[Senate Hearing 110-1168]
[From the U.S. Government Publishing Office]
S. Hrg. 110-1168
PREPARING CONSUMERS FOR THE DIGITAL TELEVISION TRANSITION
=======================================================================
HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
JULY 26, 2007
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
DANIEL K. INOUYE, Hawaii, Chairman
JOHN D. ROCKEFELLER IV, West TED STEVENS, Alaska, Vice Chairman
Virginia JOHN McCAIN, Arizona
JOHN F. KERRY, Massachusetts TRENT LOTT, Mississippi
BYRON L. DORGAN, North Dakota KAY BAILEY HUTCHISON, Texas
BARBARA BOXER, California OLYMPIA J. SNOWE, Maine
BILL NELSON, Florida GORDON H. SMITH, Oregon
MARIA CANTWELL, Washington JOHN ENSIGN, Nevada
FRANK R. LAUTENBERG, New Jersey JOHN E. SUNUNU, New Hampshire
MARK PRYOR, Arkansas JIM DeMINT, South Carolina
THOMAS R. CARPER, Delaware DAVID VITTER, Louisiana
CLAIRE McCASKILL, Missouri JOHN THUNE, South Dakota
AMY KLOBUCHAR, Minnesota
Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
Lila Harper Helms, Democratic Deputy Staff Director and Policy Director
Christine D. Kurth, Republican Staff Director and General Counsel
Kenneth R. Nahigian, Republican Deputy Staff Director and Chief Counsel
C O N T E N T S
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Page
Hearing held on July 26, 2007.................................... 1
Statement of Senator Cantwell.................................... 28
Statement of Senator Inouye...................................... 1
Statement of Senator Klobuchar................................... 21
Statement of Senator McCaskill................................... 23
Statement of Senator Smith....................................... 31
Statement of Senator Snowe....................................... 26
Statement of Senator Stevens..................................... 15
Prepared statement........................................... 7
Statement of Senator Sununu...................................... 18
Statement of Senator Thune....................................... 33
Witnesses
Barnett, Nelda, Member, Board of Directors, AARP................. 37
Prepared statement........................................... 38
Kneuer, Hon. John M.R., Kneuer, Assistant Secretary for
Communications and Information, National Telecommunications and
Information Administration, U.S. Department of Commerce........ 2
Prepared statement........................................... 4
Nogales, Alex, President and CEO, National Hispanic Media
Coalition...................................................... 41
Prepared statement........................................... 43
Seidel, Catherine W., Chief, Consumer and Governmental Affairs
Bureau, Federal Communications Commission...................... 7
Prepared statement........................................... 11
Zirkin, Nancy M., Vice President, Director of Public Policy,
Leadership Conference on Civil Rights (LCCR)................... 45
Prepared statement........................................... 46
Appendix
Lautenberg, Hon. Frank R., U.S. Senator from New Jersey, prepared
statement...................................................... 51
Letter, dated July 26, 2007 to Hon. Daniel K. Inouye and Hon. Ted
Stevens, from Gary Shapiro, President and CEO, Consumer
Electronics Association........................................ 55
Letter, dated August 30, 2007 to Hon. Claire McCaskill from John
M.R. Kneuer, Assistant Secretary for Communications and
Information, National Telecommunications and Information
Administration, U.S. Department of Commerce.................... 51
Response to written questions submitted by Hon. Frank R.
Lautenberg to:
Hon. John M.R. Kneuer........................................ 56
Catherine W. Seidel.......................................... 57
PREPARING CONSUMERS FOR THE DIGITAL TELEVISION TRANSITION
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THURSDAY, JULY 26, 2007
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 10 a.m. in room
SR-253, Russell Senate Office Building, Hon. Daniel K. Inouye,
Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. DANIEL K. INOUYE,
U.S. SENATOR FROM HAWAII
The Chairman. Between 15 and 21 million households rely
exclusively on over-the-air television. Many more have second
and third over-the-air sets in their homes.
In February 2009, these Americans could see their TVs go
dark, disconnecting them from the news, public safety
announcements and their community, unless they get a converter
box and attach it to their television. Yet, far too few of
these consumers know that the transition from current analog TV
technology to digital TV is underway.
An article in the--last month's National Journal stated
that only 10 percent of our citizens know that DTV transition
is slated for 2009. Many stakeholders in industry, in
government, and in our communities are engaged in well-intended
efforts to publicize and promote the upcoming transition. To
date, however, their efforts have yielded too few results. We
need to get the digital transition right.
Consumers stand to benefit mightily from the DTV
transition. They can expect sharper pictures, served up with
CD-quality sound that provides a dramatically improved viewing
experience. DTV also makes possible multicasting. This could
mean whole new channels devoted to local news, weather,
children's fare, and non-English-language programming. Along
with these improvements, public safety will receive unbroken
slices of our airwaves to enable interoperable communications
and improve information-sharing.
Managing the transition is, by no means, easy. We are now
nearly 18 months away. We have seen working groups,
conferences, tip sheets, and a converter box coupon plan. What
we do not have yet is a public that is aware that digital TV
and--transition is taking place.
The time to act is now, before the digital transition
devolves into a digital disaster. We must work together to
ensure that no citizen is left behind in the transition to
digital television.
