to provide guidance to its 
partners that are playing a critical role in educating their 
members, constituents and customers about the Coupon Program. 
Available for use by partners since January 1, 2008 and 
continuing through early July 2009, the Toolkit attempts to 
offer simple tips and recommendations to help each organization 
reach its members with information about the Coupon Program in 
a way that will resonate best with them. The Toolkit includes a 
set of materials, including fact sheets, a poster, a mailer, 
sample presentations and other materials that can be co-branded 
for use by partners. The Toolkit also contains specific tools 
and strategies that can be used to reach the media to 
effectively deliver the Coupon Program message, and ideas and 
resources for informing consumers through community and in-
store events or other activities.
    The Toolkit includes four sections, each of which can be 
used on its own, or in conjunction with other parts of the 
Toolkit:
     Program Background. This section includes background 
information on the DTV transition and the TV Converter Box 
Coupon Program. Partners are strongly encouraged to familiarize 
themselves with the Coupon Program and with what consumers told 
us they want to know.
     Development and Dissemination of Messages and Materials. 
This section includes a series of tailored messages about the 
Coupon Program that partners can incorporate into their own 
materials to explain how to apply for and redeem coupons. The 
messages have been tested in consumer focus groups to ensure 
that they are easily understood and have been reviewed by NTIA 
for accuracy and consistency. This section also outlines the 
ready-made materials available for downloading, co-branding and 
use by all partners.
     Communicating Through the Media. This section provides 
guidance and ideas for generating "earned media" coverage 
through television, radio, print or online information sources. 
The information in this section ranges from ideas for 
conducting proactive media outreach, to placing public service 
announcements and tips on conducting a solid media interview.
     Conducting Outreach Activities. The Toolkit includes 
creative ideas for communicating about the Coupon Program 
through existing organizational resources, as well as 
developing events and activities that focus specifically on the 
TV Converter Box Coupon Program.
    NTIA has been greatly encouraged by the robust 
participation of manufacturers and consumer electronic 
retailers in the Coupon Program. As part of this effort, NTIA 
has been working with manufacturers to ensure that converter 
boxes are timely available for viewers and contain the 
necessary functions and features. Voluntary industry efforts by 
consumer electronics manufacturers to educate consumers about 
the DTV transition and the Coupon Program are clearly having an 
impact as demonstrated by the number of requests for coupons 
NTIA has received to date.
    As of February 1, 2008, NTIA had certified over 34 
converter boxes containing the required minimum features as 
well as permitted features, including three boxes which include 
the capability to pass through an analog broadcast signal. A 
complete list of converter boxes certified to date is available 
on NTIA's website. These boxes demonstrate a range of consumer 
options and are priced between $40 and $70. We are continuing 
to review and certify boxes as manufacturers come into this 
Program.
    NTIA continues to work on one issue with the Federal 
Communications Commission (FCC), consumer electronics 
manufacturers, and the broadcasting community to ensure that 
there are converter boxes that will serve the needs of viewers 
of Class A, low-power television, and television translator 
stations. As you know, these stations are not subject to the 
February 17, 2009 analog broadcasting cutoff deadline. Viewers 
of these stations who wish to continue receiving these analog 
broadcasts as well as the new digital signals after the 
February 17, 2009 deadline may want a converter box that 
includes an analog signal pass through feature. When the Coupon 
Program regulations were issued, NTIA asked manufacturers to 
take this into consideration in the development of certified 
converter boxes. At the same time, NTIA asked manufacturers 
interested in including this feature to investigate options 
that would provide an acceptable analog signal pass through 
with minimal signal loss. On February 5, 2008, I sent a letter 
to each of the manufacturers involved in the certification 
process to once again encourage them to consider the needs of 
all viewers, including the viewers of Class A, low-power 
television, and television translator stations, in the 
development of converter boxes for the Coupon Program. NTIA is 
committed to an expedited review and recertification process 
for any box to which a manufacturer adds an analog signal pass 
through feature.
    I was very pleased by the recent announcement of the 
National Association of Broadcasters (NAB) that it will be 
taking steps to help resolve this issue. NAB has said that it 
will also request that manufacturers incorporate the pass-
through feature. In addition, it will urge broadcasters to let 
their viewers know that low-power stations and translators will 
not necessarily discontinue broadcasting in analog at the 
deadline, will help to identify locations where large numbers 
of viewers might still be getting analog signals after the 
transition, and will produce television spots that directly 
address the issue and what viewers need to do to still receive 
the signals.
    In addition, NTIA began accepting grant applications in 
October 2007 from eligible Class A, low-power television, and 
television translator stations to enable them to continue 
analog broadcasts. This grant program will provide $1,000 to 
eligible stations that must purchase a digital-to-analog 
conversion device to convert the incoming digital signal of a 
full-power television station to analog for transmission on the 
station's analog channel. Applications will be accepted until 
February 17, 2009.
    Of course, stations that operate at less than full power 
will also eventually convert to digital broadcasts, and by 
statute NTIA is directed to assist this effort through a 
program that provides $65 million for necessary equipment 
upgrades in eligible rural communities. To implement this 
program, a technical correction to the program authorization is 
required to permit the agency to begin making funds available 
during fiscal year 2009. S. 2607, recently introduced in the 
Senate, provides the correction necessary to enable NTIA to 
implement the program. NTIA will continue to work with the FCC, 
industry and the broadcast community to assist low-power 
television stations and their viewers during the transition to 
digital broadcasting.
    NTIA will begin mailing coupons to consumers at the 
beginning of next week - - one year from the date of the 
transition. NTIA and IBM have been working closely with 
retailers in anticipation of this day. The agency has certified 
more than 615 retailers, representing more than 16,475 outlets 
nationwide, to participate in the program. Eight of the largest 
consumer electronics retailers -- Best Buy, Circuit City, 
Kmart, RadioShack, Sam's Club, Sears, Target, and Wal-Mart - as 
well as many smaller retailers are among the 615 retailers 
certified by NTIA to participate in the Coupon Program.
    At the request of many of these retailers that have 
reported the need for assistance in ordering stock, NTIA has 
made information available about the number of coupons 
requested on a per State basis as well as with greater 
granularity (by first 3-zip code digits). NTIA and IBM have 
made employee training materials available to all participating 
retailers so that they will be ready to answer consumers' 
questions about certified boxes and the use of the coupon for 
payment. NTIA and IBM have tested the coupon application and 
redemption process in a limited pilot program in two markets to 
identify and correct any issues prior to full scale deployment 
of the coupons to consumers. When the Coupons are mailed next 
week, over 9,000 retailer locations will be participating in 
the program, including locations in all 50 states, Puerto Rico, 
and the U.S. Virgin Islands. Participating stores will have 
completed certification in the Coupon Program and will have 
indicated that their employees are trained, they have converter 
box inventory in their stores and their systems are prepared to 
redeem coupons. Participating retailers can be found on 
www.DTV2009.gov.
    Thank you again for this opportunity to testify before you 
today. I will be happy to answer your questions.
                              ----------                              