Today, we have a panel of very knowledgeable and
distinguished men and women. Our first panel is the Assistant
Secretary of Commerce, for Communications and Information of
the National Telecommunications Information Administration of
the Department of Commerce, the Honorable John Kneuer; and the
Chief of the Consumer and Governmental Affairs Bureau of the
Federal Communications Commission, Ms. Cathy Seidel.
Secretary Kneuer, welcome, sir.
STATEMENT OF HON. JOHN M.R. KNEUER, ASSISTANT
SECRETARY FOR COMMUNICATIONS AND INFORMATION
NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION,
U.S. DEPARTMENT OF COMMERCE
Mr. Kneuer. Thank you, Mr. Chairman. Thanks for having me,
and for this opportunity to testify before you.
As you know, NTIA's traditional responsibilities have
expanded considerably with the enactment of the Deficit
Reduction Act of 2005. Specifically, the Act charged NTIA to
administer a number of new one-time programs to be funded from
the anticipated spectrum auction proceeds associated with the
transition to digital television. These programs include our
recently announced Public Safety Interoperable Communications
Program, as well as two important initiatives that are directly
germane to the digital TV transition.
First, Congress directed NTIA to implement a Digital-to-
Analog Converter Box Program, provide financial assistance to
those consumers that wish to continue to receive broadcast
programming over-the-air, using existing analog-only
televisions.
Second, to ensure that viewers in primarily rural and
remote areas who rely on LPTV or television translator stations
are able to continue to receive these services, Congress
authorized NTIA to provide funding to assist licensees of those
stations with the transition.
Under the Digital-to-Analog Converter Box Program, eligible
U.S. households may obtain up to two coupons of $40 each to be
applied toward the purchase of a digital-to-analog converter
box. The Act authorizes NTIA to use up to $990 million to carry
out this program, including up to $100 million for program
administration, $5 million of which will be used for consumer
education. It authorizes an additional $510 million in
contingent funding, to be available upon 60 days notice to the
Congress.
To meet the mandated deadlines to start and complete this
coupon program, we published a request for proposals in March
to procure end-to-end services to implement and administer the
coupon program, including the consumer education and
communications component. I'm happy to report, this procurement
process is well underway. We expect to make an award by the
middle of this month.
To make the most effective use of the $5 million available
for consumer education, NTIA has focused its consumer education
resources on population groups most likely to lose television
service as a result of the transition. We'll obtain optimum
leverage from those dollars by maximizing our engagement with
the diverse range of stakeholders through partnerships. Indeed,
we received support from many partners in the private sector
who are working to help inform consumers of the digital
transition.
Over 120 business, trade, and industry groups, as well as
grassroots and membership organizations that share an interest
in the transition, came together earlier this year to charter
the Digital Television Transition Coalition. NTIA has been
working with the coalition since its inception. To reach those
most likely to be affected by the digital transition, NTIA has
identified five target groups for its consumer education
efforts: seniors, the economically disadvantaged, rural
residents, people with disabilities, and minorities.
With respect to seniors, NTIA is working closely with the
AARP to ensure that the coupon program is highlighted in their
publications and online newsletters. We're also reaching out to
establish partnerships with the Administration on Aging, the
National Council on Aging, SeniorNet, and other organizations,
to ensure that seniors are not caught by surprise by the
digital transition.
We're expanding our outreach efforts into minority and
rural communities. We'll work with the U.S. Hispanic Chamber of
Commerce, the U.S. Black Chamber of Commerce. NTIA is also
partnering with the Southeast Asian Resource Action Center to
translate and distribute coupon program information in Chinese,
Korean, Vietnamese, and Filipino communities. We're pursuing
partnerships with the Koahnic Broadcast Corporation for the
dissemination of coupon information to Alaskan native villages,
as well as Native Voice One to reach tribal reservations
through radio communications.
We've printed our brochures in both English and Spanish to
explain the digital transition and the options available to
households, depending on the type of television service. We've
distributed copies of those brochures to every member of the
House and Senate, community organizations, constituency groups,
industry stakeholders.
We've established a toll-free number, 1-888-DTV-2009. This
is currently in English, Spanish, and with TTY capability for
people who are hearing-impaired. In addition to the toll-free
number, we're working with the American Association of People
with Disabilities, we maintain our website, Consumer
Information Accessible Form, to ensure disabled Americans are
made aware of the transition.
In addition to the private sector partnerships I've
discussed, we are also leveraging our relationships with other
governmental agencies to extend the reach of our message. In
particular, we will work with agencies that target economically
disadvantaged Americans. We're currently in discussions with
the IRS, the U.S. Department of Agriculture Food Stamp Program,
Social Security Administration, Department of Veterans Affairs,
GSA, and others.
As I mentioned at the outset, Title III also directed NTIA
to implement and administer programs related to the digital
television transition with regard to eligible low-power
television and television translator stations, to obtain
equipment to enable them to convert the incoming digital
signals into broadcast format, and to ultimately convert to the
digital signals. We've been working aggressively to effectuate
the statute's requirements to begin the program authorized
under the statute, and recently posted information about these
programs on our website.
Thank you, again, for the opportunity to testify, and I'll
certainly look forward to your questions.
[The prepared statement of Mr. Kneuer follows:]
Prepared Statement of Hon. John M.R. Kneuer, Assistant Secretary for
Communications and Information, National Telecommunications and
Information Administration, U.S. Department of Commerce
Mr. Chairman and Members of the Committee, thank you for this
opportunity to testify before you today. As you know, NTIA is
responsible for the development and implementation of United States
national policies related to domestic and international
telecommunications and for the effective use of Federal radio spectrum
and state-of-art telecommunications research, engineering, and
planning. NTIA also administers the provision of grants in support of
the equipment needs of public broadcasting stations.
NTIA's responsibilities have expanded considerably with the
enactment of the Deficit Reduction Act of 2005. Specifically, the Act
charged NTIA to administer a number of new one-time programs to be
funded from anticipated spectrum auction proceeds associated with the
transition to digital television broadcasts through the Digital
Television Transition and Public Safety Fund. These programs include
our recently announced Public Safety Interoperable Communications
(PSIC) Grant Program and two other important initiatives that are
directly germane to the digital television transition that is the
subject of today's hearing: (1) the Digital-to-Analog Converter Box
Coupon Program, and (2) the Low-Power Television (LPTV) and translator
digital conversion and upgrade programs. My testimony today will focus
chiefly on our activities with respect to the Converter Box Coupon
Program, which will most immediately help to prepare consumers for the
transition. However, before closing, I would also like briefly to
discuss our work in the LPTV and translator areas.
NTIA's Role in the Digital-to-Analog Transition
Title III of the Deficit Reduction Act of 2005 (the Act) directed
the Federal Communications Commission (FCC) to require full-power
television stations to cease analog broadcasting on February 17, 2009.
To avoid any unnecessary service disruptions for American television
viewers during the conversion from analog to digital television
broadcasting, the Act established, and directed NTIA to administer, two
sets of programs. As I will explain, these programs are intended to
bridge the gaps between the analog and digital platforms that will
continue to exist for some period of time.
First, Congress directed NTIA to implement a Digital-to-Analog
Converter Box Coupon Program to provide financial assistance to those
consumers that wish to continue receiving broadcast programming over-
the-air using analog-only televisions not connected to cable or
satellite service. Second, to ensure that viewers in primarily rural
and remote areas who rely on LPTV or television translator stations are
able to continue to receive these services, Congress authorized NTIA to
provide funding to assist licensees of these stations with obtaining
equipment to (A) enable them to convert the incoming digital signal of
their corresponding full-power station to analog format for
rebroadcast; and (B) to ultimately convert the LPTV and translator
facilities themselves to broadcast in digital format.
The Digital-to-Analog Converter Box Coupon Program
Under the Digital-to-Analog Converter Box Coupon Program, eligible
U.S. households may obtain up to two coupons of $40 each to be applied
toward the purchase of digital-to-analog converter boxes that will
convert digital signals for display on analog television sets. The Act
authorizes NTIA to use up to $990 million to carry out the program,
including up to $100 million for program administration, $5 million of
this for consumer education. It also authorizes an additional $510
million in contingent funding to be available upon 60 days advance
notice to Congress.
Activities to Date
NTIA has made substantial progress in fulfilling its requirements
under the law to ensure that coupons for converter boxes will be
available to U.S. households upon request beginning January 1, 2008.
Because the auction receipts that fund this program are not anticipated
to be available until after this date, NTIA entered into a Borrowing
Agreement in May 2006 with the Department of Treasury to borrow funds
necessary to implement the Coupon Program. NTIA then initiated a
rulemaking seeking comments from interested parties on the most
efficient and effective way to administer the program. In March of this
year, NTIA published regulations that set forth the framework for the
Coupon Program and provide guidance to consumers, converter box
manufacturers, and retailers. The regulations outline requirements
related to household eligibility, converter box technical
specifications, and retailer certification. Shortly after releasing the
rules, NTIA held its first public meeting to discuss various aspects of
the Coupon Program.
To meet the mandated deadlines to start and complete the Coupon
Program, NTIA published a Request for Proposals (RFP) in March of this
year to procure end-to-end services to implement and administer the
Coupon Program. The procurement covers three broad, functional areas:
(1) consumer education and communications; (2) systems processing
(e.g., determining consumer eligibility, distributing and activating
coupons, certifying retailers, and providing training materials); and
(3) financial processing (e.g., administering the processes to
authorize coupons for redemption and ensure payment to retailers, and
performing independent auditing). I am pleased to report that this
procurement process is well underway, and we expect to make an award by
mid-August.
NTIA also continues to collaborate with the FCC to ensure that the
converter boxes offered to consumers under this program meet our
technical specifications. In that regard, NTIA and the FCC entered into
a Memorandum of Understanding pursuant to which the Commission will
provide verification and testing services for the converter boxes.
Moreover, in May of this year, NTIA issued a Notice that provides
guidance to converter box manufacturers regarding the submission of
test results and sample equipment. To accommodate the numerous
inquiries that the agency receives daily from consumers, manufacturers
and retailers, NTIA maintains and continuously updates a ``Frequently
Asked Questions'' section on our website.
Consumer Education Initiatives
As the title of this hearing reflects, it is essential that
consumers be prepared for the digital television transition. The
success of the transition will be judged by how smoothly and
efficiently it occurs, and this will depend to a critical extent on
effective outreach to consumers. Consumers will need to know the
options available to them to participate in the transition. For
example, consumers who receive cable, satellite or other pay-television
services to view television will not need converter boxes. Likewise,
consumers that have televisions equipped with digital receivers will
not need a converter box. Neither of these groups will need to apply
for a coupon as part of NTIA's program. Likewise, consumers may choose
to effect the transition on their own, by subscribing to cable or
satellite, buying a digital television, or buying a converter box with
additional functionality, such as a DVD.