    Mr. Markey. The gentlelady's time has expired, and we will 
now turn to members of the subcommittee for questions of the 
panel. And the chair will recognize himself for a round of 
questions. Chairman Martin, I want to talk to you about the 
fact that the geographic coverage area for broadcasters may not 
be exactly the same in digital as it is in analog. In other 
words, some customers may find themselves newly outside the 
reception area of a channel they currently receive or they may 
need to adjust or to put up antennas to get the digital signal. 
What is your estimate of the number of households that may find 
themselves outside the reception area for channels they have 
historically received and what is your estimate of the number 
of households that will need new antennas as a result of this 
transition?
    Mr. Martin. Let me say first that our estimate is that all 
of the viewers within their predicted contour of the broadcast 
stations will continue to receive the broadcast signals after 
the transition just as they do today so there is going to be a 
change potentially for some consumers who are outside that 
predicted contour. Those are consumers today who are not within 
where we expect the broadcasters to be able to serve but maybe 
on the rural areas or in other communities who still pick up 
some of those other broadcast signals, and there could be some 
change on that. I asked our engineers that question in response 
to this interest survey that was released earlier this week 
which they had some questions about and think there are some 
flaws in. But they estimate that that will be 5 percent or less 
change, and this would only be on consumers who are outside 
where we say broadcasters must serve today.
    Mr. Markey. We are in situation where people may receive 
the signal in those areas and perhaps they are not expected to 
but they do today, and beginning next year they won't any 
longer, so I think it is important for us to deal with how 
people actually do relate to these signals in the analog era.
    Mr. Martin. We don't have any way to know for sure because 
those would be people that are receiving broadcast signals and 
they are not expected to be, and the broadcasters are not 
expected to be serving those. They are picking up signals 
beyond where the broadcasters----
    Mr. Markey. It is just important for us to know how many of 
those people will need antennas so that there is an 
understanding of what will happen on that day in terms of the 
number of people who will be complaining that they have always 
received a signal during the analog era and they are now not 
even though under our historical guidelines perhaps they 
weren't expected to receive it but they did receive it and now 
they won't receive it any longer.
    Mr. Martin. And as I said the only estimate I have from our 
engineers is they think it will be less than 5 percent of the 
consumers who would be impacted because again everyone who is 
in the predicted contour will continue to be.
    Mr. Markey. So do you think antennas will be a big problem? 
In other words, in that area do you think that we might be 
talking about millions of people who will have to purchase 
antennas that today would not necessarily need to use an 
antenna in order to receive a signal?
    Mr. Martin. Well, let me try to explain the way the 
engineers explained to me the concerns. For example, with the 
Centra survey that was released this week that said that, they 
said that the Centra survey, the flaw in that study as it 
compared the analog broadcasting today to digital broadcasting 
tomorrow and it assumed analog consumers today have an antenna 
on their roof as our model assumes, and it has for years, and 
then compared that to digital signals tomorrow and assumed that 
consumers did not have an antenna on the roof and only had 
rabbit ears, so you are comparing and contrasting different 
consumers with different antenna structures so what we would 
say is consumers should be all except for that 5 percent should 
be continued to be able to receive broadcasting tomorrow as 
they do today with no change in the antenna as they do today so 
there shouldn't be any difference between a roof top or a new 
antenna.
    Mr. Markey. Congress is a stimulus response institution and 
there is nothing more stimulating than millions of people on 
February 17, 2009, calling to say they no longer can get 
Channel 4, and I have had it since 1949 in our households so we 
don't have to worry about the successful part of it. We have to 
worry about the part that is going to cause disruption. One 
final question. Hundreds of low power stations and thousands of 
translators will remain in analog form and just 4 converter 
boxes reportedly possess the so-called analog pass through 
capability. How are the two of you coordination consumer 
education efforts in affected communities, and are you working 
with retailers to insure that appropriate boxes are stocked in 
stores in those communities, and if you could give me a brief 
answer that would be very helpful.
    Mr. Martin. We are certainly trying to work to coordinate 
to make sure that the message is communicated effectively to 
consumers about the concern. We are taking a variety of other 
steps including trying to encourage LPTV stations with a hard 
deadline to transition to digital, working with consumer--I 
sent letters to the Consumers Electronic Association and the 
Consumers Electronics Retailers Association asking them to make 
sure each manufacturer produces at least one box that has a 
pass through and that each retail outlet contain and sell at 
least one box with a pass through. And we have also proposed 
that we try to provide some additional assistance to the class 
A low power stations and provide them the opportunity to become 
full power stations and be at the front of the line, so to 
speak, after the digital transition, which I think will be 
essential to the low power community.
    And they have indicated to me that that would be a very 
important opportunity for them to ease their transition, and so 
I have taken a variety of steps and will continue.
    Mr. Markey. Ms. Baker, very quickly.
    Ms. Baker. We are working with the FCC obviously on the 
education program with the CBA. On our coupon mail out we will 
identify the boxes. We will asterisk which boxes have low power 
pass through and send them to the web site with coordinated 
fact sheets. We also want to make sure that everyone knows that 
they don't all need it so we want to clarify that and work with 
again the education effort, the joint industry education 
effort.
    Mr. Markey. OK, great. This is going to be a big issue. We 
have to make sure that this part of it works. The chair 
recognizes the gentleman from Florida, Mr. Stearns.
    Mr. Stearns. Thank you, Mr. Chairman, and I welcome the 
opportunity to work with Chairman Martin. He has always been a 
good friend, and I look forward to working with him. Secretary 
Baker, in your opening statement and mine we both talked about 
the huge number of people that are requesting these coupons, 
and flat out wouldn't you say that this program is working, 
that industry and government and consumer education is working, 
would you say so?
    Ms. Baker. I think the word is definitely getting out.
    Mr. Stearns. Definitely. Would you say it is working?
    Ms. Baker. Yes.
    Mr. Stearns. OK. Some people are asking to require all 
converter boxes to include a low power pass through. Are you 
concerned that the manufacturers and retailers suddenly might 
drop out of the program altogether if we change the 
requirements at this late date?
    Ms. Baker. Yes. I think it is a voluntary program and as I 
mentioned not all people need this pass through so I think it 
would stifle the retailer participation and the manufacturers 
if this were required.
    Mr. Stearns. Thank you. And with that, Chairman Martin, it 
seems that you are talking about low power issue, and I guess a 
lot of us are wondering what all the facts are. I believe you 
have already started providing some data. It needs to be cross 
referenced staff tells me before we can take action. Can you 
obviously work with the committee, particularly our staff, to 
create a list of all low power stations and their location 
breaking out those that are class A or translators, those that 
will be digital by February 17, 2009, whether they are an 
affiliate of one of the top 4 networks, whether all the 
stations in their market are analog, low power, and how many 
people are actually watching them. I say this as an overlay 
because as I talked to Secretary Baker there is a perception 
that this low power--to include a low power pass through it is 
going to create some kind of detriment so towards the end if we 
had all those facts and we could cross reference them that 
would be helpful. So if you would be so kind as to address some 
of the items that I have requested that you provide our staff.
    Mr. Martin. Of course we will work with your staff to 
provide any of the information that you end up needing and that 
we have and have available. I think we have already tried to 
provide some of those numbers. I can give you a brief overview 
if you would like. And the only problem, the only issue that I 
see with any of the requests you have made is Nielsen doesn't 
actually keep track of the number of people that are watching 
the low power television stations. They focus on the full power 
television stations. So we may not be able to get you--we will 
provide you whatever we can obtain.
    Mr. Stearns. Can you provide us a list of all the low power 
stations and their locations?
    Mr. Martin. Absolutely.
    Mr. Stearns. That is no problem.
    Mr. Martin. Yes.
    Mr. Stearns. Breaking out those that are class A or 
translators, can you provide that?
    Mr. Martin. Yes. That is no problem.
    Mr. Stearns. Those that will be digital by February 17, 
2009?
    Mr. Martin. All the information we have about anybody who 
will be digital, absolutely.
    Mr. Stearns. Whether they are an affiliate of one of the 
top 4 networks, can you provide that?
    Mr. Martin. Yes.
    Mr. Stearns. And whether all the stations in the market are 
analog, low power.
    Mr. Martin. Yes.
    Mr. Stearns. And how many people is the one you say you 
can't provide?
    Mr. Martin. We will provide whatever we can gather but I am 
not sure we will be able to provide that.
    Mr. Stearns. Thank you, Mr. Chairman.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from Michigan, Mr. Stupak.
    Mr. Stupak. Thank you, Mr. Chairman. Chairman Martin, in 
2004 as I said in my opening News Corp acquired DirecTV and 
pledged to provide local carriage in all 210 DMAs, yet here we 
are in February, 2008, and DirecTV only covers 142 DMAs and 
EchoStar 170 DMAs. You testified at this committee that it 
would be a win for consumers' perspective and policy 
perspective. Later this month you are urging the commission to 
approve Liberty Media's request to acquire News Corp stake in 
DirecTV without a similar pledge of working to provide 
universal local to local. Why not?
    Mr. Martin. First, let me say I do continue to think it 
would end up being a win from a consumer perspective, and I 
support trying to make sure that we move forward. I think you 
asked it in your opening statement to have the commission work 
with Congress to have a deadline that we would insure that all 
local to local actually occurs. I went back after the last 
hearing and looked at the commitment that was made in 2004 and 
it was a commitment that was made not to deliver all those 
local to local using satellite but to use a hybrid system in 
which they delivered local to local, and some communities via 
satellite and some using an over the air signal that would be 
obtained and then integrated in.
    Mr. Stupak. And that hasn't worked either?
    Mr. Martin. No, but we have required--they committed to do 
that by 2008 and 2004, and we are requiring them again in this 
order that I circulated to the commissioners that they do have 
to integrate all of those in all 210 by the end of this year.
    Mr. Stupak. How many have they integrated thus far if you 
have 10 months left this year? Very few, if any.
    Mr. Martin. Very few. Absolutely.
    Mr. Stupak. So they are not realistically going to get done 
by the end of 2008, are they? If this merger goes through they 
are no longer required to do it, right?
    Mr. Martin. No, no, no. We are making if the merger goes 
through they are still required to. We are not eliminating that 
obligation of being required to.
    Mr. Stupak. So realistically are they going to get it done 
even if the merger goes through?
    Mr. Martin. They are saying that they will be able to roll 
that out to offer that to consumers in all 210 markets this 
year using this integrated solution, not using the satellite 
into satellite solution, which is an imperfect solution but 
that is----
    Mr. Markey. The gentleman from Michigan, just so that he 
knows, there are 3 minutes left to vote on the floor. We could 
suspend here and come back and then I will recognize the 
gentleman.
    Mr. Stupak. Why don't we do that, why don't we suspend, and 
get back my time.
    Mr. Markey. There is only one roll call, a Republican 
motion to adjourn the Congress for the day, which we are going 
to go over and oppose. I think we will be successful and that 
will allow for the continuation of the hearing. We will take a 
brief recess. Thank you.
    [Recess.]
    Mr. Markey. The committee will reassemble and we will once 
again recognize the gentleman from Michigan with an extra 30 
seconds on the clock because of the disruptive time at which we 
suspended the hearing, and the gentleman is recognized once 
again for that purpose.
    Mr. Stupak. Thank you, Mr. Chairman, and thank you for your 
courtesy. Mr. Martin, we were talking about local to local, and 
I still want to ask you about that. Why don't we just, FCC just 
put a hard date much like we do with DirecTV. Why don't we just 
say by February 17, 2009, this will be done, the last remaining 
40 areas will be covered because this hybrid system that you 
are speaking of still would not work in areas like Marquette, 
Michigan, Alpena, Michigan because of topography.
    Mr. Martin. And I was able to confirm during the break the 
hybrid system that they are offering to do is what they had 
committed to do in 2004 they are saying they will have done by 
October of this year.
    Mr. Stupak. And I am telling you the hybrid system won't 
work because of the topography of some areas especially in 
Minnesota, northern Michigan, so that still doesn't solve our 
problem. Why not just put a hard date and say, OK, by February 
17, 2009, we got to go to DirecTV. Let us make sure we have all 
local to local and all the DMAs.
    Mr. Martin. The reason why is because actually Congress 
made the decision to require instead of requiring all the 
satellite operators----
    Mr. Stupak. Congress did not say it had to be done. We 
encouraged it to be done. We had hoped the FCC would follow 
through so I am urging the FCC to do it. So if we introduce 
legislation saying local to local must be completed by February 
19, 2009, would you be supportive of that?
    Mr. Martin. I would. I mean I have been very supportive of 
carriage in every context, and so I would and I would continue 
to say that I think that is a good thing and would be 
supportive of it, yes. I would be happy to work with you on it.
    Mr. Stupak. OK. So why don't you just do it as part of this 
merger here, require it to be done? If you are looking at this 
merger later today.
    Mr. Martin. I believe the fact that Congress was very 
specific in saying that the satellite operators didn't have to 
do it they were going to do it market by market. If they did it 
for one station in the market they would do it everywhere, but 
they did not require it to be done nationally and so I think 
that them coming forward saying that they would assume it 
through other technology is probably the extent to which that I 
think is reflective of what I understood Congress' intention on 
that. I certainly support is as a policy matter and would 
support legislation if it was introduced.
    Mr. Stupak. So why don't you have the commission do it as 
part of the merger. If DirecTV covers 142 now they would have 
about 60, 80, almost 70 more to go so why not just make it part 
of that agreement you are looking at later this month?
    Mr. Martin. I think what is important is if we required 
that that way it would take away the capacity to provide the 
carriage for other signals because of the one limited nature of 
their capacity.
    Mr. Stupak. Well, that is the argument but has the FCC ever 
inquired, done a feasibility study or looked at the cost due to 
local to local? What is the cost? We hear that excuse all the 
time but yet we see new channels coming on all the time.
    Mr. Martin. No, what I was saying is I agree. I think it is 
probably a higher priority to carry the broadcast signals. I 
support that. I was meaning that I deferred to Congress' 
decision if they weren't going to require that of the satellite 
operators unlike the cable operators, and so it was out of that 
deference that I was concerned about whether we should do that, 
but I support it and would support the legislation if that was 
introduced. And I think I would support working with you on 
anything else we can come up with to try to solve the problem.
    Mr. Stupak. It will be introduced, hopefully soon. We are 
looking at it right now. Thank you, Mr. Chairman. Thank you, 
Mr. Martin.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from Michigan, Mr. Upton.
    Mr. Upton. Thank you, Mr. Chairman. Welcome, both of you. 
Chairman Martin, one year to go before the transition my 
understanding is that the broadcasters are still waiting on the 
FCC's seventh reconsideration order and some other items so 
that they can finish constructing their digital facilities. It 
seems to me that in terms of media issues the FCC should be 
focusing its attention on that rather than other TV related 
items. Would you be able to send us a list of all the pending 
and planned media related rulemakings that you anticipate that 
the commission might address between now and February 17 of 
next year?
    Mr. Martin. I would be happy to, and I believe the seventh 
DTV order we did at the end of the year and the only thing that 
I know from a technical standpoint there is individual 
petitions for recon that were filed that said I don't want the 
channel you gave me, I want a different one, and that is 
actually on circulation already at the commission. But I will 
be happy to give you a list of the remaining technical items 
that would need to be done but I believe all of them are 
already on circulation and we anticipate being able to move 
through all of them. Several of them are on the agenda for this 
month and all of them are in circulation before the commission 
now.
    Mr. Upton. Great. Thank you. Secretary Baker, will you be 
able to track and share the coupon requests and redemption date 
rate data to help the manufacturers and retailers allocate 
their resources in proportion to levels of demand across the 
country?
    Ms. Baker. Absolutely. IBM has designed a system that will 
electronically track as we have already shared with the 
retailers the applications down to the zip code where they have 
been asked for. We will also give that information both to the 
Congress as well as to the retailers as to where these coupons 
are redeemed.
    Mr. Upton. Great. And I know that you recently received a 
letter from Chairman Dingell and others asking to let you get 
people that get back in line after their coupons expire. The 
letter asked you to do so. However, only if it won't cause us 
to run out of coupons. But my sense is that we are going to 
have to wait a couple of months to see if the redemption and 
the expiration rates occur before. We will know whether there 
in fact is going to be a risk so I am not necessarily against 
that at all but I think that we are going to need to see some 
data before we get there.
    Ms. Baker. I agree with you. I think as we move from the 
theoretical design of this program to when it is more real and 
we have real people and real constituents we start to get a 
little bit more sympathetic, and I think this is one of those 
things that we can be very sympathetic on. I do think that we 
need to wait and see the redemption rates but I have gone ahead 
and asked IBM to price out what the cost of this would be, what 
would the cost of the application, fielding another 
application, making another card, mailing it out to another 
constituent so we have the data as to how much it cost and so 
we can compare that with the redemption rates and see if there 
is money to do such a thing.
    Mr. Upton. Thank you. I yield back.
    Mr. Markey. The gentleman's time has expired. We have 
another--Mr. Shimkus earlier made reference to the movie 
Groundhog Day, and there is now another motion to adjourn on 
the House floor. If it goes on all day there will be a more 
contemporary movie, There Will Be Blood will be what happens by 
the end of the day. But at this point we are all still in good 
humor and I think we have enough time actually for 5 minutes to 
recognize one member, and that would be the gentlelady from 
California, Ms. Eshoo.
    Ms. Eshoo. Thank you, Mr. Chairman. What I want to do is 
just put my questions out there and then give you time to 
respond to them. My first question is directed to Ms. Baker. 
Thank you for being here. Congratulations on your position. On 
August 3 of last year the President signed the 9/11 Commission 
Implementation Act into law, and contained in that was a grant 
program for the PSAPS. I along with Mr. Shimkus co-chaired the 
E-911 caucus in the House and so we are very interested in the 
capabilities relative to E-911. So I would like to know what 
the status of the funding is for those grants and how the 
dollars are going to be distributed. To Chairman Martin, I 
would like to know if you have decided if you are going to 
auction the advanced wireless services spectrum, and if so when 
you plan to do so. That is fallow as you well know, and I think 
that this auction, the auction of this spectrum, should be as 
soon as possible but I would like to know where you are on 
that.
    I would also like to query on the whole issue of cable. 
When one looks at the decisions that you have taken, it kind 
of--it says to me that there is a deep chasm between you and 
cable, the manipulation of the data in the 7070 proceeding, and 
I use the word manipulation because I think the data was 
manipulated. I don't think in that re-regulation that the 
consumers win. The franchising regime should allow it to work, 
and I don't think that that is consumer friendly. The multicast 
must carry, I think that that raises rates. I don't know where 
you are coming from on that. The slashing of the rates cable 
can charge for leased access. Now I understand that people can 
fall on either side of that issue but I think that that is on 
the list as well.
    The eradication of existing contracts with the multi-
dwelling units, the continued pressure to implement ala carte 
which I think raises rates, and there is a lot that seems to 
drive you on that. I don't see broad support for that but you 
seem to stay on it, and then the 30 percent cap. I am not happy 
with the--that is one of them but I don't know whether I 
disagree with you on that or not. But that is a long list and I 
think that the commission really needs to be working better 
with cable. I think that the consumers are hurt in some of 
these decisions but I don't want the decisions to just stand on 
their own. I mean it is a long list and I think it is troubling 
to me and I think that it is to others. So those are my 
questions, and maybe we can start with Ms. Baker on the PSAPS 
and the funding and the grants.
    Ms. Baker. Right. Well, we are glad that the E-911 program 
has finally been funded. We have had a joint program office 
with NITSA now for I think over a year, and we have just 
received a draft joint work program. I am happy to share it 
with you and your staff.
    Ms. Eshoo. What does that mean, how you are going to 
distribute the funding?
    Ms. Baker. Yes. And so we are working with them, and I am 
happy to share the draft with you.
    Ms. Eshoo. Do you have a date by which the funding will be 
out?
    Ms. Baker. I think that that is still in development.
    Ms. Eshoo. OK. Chairman Martin.
    Mr. Martin. Sure. I am happy to end up answering your 
concerns about the--my concerns with cable, and I would say 
that first just very briefly in direct response to some of the 
concerns, multicast must carry doesn't raise rates. It is the 
carriage of free programming so it can't raise rates. Leased 
access, decreasing rates for leased access can't again raise 
rates. We were decreasing rates for leased access. On the 
apartment building issue and the franchise reform, I continue 
to believe everyone deserves to have the benefit of 
competition, not just people that don't live in apartments. An 
overwhelming number of minorities in this country do--more 
minorities live in apartment buildings than others and I think 
they deserve to have the benefits of competition.
    Ms. Eshoo. Do you think minorities are hurt by your overall 
media consolidation? I mean it seems you support minorities on 
one thing and then on one of the largest things that the 
commission could ever take up minorities are, well, I don't 
want to use the term, but they are hurt by it.
    Mr. Martin. Well, I was glad that maybe you agreed with the 
30 percent cap but overall when you talk about the list, I 
think this is the reason why, the list, and if I can have this 
entered into the record, Mr. Chairman, I would appreciate it. 
What we have seen is a dramatic increase in cable rates 
compared to every other sector the commission regulates. Cable 
rates have dramatically increased. In 1996 when the 
Telecommunications Act was passed cable rates were $22 a month 
for expanded basic. Today they are over $50 a month. The reason 
why I am concerned about cable is because I believe consumers 
are concerned about cable. Eighty percent of consumers say they 
think they are paying too much, and I believe we need to do 
something about the ever expanding cable rates.
    Mr. Markey. There is only 3 minutes left on the roll call 
on the floor.
    Ms. Eshoo. Can he answer on the auction?
    Mr. Martin. We have been very busy with the 700 megahertz 
auction. As soon as we finish that, I plan to move forward on 
the----
    Ms. Eshoo. When do you anticipate that to be?
    Mr. Martin. The 700 megahertz auction could close when 
people stop bidding on it and so I am waiting for that to 
conclude, and I can't give you an exact time frame but that 
will be the next priority for the commission as soon as we 
finish the 700 megahertz auction.
    Ms. Eshoo. Thank you. Thank you, Mr. Chairman.
    Mr. Markey. Again, the committee will stand in recess, and 
we will reconvene in another 6 to 10 minutes.
    [Recess.]
    Mr. Markey. The committee will please reassemble, and once 
people are settled down a little bit the chair will recognize 
the gentleman from Illinois, Mr. Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman. I finally got lucky 
on a hearing for a change so let me go with Secretary Baker. 
According to Nielsen only 11.7 percent of the households 
representing 13 million homes rely exclusively on the over the 
air television as of January, 2008. What percent of coupon 
requests have come from such homes?
    Ms. Baker. Right now we are at 47 percent have been over 
the air only.
    Mr. Shimkus. When we have had other of these hearings what 
I have always focused on is the amount of consumers out there, 
and I focused on how many have cable, how many have satellite 
TV, try to address the cost, do we have enough money budgeted 
and the issue, so that is kind of where my line of questionings 
have continued to focus on. And this is for both Chairman 
Martin and you, Secretary Baker. I know there has been an 
overwhelming interest in the converter box coupon since the 
public was able to start requesting them. Over 3.4 million 
converter box coupons will be mailed out starting next week. If 
the public has requested such an overwhelming number of coupons 
over a year before the transition date doesn't that demonstrate 
that the consumer education plan is working, and a follow-up 
question, how should consumer education change as we get closer 
to February 17, 2009? We will go first with Chairman Martin.
    Mr. Martin. I certainly think that is evidence that the 
education campaign is beginning to work, and I think the most 
important thing that we need to recognize as some of the recent 
surveys have been done about consumers by Consumers Union that 
as more and more people become aware of the transition our 
education focus needs to change to not only just saying the 
transition is coming but what they need to do to prepare for 
it, and more and more the focus on what actions they need to 
take as opposed to just the transition is coming.
    Mr. Shimkus. Secretary Baker.
    Ms. Baker. I do. I think the fact that we had such a large 
demand the first week means that the consumer education 
campaign is working. The spike really is it goes up the first 
week and then it kind of levels off. I think we are at an 
average of 61,000 coupons now a day being asked for. I think 
that we will have spikes. We will probably have a spike at the 
year out as we have all this great interest in a year out and 
the events of the year out. I think we will have different 
spikes throughout the summer. I think we are looking for spikes 
so that we can get the consumer education campaign out there 
particularly to the elderly, the disabled, the rural, the low 
income, and the minorities.
    I also think what will be more telling is not the demand 
for the coupons but how they are redeemed and I think we will 
start seeing those. Obviously since we are mailing the coupons 
out starting next week, we will start seeing redemption rates 
shortly and we will see what the redemption rate is on the 
coupons and that will be more telling.
    Mr. Shimkus. Great. And since I have you here, Chairman 
Martin, let me just focus briefly on the WARN Act and the FCC 
has pending before it a rulemaking to implement the voluntary 
alert warning system on commercial mobile networks. This is 
part of your execution of the act which also detailed a process 
based on industry recommendations for its implementation. You 
have raised questions about the industry's detailed 
recommendations especially with respect to the alerting 
geographic granularity. That is tough. I usually don't try to 
go into multi-syllable words. Granularity is one of the 
toughest ones I have had to use today but since the involved 
parties worked to provide a consensus and set of 
recommendations that can be implemented broadly across 
commercial networks, can you speak to what concerns you may 
have? As you know, Congress worked its will and permitted 
carrier participation to be voluntary and for the FCC rules to 
be consensus driven.
    We obviously want carriers to participate or consumers 
won't have access to the alerts. Do you worry that your process 
underway may prove a disincentive for carriers to participate 
and thus reduce the availability of alerts to consumers as 
outlined in the recommendations presented by the WARN Act 
advisory committee?
    Mr. Martin. No. I think the process has actually been very 
conducive. Out of all the recommendations made by the joint 
committee that contained both consumer interest, public safety 
interest, and the wireless industry's interest there was only 
one concern that I raised on the recommendation and it was on 
the geographic area. I didn't think that we should require 
anything smaller in terms of geographic area but I was 
contacted by several public safety agencies and by the mayor of 
New York about concerns that if we require--the geographic area 
that was being discussed would not be conducive to extremely 
dense urban areas like New York City, and trying to find a way 
that we would make sure that the residents of New York were 
also able to get the benefits of the WARN Act and try to either 
get some of the industry players to participate in something on 
a smaller geographic area or to try to make sure that we 
allowed individual public safety entities and/or local 
communities to come forward and say we need it on a smaller 
area because it is so densely populated in our urban areas I 
think was important.
    I am still trying to work with the industry on trying to 
figure out a way to voluntarily try to address this issue, and 
obviously I am going to be very sensitive to what concerns the 
Congress members may have about this one focus. I think that 
some Congress members had raised a concern with me about this 
but some of their offices have but I think more of them are 
comfortable with it now, and so we will continue going forward 
and work on this, but I think it is a voluntary program. I 
think we need to be very sensitive to all the issues that are 
raised by the whole organization. And as I said except for this 
one issue that was really raised predominantly by New York 
City, I think everything else has all been worked out.
    Mr. Shimkus. Thank you, Mr. Chairman. And just for me to 
close, this is kind of tied in to digital transition because 
the whole debate of date certain and getting the spectrum freed 
up for the first line responders is something that a lot of us 
have worked very diligently to--the last thing we want, Mr. 
Chairman, is another major catastrophe where we have people not 
able to communicate with each other. The public broadcasters 
are on the Hill today, and the ones I talked to have been very 
strongly in support of the date certain based upon their plans 
and procedures and what they are trying to do. And I hope we 
can continue to move in that direction for what has been my 
focus, and I know my colleague, Congresswoman Eshoo's, is the 
first line responders and the public safety communities. So 
with that, thank you very much, Mr. Chairman, and I yield back 
the balance of my time.
    Mr. Markey. The gentleman's time has expired. To the 
gentleman from Texas, we were going to recognize Mr. Boucher 
before the last roll call but he decided to pass so that we 
could go so if you don't mind we will recognize Mr. Boucher out 
of order and then we will come back to you. The gentleman from 
Virginia, Mr. Boucher, is recognized for 8 minutes.
    Mr. Boucher. Well, thank you very much, Mr. Chairman, and 
Mr. Martin and Ms. Baker, welcome to the committee. We 
appreciate your advice this morning. In November of last year I 
had the opportunity to visit White Haven in the United Kingdom. 
That is the community where the digital television transition 
was first completed in the UK. And I was very interested to 
learn about that experience. It was a good experience for them. 
They had no surprises. On the day of the transition everyone 
was aware of it. They had taken the steps to prepare 
themselves. That of course is the goal we hope to achieve in 
the U.S.
    They did, however, encounter some issues that I don't think 
we have given much consideration to with regard to our 
transition, and I would welcome your thoughts about these 
issues. There were two in particular. They discovered that 10 
percent of the external antennas had to be replaced in order to 
accommodate the digital signal. These were outdoor antennas 
that were adequate to get an analog signal, probably a snowy 
one, not a very good one, but at least these outdoor antennas 
could get analog signals. They were not sufficient, however, to 
get a digital signal at all, and so 10 percent of the antennas 
had to be replaced.
    Now in putting together a program for converter boxes and 
the subsidy program for that, we really thought that would be 
the only hardware need. We were not aware that possibly outdoor 
antennas would also have to be replaced. And I don't know how 
many that will be but there are about 70 million analog sets in 
the U.S. that are over the air dependent. If you took 10 
percent of that figure, we would be talking about 7 million 
homes. It probably won't be that many but that is the outer 
edge of the potential problem. So my first question to you, and 
I have a second one and I will just have you answer both at 
once, my first question to you is what thought have we given to 
this, and how are we going to address that concern when it 
arises here in the U.S.? Is this just going to have to be a 
cost that the TV viewer has to bear or alternately should we 
consider legislation in order to provide the funding necessary 
to accommodate this just as we have accommodated the need for 
converter boxes.
    The second challenge was this. They found that a very large 
percentage of the people had to have technical assistance. They 
got their converter boxes but they didn't know to install them. 
They had a need to replace outdoor antennas in some places but 
didn't know how to replace them or even really what the problem 
was. They might have had their converter box properly installed 
but still couldn't get a signal. Their problem was that their 
outdoor antenna wasn't adequate but they really had no way to 
know what that problem was. So in the UK their help program 
actually financed a broad range of technical assistance, and 
people employed through this program were made available to 
help with the converter box installation at the home and to 
assess other technical difficulties, including possibly the 
need to replace an outdoor antenna.
    Now we do not have as I understand our program a technical 
assistance component. I guess we are thinking that the retail 
store that sells a converter box for $50 or $60 is going to 
provide that advice. Somehow I don't have confidence that is 
really going to work. I don't think that store, Wal-Mart 
perhaps, is going to have an ongoing interest in perhaps 
sending somebody to the person's home in order to solve these 
problems. And so I am wondering if we don't need to rethink our 
program in light of also providing some financing for technical 
assistance. So I have a couple other questions but those are 
the two main ones, and I just welcome your advice about to what 
extent we thought about this and how we might meet these needs. 
Mr. Martin.
    Mr. Martin. In response to the first question you have got 
about the replacement of outdoor antennas, I think that our 
engineers would say because of what they call the cliff effect 
of digital broadcasting in which the people that are able to 
get it receive a better picture but those that are on the edges 
there will be a point at which you used to be able to get not a 
very good picture or a snowy picture outside of the contours of 
where the broadcaster is supposed to be operating but that you 
would no longer be able to, our engineers estimate it is 
probably closer to around 5 percent of those outdoor antennas 
would end up needing to potentially be replaced in those 
situations.
    Mr. Boucher. So your estimate is about 5 percent of our 
outdoor antennas?
    Mr. Martin. This is what our engineers were saying, and 
that was what I referenced earlier in response to a question 
from Chairman Markey. And whether Congress decides to provide 
any additional support for that or not, I obviously would leave 
up to Congress to decide about the use of its resources, but we 
do estimate that it will be small but about 5 percent of those 
people using outdoor antennas would be what we would estimate, 
not as high as 10. In response to the second question about the 
technical assistance, I would say obviously there is already 
some response in the marketplace to these kinds of issues. Best 
Buy, for example, has their D squad that comes out, and we were 
at Best Buy last week for an event and they offered technical 
assistance in setting up any of the products that you can 
purchase there.
    But we have also in response to some of the concerns that 
have been raised by this technical assistance have contacted 
some groups and some organizations that target particular 
groups that I think might need that technical assistance like 
the elderly or the disabled. We have been in contact with Meals 
on Wheels and have asked them, for example, to help distribute 
information about the upcoming transition. One of the concerns 
they raised, initially they said yes, and then they raised a 
concern that they then thought they would be asked to 
participate and do provide that technical assistance if they 
start telling people about the transition. So we have actually 
gone back to them and said, well, that will be positive, not 
negative.
    And they said that they would need resources, and we said 
how much would you need to be able to participate. We have 
gotten some estimates on that. I probably should share that 
privately with folks, but they said that potentially they would 
be willing to help participate, and that would be targeting the 
kind of audiences that I think--targeting some of the consumers 
that might be most in need of assistance, and that would be one 
of the things that assuming Congress provides us additional 
resources that we have asked for this year in our budget that I 
have asked my staff to take into account to try to provide for 
the ability to try to target some of these consumers who we 
know will be needing some assistance.
    Mr. Boucher. Are you asking for the resources that your 
evaluations suggest would be necessary in order to provide that 
technical assistance?
    Mr. Martin. The only organization that I have been able to 
identify that could provide that directly would be the kind of, 
as I said, Meals on Wheels, which is we talked----
    Mr. Boucher. Well, but they said they would need some 
funding to do it. Are you going to be asking us to provide the 
funding?
    Mr. Martin. I have discussed--we have asked for additional 
appropriations this year of $20 million, and I have talked to 
my staff about making sure we include the estimates for that 
program in our estimates of what we would do with that $20 
million.
    Mr. Boucher. Well, the $20 million leads me to the second 
question, and, Ms. Baker, I don't mean to exclude you. My time 
is running out, however. And that is that in the United Kingdom 
about $1.2 billion in total was made available for their 
assistance program and their public education. They have got 1/
5 of the population of the United States. Until now we have 
allocated $5 million for our public education campaign. Just 
splitting their total appropriation in half, let us say that 
$500 million went to public education there. You know, we are 
at 1 percent of that here. $20 million doesn't really fill the 
gap very well. I remain deeply concerned that we still have not 
allocated enough for that, and now you are suggesting part of 
that $20 million might even get diverted into a help scheme of 
some sort for technical assistance perhaps.