As I mentioned earlier, the Act allotted NTIA $5 million for
consumer education. To make most effective use of these funds, NTIA
will focus its consumer education resources on population groups most
likely to lose all television service as a result of the transition,
and we will obtain optimum leverage from those dollars by maximizing
the engagement of a diverse range of stakeholders through partnerships.
In this regard, I would like to acknowledge the support we have
received from our many partners in the private-sector who have stepped
up to the plate to help inform consumers of the digital transition.
Over 120 business, trade and industry groups, as well as grass
roots and membership organizations that share an interest in a smooth
transition, came together earlier this year to charter the Digital
Television Transition Coalition to ensure that no consumer is left
without broadcast television due to a lack of information about the
transition. The Coalition will use marketing and public education
strategies including paid and earned media placements to distribute
consistent, unified, and accurate information about the transition.
NTIA will work with the Coalition to coordinate our messages. In
particular, we encourage the industry to get the message out about the
benefits of the digital transition. For example, consumers should be
made aware that digital transmission is a more efficient technology
that will allow broadcasters to provide a better viewing experience and
give consumers more choices while using less radio spectrum.
We also understand that consumer education must be made at an
optimal time to afford consumers sufficient time to prepare for the
transition. To reach those most likely to be affected by the digital
transition, NTIA has identified five target groups for its consumer
education efforts: (1) seniors: (2) the economically disadvantaged; (3)
rural residents; (4) people with disabilities; and (5) minorities.
With respect to seniors, NTIA is working closely with the AARP to
ensure that the Coupon Program is highlighted in their publications and
online newsletters. AARP The Magazine reaches 22.5 million of the
organization's members and AARP Segunda Jeventud reaches another
400,000 members. NTIA is also working with the American Library
Association to distribute posters and coupon applications to
participating libraries, and to train librarians to help seniors fill
out coupon applications. NTIA has also reached out to establish
partnerships with the Administration on Aging, the National Council on
Aging, SeniorNet, and other organizations to ensure that seniors are
not caught by surprise by the digital transition. During the recent
National Cable and Telecommunications Association convention, I
participated on a panel hosted by Retirement Living TV, available via
cable to 24 million households, for the purpose of raising awareness
among seniors of the upcoming digital transition.
NTIA is also expanding its outreach efforts into minority and rural
communities. We will work with the U.S. Hispanic Chamber of Commerce
and the U.S. Black Chamber of Commerce to disseminate coupon
application information nationwide through retailers in predominantly
Hispanic and African-American neighborhoods. NTIA is also partnering
with Southeast Asia Resource Action Center to translate and distribute
coupon program information in Chinese, Korean, Vietnamese and Filipino
communities. We are pursuing partnership opportunities with Koahnic
Broadcast Corporation for dissemination of coupon information to
Alaskan Native villages as well as Native Voice One to reach tribal
reservations through radio communications. In addition, NTIA will
collaborate with the Appalachian Regional Commission to distribute
information packets about the transition to 70 councils of government
and local development districts representing 23 million people in 410
counties (42 percent rural).
Moreover, we have printed brochures in both English and Spanish to
explain the digital transition and the options available to households
depending on the type of television service, and we have distributed
copies of these brochures to every member of the House and Senate,
community organizations, constituency groups, and industry
stakeholders. We have also established a toll free number, 1-888-DTV-
2009, to assist consumers who do not have Internet access, are hearing
impaired, or who simply prefer to receive information about the Coupon
Program over the telephone. In addition to this toll-free number, NTIA
is working with the American Association of People with Disabilities
(AAPD), and we maintain our website and consumer information in
accessible form to ensure disabled Americans are made aware of the
transition.
The NTIA staff will also continue to participate in meetings and
conferences over the next 2 years to spread the word about the
transition as well as the Coupon Program through events such as the
upcoming White House Faith-Based and Community Initiatives Conference
in August and the AARP convention in September. We will be hosting a
public meeting on September 25, 2007, to discuss progress in educating
the public about the Coupon Program. This public meeting will focus on
our partnerships in the digital transition and will feature two CEO-
level panels from the impacted industries. The public meeting will also
include an expo in the Department of Commerce lobby which will include
displays form over a dozen companies and organizations featuring
products and services to enable consumers to make a smooth digital
transition. We invite you to attend that meeting and welcome any
suggestions or concerns you have about the Coupon Program.
Government Partnerships
In addition to the private sector partnerships discussed above,
NTIA will also leverage our relationships with other governmental
agencies to extend the reach of our message. In particular, we will
work with agencies that target economically disadvantaged Americans. We
are currently in discussions with the Internal Revenue Service, the
U.S. Department of Agriculture Food Stamp Program; the Social Security
Administration; the Department of Veterans Affairs; the White House
Office of Faith-Based and Community Initiatives; the General Services
Administration; and the Department of Health and Human Services'
Administration for Children & Families, Administration on Aging, and
Centers for Medicare & Medicaid Services.
Separately, as I noted above, we are also working in cooperation
with the FCC to implement significant measures to increase awareness
among the general public about the DTV transition and the Coupon
Program. Both the www.DTV.gov webpage and NTIA's website,
www.ntia.doc.gov/otiahome/dtv/index.html, provide significant
information about all aspects of the transition. I encourage the
Members of this Committee, and all of Congress, to help us in this
important effort by linking your own websites to these consumer
education materials.
The Low-Power Television and Translator Upgrade Program
As I mentioned at the outset, Title III of the Deficit Reduction
Act of 2005 also directed NTIA to implement and administer other
programs related to the digital television transition. Specifically, it
mandates that we provide funding to assist licensees of eligible Low-
Power Television and television translator stations to obtain equipment
to enable them to convert the incoming digital signal of their
corresponding full-power station to analog format for rebroadcast; and
to ultimately convert the LPTV and translator facilities themselves to
broadcast in digital format. We have been working aggressively to
effectuate the statute's requirements to begin the program authorized
under Section 3008 of the Act in Fiscal Year 2008 and recently posted
information about these programs on our website (www.ntia.doc.gov/
otiahome/dtv/lptv.html).
With respect to the LPTV and translator upgrade program under
Section 3009 of the Act, however, NTIA has discovered an inconsistency
in the statute that we believe must be corrected in order to enable us
to implement Congress' intent. Specifically, as presently drafted,
Section 3009 requires the Assistant Secretary to ``make payments . . .
during Fiscal Year 2009 from the Digital Television Transition and
Public Safety Fund . . . to implement and administer [the] program'';
however, the same provision later states that ``[s]uch reimbursements
shall be issued to eligible stations no earlier than October 1, 2010''
(i.e., the beginning of Fiscal Year 2011).
These conflicting payment obligations cannot be resolved without a
technical correction to the dates contained in Section 3009 of the Act.
The Department of Commerce has raised this issue with appropriate
Congressional authorizers and appropriators to suggest a legislative
remedy.
In conclusion, I want to thank the Committee for the opportunity to
testify before you today. I will be happy to answer your questions.
The Chairman. Thank you very much, Mr. Secretary.
Ms. Seidel, before I call upon you, I'll call upon the Vice
Chairman for his opening remarks.
Senator Stevens. Well, thank you very much, Mr. Chairman.
I'm sorry to be late, but I would like to put my statement in
the record, as though read, to begin with.
The Chairman. Without objection, so ordered.
[The prepared statement of Senator Stevens follows:]
Prepared Statement of Hon. Ted Stevens, U.S. Senator from Alaska
Thank you, Mr. Chairman, for holding this important hearing. One of
the most important steps this Committee took last year, on a bipartisan
basis, was to set a hard date for the digital television transition.
This transition will reap important benefits for all Americans, but
especially with respect to public safety because they will receive much
needed spectrum. Additionally, the auction will fund vital programs
like the $1 billion for interoperability grants, $1.5 billion for the
convertor box program, more than $7.3 billion for deficit reduction and
$43.5 million for E-911.
As such, Congress cannot afford to let the transition delay or
fail. I am concerned that some of the proposals currently coming out of
the FCC regarding the auction may threaten the overall value and affect
the American taxpayer by potentially costing them billions of dollars.
With respect to the TV side of the transition, I am pleased by the
progress made to date. We all know that some elements will require
special attention. I look forward to hearing from our witnesses as to
how the transition will address rural areas of the country, like
Alaska. We have our fair share of residents in Alaska who rely solely
on broadcast TV for their news and entertainment. I am also concerned
that no demographic is overlooked as the transition moves forward.
Thank you, Mr. Chairman.
The Chairman. And now, Ms. Seidel?
STATEMENT OF CATHERINE W. SEIDEL, CHIEF,
CONSUMER AND GOVERNMENTAL AFFAIRS BUREAU,
FEDERAL COMMUNICATIONS COMMISSION
Ms. Seidel. Good morning, Chairman Inouye, Vice Chairman
Stevens, and members of the Committee. Thank you for the
opportunity to speak about the ongoing efforts of the Federal
Communications Commission to facilitate and promote consumer
education and awareness about the upcoming digital television
transition.
The Commission is working, consistent with its statutory
authority and budgetary capacity, to ensure that no American is
left behind in this important part of the digital revolution.
For some time now, we have been working, both on our own and in
cooperation with industry, other government agencies, and
consumer groups, to advance the transition and promote consumer
awareness.
Our efforts to date have been threefold. First, we have
been working to get the right rules in place to facilitate a
smooth transition. Second, we have been actively enforcing our
rules to protect consumers. And, third, we have been promoting
awareness of the transition through our consumer education and
outreach efforts. Through all of our activities, the Commission
has been dedicated to minimizing the negative impact of the
digital transition on consumers, while maximizing the benefits
to them.
The Commission has initiated several rulemaking proceedings
designed to facilitate the upcoming transition. In one recent
proceeding, the Commission proposed to ensure that cable
subscribers do not lose access to broadcast signals because of
the digital transition. About 50 percent of cable subscribers
today, at least 32 million people, subscribe to analog, not
digital, cable. These consumers are at risk of losing their
ability to watch broadcast television after the digital
transition, unless the Commission acts. According to the 1992
Cable Act, cable operators must ensure that all local broadcast
stations carried pursuant to the Act are viewable by all cable
subscribers. The Commission is currently considering a
rulemaking that would require cable operators to ensure their
analog customers don't lose their broadcast signals. Cable
operators can either continue to carry signals in analog format
to the millions of analog cable subscribers, or, alternatively,
cable operators who have chosen to go all-digital can provide
their subscribers with the necessary equipment to view
broadcast and other channels.