    So, Mr. Chairman, my time is up. Let me just leave the 
thought that I think we need to do something on this subject. 
We are clearly going to need resources beyond the $20 million 
that has been requested, and I hope that we can respond to that 
and do so, so we can prevent serious problems from occurring. 
Thank you. I yield back.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from Texas, the ranking member of the 
full committee, Mr. Barton.
    Mr. Barton. Thank you, Mr. Chairman. I was a little bit 
late because I had to go use the hotline to call for my 
coupons. I wanted to make sure that there wasn't a shortage, 
you know, since they are going to start mailing them out next 
week, so I had to do that little errand. It is good to have our 
commissioner here. It is good to have Ms. Baker here. I know 
her and several members of her family very well. We got 
Commissioner Adelstein here. We are glad to have him here, and 
former Congressman Klink. The front row is just kind of an all 
star group of people. It is our, I guess, biweekly DTV 
transition update hearing so things are moving along pretty 
well.
    I am always tempted when we have our chairman of the FCC to 
ask a totally extraneous issue but I won't do that today. On 
the good side, it looks to me like the coupon program is moving 
along pretty well. Over 4 million have been requested. You are 
going to start mailing them out next week. Not you, but the 
agency that is responsible for it. Do you see any problems in 
the coupon program as it currently exists, and I am asking that 
to Chairman Martin. And if Ms. Baker wants to answer, she can 
too.
    Mr. Martin. No. I think the coupon program seems to be on 
track. There seems to be a high demand for it, and I think that 
we are moving forward in a positive way on that. I think as I 
said before it seems like there are a lot of consumers who are 
aware of the transition. We need to target our message to make 
sure we are telling them what they need to do but it seems like 
we are on track.
    Mr. Barton. OK. Ms. Baker.
    Ms. Baker. I would say that I am very happy with the 
retailers that are participating as we roll this out. We are 
going to be tracking very carefully as the coupons go out what 
the redemption is. There will be more retailers who are 
actually participating. We have certified a bunch more than 
those that are participating. Participating means they have 
boxes on the shelves. There will be more and more in the coming 
weeks. There will be more boxes with more features in the 
coming weeks, so I think things look good. We will be 
monitoring it closely and sharing all that information with 
your staff.
    Mr. Barton. OK. Very good. Mr. Chairman, on the D block 
auction part of the reason we are doing the DTV transition is 
to clear up the spectrum so it can be used for other purposes, 
and one of the real supposed stars in the auction was supposed 
to be the D block, and so far the reserve price has not been 
met. There are many people, and I am one of those people, that 
thinks the commission has put so many encumbrances on it that 
the private sector is not really comfortable proposing a bid. 
If you don't make the reserve price, and it doesn't appear that 
you are going to, what is the commission's plan B on that D 
block spectrum?
    Mr. Martin. Well, I think that the most important thing to 
put in context for all the encumbrances on the D block were 
that they were all done at the urging and the request of public 
safety to try to resolve the problems they have on 
interoperability, trying to find a way that the local police 
and local fire department are going to be able to communicate 
using the next generation of wireless services. And I think 
that we need to continue to end up having their concerns at the 
forefront of these issues going forward, but obviously the 
encumbrances and the expectations that they work with public 
safety if no one ends up bidding on that piece of spectrum were 
too great the commission will have to continue to go back and 
re-evaluate what we should put in place to try to resolve these 
public safety concerns.
    I am pleased that the rest of the auction all went forward 
and we were able to meet the reserve price and all the other 
pieces. I think there were concerns that were raised about some 
of those encumbrances in terms of build out or openness on the 
C block. All of those have been met, and we have been able to 
successfully raise despite the fact that the D block has not 
met the reserve price, successfully raise significantly more 
revenue than anyone had anticipated, almost twice, and more 
revenue than we have ever raised in the auction in the past for 
even less spectrum than we have auctioned off in the past. So I 
think in general it has been very successful, but I do 
recognize the concerns that public safety raised seem like they 
are too great for at this point anyone being willing to put in 
place a bid that would be able to work with public safety.
    I would hope that someone would come forward and be willing 
to work with public safety but if no one is then we are going 
to have to go back to the drawing board and consider how to----
    Mr. Barton. Well, I am going to encourage Chairman Markey 
and Chairman Dingell to squeeze in a hearing outside of the DTV 
transition on that issue because that spectrum, A, is valuable, 
and, B, is very important for public safety and first 
responders, and we need to figure out a way to get it sold in a 
way that meets the goals of the legislation that we all 
supported. And with that, Mr. Chairman, I yield back, and thank 
you for your courtesy.
    Mr. Markey. I thank the gentleman, and I would say to the 
gentleman that when this auction is completed assuming that the 
D block does not have any bidders our intention is to have a 
hearing and then to do a top to bottom evaluation of what we 
should do going forward. The chair recognizes the chairman of 
the full committee, the gentleman from Michigan, Mr. Dingell.
    Mr. Dingell. Mr. Chairman, I thank you for that courtesy. I 
ask unanimous consent that I be permitted to insert into the 
record a letter which we will be sending to the Chairman of the 
Commission and the Secretary and their responses.
    Mr. Markey. Without objection.
    Mr. Dingell. Madam Secretary and Chairman Martin, are you 
concerned that there will be sufficient funds to meet the 
demand for converter box coupons, yes or no?
    Mr. Martin. When I testified last October I said that I was 
obviously concerned and if Congress provided more I am sure the 
program would make sure that that had been implemented but that 
I would defer to NTIA on their expectations with what is going 
on with the program.
    Mr. Dingell. Does that mean you are concerned or not 
concerned?
    Mr. Martin. I am always concerned to make sure that enough 
people have the opportunity to take advantage of the program.
    Mr. Dingell. Madam Secretary.
    Ms. Baker. Would you like to hear my calculations? Using 
the first phase of the money which is $890 million for coupons, 
we have 152 days at the average base. Now that includes the 
first spike, and that is 5 months and that would be July 13. We 
have 286 days at the last 3 weeks pace, which is an average of 
61,000 coupons a day, and that puts us--that 260 days puts us 
at November 24. We have 571 days at the lowest pace. So we are 
tracking it very closely. I would expect that you would receive 
a request for additional funds, not that I think that we are 
necessarily going to get to it but because I think that there 
should be no disruption between phase 1 and phase 2 of this 
program.
    Mr. Dingell. Would you each, please, for the record submit 
calculations indicating whether the committee should be 
concerned, including whatever calculations you have already 
made and such further calculations as you deem appropriate to 
inform the committee? Now, Madam Secretary and Mr. Chairman, 
will you commit to giving the Congress all the notice you can 
when and as soon as you come to believe that the converter box 
program will run out of funds?
    Mr. Martin. Yes.
    Ms. Baker. Yes, absolutely.
    Mr. Dingell. Now these questions are to Chairman Martin. I 
am very much troubled by the discussions now going on with 
regard to allowing some low power stations to upgrage to full 
power status. My first question, has the Commission conducted 
any sort of background analysis to ensure that a transition 
would not cause harmful interference to full power 
broadcasters?
    Mr. Martin. The proposal that I have put forth would say 
that they have to meet the same interference standards that are 
required now of anyone else who wants a full power station. 
There could be no interference caused----
    Mr. Dingell. I understand that, but can you give us the 
assurance that there will be no interference?
    Mr. Martin. We can give you an assurance because we would 
not grant any that created an interference, so, yes, we can 
give you that assurance.
    Mr. Dingell. Now will this create problems with regard to 
theavailability of channels and space on both satellite and on 
cable?
    Mr. Martin. I would say that I am not sure what it would 
end up having on the implications for cable and/or satellite. I 
can say that I think that some of those cable and satellite 
companies carry low power, more cable does than satellite, 
satellite doesn't even carry all the full power stations. So I 
think it would be more of a problem on satellite than on cable.
    Mr. Dingell. All right. But these are matters of concern to 
the committee, and I would appreciate in the communication 
which I will send you if you would respond as fully as you can 
to the concerns that I have and I think the committee has with 
regard to the potential for mischief here if this becomes a 
problem, which I think it is very liable to do. Now, Chairman 
Martin, you have requested $20 million for consumer education 
in the 2009 budget. Did you request more money for that or is 
that the number that was your request to the Office of 
Management and Budget?
    Mr. Martin. That was the number that was requested at the 
Office of Management and Budget.
    Mr. Dingell. So you got every cent that you asked for, is 
that right?
    Mr. Martin. In this budget request, yes, and that was a 
number that actually I consulted with all my colleagues and it 
was one the commission unanimously asked of O&B.
    Mr. Dingell. Now do you have plans on how you will spend 
that money?
    Mr. Martin. We do have some tentative plans on how we would 
end up spending the money in terms of additional PSAs that 
would be broadcast and created, additional information that 
would be distributed, and we have also been trying to work--we 
have just announced utilizing the resources that were just 
provided to us at the end of last year, we have just announced 
the contracting with the public relations firm, Ketchum, who 
will help us put together the plan, not only for the money that 
Congress has already provided to us but how we would best 
utilize that money going forward but we do have tentative plans 
that I can provide.
    Mr. Dingell. In my letter, Mr. Chairman, I will be 
submitting 2 questions as to this matter. Would you please give 
us in that response as full answers as you can as to the plans 
with regard to spending that money?
    Mr. Martin. Sure.
    Mr. Dingell. Is this going to be sufficient money to insure 
that there is adequate awareness on the part of the consuming 
public of these coupons and of the impending problems with 
regard to the changeover from analog to digital?
    Mr. Martin. I think that you have to put in context this 
money alone would not be enough but you have to put in context 
with the education efforts that are ongoing both by NTIA about 
the converter box program and the industry. Both the 
broadcasters and the cable operators and the Consumer 
Electronics Association have all put forth additional 
educational efforts, and I think in that context I think that 
it could be enough. If Congress thinks that we need more, we 
would obviously welcome additional resources.
    Mr. Dingell. Madam Secretary, have you requested any funds 
in the budget for consumer education, or are you relying on the 
budget of the FCC on this matter?
    Ms. Baker. We are relying on the FCC's budget as well as 
the public-private partnerships of which we already have. We 
had $5 million for consumer education. We have hired Ketchum 
and we have done a pretty outstanding reach at this point. We 
have 15 Federal partners and 130 social organization partners, 
and we are part of the DTV coalition which is over 200 members 
strong, so we have not requested any additional funds.
    Mr. Dingell. Do you regard that $5 million as being 
sufficient?
    Ms. Baker. At this point we are very encouraged with the 
consumer education program and we are not requesting any 
further money.
    Mr. Dingell. Very well. Mr. Chairman, I thank you for your 
courtesy.
    Mr. Markey. Thank you, Mr. Chairman. The chair recognizes 
the gentleman from Georgia, Mr. Deal.
    Mr. Deal. Thank you, Mr. Chairman. Chairman Martin, I have 
just a few questions for you as it relates to the white space 
technology as that issue of technology pertains to the DTV 
transition. Is it your opinion that continued testing of these 
devices by the FCC will interfere with the DTV transition?
    Mr. Martin. I don't think any testing of the devices will 
interfere, no. Whether or not the devices will demonstrate that 
they can operate or not operate, we will have to wait and see. 
The testing is ongoing now. The engineers and the labs are 
doing it. It is open so that any broadcaster and/or any 
technology company can come watch but the testing alone won't 
interfere. The question is whether the devices themselves 
would, and we will have to wait and see.
    Mr. Deal. And that is the purpose of the testing obviously.
    Mr. Martin. That is right.
    Mr. Deal. And if you were to issue a rulemaking allowing 
these devices to be used is it true that these devices could 
not even come to the marketplace until after the DTV transition 
date has passed and therefore could not interfere with DTV 
transition?
    Mr. Martin. At this point I think practically that is 
correct. Originally, I had committed to Congress based on the 
testing of the devices we had already received, we would try to 
put them in place and allow for them to come into the 
marketplace by the end of this year, but because the first 
round of testing was not successful to show that it wouldn't 
interfere we asked for additional devices and we are undergoing 
testing now, and I think practically that is the case.
    Mr. Deal. And of course if the FCC determines that these 
devices can operate without interference, do you see that this 
is a new marketplace from which consumers would benefit?
    Mr. Martin. Oh, absolutely. I think so.
    Mr. Deal. Thank you, Mr. Chairman. I will yield back my 
time.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from Texas, Mr. Gonzalez.
    Mr. Gonzalez. Thank you very much, Mr. Chairman, and I have 
to comment on your announcement that you have introduced the 
Markey-Pickering bill, and I hoping that we are going to have a 
full discussion, a good faith debate in it because of course I 
have some concerns, and I am going to ask Chairman Martin for 
his assistance to this committee that all the members fully 
understand the implications or the need for the legislation. 
Again, I really mean this in good faith that we understand what 
the Internet really represents and what it is, the difference 
between the network and ISP, content aggregators, search 
engines, operating software applications, device manufacturers. 
We also, I think, need a good education on delivery systems 
whether it is going to be copper, coaxial, fiber optic, power 
line, and of course wireless.
    I think we need to understand the relationships among all 
of the different participants in providing this access to the 
Internet because I think we all have the same goal at the end 
of the day, and that is to make sure that we have a robust 
build out, maintenance and improvement of our broadband 
capacity, so when is broadband capacity management legitimate 
or illegitimate, appropriate or inappropriate, necessary and 
sometimes unnecessary, so I am hoping in the search for truth 
that we end up evaluating and analyzing again the need and of 
course the implications for the proposed legislation. I am 
going to ask Secretary Baker a question so I can sort of 
understand what is going on. Starting January 1, 2008, was when 
the request for coupons took place. It is going to end on March 
31, 2009, correct? They will be mailed on February 17 in about 
4 days or so, right?
    Ms. Baker. We are going to start mailing.
    Mr. Gonzalez. You are going to start mailing them in about 
4 days.
    Ms. Baker. Correct.
    Mr. Gonzalez. And they will be able to be redeemed 
obviously, and there is going to be an expiration date, and I 
am going to ask you about the expiration date. My concern is, 
and I think as much as we prepare for it and work for it and so 
on, that you are still going to have a tremendous demand after 
February 17, 2009, when the television sets go dark. Do you 
anticipate at that point a tremendous spike in the demand, and 
you are only going to have a window of about 90 days, I guess, 
or less, about a month and a half, I am sorry, from the time 
that the coupons will no longer be available. Do you anticipate 
a demand at that point when we reach a crisis state and people 
obviously are made aware because they can't watch their 
television sets, and if you do anticipate a tremendous demand 
how does the expiration of the coupons play into that but more 
so do you have a contingency plan in case demand will out pace 
the resources that are available to you?
    Ms. Baker. Well, first of all, the way the coupon program 
is set up, Congress set it up so we started accepting coupons 
on January 1, 2008. We have been testing our systems to make 
sure that they work, and we thought clarity was important so we 
set the date of February 17 to start mailing out the coupons or 
to start the processing of the coupons. February 17 is a 
Sunday. That is probably why we are not having this hearing on 
February 17. So the first batch of coupons will go out that 
week. We are going to monitor it carefully. We are going to 
send out probably not as many as we could the first week so 
that we can make sure the systems are up and running. I think 
you are right. As we work through this, as there are more 
coupons out there, as there are more boxes and manufacturers, 
particularly as we get towards the end of this program, 
February 17, 2009, at midnight when all full power broadcasting 
is turned off, and people go on February 18, February 19, maybe 
February 22 because they don't watch much TV and they turn on 
their television and it doesn't work, I think that we will see 
a spike there. I think we will see--we had always anticipated 
the largest number of coupon applications would be towards the 
end of the year, the Christmas season, and also in the January-
February range of next year.
    We were able to allow accepting coupons until March 31, 
2009, so there is a window there of about a month and a half 
for people who turn on their television and it doesn't work, 
that they can still apply for a coupon. As far as the 90-day 
expiration goes, I think I have mentioned that we are 
interested in looking into that after all of the coupons have 
been--after we see the redemption rate on the coupons we will 
be getting back to you in Congress and consulting with you as 
to what the redemption rate is and how much it would cost to 
put people back in the line at the end of the line.
    Mr. Gonzalez. When these coupons are sent out, this first 
wave which I know is almost like a test wave of the coupons 
then we will actually know how it is really working with the 
retailers and such. My understanding, you have about 34 
different converter boxes that have been approved that would 
have the added feature, the analog pass through feature, is 
that correct?
    Ms. Baker. Yes. There are 37 that are approved at this 
point and 4 of them which have the analog pass through.
    Mr. Gonzalez. And I guess when we have our next hearing you 
will be reporting the results of this initial mailing of the 
coupons and the redemption rates, and I think we will start 
hearing maybe from our constituents as to again the 
application, the installation, and the problems with that. I do 
want to point one thing out that I think is very important as 
you go through your list of qualified or certified retailers. 
In the San Antonio area they are not listed on here because 
their appeal was actually granted, and that is going to be ATB, 
which is a very prominent, prominent grocery store chain in all 
of South Texas. It is a huge endeavor. But I assure you that 
you probably will have more consumers in those impacted 
neighborhoods that feel more comfortable and will be obviously 
visiting the ATB store much more so than many of the large 
electronic outlets which I appreciate their contribution.
    The last question, I have 2 minutes. The coupons can be for 
$40. I think your testimony was that the converter boxes are 
going to be selling anywhere from $50 to $70?
    Ms. Baker. Correct. $40 to $70. Actually I think Consumer 
Electronics, one of the manufacturers, announced a $39.99 box.
    Mr. Gonzalez. OK. But we are not going to know that until 
after they go to redeem these particular coupons. There is no 
definite price that we could say that is what is going to 
happen on February 18-19 when people receive their coupons. We 
will have to wait, is that correct?
    Ms. Baker. That is right. There are certain permissive 
features in the boxes such as smart antennas, BTSC audio 
output, enhanced program guide, Energy Star. Some of them are 
Energy Star qualified. So I think that boxes are not all the 
same so that they were priced differently.
    Mr. Gonzalez. And, forgive me, what is part of the 
criteria? Do you have any on price when you--when you certified 
a converter box manufacturer what is the parameters, I guess, 
of pricing?
    Ms. Baker. We don't have any parameters on pricing. The 
pricing is up to the market.
    Mr. Gonzalez. OK. Is there any other criteria that you 
would have?
    Ms. Baker. Well, we are testing for 24 features in the 
testing of the boxes. We want to make sure the boxes work when 
they plug them in so we have had in conjunction with the FCC 
labs we have been testing these boxes to make sure that they 
work. There are closed captioning requirements. There are 
parental control requirements that are written into the 
statute. We want to make sure those things work so we have had 
pretty rigid testing going on at the FCC labs.
    Mr. Gonzalez. And the converter box that will meet the 
minimum requirements for certification whether it had 
additional features, will people still be able to use their 
vouchers?
    Ms. Baker. As I mentioned, there are several permissive 
features but there are also disqualifying features. I think if 
it had a DVD in it, it would not be qualified. The parameters 
that Congress gave us is for a very simple box that has a 
remote control.
    Mr. Gonzalez. Thank you very much, and I yield back my 10 
seconds, Mr. Chairman.
    Mr. Markey. The gentleman's time has expired. The gentleman 
from Oregon, Mr. Walden, is recognized.
    Mr. Walden. Thank you very much, Mr. Chairman. In Oregon we 
are running about 2-1/2 times the national rate for filing for 
the coupons. We appreciate the updates we get from NTIA. 
Realizing we also have a lot of translators in low power but 
especially translators given the mountainous areas of the 
state. I know realizing it was going to take some extra time to 
get these translators upgraded to digital the DRA--we created a 
fund and reimbursed low power TV and translator station 
licensees in rural communities was set up to provide them 
reimbursement. I am concerned about the timing of that 
reimbursement. This isn't your issue. It is our issue because 
we wrote the statute and set the time lines but now in 
retrospect it looks like to me there is a problem in the 
disconnect there in that you were originally supposed to make 
the payments during fiscal year 2009, but not actually put the 
checks in the mail until, this will shock you, the next fiscal 
year, October 1, 2010.
    I know Senator Snow has put a bill 2607 aimed at moving up 
the date that NTIA is permitted to put the checks in the mail 
and allow for you to disburse the reimbursement sooner, in 
fact, fiscal year 2009 through 2012. Do you think this is 
needed? Are you hearing from low power folks?
    Ms. Baker. I think it is--we strongly support the bill that 
Senator Snow as well as Senator Stevens have introduced, and I 
think it is $65 million which I think the goal is the digital 
transition so it would be helpful to assist these low power 
stations to actually go digital, and I think that was the 
intention of this.
    Mr. Walden. Thank you. That is good to know. Chairman 
Martin, a couple of things. First, as an old broadcaster, I am 
now out of the business, I am concerned about your rulemaking 
related to mandating that broadcasters have to air public 
service, so-called public service announcements on a fairly 
regimented schedule, and the effect that can have. I don't know 
that you have ever done that before at the FCC. Has the FCC 
ever mandated other than perhaps on the emergency alert system 
requirements and on relicensing issues, I think, we had to run 
announcements.
    Mr. Martin. Yeah. Yeah.
    Mr. Walden. Have you ever taken this step before?
    Mr. Martin. No, there has never been another step that we 
have taken to mandate these kind of public service 
announcements.
    Mr. Walden. It seems a rather slippery slope, frankly, to 
me.
    Mr. Martin. Well, I think it reflected the gravity and the 
concern that many people had to make sure that broadcasters 
were doing all they could to educate consumers. Chairman Markey 
and Chairman Dingell had sent us letters last summer 
encouraging us to open the rulemaking and consider that 
requirement to make sure that broadcasters and all the 
industries the commission regulates were taking all the steps 
they could to inform consumers. As I said in my opening 
statement the broadcasters have recently filed an alternative 
plan where they would have some more flexibility but make some 
voluntary commitments of what they would end up doing as a safe 
harbor potentially and so the commission is currently 
evaluating that, and I hope that the commission will act on 
that soon.
    Mr. Walden. I hope you will take the voluntary effort into 
consideration. Let me move on to a different topic and that is 
the timing issue. Having been not in the TV business but the 
radio business, I know during certain times of the year it is 
easy to send engineers up and down your tower and at other 
times it is not, and at certain times you can't push to a 
certain date and have an engineer available at every station 
necessarily. A lot of these are consulting engineers that get 
brought in.
    Given that the statute calls for a specific one-day change, 
do you anticipate any problems with stations being able to 
accommodate that change on a given day in the winter?
    Mr. Martin. What we do anticipate is that will require, as 
you said, some of the broadcasters to begin to work people 
earlier in the year to make sure that they are capable of 
making that change, and that may require some temporary 
disruptions of service. One of the things that the commission 
did in the order we adopted at the end of last year was put in 
place that kind of flexibility for the broadcasters and which 
we allowed them to come forward and say that I can only 
schedule a construction crew on a certain date prior to that 
date so I need to be able to move my antenna at that time so I 
need to have flexibility.
    Mr. Walden. So you got that built into your----
    Mr. Martin. We have got a streamlined process for approval 
for any kind of flexibility that is needed to make sure that 
they can make that transition on that day.
    Mr. Walden. And I think that is important for the committee 
and for the consumers to know that in some markets the date may 
actually be different than February 17, '09.
    Mr. Martin. That is right, and one of the aspects of 
providing them that flexibility is we said that they would have 
to inform their viewers in those markets to make sure that 
viewers understood that they could have this implication. At 
times it could be a temporary change as they are going through 
the construction but at times it could be more permanent but 
either way we have different flexibility for those two 
circumstances, but either way we have required them to inform 
their viewers.
    Mr. Walden. Secretary Baker, quickly as I am running out of 
time here, we heard from Mr. Boucher about the transition 
funding and all in England and the way that worked. Do you 
believe that given the voluntary contributions by various 
industry groups, cable and others, that there is sufficient 
resource there coupled with the taxpayer money? Very quickly, 
please.
    Ms. Baker. Given the outstanding public-private 
partnerships that we have seen, I think people are stepping up. 
I think the funding is sufficient.
    Mr. Markey. Thank you. The gentleman's time has expired. 
The chair recognizes the gentlelady from California, Ms. Solis.
    Ms. Solis. Thank you, Mr. Chairman.
    Mr. Markey. There are 12 minutes left to go until the vote 
on the floor.
    Ms. Solis. I have basically two questions. My first 
question is for Administrator Baker, and it is regarding the 
challenges that I think we are going to be foreseeing here 
along the U.S. and Mexican border, particularly the low power 
TV stations and DTV transition, and I understand that the NTIA 
has only certified 4 converter boxes thus far analog pass 
through technology out of 37, and we know that right now there 
are communities that are going to be disadvantaged, so is the 
NTIA able to pinpoint where these geographical areas are in the 
U.S.? Do we have any of that data?
    Ms. Baker. We are able to tell--are you asking where the 
low power stations are? Yes, absolutely. And I do know that 
your district in particular is higher--it is 17.5 percent over 
the air viewers so I do think it is particularly important for 
education. You are right, we only have 4 certified boxes at 
this point. In our final rule, we encouraged the permissive 
feature of the analog pass through. I sent out a letter to all 
of the manufacturers and asked them again to consider this 
important audience. In response we have visited with several of 
the major manufacturers, and we have notices of intent from 
more than half a dozen for more boxes that will be analog pass 
through so I think there will be sufficient boxes on the market 
to serve these markets that need these boxes.
    Ms. Solis. Are you also willing to work with retailers 
along the U.S.-Mexican border because I am up in Los Angeles 
but obviously in Texas and other important states that is where 
I think we are really not seeing a lot of involvement with the 
retail industry there, and I would ask what outreach is 
happening if you could give us that information, and would 
encourage you to do that.
    Ms. Baker. We will be glad to do so.
    Ms. Solis. And then my next question is for both of you. 
Can the FCC or NTIA require appropriate labeling for analog 
pass through technology in the form of some information like a 
sticker that could be placed on the product. One of the 
questions or concerns I have is that so many people in our 
communities don't even know what that means. And I think that 
it can be very misleading in terms of what they have to 
purchase or what they should be purchasing, and I think we have 
to do a better job at providing not just relying on the 
retailers to give that information but having something that is 
certified from the FCC or NTIA that can do that. Is that 
something that we can maybe plan on?
    Ms. Baker. We do not have the labeling authority. 
Originally we thought it might be a bad idea just because we 
thought we might have all sorts of boxes that might claim it 
when the didn't have it but we have since changed our position 
on that and we think that the manufacturers should label their 
boxes and I think that many of them are labeling their boxes 
for the analog pass through and we are encouraging that now.
    Mr. Martin. I think that certainly trying to encourage both 
the manufacturers of the boxes and the retailers to be 
identifying the boxes that have the pass through is going to be 
important. I have encouraged both the manufacturers that tried 
to put this capability in all their boxes but certainly in some 
of them, and I have encouraged the retailers to make sure that 
they carry at least one that has an analog pass through but I 
think labeling is a good idea. I hope the commission has 
complimentary role with the converter box program, but I am not 
sure that we would have the authority to require labeling of 
those but certainly we can do all we can to encourage that.
    Ms. Solis. And just going back to concerns that members of 
the committee have had about giving information publicly and 
the broadcasters providing PSAs to give information to our 
communities, I think that is great. However, just in the last 
2-month cycle, I have been getting a lot of phone calls in my 
office and many Spanish speakers are not fully aware of what 
this means. Congresswoman, do I have to buy a converter box? I 
have cable, do I need to do this? So I think there still has to 
be a lot more clarification in detail so it isn't just enough 
to say that in February, 2009 this is what is going to happen 
to you. People are getting worried and scared and they are 
calling our offices. I don't know if other members are picking 
that up but I certainly am especially with the senior 
community, Spanish language senior community, so I think there 
still has to be some testing that goes on out there about what 
and how we phrase these words and technology.
    So many people still are thinking what do I need to 
purchase to make sure that we don't go black, that we are out, 
and I really think that we have a responsibility and maybe we 
do need to beef up your budgets to do that, and I would like to 
just get a response.
    Ms. Baker. I think you are right. It is a very important 
outreach. Secretary Gutierrez himself has done several Spanish 
language. He has done CNN Espanol, Washington Hispanic, La 
Penun, Radio Hispanica----
    Ms. Solis. But they are very short. They are 30 seconds. In 
that sound bite you don't get the full gist of what has to 
happen here and what takes place. People have to have things 
explained to them in more detail so that is what I am asking 
for.
    Mr. Martin. I agree. The Consumers Union survey recently 
indicated that we need to do more in educating people, not just 
that it is coming but what they have to do, and I think that 
will be the challenge of the consumer education efforts from us 
and the industry.
    Mr. Markey. The gentlelady's time has expired. There are 6 
minutes and 42 seconds left to go on the roll call on the House 
floor. If I recognize the gentleman from Texas for 5 minutes 
that will leave us all a minute and a half to make it over to 
the House floor. The gentleman is recognized to ask a round of 
questions.
    Mr. Green. Thank you, Mr. Chairman, and after I am finished 
you all get to leave and we go vote, so this will be quick. 
Chairman Martin, I learned earlier this year, I learned the 
problems that the Spanish language DTV help line at the FCC. 
Can you tell us what has been done to correct that, someone 
calling in to the help line in Spanish?
    Mr. Martin. We do end up having an opportunity for someone 
calling in and asking for direction in Spanish and provide that 
assistance. I am not sure what the problem was that was 
identified but I will look into it, and we will certainly work 
to correct it if there was a problem with our Spanish help line 
at the time.
    Mr. Green. Well, generally they couldn't get through the 
line, and when they did the people on the line were not Spanish 
speakers.
    Mr. Martin. Well, then that would be a problem so I 
didn't--I wasn't aware of that, but we will certainly correct 
it. I think it has already been corrected but I will certainly 
make sure it has been corrected.
    Mr. Green. We will follow up with you, and I know our chair 
will continue to have hearings and we will follow up with the 
members who are interested. Secretary Baker, I mentioned in my 
opening statement about the expiration date of 90 days, and 
also that some of our retailers are only carrying the higher 
end cost. I know there will be converter boxes as low as $39.99 
coming out, but they may not be here until June or July. If 
someone gets something next month are they going to have to 
come and get another coupon to be able to get the cheaper one 
that they might be able to afford in low income areas instead 
of paying 20 bucks more?
    Ms. Baker. I think we are seeing the market do different 
things with the prices of the boxes so I think that we will 
still be watching that. As far as the 90 days, I am committed 
to look at that with the Congress as soon as we see the 
redemption rates on these coupons.
    Mr. Green. OK. Is there a way that that could be extended 
much easier than having them send it back and go through that 
mechanism again?
    Ms. Baker. It really is a valuable tracking mechanism at 
this point so we can see which coupons are being redeemed.
    Mr. Green. Well, that gets me to my next question. I know 
the stats show that NTIA sends out--that 9 percent of the total 
applications have been denied. What are some of the common 
reasons for being denied aside from being duplicates, and I 
have also noticed a number of phone applications being denied 
labeled as invalid. And you know why that is, and I guess 
looking at information Senator Nelson sent yesterday that there 
was a decision not to send coupons to multi-family locations. 
Now I have to admit my area of Houston may not have as many as 
South Florida but we do have folks who live in senior citizen 
centers, assisted living centers, and they all have their own 
TV. It may not be attached to cable to that facility. Is that 
part of the reason that we are seeing some of the denials?
    Ms. Baker. That is part of the--the largest amount of 
denials are from duplicate submissions. Second to that are PO 
boxes. I think we made PO boxes not eligible if you were not in 
a rural or tribal Alaskan situation because of some of the 
fraud that had gone on with the FEMA Katrina cards.
    Mr. Green. So you are requiring a fixed address but they 
may only get their mail at a PO box, is that----
    Ms. Baker. You have to have a physical U.S. household 
address to get a----
    Mr. Green. OK. Does it have to be mailed at that address?
    Ms. Baker. The box needs to be mailed to that address at 
this point, yes, or the coupons.
    Mr. Green. The problem we have though is that I have 
seniors that I suggest not to get any mail at home because of 
the theft of mail in some neighborhoods. You know, you might 
revisit that and look at it, and if they put a physical address 
on there that is able to be audited then you might want to 
check on that and see if their mailing address, maybe a PO box.
    Ms. Baker. I agree. Congress gave us a definition of 
household and we just looked down the hall and used the census 
definition of household which does exclude group quarters, and 
we realized this problem and we are looking into fixing it, 
particularly as far as the nursing home situation goes, and 
possibly dealing with exceptions on a case by case basis.
    Mr. Green. Mr. Chairman, my last question is I noticed in 
an article in CQ yesterday that patent holders, for example, 
for the ATSE technology part of the cost of this is there is a 
large percentage, in fact, 20 percent of the cost may be paying 
for patent. Believe me, if I had invented something, I would 
want 20 percent but is that a high percentage cost say for 
$69.99 or $59.99 that converter boxes available at Best Buy 
that patent holders are being reimbursed much more than normal?
    Ms. Baker. Well, coming from the Commerce Department we are 
big fans of IP, intellectual properties, and patents so I 
understand that that is a high--it is the same as a DVD that 
costs about $59.95 so it is in line with other consumer 
electronics--those prices.
    Mr. Green. OK. What about something that may be needed? I 
don't need a DVD but if I am going to be able to see TV over 
the air something that is actually more mandated like a TV set, 
what would be the patent cost or percentage cost for that? I 
assume it would be very low because of the mass production.
    Ms. Baker. Unfortunately, I don't have that figure. I would 
be happy to get back to you on that.
    Mr. Green. Well, that is one of the concerns, I think, when 
people are realizing that they might be paying much more 
percentage wise for something that is mandated or something 
that they have to have instead of something if I don't--that 
$59.95 for DVD, I don't want it, I don't need it. Thank you, 
Mr. Chairman.
    Mr. Markey. The gentleman's time has expired. There is a 
minute and 11 seconds left to get over to the House floor. 
There are 2 votes that are pending. We will probably take a 15-
minute break at this time at least. It could go a little bit 
longer, so we will then hear from the second panel. And with 
the thanks of the subcommittee the first panel has completed 
its testimony.
    [Recess.]
    Mr. Markey. Ladies and gentlemen, thank you so much. I 
apologize for the extended break. There were several 
unanticipated roll calls. We continue to have a highly 
contentious atmosphere out on the House floor. Here, however, 
we are working together in harmony to find a solution to the 
problems which are raised by the transition from analog to 
digital television by February 17, 2009. And we have for our 
second panel a very, very distinguished group of people, who 
reflect just about every perspective that needs to be heard 
from in the resolution of the remaining issues.
    We are going to begin, and I am going to ask each of you to 
keep your opening statement to 5 minutes, no more than 5 
minutes. We are already deep into the afternoon, but I promise 
you that there will be much interest on the part of the members 
of the subcommittee to probe more deeply into your testimony. 
So with that, I am going to recognize Ron Bruno, who is the 
President of Community Broadcasters Association. Mike Doyle, 
who is the congressman from western Pennsylvania on this 
subcommittee, cannot be here at this moment. I think there is 
an ice storm which has affected travel from Pittsburgh to come 
down here. But he wanted me to extend his best to you, sir, and 
whenever you are ready, you are recognized to address the 
Subcommittee on Telecommunications for 5 minutes.