One of the most important actions we have taken to
facilitate a smooth transition is to ensure that electronics
retailers fully inform consumers at the point of sale about the
DTV transition date and the equipment necessary to continue to
be able to receive over-the-air television signals. Consumers
have certain expectations, and one of which is that the
television that they purchase today will also work 2 years from
now. As of March 1st, all television receivers shipped in
interstate commerce or imported into the United States must
have an integrated digital tuner.
Despite this prohibition on shipment, retailers may
continue to sell analog-only devices from their existing
inventory. In April of this year, the Commission released an
order requiring retailers to disclose to consumers that a
television with only an analog tuner will not receive over-the-
air broadcast signals after February 17, 2009. Such notice
should ensure that consumers are making a fully informed
decision about the television that they seek to purchase before
bringing it home. It will also help educate consumers about the
upcoming digital transition.
Just last week, the Commission adopted a Notice of Proposed
Rulemaking on several DTV education initiatives. This NPRM
seeks comment on proposals that would require broadcasters,
multichannel video programming distributors, retailers, and
manufacturers to take certain actions to publicize the digital
transition. The Chairman intends for the Commission to complete
this proceeding expeditiously.
In addition to our policymaking efforts, we have also been
vigorously enforcing our digital transition-related rules. As I
described earlier, in April the Commission adopted labeling
requirements to ensure that consumers are protected from the
unknowing purchase of television equipment without integrated
digital tuners. As of July 24, 2007, Commission staff had
inspected about 1,089 retail stores around the country, as well
as retailers' websites, to monitor compliance with the labeling
rules. As a result of these inspections, the Commission issued
over 262 citations notifying retailers of violations. As an
outgrowth of these investigations, the Chairman recently
presented his colleagues with Notices of Apparent Liability
against seven large retailers for apparently violating the
Commission's television labeling requirements. These fines, in
aggregate, total over $3 million.
The Commission has actively pursued entities violating the
DTV tuner requirement by acting on complaints and staff review
of U.S. Customs data. On May 30, 2007, the Commission issued
Notices of Apparent Liability against two companies, Syntax-
Brillian Corporation and Regent USA, Incorporated.
Swift enforcement of all of our DTV-related rules is
critical to protecting consumers from purchasing television
sets that may be rendered useless in 18 months. Enforcement
activities in this area will continue to be a priority for the
Commission.
In addition to our policymaking and enforcement efforts, we
have devoted resources to promoting consumer awareness of the
upcoming transition through education and outreach.
Specifically, the Commission has prepared and disseminated
numerous consumer publications to alert and inform consumers
about the transition. For example, we have issued a consumer
advisory on what consumers should know about buying TVs as the
analog cutoff date approaches. We have also issued a consumer
advisory on closed captioning for digital television, which
will help inform and advise people who are deaf and hard of
hearing. And we recently revised one of our DTV fact sheets,
``DTV is Coming, (And Sooner Than You Think),'' to add a
section focused on helping consumers determine whether their
current TV set contains a digital tuner.
Moreover, we are reaching out to consumers through many
different venues, including forming partnerships with
government and other organizations. For example, we are working
together with government agencies, including the NTIA and the
United States Administration on Aging to enhance the
Commission's consumer education and outreach efforts. In
addition, we are working with the Digital Television Transition
Coalition, of which we are now a member, to coordinate consumer
education and outreach efforts.
We have also partnered with several organizations,
including the Consumer Electronics Retailers Council, the
NACAA--and the NACAA--to help us disseminate DTV education
information. In addition, we are continually developing working
relationships with state and local entities and educational
institutions. For example, we have been in contact with
representatives of the Council of Great City Schools, which is
a coalition of 66 of the Nation's largest urban public school
systems, about ways that we can work with them to inform and
educate school-aged children about the transition. We have also
reached out to state and local entities to enlist their
participation in consumer education and outreach efforts. Some
of the organizations we have reached out to include the State
Chambers of Commerce, the National Association of Regulatory
Utility Commissioners, the National Association of
Telecommunications Officers and Advisors, the National Council
of State Legislators, the National Congress of American
Indians, and other tribal organizations, as well as the United
States Hispanic Chamber of Commerce.
Our consumer outreach and education activities are geared,
in part, toward reaching consumers who are likely to be unaware
of the upcoming digital transition, including senior citizens,
non-English-speaking consumers, minority communities, people
with disabilities, low-income individuals, and people living in
rural and tribal areas. For example, earlier this month we held
an Indian Telecommunications Initiative Regional Workshop in
Albuquerque, New Mexico. The workshop focused on the DTV
transition, with the goal of assisting Indian tribes in
preparing, organizing, and conducting DTV outreach campaigns.
While there, we organized and conducted DTV panels, exhibited
equipment, and distributed DTV education materials.
In addition, we have coordinated with the National Council
of Aging, as well as the Umbrella Leadership Council of Aging
Organizations, to find ways that we can work together to
educate seniors about the upcoming transition.
We have also taken a number of measures to ensure that we
are communicating with the large Spanish-speaking community
throughout the country. For example, all of our DTV consumer
publications are available in Spanish versions, and our
dedicated DTV.gov webpage has an entire section in Spanish.
Furthermore, consumers who call our toll-free number, 1-
888-CALL-FCC, may receive assistance, including DTV-related
information, in English or Spanish.
Another important way we have been disseminating
information is through our participation in events and
conferences. For example, we have worked with AARP to arrange a
speaking role for Commission staff on the DTV transition at
AARP's Annual Convention this fall in Boston on one of the
convention's presentation stages. We are also working with AARP
to obtain prime exhibit space on their convention floor that
will further enable us to spotlight the DTV transition and its
implication for seniors.
We recently announced that we will host a DTV Consumer
Education Workshop on September the 26th. The Commission's
workshop will consist of officials from organizations who
represent a broad range of DTV stakeholder groups, including
government agencies, industry, tribal organizations,
disabilities, community groups, non-English-speaking groups,
senior citizen organizations, low-income consumers, and other
public interest organizations that may represent underserved
communities or those living in rural areas. The purpose of this
workshop will be to provide an opportunity for all interested
parties to jointly discuss the challenges associated with the
upcoming transition, and explore ways in which these
organizations can work together and with us to develop
coordinated consumer outreach initiatives.
In addition to furthering the activities already discussed,
the additional funding we have requested from Congress will
allow us to undertake several new initiatives that will greatly
enhance our efforts to reach these consumers, those who
currently rely on over-the-air service. For example, in order
to reach consumers more directly, additional funding would
allow us to expand our dissemination of published materials
through targeted direct mailings of DTV-related information to
hundreds of thousands of households, with a focus on
underserved communities and senior citizens, and we could
translate our DTV consumer education materials into languages
other than Spanish, possibly including French and Mandarin, and
distribute these materials through government and community
organizations serving immigrants and non-English-speaking
consumers.
In conclusion, the Commission is committed to ensuring that
Americans are not left in the dark after the DTV transition.
Through all of our activities, policy enforcement, and consumer
outreach, the Commission is dedicated to minimizing the
negative impact of the upcoming transition. We look forward to
working closely with Congress, other agencies, and industry and
consumer groups during the next 18 months to minimize the
burden on consumers and ensure that all consumers reap the
benefits of the digital transition.
As the deadline approaches, we plan to continue our close
coordination with NTIA and the DTV Transition Coalition, and to
accelerate our consumer education and outreach initiatives, as
funding permits, to ensure that all Americans are aware of the
transition and understand what steps they need to take in order
to continue watching TV when analog broadcasting ends.
Thank you.
[The prepared statement of Ms. Seidel follows:]
Prepared Statement of Catherine W. Seidel, Chief, Consumer and
Governmental Affairs Bureau, Federal Communications Commission
Good morning, Chairman Inouye, Vice Chairman Stevens, and members
of the Committee. Thank you for the opportunity to speak about the
ongoing efforts of the Federal Communications Commission (Commission)
to facilitate and promote consumer education and awareness about the
upcoming digital television (DTV) transition. The Commission is
working, consistent with its statutory authority and budgetary capacity
to ensure that no American is left behind in this part of the digital
revolution.
For some time now, we have been working both on our own and in
cooperation with industry, other government agencies, and consumer
groups to advance the transition and promote consumer awareness. Our
efforts to date have been three-fold. First, we have been working to
get the right rules in place to facilitate a smooth transition. Second,
we have been actively enforcing our rules to protect consumers. And,
third, we have been promoting awareness of the transition through our
consumer education and outreach efforts. Through all of our activities,
the Commission has been dedicated to minimizing the negative impact of
the digital transition on consumers while maximizing the benefits to
them.
Policy and Rulemaking Activities
The Commission has initiated several rulemaking proceedings
designed to facilitate the upcoming transition.
Viewability NPRM. In one recent proceeding, the Commission proposed
to ensure that cable subscribers do not lose access to broadcast
signals because of the digital transition. About 50 percent of cable
subscribers today--at least 32 million people--subscribe to analog not
digital cable. These consumers are at risk of losing their ability to
watch broadcast television after the digital transition unless the
Commission acts. According to the 1992 Cable Act, cable operators must
ensure that all local broadcast stations carried pursuant to this Act
are ``viewable'' by ``all'' cable subscribers. The Commission is
currently considering a rulemaking that would require cable operators
to ensure their analog customers don't lose their broadcast signals.
Cable operators can either continue to carry signals in analog format
to the millions of analog cable subscribers or alternatively, cable
operators who have chosen to go all-digital can provide their
subscribers with the necessary equipment to view broadcast and other
channels.
Consumer Information and Labeling. One of the most important
actions we have taken to facilitate a smooth transition is to ensure
that electronics retailers fully inform consumers at the point of sale
about the DTV transition date and the equipment necessary to continue
to be able to receive over-the-air television signals.
Consumers have certain expectations and one of their expectations
is that the television that they purchase today will also work 2 years
from now. As of March 1, 2007, all television receivers shipped in
interstate commerce or imported into the United States must have an
integrated digital tuner. Despite this prohibition on shipment,
retailers may continue to sell analog-only devices from existing
inventory. In April, the Commission released an order requiring
retailers to disclose to consumers that a television with only an
analog tuner will not receive over-the-air broadcast signals after
February 17, 2009. Such notice should ensure that consumers are making
a fully informed decision about the television that they seek to
purchase before bringing it home. It will also help educate consumers
about the upcoming digital transition.