STATEMENT OF RONALD J. BRUNO, PRESIDENT, COMMUNITY BROADCASTERS 
    ASSOCIATION, PRESIDENT, BRUNO-GOODWORTH NETWORK, INC., 
                         PITTSBURGH, PA

    Mr. Bruno. Thank you, Mr. Chairman, Mr. Ranking Member and 
distinguished members of the subcommittee. I am honored to be 
here today to discuss how the converter digital box program and 
the transition generally will affect our industry. I applaud 
and appreciate your opening remarks, Mr. Chairman, and Chairman 
Dingell's comments, as well as the other ladies and gentlemen 
that have commented positively on our issue and seem to 
understand it. More than 10 years ago, Congress and the FCC 
gave full power stations second channels on which to operate 
their digital stations. Low power stations were not given a 
second channel. Our industry has been told for the last 10 
years that we would get digital channel assignments when all 
the full power stations were ``taken care of.''
    Only 6 months ago LPTV stations started to get their 
digital channels granted. To date, only 35 percent of LPTV 
stations have been granted a digital station, a second channel. 
To put this into perspective there are 567 class A stations, 
2,227 low power stations, and 4,418 translators that will not 
be making the transition in February of next year. To be clear, 
that is 80 percent of the stations in the country will continue 
to be broadcasting in analog after February, 2009. Our industry 
was under the impression that adequate time would be provided 
for our stations to make the transition once our second 
channels were received. Unfortunately, the digital converter 
box program currently in use funded by taxpayer dollars and 
administered by a government agency cuts our conversion time to 
zero to the point where bankruptcy is the only logical result 
for most of our stations.
    Not long ago, Congress mandated NTIA to develop rules for 
manufacturers to follow to build these boxes. Despite the CBA 
and the translator stations commenting to NTIA about the 
continued analog operations of our stations, NTIA determined 
that including an analog tuner in a box was in violation of the 
congressional mandate. Therefore, all boxes that have been 
certified by the NTIA and manufactured do not have an analog 
tuner. And as we heard today, only 4 of 37 certified boxes, 
even pass through analog signals, in a manner that we call user 
hostile that will lead to consumer confusion in its 
installation and use. In a few days the public will start to 
receive $40 coupons from NTIA for a DTV conversion box.
    These people will go out to buy a box. If they have 
purchased one of the vast majority of boxes certified by the 
NTIA once they get home and plug it in they will realize that 
they will lose their ability to receive the analog broadcast 
continuing to be transmitted from 80 percent of the nation's TV 
transmitter facilities. This will cause confusion and anger 
among the general public when they can no longer watch the 
local programming that they have previously enjoyed and relied 
upon, and with each block sold that is one less viewer for 
class A and low power stations. With the expectation of sales 
being in the vicinity of 30 million boxes without a speedy and 
effective remedy our industry is simply out of business, Mr. 
Chairman.
    With the extinction of class A stations goes the only 
mandated locally produced programming on television. The CBA 
believes that the manner in which NTIA implemented this program 
is in violation of the longstanding requirements mandated in 
the All Channel Receiver Act, and while we have filed a 
Petition for Declaratory Ruling to this effect at the FCC, we 
indeed may have no choice but to take our case to the courts. 
We remain cautiously optimistic that Congress, the NTIA, and 
the FCC will do the right thing for our industry. We understand 
that Chairman Martin and his staff have a comprehensive 
proposal to help our stations. We applaud Chairman Martin and 
all his staff for working so hard with us on this issue. We 
also applaud other industry groups like the NAB for their help 
to get educational efforts out to consumers that they will not 
get stuck with these bad TV converter boxes.
    And while we look forward to the actions of the commission 
and others, the steps needed to take to insure the survival of 
these 7,212 stations will need your help. First, the CBA 
requests that Congress mandate the NTIA going forward to only 
authorize boxes that are equipment with both an analog and 
digital tuner. We also request that the 90-day expiration date 
on the coupon is overly burdensome to our consumers and should 
be changed to 180 days. In stores where boxes with analog and 
digital tuners are not available consumers should be allowed to 
use coupons for other devices that have analog and digital 
tuners. And because our industry is being effectively forced 
into the transition significantly faster than anticipated and 
much faster than the full power transition took, we accordingly 
respect and request that the NTIA be provided additional funds 
to assist class A and low power stations with the transition 
and any said funding should be made available to the station 
this year.
    In closing, Mr. Chairman, I just want to say that we have 
had for 3 years our proposal here for very limited class A must 
carry where we would convert to digital on channel and forego 
our analog channels, and that has not gone anywhere. Mr. 
Chairman, I look forward to working with you. Thank you.
    [The prepared statement of Mr. Bruno follows:]

                         Statement of Ron Bruno

    Mr. Chairman, Mr. Ranking Member and distinguished Members 
of the Subcommittee:
    My name is Ron Bruno, and I am President of the Community 
Broadcasters Association (CBA), the trade association of the 
nation's Class A and low power television stations (LPTV). Our 
stations provide important programming to audiences throughout 
the country, including local news, sports and public affairs to 
underserved communities, as well as religious, Spanish language 
and other ethnic programming. I am honored to be here today to 
discuss how the digital converter box program, and the 
transition generally, will affect our industry.
    More than 10 years ago, Congress and the FCC gave full 
power stations second channels on which to operate their 
digital stations. Low power stations were not given a second 
channel at that time because LPTV stations are a secondary 
service. Our industry has been told for the last 10 years that 
we would get our digital channel assignments when all of the 
full power stations were "taken care of". Only 6 months ago, 
LPTV stations started to get their digital channels granted by 
the FCC. To date, only 35% of LPTV stations have been granted a 
second channel.
    To put this in perspective, there are 567 Class A Stations, 
2227 Low Power stations and 4,418 translator stations that will 
not be making the transition in February of next year. To be 
clear, that is 80% of the stations in the country will continue 
to broadcast in analog after February of 2009. Our industry was 
under the impression that adequate time would be provided to 
our stations to make the transition once our second channels 
were received. Unfortunately, the digital converter box program 
currently in use, funded by tax payer dollars and administered 
by a government agency, cuts our industry's conversion time to 
zero and to the point where bankruptcy is the logical result 
for most of our stations.
    Not that long ago, Congress mandated NTIA to develop rules 
for manufacturers to follow to build these boxes. Despite the 
CBA and the translator stations commenting to NTIA about the 
continued analog operation of our stations, NTIA determined 
that including an analog tuner in the box was a violation of 
the mandate. Therefore all boxes that have been certified by 
the NTIA and manufactured do not have an analog tuner. Only 
three of the over 30 boxes certified by the NTIA even "pass 
through" analog signals, albeit in a manner that will likely 
lead to consumer confusion in installation and use.
    In a few days the public will start to receive $40 coupons 
from NTIA for a DTV conversion box. These people will go and 
buy a box. If they have purchased one of the vast majority of 
the boxes certified by the NTIA, once they get home and plug it 
in they will realize that they will lose their ability to 
receive analog broadcasts continuing to be transmitted from 
about 80% of the nation's TV transmitter facilities. Local 
programming, religious services, high school sports, foreign 
language channels and political debates carried locally will 
not be able to be seen in these homes with the bad converter 
box. This will cause confusion and anger among the general 
public when they can no longer watch the local programming that 
they have previously enjoyed and relied upon.
    And with each such box sold, that is one less viewer for a 
Class A, low power or translator station. With the expectation 
of sales being in the vicinity of 30 million boxes, without a 
speedy and effective remedy, our industry is simply out of 
business Mr. Chairman. And with the extinction of Class A 
television stations goes the only mandated locally produced 
programming on television.
    The CBA believes that the manner in which NTIA implemented 
this program is in violation of long standing requirements 
mandated by Congress in the All Channel Receiver Act; and while 
we have filed a Petition for Declaratory Ruling to this effect 
at the FCC and may indeed have no choice but to take our case 
to the courts, we remain cautiously optimistic that Congress, 
the NTIA and the FCC will do the right thing for our industry.
    We understand that FCC Chairman Martin and his staff have a 
comprehensive proposal to help our stations. We applaud 
Chairman Martin and all of his staff for working so hard with 
us on this issue. We also applaud other industry groups like 
the NAB for their help to get educational efforts out to 
consumers so that they will not get stuck with the bad DTV 
Converter boxes that only receives digital signals. And while 
we look forward to the actions of the Commission on issues 
relating to our industry, other steps need to be taken to 
ensure the survival of these 7,212 stations and the important 
service they provide to the public.
    First, the CBA requests that the Congress mandate the NTIA, 
going forward, to only authorize converter boxes that are 
equipped with both analog and digital tuners. We also suggest 
that the 90 day expiration date on the coupon is overly 
burdensome to consumers and should be changed to 180 days. In 
stores where boxes with analog and digital tuners are not 
available consumers should be allowed to use coupons for other 
devices that do have analog and digital tuners. Because our 
industry is being effectively forced into the transition 
significantly faster than anticipated, and much faster than 
full power stations, which had 10 years and much greater 
resources than we do to make this transition, we respectfully 
request that the NTIA be provided additional funds to assist 
Class A, low power and translator stations with the transition 
and any such funding should be made available to stations this 
year.
    Lastly, and I can't stress this enough, the CBA has put 
forth a proposal to the Congress for the last three years that 
would have expedited and will expedite our industry's 
transition to digital. Specifically, our proposal calls for 
Class A stations to be given limited cable carriage rights on 
the basic digital tier in exchange for foregoing the second 
channel to which we are entitled, thus freeing up spectrum and 
avoiding interference issues. The proposal is reasonable and it 
is fair, and I only hope that this Committee will seriously 
consider this proposal in the very near future. Our industry's 
existence may very well depend on it.
    Mr. Chairman I appreciate your time today and look forward 
to answering all of your questions.
                              ----------                              

    Mr. Markey. Thank you, Mr. Bruno, very much. Our second 
witness, Kyle McSlarrow, is the President and CEO of the 
National Cable & Telecommunications Association. Welcome, sir. 
Whenever you are ready, please begin.

STATEMENT OF KYLE MCSLARROW, PRESIDENT AND CEO, NATIONAL CABLE 
       & TELECOMMUNICATIONS ASSOCIATION, WASHINGTON, D.C.

    Mr. McSlarrow. Thank you, Mr. Chairman, Ranking Member 
Stearns. I am pleased to be here. Earlier today Chairman Martin 
had a chart on cable prices with a few data points, which I 
think is his version of the American Express card because he 
never leaves home without it. In the narrowest sense the data 
points he used were accurate but uses to which they are put are 
false and deceptive, and rather than take time now with your 
permission, Mr. Chairman, I will send you a letter and explain 
why. On the digital transition first let me just compliment all 
my colleagues in the industry and at the FCC and NTIA for 
working together so well. I think that has actually been a real 
success story.
    The issue that Mr. Bruno raises is a legitimate one. This 
morning I received, as I am sure some of my colleagues did, a 
letter from Chairman Martin addressed to us urging us to work 
in voluntary ways to address--to insure that low power stations 
are still seen by the viewers after the transition. And as 
regards cable what was put in the letter were voluntary ideas 
that I wouldn't quibble with. We in fact carry hundreds of low 
power stations voluntarily today. We will do so in the future 
and I am certainly happy to work with that community to see if 
we can do even more of that and we are certainly supportive of 
making sure the analog pass through feature is in as many boxes 
as possible and participating in education campaign for 
consumers so that they know about them, know where they can get 
them, and actually get them.
    What is a little dismaying is that both in Chairman 
Martin's testimony and in this letter there was no mention of 
an item that has been reported as circulating at the FCC which 
would go further and actually inject must carry for low power 
stations into this process, and I am troubled by it in two 
respects. One, just process once again. There is an item that 
no one has ever seen. So far as I could tell no one actually 
asked for it and so I don't know exactly what is in it. Number 
2, as you know, Mr. Chairman, you and others, Commissioner 
Adelstein and others on the commission urged the cable industry 
several years ago to reach a deal, a voluntary agreement with 
the public broadcasting stations to help them with their 
business plans after the digital transition, and we did. This 
committee, and I testified before you and made this commitment, 
asked us to step up and engage in a consumer education campaign 
which we launched last year, and we took many of the ideas if 
not all of the ideas that you suggested as part of that 
campaign, and this committee, and we worked with you and your 
staff and we appreciate it, urged us even though the 
legislation didn't cross the finish line in 2005 because it was 
put in reconciliation to voluntarily figure out a plan to make 
the transition seamless for our customers and so working with 
you we came up with a 3-year dual carriage plan, which has now 
been incorporated into an FCC rulemaking.
    We are happy to do all that, but we are now a year out, and 
I would suggest, Mr. Chairman, and urge you to use your good 
offices to send a message to the FCC that this is a time for 
all of us to be working together to solve real problems and not 
raise red herrings that are probably just going to engender 
more confusion and greater possibility of litigation. Thank 
you, Mr. Chairman.
    [The prepared statement of Mr. McSlarrow follows:]


    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Markey. Thank you, Mr. McSlarrow. Our next witness, 
David Rehr, is the President and Chief Executive Officer of the 
National Association of Broadcasters. Welcome back, Mr. Rehr. 
Whenever you are ready, please begin.

    STATEMENT OF DAVID K. REHR, PRESIDENT AND CEO, NATIONAL 
         ASSOCIATION OF BROADCASTERS, WASHINGTON, D.C.

    Mr. Rehr. OK. Thank you, Chairman Markey, and Ranking 
Member Stearns. Thank you for inviting me to testify on behalf 
of the National Association of Broadcasters on our number 1 
television priority, a successful digital television 
transition. I would like to make 4 points today. One, NAB 
aggressively constructed a comprehensive and empirically based 
DTV education effort. Broadcasters are committed to insuring 
that no viewer anywhere is left uninformed. After all, over the 
air viewers are our life blood. In constructing our campaign, 
we have turned to experts in advertising, marketing, and 
consumer research to develop a program designed to reach every 
corner of America, and to determine the best way to educate 
consumers, particularly those most impacted such as senior 
citizens and minority in rural populations.
    This explains why every broadcast network in nearly 1,500 
television stations nationwide have chosen to participate in 
NAB's massive, multi-faceted, multi-platform campaign. NAB is 
committed to a comprehensive program of DTV action spots, 30-
minute education programs, informational messages through 
crawls, snipes, and/or news tickers and other features such as 
a 100-day count down. All told the value of this campaign is 
estimated at more than $1 billion and will generate 132 billion 
audience impressions. We anticipate each household will either 
hear, see, or be exposed to this message some 642 times before 
February 17, 2009.
    Two, broadcasters have turned to the air waves to educate 
America about the transition. NAB is executing a disciplined 
and focused campaign. The first phase launched last fall drove 
the fact home that the transition was happening. Results of our 
January survey showed that consumer awareness has jumped 
dramatically to 79 percent up from 38 percent just one year 
ago. We anticipate continued forward momentum. The second phase 
of our effort will be to focus on the converter box coupon 
program. NAB has produced 4 new action spots and we would like 
to take the opportunity to show one now. Please play the spot.
    [Video.]
    Three, NAB and broadcasters have unleashed their creative 
talents which go beyond the air waves. A speaker's bureau, we 
are on track to deliver more than 8,000 plus speeches to 
community groups nationwide. DTV trekkers, these customized 
trucks designed to look like giant televisions on wheels are 
crisscrossing America making more than 600 stops at local 
events. Today the trekkers are in Noel, Missouri and Orlando, 
Florida. Retailer outreach, we are teaming up with Wal-Mart and 
other retailers to air the DTV action spots on their in-store 
channels to educate shoppers to take action. Community 
outreach, NAB is partnered with a variety of organizations, 
including the leadership conference on civil rights, the 
National Black Church Initiative, and Univision to name just a 
few to amplify our outreach efforts.
    And, finally, point 4. We must continue to build on our 
public-private partnership. Clearly this is not a project 
broadcasters can tackle alone. From the beginning we knew this 
effort would require everyone's cooperation and involvement. 
The DTV coalition, a broad-based group of 207 organizations, 
including the FCC and NTIA, is taking the lead to insure a 
smooth transition. We look forward to working with all of our 
partners, including cable, electronics manufacturers, 
retailers, community broadcasters, consumer advocates, and the 
government as we go forward. The upcoming transition is a 
historic event for America. Crystal clear pictures, phenomenal 
sound, more programs and services, and it is free. I pledge 
that NAB and our broadcasters will do all we can to make the 
switch successful.
    We welcome the committee's input. We thank you for your 
leadership. Thank you for inviting me here today, and I am 
happy to answer any questions.
    [The prepared statement of Mr. Rehr follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Markey. Thank you, Mr. Rehr, very much. Our next 
witness, Chris Murray, is Senior Counsel for the Consumers 
Union. We welcome you today, sir. Whenever you are ready, 
please begin.

  STATEMENT OF CHRIS MURRAY, SENIOR COUNSEL, CONSUMERS UNION, 
                        WASHINGTON, D.C.

    Mr. Murray. Thanks again for having me, Chairman Markey, 
and Ranking Member Stearns. I appreciate your attention in 
sitting through a long hearing today. So February 17 is more 
than just Paris Hilton's birthday, we have learned today. It is 
the day at which in Mr. Barton's district more than a half a 
million households without some sort of intervention or 
education between now and then those TVs will go blank. That is 
nearly 1 in 4 households in his district. In Mr. Green's 
district we got nearly half a million households, about 23 
percent. In the Los Angeles DMA, we have got nearly a million 
over the air households. It is my firm hope that the DTV 
transition is going to go absolutely swimmingly but it is my 
job to worry, and today I am here to express the fear that a 
few consumers are going to be left in the dark when the analog 
switch off occurs.
    There is good news and bad news for consumers today. Our 
Consumer Reports National Research Center conducted a survey 
which had some troubling findings. They found that 3 in 4 
consumers who are aware of the transition actually have major 
misconceptions about it. Half of them, nearly half of them, 
believe that every TV needs to be digital and those consumers 
are probably more likely to go out and buy a new TV set, not 
the worst thing in the world but it is important that they know 
what the least cost migration path to digital transition is for 
them. One in 4 consumers aware believe that they have to throw 
all their analog sets in the trash. Obviously, this generates 
concern from electronics waste perspective.
    And of those aware, nearly 3 in 4 don't know about NTIA's 
program for converter box coupons. One finding that I actually 
omitted in my written testimony is that 42 percent of consumers 
who have no functioning TV set after February 17, 2009, have no 
plans to do anything about it. Let me underscore that, 42 
percent, nearly half of people, who will have no over the air 
signals, have no plans to do anything about it yet. I really 
hope this is going to change but right now I think there is 
cause for concern, 370 days and counting. Awareness is good but 
it is accurate information that we actually care about. We can 
be aware that a city bus is barreling towards us but it is a 
lot more important to know where that sidewalk is and to know 
how to side step that bus.
    Citizens and consumers didn't ask for the digital 
transition and I believe since it is the result of a federal 
mandate it is the obligation of the Federal government to 
provide consumers good information to help them sort through 
some of the noise and find out what the least cost path is to 
switch to digital. So the FCC and NTIA who were in charge of 
the transition have consumer education budgets of $2.5 million 
and $5 million, respectively, at the moment. FCC has requested 
an additional $20. Just as a base line, I will note as 
Congressman Boucher did earlier, that in the UK, which has 
about 1/5 the population of the U.S., they are spending $400 
million educating consumers on a per capita basis. That is 
about 265 times more than we are presently planning to spend. 
Perhaps that is too big a number. Perhaps they are spending too 
much money. Perhaps we don't need to go and knock on doors like 
they did, but should we be concerned that we are not doing 
these things that perhaps there will be consumers who might not 
get reached. I believe that is the case.
    It is great that industry is spending a lot of money. I 
think the campaigns that are out there are excellent. I think 
the NAB's commercials are informative. But in the end everybody 
does have a bias. Somebody is always looking to sell a product 
or service. Consumer electronics industry would like you to buy 
a new television set. Cable would like you to buy cable 
service. These are all good things but I do believe the 
government has an obligation to help consumers sort through the 
noise and find that least cost transition path.
    I will leave you with a couple of quick recommendations. 
First for consumers who want to get their converter boxes, they 
should apply early. Don't wait to buy the box since it will 
expire 90 days from the date that that coupon gets put in the 
mail. And test your signal as early as you can because these 
digital signals are already out there, and you don't need to 
wait until February 17 to run a test. Second, NTIA and the FCC, 
the agencies in charge of this program, need to keep their 
hands on the steering wheel, and as I said help consumers find 
that least cost path to make the switch. I wish we had perhaps 
run the clock back and find some test markets to do this. You 
see in other countries where they have done it in the UK and 
Italy, in Germany especially. They have done this in a phase-in 
basis. They haven't done one flash cut switchover, and I 
believe that we need to find some test markets so that we know 
what is going to come.
    Finally, community leaders can't exclusively rely on 
government, and we need a localized action plan. I do think 
that is a place where Congress can have a role in helping make 
their community leaders aware and helping them find some plans. 
So again on February 17 we are going to make the switch to 
digital, and unless adequate public education takes place 
millions of consumers will wake up that morning and find a 
blank TV screen, and it is my hope that this will all go 
swimmingly.
    [The prepared statement of Mr. Murray follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Markey. Thanks, Mr. Murray, very much. Our next 
witness, Tom Romeo, is the Director for Federal Services, 
Global Business Service or IBM Corporation, a very important 
person in this whole project, and we welcome him and please 
begin.

  STATEMENT OF TOM ROMEO, DIRECTOR, FEDERAL SERVICES, GLOBAL 
     BUSINESS SERVICE, IBM CORPORATION, BETHESDA, MARYLAND

    Mr. Romeo. Chairman Markey and Ranking Member Stearns, 
thank you for the opportunity to testify before you today, and 
to provide you an update on the progress the IBM team has made 
in implementing the NTIA TV converter box coupon program. As 
Assistant Secretary Baker mentioned earlier on January 1 the 
consumer support center officially opened for business. It 
started taking orders from consumers across the nation for TV 
converter box coupons. On that first day over 249,000 
applications came in from consumers in all 50 states. Over 
475,000 coupons were requested on day one. While initial volume 
was higher than expected, all systems continued to handle 
requests and our team reacted quickly to pinpoint needed 
adjustments and implement solutions.
    For example, the volume of Spanish language callers to the 
consumer support center exceeded our initial projections. We 
moved quickly on two fronts to accommodate this fact. First, we 
added additional Spanish language agents to match the volume 
and minimize wait times for those needing assistance in 
Spanish. Second, we added an automated, interactive voice 
response system for Spanish language callers. Our experience 
with the English language IVR system shows that approximately 
78 percent of the calls are successfully completed within the 
IVR system. We expect similar results for the Spanish language 
IVR. The high percentage of calls which are fully handled with 
the IVR system speaks to the ease of applying for coupons over 
the phone. Our experience with high demand during those first 
few weeks in January underscores the unique nature of this 
program.
    The IBM team has been able to react quickly and make 
adjustments to the system as unanticipated developments arise. 
The flexibility built into the system architecture will allow 
for continued rapid response and adjustments going forward. The 
next step is to begin mailing coupons to consumers. That will 
get underway next week starting February 17. Our roll out plan 
includes continuing to work closely with our retail partners to 
confirm sufficient inventory of converter boxes to meet 
consumer demand. If necessary we can adjust the rate of coupon 
distribution to match as closely as possible projected retail 
inventory so consumers are able to purchase a converter box 
within the 90-day expiration period for the coupons.
    In 118 days since I last came before this committee, we 
have made great progress in recruiting the voluntary 
participation of both large national retailers and smaller 
local retailers. Over 615 retailers representing more than 
16,475 stores nationwide are currently certified to participate 
in the program. Eight of the largest consumer electronic 
retailers, Best Buy, Circuit City, K-Mart, RadioShack, Sam's 
Club, Sears, Target, and Wal-Mart are among the 615 retailers 
certified to participate in the coupon program. Retail 
recruitment efforts will continue until the March 31, 2008 
deadline. In preparation for coupon distribution to consumers, 
we completed a pilot program in two markets. This pilot program 
conducted during January and early February allowed for testing 
of all components of the system and their integration.
    Based on the results from the pilot program, we have made 
some updates to the system in the process, including the use of 
secret shoppers to validate the readiness of individual retail 
stores and revising language that appears on the coupon card to 
make for a consistent consumer experience. Although we are 
entering the operational phase of the coupon program, we remain 
focused on the driving force of consumer education. Our 
partner, Ketchum Public Affairs, continues to lead the consumer 
education effort focused on the 5 communities who most likely 
rely more heavily on over the air broadcasting than the general 
population. They are senior and older Americans, the 
economically disadvantaged, rural residents, people with 
disabilities, and minorities.
    We continue to build and leverage a network of committed 
partners who already have access to many of the population 
segments we are targeting. The NTIA TV converter box coupon 
program requires innovative thinking, leading technology, and 
flexibility. The IBM team is pleased to be part of this vital 
program and recognizes that many challenges remain along the 
way to February 17, 2009. Our team is ready to continue to meet 
those challenges and work to insure that consumers across the 
United States have continued access to free television 
broadcasting, including educational, entertainment, emergency, 
and homeland security information.
    Thank you for the opportunity to testify, and I am happy to 
answer any questions.
    [The prepared statement of Mr. Romeo follows:]

                         Statement of Tom Romeo

    Mr. Chairman and Members of the Subcommittee, thank you for 
this opportunity to testify before you again on the status of 
the DTV Transition. My name is Tom Romeo and I am Director of 
Federal Services for IBM's Global Business Services, Public 
Sector. I am here today to update you on the progress the IBM 
Team has made implementing the National Telecommunications and 
Information Administration (NTIA) TV Converter Box Coupon 
Program.
    NTIA awarded IBM the contract to provide services for the 
TV Converter Box Coupon Program on August, 15, 2007. IBM and 
its business partners, Ketchum Public Affairs, Epiq Systems and 
Corporate Lodging Consultants are providing services in four 
areas:
     Consumer education
     Coupon distribution to consumers and redemption
     Support for retail store participation
     Financial processing to reimburse retailers, and to 
maintain records.
    The Coupon Program, authorized by the Digital Television 
Transition and Public Safety Act of 2005, provides for 
distribution and redemption of coupons that consumers may apply 
toward the purchase of digital-to-analog converter boxes. 
Households using analog televisions will not be able to receive 
digital broadcasts after February 17, 2009, unless the analog 
television is connected to a converter box that switches the 
digital signal to an analog format, or the analog television is 
connected to cable or satellite service.
    Between January 1, 2008 and March 31, 2009, all U.S. 
households may request up to two coupons, worth $40 each to be 
used toward the purchase of up to two digital-to-analog 
converter boxes until the initial $990 million allocated for 
the program has been exhausted. After this initial phase of the 
program, NTIA may request an additional $510 million already 
authorized by Congress. During this "contingent period", 
coupons will be available exclusively to households that rely 
on over-the-air broadcasting as their sole source of television 
programming.

                             Program Goals

    With these parameters, IBM designed the NTIA TV Converter 
Box Coupon Program to be consumer-focused, easy to use, and 
provide maximum choice and access for both consumers and 
retailers. Ensuring high retailer participation and 
satisfaction are essential elements to the overall success of 
the program. Our goal continues to be to successfully 
communicate the details of the TV Converter Box Coupon Program 
to targeted consumers, distribute coupons, and complete the 
redemption process efficiently.

                             Program Launch

    On January 1, 2008 the Consumer Support Center opened for 
business and began to take orders from consumers across the 
nation for their TV Converter Box Coupons. Consumers were able 
to order coupons using any of the four available options. The 
toll-free phone number (1-888-DTV-2009) is operational 24x7 
with live agents available to callers at all times. Operators 
can accommodate requests in more than 150 languages. The toll-
free phone option also provides a TTY solution for use by the 
hearing impaired community. Other options to apply for coupons 
include online at www.DTV2009.gov, by mail (P.O. Box 2000, 
Portland, OR 97208-2000), and via fax (1-888-DTV-4ME2). To 
date, approximately 65% of the requests received have come in 
via the Internet, 35% via the telephone, and less than 1% for 
the mail and fax channels combined.
    On January 1, 2008, over 249,670 applications came in from 
consumers in all 50 states for a total of 475,652 coupons 
requested. High demand continued through the first week of the 
program resulting in over 1,131,795 application requests for 
2,144,632 coupons by week's end. While this initial volume was 
higher than expected, all systems continued to handle requests, 
and our team reacted quickly to pinpoint needed adjustments and 
implement solutions quickly. For example, the volume of 
Spanish-language callers to the Consumer Support Center 
exceeded our initial projections. We moved quickly on two 
fronts to accommodate this fact. First, we added additional 
Spanish-language agents to match the volume and minimize wait 
times for those needing assistance in Spanish during times of 
peak call volume. Second, we expedited implementation of an 
automated Interactive Voice Response (IVR) system for Spanish-
language callers to assist in handling the high volumes of 
Spanish-language requests in a timely manner. Our experience 
with the English-language IVR system shows that approximately 
78% of calls are successfully completed within the IVR system. 
We expect similar results for the Spanish language IVR. The 
high percentage of calls which are fully handled within the IVR 
system speaks to the ease of applying for coupons over the 
phone.
    As the Coupon Program moves into the next phase, we will 
continue to closely monitor all aspects of the system and make 
adjustments as needed in a timely fashion.

                          Coupon Distribution

    As of February 12, 2008, 4,801,777 coupons have been 
requested via 2,767,519 applications from consumers across the 
country. We will begin mailing these coupons out to consumers 
the week of February 17, 2008 distributing them in the order in 
which they were received. This roll out plan also includes 
continuing to work closely with our retail partners to confirm 
a sufficient number of converter boxes available at retail 
outlets to meet consumer demand. If necessary, we will adjust 
the rate of coupon distribution to match as closely as possible 
projected retail inventory so consumers are able to purchase a 
converter box within the 90-day expiration period for the 
coupons.
    Included in the coupon mailing to consumers is information 
about where they can purchase a coupon-eligible converter box 
in their local area, and what they need to do to use the 
coupon. Consumers can also search for participating retailers 
near their address using a "Retailers Near You" feature on the 
Coupon Program website (https://www.dtv2009.gov/
VendorSearch.aspx).

                         Retailer Participation

    In the 118 days since I last came before this Committee, I 
am pleased to report that we have made great progress in 
recruiting the voluntary participation of both large national 
retailers and smaller, local retailers. We project that when 
coupons are mailed starting the week of February 17, 2008, over 
9,000 retail locations will be ready to fully participate in 
the program. This includes locations in all 50 states, Puerto 
Rico, and the U.S. Virgin Islands. These stores will have 
completed certification in the Coupon Program, indicated that 
their employees are trained, have converter box inventory in 
their stores, and have their point-of-sale systems prepared to 
redeem coupons.

                               Test Phase

    In preparation for coupon distribution to consumers, we 
have completed the Open Operational Capabilities Demonstration 
(OCD) phase of the program. This pilot program, conducted 
during January and early February, allowed for testing of all 
components of the system and their integration - coupon 
ordering, distribution, redemption at a participating retailer, 
and reimbursement to the retailer. The pilot program provided 
valuable insight into how well our technical systems are 
performing and identified necessary adjustments. Based on the 
results from the pilot program, we have made some updates to 
the system and the process, including the use of "secret 
shoppers" to validate the readiness of individual retail 
stores, and revising language that appears on the coupon card 
to make for a consistent consumer experience.

                           Consumer Education

    Although we are entering the operational phase of the 
Coupon Program, we remain focused on the driving force of 
Consumer Education. Our partner, Ketchum Public Affairs, 
continues to lead the consumer education effort focused on the 
five communities who most likely rely more heavily on over-the-
air broadcasting than the general population: 1) senior and 
older Americans; 2) the economically disadvantaged; 3) rural 
residents; 4) people with disabilities; and 5) minorities. 
Focus groups, which included significant representation from 
these groups, were used to develop the branding and key 
messages for the Coupon Program. We continue to build and 
leverage a network of committed partners who already have 
access to many of the population segments we are targeting. A 
Partnership Toolkit was developed and includes DTV and Coupon 
Program background material, fact sheets, posters, sample 
public service announcements, and presentations. The materials 
can be co-branded for use by partners. Also included are 
specific strategies on how to reach the media to effectively 
deliver the Coupon Program message, and ideas and resources for 
informing consumers through community and in-store events. In 
addition, our work with the media to place stories about the 
Coupon Program is heavily focused not only on national media, 
but also the television markets that have the largest estimated 
number and percentage of over-the-air reliant households. We 
believe the strong demand for coupons indicates we are on the 
right track educating consumers about the Coupon Program.

                               Conclusion

    The IBM Team is pleased to be part of implementing this 
vital program and recognizes that many challenges remain on the 
way to February 17, 2009. Our team continues to be ready to 
meet those challenges and work to ensure that consumers across 
the United States have continued access to free television 
broadcasting, including educational, entertainment, emergency 
and homeland-security information.
    Thank you for the opportunity to testify today and I am 
happy to answer any questions.
                              ----------                              

    Mr. Markey. Thank you, Mr. Romeo, very much. Our next 
witness, Laurance Harris, is the Vice President for 
Merchandising for RadioShack. Welcome, sir.

  STATEMENT OF LAURANCE HARRIS, VICE PRESIDENT MERCHANDISING, 
                   RADIOSHACK, FORT WORTH, TX

    Mr. Harris. Good afternoon, Chairman Markey, and Ranking 
Member Stearns. I am Vice President of Merchandising at 
RadioShack Corporation. I am pleased to be here even more so 
when I saw the equipment we are using for recording is 
RadioShack equipment, so it was good news. I am here on the 
opportunity to speak on behalf of RadioShack and the Consumer 
Electronics Retailers Coalition to discuss the essential role 
of RadioShack and the retail industry are playing in NTIA's 
converter box program. RadioShack has 4,400 owned and operated 
stores, an additional 1,500 dealer stores throughout the 
country. Even with our long experience, the digital transition 
presents unique challenges to RadioShack and other retailers 
and the consumer. We worked diligently over the last 3 years to 
help make this transition as smooth as possible for consumers.
    More recently retailers have worked closely with NTIA and 
its vendors. RadioShack is pleased to announce it will have 
converter boxes available in all of its corporate stores and 
through Direct-to-You program by February 22, in time for the 
initial distribution of the converter box coupons. We believe 
that RadioShack and CERC's other brick and mortar members are 
prepared for the start of the program. Let me outline specific 
steps taken and planned by RadioShack and other retailers 
regarding the implementation. Retailers appreciate the steps 
taken by the NTIA to insure use of electronic coupons that work 
in a manner similar to plastic pre-paid, private label cards, 
so each retailer participating in the converter box program 
must in some manner adopt its core point of sale systems.
    CERC members are proud that several of us were able to 
initiate work on the necessary changes during the 4th quarter 
which is of course our busiest sales period. We are on 
scheduled to complete the modifications in time for the coupon 
distribution. The adoption of a hard date for the DTV 
transition has provided certainty for retailers. They know when 
consumers will need to buy any necessary equipment. 
Nevertheless, no one knows how many households will need a 
converter box. Indeed, no one anticipated the request to exceed 
$4.8 million within the first month of the program. In reality, 
we anticipate that some of the coupons requested will not be 
redeemed for some customers will just simply not need a box. 
Even so RadioShack and other participating CERC members are 
creating distribution systems that will handle millions of 
converter boxes over the next 18 months.
    We are all working to insure we have inventory in the right 
place at the right time. We are pleased that the NTIA is 
providing us timely information regarding where consumer demand 
for coupons exist. We hope to receive even more granular detail 
on data and coupon redemption rates once the coupons are 
distributed. This information is critical so we can target 
inventory exactly where it is needed. We believe the retailers 
will be prepared to respond with initial coupon demand. As I 
mentioned, RadioShack will have stock ready when consumers 
receive their coupons. In the event that a RadioShack's own 
store's inventory is temporarily depleted, our sales associate 
can order the product from stock located in our Fort Worth 
distribution center.
    The converter box will then be shipped to the customer's 
home at no additional shipping charge through our Direct-to-You 
program. We are also pleased to announce today for the first 
time we will be taking coupon orders by phone at RadioShack, 
877-RSD-TV4U beginning March 1.
    Mr. Markey. What was that number again?
    Mr. Harris. Do you want to order a box? 877-RSD-TV4U. 
Again, it is our first announcement. That will be ready by 
around March 1. The boxes will be shipped to the customer's 
home, again free of shipping charges. Pricing the converter box 
even with its simple features presented challenges. We only 
recently became aware of one issue in December, 2007, as orders 
were being placed retailers learned that U.S. Customs had 
imposed a 5 percent import tax on these boxes. Retailers feel 
this duty on a product that the government has subsidized will 
serve to impede distribution and burden the consumers. We hope 
this committee will join in seeking a legislative waiver on 
this import duty as surely as Congress could not have intended 
this result.
    Regarding low power television, we think NTIA was right not 
to require the inclusion of a signal pass through feature in 
the converter box. In our own decision we focused in providing 
the price, quality, and features that the vast majority of 
customers would need. We decided not to include a pass through 
feature for all boxes for the same reasons because we know the 
private sector prepared solutions already for this issue for 
the households that need them. Perhaps the most important 
success is the private sector's planning to educate customers 
about the digital transition. CERC applauds the efforts of our 
industry partners. We know these efforts are working. CA just 
announced last week that consumer awareness of the digital 
transition has grown 80 percent since 2006.
    We also recognize that retailers have the most direct role 
in consumer education. We are the end game. We are the place 
where customers go to ask the questions. RadioShack's consumer 
education plans are the following, an updated RadioShack web 
site, notifications in tens of millions of RadioShack direct 
mail flyers, on February 19 any receipt printed by a RadioShack 
store will alert the customer of the digital transition, in 
store window signs and banners, national advertising, radio 
advertising in both English and Spanish, and various public 
relations practices.
    RadioShack and all CERC members also recognize the critical 
importance of having trained sales associates to answer 
questions regarding the transition. RadioShack headquarters----
    Mr. Markey. If you could please summarize your statement, 
sir.
    Mr. Harris. In conclusion, as we embark on this program, we 
want the committee to understand the extraordinary efforts 
retailers have undertaken. RadioShack, along with 4,400 stores 
and more than 30,000 retail employees and support staff will 
insure training throughout the program. We are confident we 
have the necessary training systems in place. Our employees 
will be ready for transition. Thank you again for the 
opportunity to testify. I look forward to answering any 
questions.
    [The prepared statement of Mr. Harris follows:]

                      Statement of Laurance Harris

    Good morning. My name is Larry Harris. I am Vice President 
of Merchandising at RadioShack Corporation. With the DTV 
transition date just over one year away, I appreciate the 
opportunity to appear today at this important hearing to 
discuss the essential role that RadioShack and the retail 
industry are playing in the National Telecommunications and 
Information Administration's (NTIA) converter box program. I am 
here this morning to speak on behalf of both RadioShack and the 
Consumer Electronics Retailers Coalition (CERC), which in 
addition to RadioShack, includes as its members, Amazon.com, 
Best Buy, Circuit City, Sears, Target, and WalMart, as well as 
three major retail associations - the North American Retail 
Dealers Association (NARDA), the National Retail Federation 
(NRF) and the Retail Industry Leaders Association (RILA).

 Background on RadioShack and Retail Involvement in the Transition to 
                                  Date

    RadioShack sells a wide variety of consumer electronics 
products and is one of the largest retailers of consumer 
electronics equipment in the United States, with 4,400 owned 
and operated stores and an additional 1,500 dealer stores 
throughout the country. RadioShack is a primary resource to 
consumers for devices and accessories that assist in household 
connectivity and networking. Even with significant experience 
in the consumer electronics retail business, the transition to 
digital transition presents unique challenges to RadioShack, 
other retailers and to the consumer.
    RadioShack and the other members of CERC have understood 
for years the unique role retailers play in the transition to 
digital television. This role, of course, includes having the 
right products available at the right time for consumers. But 
equally important is the critical role retailers play in 
educating and assisting consumers in making purchasing 
decisions that best satisfy their needs. We have worked 
diligently over the last few years to help make this transition 
as smooth as possible for all consumers. At this time, there 
are approximately 250 certified retailers in the converter box 
coupon program. Each of the retailers participating in the 
coupon program is working closely with NTIA and its vendors, 
IBM and CLC, on the program's implementation. RadioShack is 
pleased to announce that it will have converter boxes available 
in all of its corporate stores by February 22nd, to coincide 
with the initial distribution and receipt of coupons. In 
addition, all stores will be able to accept coupons beginning 
on February 19th, through our Direct-to-You program which I 
will discuss later. Several other CERC members have similarly 
announced their intentions to have stock in stores by the time 
coupons are received by consumers.
    The converter box program as created by Congress presents 
unique challenges to retailers, but we believe that RadioShack 
and CERC's other brick-and-mortar members are prepared for the 
start of the program. And like the other industry groups 
involved - the broadcast, cable and manufacturing companies - 
the retail industry is investing millions of its own dollars 
and, equally important, significant human resources to 
facilitate a smooth transition. This public-private sector 
balance is purposeful and is proving to be an effective means 
by which to make the digital transition.
    During the rest of my testimony, I outline specific steps 
taken and planned by RadioShack and other retailers regarding 
the implementation of the coupon program, including the 
implementation of new point-of-sale (POS) functionality, 
inventory plans, pricing issues and consumer education. In 
addition to discussing these steps, I also highlight some 
specific challenges presented as we embark on the distribution 
of converter boxes.

                      Modification of POS Systems

    Each retailer participating in the converter box coupon 
program must in some manner adapt its core POS functionality if 
it elects to electronically authorize the government issued 
coupon. Retailers appreciate the steps taken by NTIA to ensure 
use of electronic coupons that authorize in a manner similar to 
plastic pre-paid private label cards. NTIA's contractor, IBM, 
and its sub-contractor CLC have also provided options that 
address the requirements of the automated systems used by 
larger retailers, as well as systems solutions to accommodate 
smaller retailers. Still, even with the flexibility provided, 
each retailer has its own unique POS systems and implementing 
the ability to process government issued coupons has presented 
each retailer with its own challenges. The cost of changing POS 
systems to support NTIA requirements in this manner is being 
incurred by each retailer - the government has not provided 
funding for any part of this process. In addition, CERC members 
are proud that several of us were able to initiate project work 
on these system changes during the 4th quarter of the year, our 
busiest sales period. Prior to roll-out of the systems later 
this month, a number of participating retailers are currently 
participating in NTIA's pilot programs in Kansas and D.C.

        Distribution and Maintenance of Converter Box Inventory

    The creation of a hard date for the DTV transition has 
provided certainty for retailers as to when they needed to be 
ready to offer consumers any necessary equipment. However, even 
with the hard date, some uncertainty remains as to how many 
households will need or want a converter box and at what point 
those households will request and redeem the coupons. Indeed, 
no one anticipated that requests for coupons would exceed 4.4 
million within the first month of the program!
    In reality, we anticipate that a portion of the coupons 
requested will not be redeemed as some consumers decide that 
they do not need a converter box. For example, according to the 
Consumer Electronics Association (CEA), 50 percent of U.S. 
households currently have a digital television and it forecasts 
that another 32 million digital televisions will be sold in 
2008. Many consumers making a digital television purchase may 
do so after they requested a coupon. We also know that many 
households will decide to connect their televisions, or any 
sets that weren't connected already, to cable or satellite 
which will also reduce demand for converter boxes. There are 
also indications from NTIA data that many consumers who have 
applied for coupons may be cable or satellite customers, 
meaning that they may not actually need a converter box. Part 
of our role in educating consumers will be to make sure that 
subsidized converters are obtained by consumers who actually 
have a use for them.
    Regardless of these uncertainties, RadioShack and the other 
participating CERC members are creating distribution systems 
that collectively will handle the distribution of millions of 
converter boxes over the next 18 months. Each retailer's plan 
is of course different and is tailored to its own business 
model and the customer base, but collectively the retail 
industry is confident that the demand for converter boxes will 
be met.
    With 4,400 owned and operated stores and another 1,500 
dealer stores throughout the 50 states, D.C. and Puerto Rico, 
RadioShack will play an essential role in the distribution of 
converter boxes. To that end, we and other retailers are 
working closely with NTIA, IBM and CLC to help ensure that we 
have inventory in the right place at the right time. We are 
pleased that NTIA is working with retailers to provide us 
timely information regarding where consumer demand for coupons 
exists. We encourage NTIA to provide this information in as 
granular detail as possible and with the rates of returns for 
these same areas once the coupons are distributed. This 
information is critical in helping ensure all retailers are 
able to use their distribution systems to target inventory 
where it is needed. As the only major consumer electronics 
retailer with thousands of both its own stores and dealer 
stores, this is perhaps uniquely challenging for RadioShack. 
Despite the challenge, we are committed to having each of our 
stores prepared to respond to consumer interest. Under the 
regulations and our existing contractual arrangements, our 
dealer stores must each seek their own certification from NTIA 
for participation. However, RadioShack understands the 
importance of having these stores, most of which are small 
businesses in rural settings, involved in the transition. 
Therefore, in addition to preparing our own stores, we have 
worked closely with NTIA to promote dealer participation and to 
educate dealers about the program and the digital transition 
generally.
    With the initial demand of 4.4 million coupons, I am sure 
the Subcommittee is interested in knowing whether retailers 
will be prepared over the next few months to respond to this 
initial demand. We believe that through the combined efforts of 
all participating retailers and with full cooperation from NTIA 
and CLC, the answer will be yes. As I mentioned, RadioShack 
intends to have stock in all of its stores by February 22. With 
4,400 stores, we cannot guarantee that each store will have 
stock at all times due to the ebb and flow of customer demand. 
However, in the event that a RadioShack-owned store's inventory 
is temporarily depleted, our sales associates are being trained 
to offer to order the product for the customer from stock 
located in our Fort Worth Distribution Center. The converter 
box will then be shipped to the customer's home at no 
additional charge through our Direct-to-You (D2U) program. This 
D2U program will be available for coupon-eligible converter box 
purchases in all of our stores beginning February 19th and 
RadioShack plans to hold some stock in our Fort Worth 
Distribution Center for the length of the program for D2U 
purposes. Other retailers will also provide solutions when 
store locations are out of stock or for those coupon-holders 
who are infirm or otherwise unable to come to a store. For 
example, retailers, like EchoStar here with us today, will be 
able to offer the converter boxes for sale online. Other 
retailers will have 1-800 numbers to respond to these requests.

              Issues Affecting Price of the Converter Box

    I know that this Subcommittee is hopeful that the 
consumer's contribution to the purchase of the converter box 
will be as low as possible. RadioShack understands this concern 
and recognizes the need for an affordable solution to all 
consumers. I would like to spend a few minutes addressing 
issues affecting the price of the converter box to the 
consumer. This is an area in which, of course, each retailer 
has worked through its own issues and considerations. My 
comments here reflect RadioShack's experience regarding price 
considerations.
    Although the coupon-eligible converter box has simple 
features and its sole function is to convert a digital 
television signal to analog format, keeping the price low still 
presents challenges. First, as mentioned above, the level of 
demand is unclear so that it is difficult to take full 
advantage of quantity-dependent pricing from manufacturers. 
Second, its shelf life - 18 months - is uniquely short. For 
these reasons, manufacturers are not able to amortize the 
upfront price of production over a long period of time. 
Normally, the price of a consumer electronics product would 
drop steadily over its market life of potentially several 
years; the coupon-eligible converter box product will not 
benefit from this effect.
    In addition, any single technology rich consumer 
electronics product may be covered by literally hundreds or 
even thousands of patents, and the converter box is no 
different. Whether it is the manufacturer or retailer who 
actually pays the patent license royalties for such essential 
patents, this dynamic may also add cost to the box.
    Each retailer (and manufacturer) also has had to make 
difficult choices about which permissible optional features, if 
any, to include in the box. The added cost that results must be 
balanced against the likelihood that such features will be 
required by a broad number of consumers. For example, 
manufacturers and retailers each confront this issue with 
regard to the inclusion of signal pass-through technology which 
would benefit those households who receive low-power television 
signals or wish to receive analog signals across international 
borders. NTIA made an appropriate decision to permit the signal 
pass-through feature as an optional, but not mandated feature. 
A reason for this decision related to concerns over the loss of 
signal strength in the converter box that might occur and 
affect the reception of the digital signal. Based on this and 
other information RadioShack had when making our initial 
orders, we prioritized the cost, quality and features that the 
vast majority of our customers would need and did not include 
the pass-through feature in those orders.
    Given manufacturing and distribution lead times, we believe 
that any decision at this late date to mandate such a 
requirement would jeopardize the coupon program and is 
unnecessary. There will be solutions to this problem in the 
marketplace. There are currently three approved converter boxes 
that include the pass through technology, including EchoStar's. 
While the products that RadioShack plans to sell at this time 
do not include pass-through technology, we are exploring 
solutions for LPTV viewers. At a minimum, RadioShack and others 
intend to offer LPTV consumers a discount on the external 
devices (such as an A/B switch and splitter) necessary to 
provide an external pass-through to connect their converter box 
and television. As one of the largest national retailers and 
manufacturer of antennas, we will also carry a variety of 
outdoor antennas. And, of course, the viewer could also 
purchase a dual tuner television if this makes economic sense.
    In its role as a retailer, RadioShack intends to help its 
LPTV customers with the transition and we will explore all 
possible solutions. However, it is critical that the Community 
Broadcasters educate their LPTV viewers on the problem and 
inform them of their options. In addition, RadioShack 
encourages the Community Broadcasters to provide retailers with 
specific information about the number of households affected 
and their locations. Such information will be particularly 
helpful in ensuring the delivery of appropriate solutions to 
the degree they are needed.
    Before leaving the issue of cost, I would like to raise an 
issue that only recently came to retailers' attention, but that 
has a significant effect on the price of the box. In December 
2007 as orders were being placed for converter boxes, retailers 
learned that U.S. Customs has imposed a five percent import tax 
on converter boxes. Retailers fear that this duty on a product 
that the government has subsidized through the coupon program 
for the purposes of helping U.S. households will serve to 
impede distribution and may needlessly burden consumers. We 
hope that this Committee will join us in seeking a legislative 
waiver of this import duty, as surely the Congress could not 
have intended this result.

                           Consumer Education

    Perhaps most important to the success of the transition is 
the role that the private sector is playing to educate 
consumers about the digital transition. CERC applauds the 
efforts of NAB, NCTA, CEA, the consumer groups and our 
government partners for their efforts to alert consumers. We 
know that these efforts are working. CEA just announced last 
week that consumer awareness of the transition to digital 
television grew 80 percent since 2006.
    But, we recognize that retailers have perhaps the most 
direct private sector role in consumer education. We are the 
end game - we are the place where consumers will go to ask 
questions to learn more about the transition and its effect on 
their household. Like each of the private sector industries 
involved, retailers are investing significant funds to 
communicate information about the transition through print and 
other media. However, retailers are also making significant 
investments in human capital - training hundreds of thousands 
of sales people to assist consumers. For a transition that is 
short term and product that is not relevant to everyone in the 
same manner, this is a challenging task. Let me provide some 
perspective on what RadioShack and other CERC members are doing 
regarding our media communications efforts and our sales 
associates' training.
Consumer Education through Advertising, the Internet and Signage
    RadioShack, and other CERC members, are implementing 
detailed public education plans to notify consumers of the 
digital transition generally and to inform them of the possible 
need to purchase a converter box. RadioShack's plan includes 
the following activities during just the first quarter of this 
year:
     We are updating RadioShack's website by February 17th to 
include dedicated space at www.radioshack.com/dtv to explain 
the transition, the coupon program and to answer frequently 
asked questions (including information for LPTV viewers). It 
will also include links to the relevant government websites and 
CERC/CEA/FCC's DTV tip sheet. This site highlights the 
information we have provided on RadioShack.com for many months 
already.
     We are including notifications about both the transition 
and the coupon program in tens of millions RadioShack's direct 
mail flyers and newspaper inserts throughout the year.
     By February 19th, all stores will print notifications on 
every receipt printed in a RadioShack store on any purchase 
alerting customers about the digital transition, the 
availability of converter boxes at RadioShack and both websites 
www.radioshack.com/dtv and www.dtv2009.gov.
     We are placing window signage in each store in March 
announcing the availability of coupon eligible converter boxes 
once stock is in place. There will be window signs on the 
transition, at times, throughout the program. We will also have 
bilingual educational brochures in our stores.
     The packaging on most of our converter boxes will 
indicate that they are coupon eligible; and,
     We will be placing advertising in national print media to 
notify consumers, as well as radio advertising on both English 
and Spanish language stations.
     We will use various public relations tactics to ensure 
the conversion is effectively communicated to news media and 
customers alike. This includes the use of audio and video 
podcasts, news releases and staged store events throughout the 
year announcing news and milestones relating to our 
participation in the transition process. RadioShack is also the 
focal point for many local market media outlets looking to 
explain technical issues to their viewers and readers, and the 
digital transition process is a perfect example. We will 
continue to actively promote and facilitate news media requests 
to visit local stores and interview our knowledgeable sales 
staff.
    Similar efforts by several other CERC members have been 
outlined in recent filings with the Federal Communications 
Commission (FCC). In addition, CERC has updated its Consumer 
Guide on its website and the Converter Box Coupon Program's 
site includes a prominent link to CERC's site as well.
Training of Sales Associates
    RadioShack and all CERC members recognize the critical 
importance of having trained sales associates who can answer 
specific questions regarding the digital transition and the 
coupon program. While media efforts will call consumers to 
action, our sales associates may be the only face-to-face 
opportunity that a consumer will have to ask specific questions 
and to solve their particular needs relating to the transition. 
Training our sales associates on the specifics of the 
transition and the converter box program is a Herculean task. 
Each retailer is making significant efforts to accomplish this 
task effectively - these efforts are underway at RadioShack and 
will continue throughout the next 12-18 months.
    RadioShack headquarters trains and communicates with its 
store managers and employees through several different means. 
Let me provide you some specifics. First, RadioShack provides 
online training for all employees on many different product 
lines and technologies. We have a number of training sites 
dedicated to the digital transition, digital television 
products, and the coupon eligible converter box. At the end of 
the online training course for the converter box, our employees 
are required to take a test. We monitor the test completion 
rate for each store and each store employee must pass with a 90 
percent or higher in order to be considered a completion. 
Second, in addition to our online training program, RadioShack 
conducts RadioShack TV broadcasts with its store managers and 
sales associates. We have already completed a number of 
segments on the transition and coupon program with our store 
managers and have additional segments scheduled for both store 
managers and sales associates to coincide with the appearance 
of coupons in the marketplace.
    Third, RadioShack distributes articles on issues of 
importance directly to its stores on a daily and/or weekly 
basis. This includes our daily store bulletin, RadioShack 
Today, as well as our store intranet site that stores use daily 
to access news, information and required tasks. Again, we have 
already provided significant information to our stores through 
these communications channels and will continue to do so 
throughout the transition.
    All of these forms of communication emphasize to the store 
managers and sales associates the complexities of the 
transition and the coupon program. We emphasize to our 
employees the need to ask customers the right questions in 
order to make sure the consumer makes the best purchase 
decision for their particular television viewing needs. I would 
also like to mention that RadioShack also provides all of its 
training and educational materials to its dealer stores. Each 
dealer then makes its own determination as to how they are 
used.
    As we embark on the introduction of coupons and converter 
box sales, we want the Committee to understand the 
extraordinary level of the retailers' undertaking. RadioShack 
alone has 4,400 stores and more than 30,000 retail employees 
and support staff who must be trained. This is in addition to 
our independent dealer base with thousands of their own 
employees who they must separately train as well. In addition, 
no retailers' employee base is static. This means that 
RadioShack and other retailers must have a continuous loop of 
training for all new employees throughout the coupon program 
period and provide refresher courses for current employees. 
RadioShack is confident that we have the necessary systems in 
place. We will monitor our efforts, and continue to proactively 
educate our retail employee base.

                              Conclusion:

    For several years, RadioShack has committed significant 
energy to the digital transition. This year and into next, 
RadioShack's commitment will remain strong and we look forward 
to playing our part in the effort to make the transition as 
smooth as possible for all consumers. Thank you again for the 
opportunity to testify and I look forward to answering your 
questions.
                              ----------                              


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Markey. Thank you, Mr. Harris. And our final witness is 
Mark Jackson, who is the President of EchoStar Technologies 
Corporation. We welcome you, sir.

  STATEMENT OF MARK JACKSON, PRESIDENT, ECHOSTAR TECHNOLOGIES 
                   CORPORATION, ENGLEWOOD, CO

    Mr. Jackson. Thank you, Chairman Markey and Mr. Stearns. As 
you mentioned, I am the President of EchoStar Technology 
Corporation, a company that designs and markets what we believe 
are the best set top boxes and video equipment in the world. On 
behalf of EchoStar and our sister company, DISH Network, thanks 
for inviting me to discuss the digital television transition, 
and in particular our low-cost digital-to-analog converter box. 
EchoStar and DISH Network are committed to doing our part to 
make next year's digital transition a big success. DISH 
Network, as many others here, has an ongoing education campaign 
aimed at current subscribers to explain what the digital 
transition will mean to them. Among our many initiatives, we 
have aired public service announcements to DISH Network's 
roughly 14 million subscribers as part of that awareness 
campaign, so they can try to get the word out to their friends 
and neighbors and family who may not have digital equipment.
    On the equipment side of the business, EchoStar 
Technologies has developed the lowest priced coupon eligible 
converter box, the TR-40. We think that making the TR-40 
available to the public will have a very positive impact on the 
digital transition. Earlier this year, to get the word out, we 
made an announcement at the consumer electronics show that we 
would make our basic converter box available to consumers for 
about $39.99. That is one penny less than the $40 Congress 
authorized for each converter box coupon. In other words, not 
counting sales tax a consumer who obtains a government----
    Mr. Markey. Did you say your box is $39.99?
    Mr. Jackson. $39.99 retail price.
    Mr. Markey. And you get a $40 coupon?
    Mr. Jackson. So it is a penny less.
    Mr. Markey. I would go to EchoStar Technologies Corporation 
if I could to be honest with you.
    Mr. Jackson. We hope that a lot of people decide to do 
that.
    Mr. Markey. I am sorry, but that sounds like that is the 
right price.
    Mr. Jackson. So Congress made it clear its intent not to 
leave anyone behind when broadcasters go digital in February, 
2009, especially families of lesser means who rely on free, 
over the air TV for their news and information. By providing a 
digital-analog converter box at no cost to the consumer 
fundamentally, EchoStar is doing its part to bring this policy 
goal to fruition. Our announcement has generated a lot of 
excitement in the government and consumer communities, along 
with many questions. I will address one of the major questions 
now, and, of course, will answer any additional questions you 
may have after the opening statements.
    We have been asked, how is EchoStar able to offer a device 
at such a low price point and still make a good business out of 
it? Well, first of all, we specialize in low cost equipment. As 
mass producers of set top boxes with over 65 million EchoStar 
boxes sold worldwide, we bring economies of scale to this 
project. We can draw on our volume-based deals with suppliers 
and order the product at the lowest possible cost. We also know 
something about how to build converter boxes for the digital 
transition, as our British division has gone through this 
process in the U.K. This group has helped us come up with many 
useful feature, like the pass through of analog signals from 
broadcasters who might not yet have gone digital.
    Second, we are willing to subsidize the cost of the box 
where necessary to drive brand awareness for our core DISH 
business. Many of these boxes will be used in households that 
do not subscribe to DISH Network today. If people have a good 
experience with our box, they are more likely to think of us 
when they want to become a satellite TV subscriber. Finally, 
with the split of EchoStar into two separately traded public 
companies, the company I head, EchoStar Technologies, will not 
just sell DISH Network but to any and all companies and 
consumers who would like to get out technology and products. 
Therefore, we have a big incentive to get our brand name into 
as many households as possible. So these attributes, a devotion 
to low cost products, a pay TV service, and a technology 
company working in tandem make us very unique in the 
marketplace for converter boxes and allow us to offer the low 
cost product that you see today.
    We know that the Federal government is working on educating 
the public on the digital transition, and we are participating 
in this effort with respect to DISH subscribers, as I mentioned 
earlier. But when it comes to the population at large, I think 
we can all agree that nothing gets the word out in America like 
a company with something to sell, and we intend to use our 
marketing expertise to get the word out about our TR-40. 
Finally, I want to make the subcommittee aware that we have 
notified the NTIA of our intent to submit other converter boxes 
for approval. For example, we have devised means of lowering 
the cost even further so we are hopeful that the NTIA and the 
FCC will test the devices and approve them quickly as there is 
no time to lose. So in closing I look forward to your questions 
and thanks for your time.
    [The prepared statement of Mr. Jackson follows:]

                       Statement of Mark Jackson

                                Summary

     EchoStar is committed to a successful digital transition.
     EchoStar's digital-to-analog converter box (TR-40) is 
priced at $39.99, once cent less than the $40 coupon value, and 
is the lowest-cost converter box on the market.
     EchoStar specializes in low-cost video equipment and 
leverages its vendor relationships and expertise to reduce the 
cost of the TR-40.
     The TR-40 contains analog pass-through, allowing 
reception of stations that have not yet gone digital-a feature 
we included based on our experience with the digital transition 
in the U.K.
     EchoStar sees the digital converter box initiative as an 
opportunity to build our brand and perhaps add new customers; 
we are willing to subsidize the cost of converters if 
necessary.
     We will be submitting improved, lower-cost converter 
models to NTIA soon and are hopeful for a rapid approval.

                               Testimony

    Chairman Markey and members of the Subcommittee, my name is 
Mark Jackson and I am the President of EchoStar Technologies 
Corporation, a company that designs and markets what we believe 
are the highest quality, best value digital set top boxes and 
video equipment in the world. On behalf of EchoStar 
Technologies and our sister company, DISH Network, thank you 
for inviting me to discuss the digital television transition, 
and in particular our low-cost digital-to-analog converter box.
    EchoStar and DISH Network are committed to doing our part 
to make next year's digital transition a success.
    DISH Network has an ongoing education campaign aimed at 
current subscribers to explain what the digital transition will 
mean to them. Among our many initiatives, we have aired public 
service announcements to DISH Network's roughly 14 million 
subscribers as part of that awareness campaign.
    On the equipment side of the business, EchoStar 
Technologies has developed the lowest-priced coupon eligible 
converter box, the TR-40. We think that making the TR-40 
available to the public will have a very positive impact on the 
digital transition.
    Earlier this year, at the Consumer Electronics Show, 
EchoStar announced that it would make our basic converter box 
available to consumers for $39.99. That's one penny less than 
the $40 Congress authorized for each converter box coupon.
    In other words, not counting sales taxes, a consumer who 
obtains a government coupon will be able to get a converter box 
free of charge.
    Congress made clear its intent to not leave anyone behind 
when broadcasters go digital on February 19, 2009, especially 
families of lesser means who rely on free, over-the-air TV for 
their news and information. By providing digital-to-analog 
converter boxes at no cost to the consumer, EchoStar is doing 
its part to bring that policy goal to fruition.
    Our announcement has generated a lot of excitement in the 
government and consumer communities, along with many questions. 
I will address one of the major questions now and, of course, 
will answer any additional questions you might have after 
opening statements.
    We have been asked, how is EchoStar able to offer a device 
at such a low price point and still make a good business out of 
it?
    First, we specialize in low-cost equipment.
    As mass producers of set-top boxes, with over 65 million 
EchoStar boxes sold worldwide, we bring economies of scale to 
this project. We can draw on our volume-based deals with 
suppliers in order to produce a low-cost converter box.
    We also know something about how to build converters for a 
digital transition, as our British division is going through 
this process in the U.K. Those employees helped us come up with 
useful features, like the pass-through of analog signals from 
broadcasters who might not yet have gone digital.
    Second, we are willing to subsidize the cost of the box 
where necessary to drive brand awareness for our core 
businesses.
    Many of these boxes will be used in households that do not 
subscribe to DISH Network today. If people have a good 
experience with our box, they are more likely to think of us if 
and when they want to become satellite TV subscribers.
    Finally, with the recent split of EchoStar into two 
separately traded public companies, the company I head--
EchoStar Technologies Corporation--will sell not just to DISH 
Network but to any and all companies and consumers. Therefore, 
we have an incentive to get our brand name into as many 
households as possible.
    These attributes--a devotion to low-cost products, a pay-TV 
and a technology company working in tandem--make us unique in 
the marketplace for converter boxes and allow us to offer the 
low-cost product you see before you today.
    We know that the federal government is working on educating 
the public on the digital transition. We are participating in 
that effort with respect to DISH subscribers, as I mentioned 
earlier.
    But when it comes to the population at large, I think we 
can all agree that nothing gets the word out in America like a 
company with something to sell. And we intend to use our 
marketing expertise to get the word out about the TR-40.
    Finally, I want to make the Subcommittee aware that we have 
notified NTIA of our intent to submit other converter boxes for 
approval. For example, we have devised a means of lowering the 
cost even further by separating out the power components. We 
are hopeful that NTIA and the FCC will test the devices and 
approve them quickly. There is no time to lose.
    I look forward to your questions.
    Thank you.
                              ----------                              

    Mr. Markey. Thank you. Thank you, Mr. Jackson. The chair 
will recognize himself for a round of questions. So you are 
saying, Mr. Jackson, that you might even have one below $39.99?
    Mr. Jackson. We are working very hard on getting one below 
$39.99.
    Mr. Markey. That would be so great, and I can see you 
actually on TV like it was a vegematic or something, you know, 
selling it to people. If someone could come up with like the 
vegematic version of why you need to switch over and why you 
need a converter box, I think we wouldn't have a problem at 
all. I haven't seen those types of ads yet but I imagine if you 
get make a buck doing it that ad will be made. That will be the 
break through moment. I am going to go to you, Mr. Murray. You 
seem a little bit pessimistic about where we are right now just 
to be honest with you. You had a fairly high percentage of 
people who have misconceptions and confusion about what the 
digital revolution means for them and their television sets and 
whether or not----
    Mr. Murray. Mr. Chairman, it is my job to be a pessimist.
    Mr. Markey. And you are very good at it. And I want to say 
of all the witnesses you capture our attention because 
obviously our names are on the ballot and so pessimism is 
something we have to identify early so it is not manifested in 
another kind of a box, a secret ballot box, that no one knows 
how anyone voted. So my question to you is Chairman Martin said 
he had a $20 million fund for public education. If you were 
going to spend it, Mr. Murray, where would you spend that $20 
million in order to insure that the most vulnerable population 
was given the information they need to avoid a catastrophic 
February 17, 2009.
    Mr. Murray. Well, sir, we have got pretty good demographic 
information from Nielsen about who is affected here. It does 
seem to be disproportionately elderly, disproportionately 
Latino, and so that is a good place to start is find those 
communities, find a way to reach nursing homes with some scale, 
find a way to help people with a sort of geek squad kind of 
outfit that can actually--I think part of the problem here is 
people may be aware of it, they may even know where to go get 
their boxes but they get home, they get that box in their 
hands, they start messing around with their television set, and 
they are a little bit clueless about how to put the thing 
together. So I think part of it would go into materials to 
actually effectively educate people about, OK, you got a box in 
your hands, how do you actually hook it up.
    But I think really localized action plans tailored to the 
demographic information that we have from the excellent people 
at Nielsen is a good place to start. And as to whether or not I 
am overly pessimistic, I would be happy to take wagers for 
anyone who wants to bet on how this is going to go February 17.
    Mr. Markey. And you would be betting on?
    Mr. Murray. I am going to bet on there is going to be 
enough displaced consumers to light up the switchboard on both 
the House and Senate side.
    Mr. Markey. Thank you. Thank you for saying that. That is 
important testimony to hear. Let me ask you, Mr. Romeo, there 
is a letter that Mr. Dingell and I and other members of the 
subcommittee sent to the NTIA asking that consumers could 
reapply after 90 days for a coupon, and my question to you is, 
is there a technical reason why that wouldn't be possible, and 
for IBM to insure that people who do reapply in fact can 
receive the coupon and as a result of the converter box they 
would need in order for their TV set to work?
    Mr. Romeo. There is no technical reason that we couldn't 
implement the policy change if that were decided.
    Mr. Markey. OK. That is great because the NTIA agrees that 
there is no technical problem so I think we should begin to 
work towards dealing with that issue. I just heard from Mr. 
Murray, so why don't I give all the rest of you an opportunity. 
We will begin with you, Mr. Jackson, over here. What do you lie 
awake at night worrying about that could go wrong on February 
17, 2009? What is the nightmare scenario from your perspective?
    Mr. Jackson. Well, I found with great interest on session 
one a lot of the members' concerns that they have. I think they 
are well-founded. I think we share Mr. Murray's concern that 
there are a lot of issues that we have to work through. The 
biggest thing I would recommend for the government to implement 
is that perhaps a test nationwide is warranted 4 months before 
the program comes out like I would ask the broadcasters to go 
digital from one day or a few hours. I think that would 
generate a lot of awareness of what is going to happen, and 
that would be my biggest recommendation for you. I think some 
of the members' concerns about antennas not working are well 
founded, so much so I think you will see us at EchoStar set up 
a service that consumers could pay for and we will go out and 
set them up because we will have a lot of issues there.
    So I think those are our two biggest concerns but I think 
the test and get the awareness out will make consumers go to 
the retail stores. I think it will make the broadcasters be 
prepared. I think it would force a lot of people to wake up.
    Mr. Markey. Thank you, Mr. Jackson. Mr. Harris.
    Mr. Harris. Our concerns when you are really dedicated to 
customer service is what level the customer understands what 
they need, and that is the role that RadioShack fills, but we 
don't know when you ask a customer a question are you watching 
low power, they won't know so we would ask the community 
broadcasters to inform their viewing public that they are 
watching low power because that is one of our concerns. The 
other concern that I think we have covered is spikes in demand. 
No one expected 4 million coupons so we moved up a lot of 
orders. Also, when the program ends as far as merchants and 
retailers, we are concerned about inventory residue because we 
want to have the inventory covered as it is needed but after 
the program ceased how much more demand is there.
    We at RadioShack always carry legacy products so we will 
have the product quite a bit after the coupons end but we are 
just worried about residue inventory as well because that is 
substantial.
    Mr. Markey. Mr. Romeo, what is your greatest fear?
    Mr. Romeo. As someone who cares about the program's success 
obviously not leaving people outside the sphere of educating 
them so that they know that they need to act is a major concern 
for me. From a technical and parochial view having 20 million 
orders on February 16, 2009, would be a concern that it all 
comes late.
    Mr. Markey. Mr. Murray, do you think you have already 
expressed your deepest pessimistic fears for that day or do you 
have additions that you would like to make to the list?
    Mr. Murray. I do think I have fully expressed myself, Mr. 
Chairman.
    Mr. Markey. Thank you. I appreciate it. Mr. Rehr, how about 
you at the broadcasters, what is your nightmare scenario?
    Mr. Rehr. I scribbled down 5. Number 1, if our program 
works the way we envision it, we could run out of coupons and 
we will need to come back to Congress and the FCC and the NTIA 
for additional funds. Number 2, that senior citizens who are 
difficult to reach, we somehow won't be able to touch them and 
we will miss some of them. Number 3, we will have some isolated 
antenna issues although we will be announcing soon a 
partnership with the Consumer Electronics Association to insure 
that people understand the antennas that they will need to make 
the digital transition successful, and we want to applaud CEA 
for all their great work on that end.
    Number 4, technical issues, snow, heavy rain, sleet, fog, 
maybe a lack of engineers to do the final conversions the day 
before. And then number 5----
    Mr. Markey. Does that go over to Mr. Jackson's 
recommendation that we have like a 1-day trial 4 months in 
advance just so everyone can experience in some form what might 
happen 4 months later permanently?
    Mr. Rehr. Well, we actually have a thousand plus stations 
that are running analog and digital systems today. These are 
stations that are going to just make the switch over, and I am 
not quite sure how many they are that has to do with channel 
selection and getting to a different channel, but if we can 
minimize those through the FCC allocation of channels that 
would be good. And then finally number 5, since my cell phone 
is on all my business cards, I personally worry that I will be 
held responsible by you and every other member of the 
committee. I am just kidding.
    Mr. Markey. No, you are actually dead on that. That is a 
given. Bipartisanship at its best.
    Mr. Rehr. That is right. We at the NAB take this extremely 
seriously and I take this extremely personal.
    Mr. Markey. Mr. McSlarrow.
    Mr. McSlarrow. Well, I have now decided to put David's cell 
phone on my card so I have taken care of my biggest problem. I 
think it is the same thing that we have been talking about 
before. I worry that despite great efforts across the board 
that the most sophisticated, wide ranging consumer education 
campaign in the world is still going to miss people, and it 
just is. And obviously we need to narrow that pool to the 
smallest possible pool we can but there is going to be some 
disruption.
    And the second point that has been made earlier even if--
and I think we are well on our way to get the coupon program to 
get the boxes out there, even if all that works seamlessly we 
are basically talking about a universe of people who either 
don't or chose not to have boxes in their home, and this is a 
new thing and hooking them up, and someone mentioned the geek 
squad, but somehow there is that last little step to actually 
making the box work that I am not sure we are completely on top 
of and we will have to think through.
    Mr. Markey. Would you recommend for February 17 that like 
on election day we all have these get out the vote operations 
that every one of the entities that is here on quadruple alert 
and that everyone is ready to go because as you are saying, Mr. 
McSlarrow, perhaps there are inevitable problems that are going 
to be there and that we should have almost like a D day like 
operation ready to go to deal with what is left over. Do you 
think that is advisable?
    Mr. McSlarrow. I do. It is a lot like a political campaign 
with the advantage you don't actually have somebody on the 
other side pushing back. If we are all rowing in the same 
direction we should be able to do it. I think we ought to treat 
it with the seriousness with which it deserves, and I think we 
can do it and we are off to a good start, but particularly when 
you think through the elections coming up here there is going 
to be a 3- or 4-month period of time where no one is focused on 
the DTV transition. It is all about the election, and after 
that period to February is sort of the forced march.
    Mr. Markey. And, Mr. Bruno, your nightmare scenario?
    Mr. Bruno. Yes, sir. Mr. Chairman, our nightmare is not 
going to start on February 17 of '09. Our nightmare will start 
5 days from now when those coupons are passed out. I want to 
try to explain something as easily as I can. There are 3 types 
of boxes. There is the bad box that is digital only. When you 
buy that box and you bring it home and you plug it in, you will 
lose 80 percent of your transmission, and you will say, well, 
gee, I don't get this channel anymore, I don't get that 
channel. So you go back to the retailer, you turn it in, big 
mess. It is confusing. It is very, very confusing for the 
consumer. The other box that we have heard about--both of these 
boxes, by the way, are not compliant with the All Channel 
Receiver Act. The other box we call a user hostile box, and 
that is because----
    Mr. Markey. The user----
    Mr. Bruno. User hostile is what we call it, and here is 
why. You take this box home with what we have been hearing all 
day today with a pass through. You plug the box in and 
hopefully you can get it right because there are a lot of 
wires.
    Mr. Markey. Which is worse, bad or user hostile?
    Mr. Bruno. The bad box blocks out all analog. The user 
hostile box passed through analog. Both are not compliant with 
the All Channel Receiver Act. Now when you use the user hostile 
box and you plug you in, you flick through your channels and 
you get analog but you go to Channel 3 typically on these 
boxes, and then you get another remote that came with the box 
and now you have to flick around and try to see all your 
digital channels on Channel 3, and if you want to plug in a VCR 
or a DVD recorder or something else, I don't think you can. I 
haven't tried it yet. I am fairly technical but I don't think 
you can do this.
    Now the boxes that aren't approved, the good boxes, the 
user friendly boxes, pass analog and digital, and that is why 
we need these boxes available to the consumer. They are not 
that expensive. For around $100 you can buy a user friendly box 
with analog and digital that has a DVD recorder in it, so we 
are not talking about the manufacturers----
    Mr. Markey. Do you think RadioShack is going to be selling 
bad boxes and user hostile boxes?
    Mr. Bruno. Sir, they are bad to us because we lose our 
viewers. We don't have cable carriage rights for the most part, 
and we have heard today that Nielsen says there is 11 percent 
of the population that watches over the air signals. Every time 
one of these non-compliant boxes are being sold, and remember 
37 of them have been approved and only 4 have the user hostile 
analog pass through. Every time one of these boxes are plugged 
in, we lose a viewer. We are out of business over this program, 
7,212 television stations. Mr. Chairman, we need help.
    Mr. Markey. Help is on the way. So my time has expired, and 
I will recognize the ranking member for as much time as he may 
consume.
    Mr. Stearns. Thank you, Mr. Chairman. Mr. Bruno, I 
understand what you are saying but I think let me just ask Mr. 
Harris and Mr. Jackson, don't viewers using over the air 
antennas have several options regarding how to continue 
watching analog low power stations, and do you think 
manufacturers and retailers will simply respond to the demands 
that they were talking about?
    Mr. Jackson. Well, we have a couple of conflicts here. 
First of all, one of the things that is talked about is that we 
don't have the feature that we would like. Just so you 
understand, the rules to be coupon eligible prohibit us from 
having that functionality. If we added that functionality it 
would not pass the FCC's testing to make us coupon eligible. So 
the other thing is that in the user hostile method, we will 
call it, we try to make it as easy as possible for consumers to 
be able to look at these low power stations, you basically just 
turn off the box and the signal gets passed through. You pick 
up your TV remote. You would have to do that, and channel up or 
down to get those channels, but we have tried to make it so 
that they can't be able to participate and not get left behind.
    Mr. Stearns. Mr. Harris, anything you want to add?
    Mr. Harris. Yeah, I agree with Mr. Jackson, and the note 
that even if a box does not have a pass through it is a pretty 
simple device of just using a splitter and a coaxial cable to 
split the signal before it gets to the box. We have on our web 
site several diagrams that are really consumer friendly plus 
some very good tools that are on their web site as well as 
retailers web sites to explain how to do this. So besides a 
pass through it is a simple splitter and if someone doesn't 
have the proper hookups in the box----
    Mr. Stearns. What is a splitter? What is a simple splitter?
    Mr. Harris. A simple splitter--in fact, I think we have one 
here. We happen to have a sample here.
    Mr. Rehr. I am sorry. This is a whole kit that we had----
    Mr. Stearns. Well, that is more than a splitter though. I 
mean that is a little bit more----
    Mr. Harris. The splitter is just right here.
    Mr. Stearns. And we all go to RadioShack to buy the 
splitter. We understand that.
    Mr. Harris. So it is a splitter that splits the signal 
before it gets to the box and lets it really pass through the 
box so it is like a pass through but it is a simple about that 
big. It is all you need. Now if a customer doesn't have a box 
that has composite inputs and RF, if their TV is over 15 years 
old, they may not have both inputs so if they don't have that 
they can use a splitter, the coax, and a B switch. It is still 
a very low price situation, pretty easy to install. We intend 
to explain it as other retailers can.
    Mr. Stearns. Mr. Murray indicates there are going to be 
lots of people that will not be able to follow these directions 
but isn't it simply if you are not dealing with low power you 
are just putting together your box on your analog TV. Isn't it 
pretty much like you just hook one end of the box up to the 
antenna and the other up to the television?
    Mr. Harris. Yeah, a very simple hook up.
    Mr. Stearns. It is just like hooking a toaster up.
    Mr. Harris. It is very simple.
    Mr. Stearns. So Mr. Murray has created this impression that 
when they get this box it is going to be very difficult for 
them to figure out how to do that. I assume most people 
understand that. You just put the box between the antenna and 
the television. It is that simple.
    Mr. Harris. It is very simple.
    Mr. Stearns. That is pretty much simple.
    Mr. Harris. Yes, it is.
    Mr. Stearns. Let me ask a quick question. We have heard, 
and I think Chairman Markey has made a good point in asking 
what the down side, what is your biggest fear, so to speak, but 
I guess the question is, I will ask all of you, do you have all 
the incentives that we provided to you and all the resources to 
take care of those problems you mentioned, and I will just 
start to my right down. Just yes or no, and if you don't have 
them just very briefly say what you want.
    Mr. Jackson. I don't know what we are missing. I think we 
are going to see things that we just don't anticipate when it 
comes----
    Mr. Stearns. But right now you say you have the resources 
and the incentives to do it?
    Mr. Jackson. Under the plan that is there, we can get the 
job done.
    Mr. Stearns. OK. Mr. Harris.
    Mr. Harris. Yes, I would have to concur with that. Also, I 
will have to say that the NTIA, IBM, and CLC have been 
extremely accessible and available even on an hour notice to 
us. We have been very happy with that. Also, it wasn't 
mentioned before, NTIA put out a very good welcome dealer kit 
that is extremely strong. It has video and has brochures, so I 
have all the tools that we need to make this successful.
    Mr. Stearns. Mr. Romeo.
    Mr. Romeo. Yes, I believe we have everything we need to 
implement the program successfully.
    Mr. Stearns. Mr. Murray, you hear all these people saying 
they have all the incentives and resources so what do you 
think? Do you think there is----
    Mr. Murray. Well, at Consumer Reports we have actually 
spent a lot of time trying to figure out how can we provide 
real information, not just at the high level but how can you 
actually get into the back of your television set and hook this 
stuff up for most consumers. And I will tell you it is 
difficult to do.
    Mr. Stearns. I don't think it is that complicated. You 
don't have to get into the back of the TV.
    Mr. Murray. Sir, that is why you are a member of Congress 
and----
    Mr. Stearns. Even my son knows how to hook up a cable to 
the television, and he knows how to just screw it on.
    Mr. Murray. Right, but I mean if you look at how many 
millions of consumers in the United States VCRs are still 
flashing 12:00. Mine is. I don't know about yours.
    Mr. Stearns. Yeah, but I am capable of stopping it. I am 
just not interested in stopping it.
    Mr. Murray. So the materials that we have tried to produce, 
we have got some good things on line at hearusnow.org. Consumer 
Reports is doing more materials but it is really difficult to 
do this in a drill down fashion that actually tells people here 
is how you are going to meet the complications of your 
individual television set, and I understand it seems like it is 
just this wire to that wire, but for a lot of people who aren't 
accustomed to this wire to that wire it is a little more drama 
than this. And they didn't ask for it. That is the problem.
    Mr. Stearns. You keep saying this is sort of a government 
mandate and no one asked for it, and you say it is a bus coming 
down the road and they are getting ready to see it and they 
don't know what to do. I think that is a pretty dramatic 
draconian example of what we have. I mean this is like your son 
saying I don't want to go to high school, it is a mandate, Dad. 
And I say, well, if you go to high school you are going to make 
a lot more money, you will be able to go to college and all the 
benefits. And if we sat here without this February 17, '09 the 
benefits would not occur, not just dealing with third 
generation and first responders. Under the old law broadcasters 
are required to convert to digital under this formula, and it 
turns out that there are 50 markets that would not actually be 
able to conform and ultimately would not be able to move ever 
in this position.
    So to use it as a mandate it is really like my son who said 
why do I have to go to high school and if you go to high school 
because then you get more money and a satisfying life, and I 
say to the constituents this is not a mandate, this is an 
opportunity to get and auction off more of the spectrum and so 
much benefits, a cornucopia of benefits.
    Mr. Murray. But do you think those benefits were clear to 
consumers? I am not so sure that those benefits are clear to 
most consumers. I think most people, this will come down the 
pike at them and maybe they will get a better television set 
but most people know, they get TV today, they are pretty happy 
with it, and they don't really want to have to go to the store 
to do anything else to continue to receive television tomorrow.
    Mr. Stearns. Dr. Rehr, let me just ask you, do you have all 
the incentives and research to make this successful?
    Mr. Rehr. Yes, however, it would be nice if we could fully 
use the government's resources to insure we are educating 
people. What do I mean by that? We are glad that we are 
putting--that the FCC is going to put posters up in post 
offices. If we are sending checks to senior citizens, veterans, 
if there is a way that we could do additional piece of 
information in there about the DTV transition so we don't miss 
anybody. If we could have the President or the presidency's 
bulley pulpit on the DTV transition, that could be huge in 
order to make sure Americans understand this.
    The one area of need I think going down the pike is perhaps 
having a phone center which people could call and talk to a 
real live human being about a problem either in English or 
Spanish. That is immensely costly. We at the NAB have committed 
tens of millions of dollars of our trade association resources 
towards this but that would be--you know, if I had a wish list 
that would be an additional wish list. Let me also say that 
unlike my colleague, I think when people see the crystal clear 
picture, the amazing audio quality, the fact that there will be 
multi-cast channels and more programs and more services they go 
wow.
    Mr. Stearns. Yeah, I agree. Mr. McSlarrow, resources and 
incentives you have in place?
    Mr. McSlarrow. I think largely yes. One exception, that is 
the FCC has before proceeding to do what this committee 
actually did which is have a small system exemption for very 
small operators to the dual carriage requirement. They need to 
get on with that, get it done, and I think what we need most 
now is certainty. We have a plan. We don't have much time. Let 
us just go execute.
    Mr. Stearns. Mr. Bruno.
    Mr. Bruno. Yes. Thank you for asking that question. I 
appreciate that. The NTIA has set aside $65 million for 
translators in towns less than 20,000 people. Full powers as we 
all know spent 10 years on this transition. Believe it or not, 
class A stations and low power stations are a progressive group 
of folks. We actually want to transition to digital but we find 
ourselves being squeezed by this time line so what we need for 
the class A and the low power industry, we need the NTIA to be 
provided with additional funds so we can quickly build out our 
digital signals.
    Mr. Stearns. $65 million is not a help, enough help?
    Mr. Bruno. It doesn't go to us, sir. It is for the 
translators with less than 20,000 people in their coverage 
area.
    Mr. Stearns. But isn't it true that we exempted low power 
from the transition originally because you folks requested it?
    Mr. Bruno. No, I don't recall that, sir. No.
    Mr. Stearns. OK. OK. I would just conclude, Mr. Chairman, 
and say all of us went through the Y2K discussion in which we 
were worried, immensely worried, about everything possibly 
happening, and some of this discussion was very helpful. We did 
have a presidential task force for that. You folks are the 
presidential task force. And we think based upon the incentives 
and the resources that are available we should be successful. 
And I am optimistic and I think the benefits to the consumer 
are so immense that members of Congress and others have to 
explain that to them so that they realize it takes a little 
effort to get good things in life. You can't get them for free 
and you have to learn to be able to hook up your box from Echo 
and save a penny and do it. So I thank you, Mr. Chairman.
    Mr. Markey. I thank the gentleman, and I will recognize 
myself for some additional questions. I first wanted to let you 
each know that we are going to have each one of you back here 
on February 17, 2009. There is a hearing that I am announcing 
is scheduled for that date, and we are going to ask you all to 
come back and sit here as we are on the transition day, and so 
I just want you to clear the--a lot of times you don't get 
enough notice so I just want you all to know that on that day 
we will see quite clearly what the holes are in the system.
    So let me thank you. It was I think a highly illuminating 
hearing. I remember back years ago my old buddy, Mark Fowler, 
when he was the chairman of the Federal Communications 
Commission back in the 1980's, he used to say that really a 
television is nothing more than a toaster with pictures. And as 
the public tries to figure out how to attach with splitters 
this converter box to their TV it will very much be like trying 
to attach a toaster to a TV set turning it into a toaster with 
pictures. And I don't know who will be toast that day. That 
still remains to be seen, but I do know that the most 
vulnerable part of the American population are the minorities, 
are the senior citizens, and are poor people, and there is a 
very heavy responsibility which all of us share to insure that 
there is the minimal amount humanly possible of disruption to 
their lives that occurs on that day.
    And if there are holes that there is a program in place on 
that day that will insure that everything is rectified in a 
very brief period of time after February 17. But our goal is, 
as it is at RadioShack, zero defects. So we want to put in 
place the best plan that we can and execute it. Life is 20 
percent concept, 80 percent execution. So the execution of this 
plan will ultimately determine how effective respectively all 
of the planning is viewed. And I just want to finish just by 
again thanking you, Mr. Harris, and RadioShack for removing the 
remaining analog inventory from your store shelves.
    Mr. Harris. You are very welcome.
    Mr. Markey. And I would urge all of the other retail stores 
across the country to do the same. I think it would be in the 
public interest if they did so, and we are going to be 
continuing to monitor that situation. So with the thanks of the 
committee this hearing is adjourned. Thank you.
    [Whereupon, at 2:30 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:] 

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