DTV Education NPRM. Just last week, the Commission adopted a Notice
of Proposed Rulemaking on several DTV education initiatives. This NPRM
seeks comment on proposals that would require broadcasters,
multichannel video programming distributors, retailers and
manufacturers to take certain actions to publicize the digital
transition. The Chairman intends for the Commission to complete this
proceeding expeditiously.
Enforcement Activities
In addition to our policymaking activities, we have also been
vigorously enforcing our digital transition-related rules.
Labeling Requirement. As I described earlier, in April we adopted
labeling requirements to ensure that consumers are protected from the
unknowing purchase of television equipment without integrated digital
tuners. As of July 24, 2007, Commission staff had inspected about 1,089
retail stores around the country, as well as retailers' websites, to
monitor compliance with our rules. As a result of these inspections, we
issued over 262 citations notifying retailers of violations. As an
outgrowth of our investigations, the Chairman recently presented his
colleagues with Notices of Apparent Liability against seven large
retailers for apparently violating the Commission's television labeling
requirements. These fines, in the aggregate, total over $3 million.
DTV Tuner Requirement. The Commission has actively pursued entities
violating the DTV tuner requirement by acting on complaints and staff
review of U.S. Customs data. On May 30, 2007, the Commission issued
Notices of Apparent Liability against two companies--Syntax Brillian
Corp. and Regent USA, Inc.
Swift enforcement of all of our DTV-related rules is critical to
protecting consumers from purchasing television sets that may be
rendered useless in 18 months. Enforcement activities in this area will
continue to be a priority for the Commission in the coming year.
Consumer Education and Outreach
In addition to our policymaking and enforcement activities, we have
devoted resources to promoting consumer awareness of the upcoming
transition through education and outreach efforts.
Consumer Publications. Specifically, the Commission has prepared
and disseminated numerous consumer publications to alert and inform
consumers about the transition. For example, we have issued a consumer
advisory on what consumers should know about buying TVs as the analog
cutoff date approaches. We have also issued a consumer advisory on
closed captioning for digital television which will help inform and
advise people who are deaf and hard of hearing. And, we recently
revised one of our DTV fact sheets--``DTV is Coming (And Sooner Than
You Think)''--to add a section focused on helping consumers determine
whether their current TV set contains a digital tuner or whether they
will need to purchase a new one.
Collaborative Partnerships. Moreover, we are reaching out to
consumers through many different venues, including forming partnerships
with government and other organizations. For example, we are working
together with government agencies including the National
Telecommunications and Information Administration (NTIA) and the U.S.
Administration on Aging to enhance the Commission's consumer education
and outreach efforts. In addition, we are working with the DTV
Transition Coalition, of which we are a member, to coordinate consumer
education and outreach efforts.
We have also partnered with several consumer organizations, such as
CERC and NACAA, to help us disseminate DTV education information. In
addition, we are continually developing working relationships with
state and local entities and educational institutions. For example, we
have been in contact with representatives of the Council of Great City
Schools, a coalition of 66 of the Nation's largest urban public school
systems, about ways we can work together to inform and educate school
age children about the transition.
We have also reached out to state and local entities to enlist
their participation in consumer education efforts. Some of the
organizations we have reached out to include State Chambers of
Commerce, the National Association of Regulatory Utility Commissions,
the National Association of Telecommunications Officers and Advisors,
the National Council of State Legislatures, the National Congress of
American Indians, other Tribal organizations, and the U.S. Hispanic
Chamber of Commerce.
Targeted Outreach. Our consumer outreach and education activities
are geared in part toward reaching consumers who are likely to be
unaware of the upcoming digital transition, including senior citizens,
non-English speaking consumers, minority communities, people with
disabilities, low-income individuals, and people living in rural and
tribal areas.
For example, earlier this month we held an Indian
Telecommunications Initiative Regional Workshop in Albuquerque, NM.
This workshop focused on the DTV transition with the goal of assisting
Indian Tribes in preparing, organizing and conducting their own DTV
awareness programs and initiatives. While there, we organized and
conducted DTV panels, exhibited equipment, and distributed DTV
education materials.
In addition, we have coordinated with the National Council of
Aging, as well as the Umbrella Leadership Council of Aging
Organizations (LCAO), to find ways we can work together to educate
seniors about the upcoming transition.
We have also taken a number of measures to ensure that we are
communicating with the large Spanish-speaking community throughout the
country. For example, all of our DTV consumer publications are
available in Spanish versions and our dedicated DTV.gov webpage has an
entire section in Spanish. Furthermore, consumers who call our toll-
free number, 1-888-CALL-FCC, may receive assistance, including DTV-
related information, in either English or Spanish.
Events and Conferences. Another important way we have been
disseminating information is through our participation in events and
conferences. For example, we have worked with AARP to arrange a
speaking role for Commission staff on the DTV transition at AARP's
annual convention this fall in Boston, MA, on one of the convention's
``Presentation'' stages. We are also working with AARP to obtain prime
exhibit space on their convention floor that will further enable us to
spotlight the DTV transition and its implications for seniors.
We recently announced that we will host a DTV Consumer Education
Workshop on September 26. The Commission's workshop will consist of
officials from organizations who represent a broad range of DTV
stakeholders, including government agencies, industry, tribal
organizations, disability community groups, non-English speaking
groups, senior citizen organizations, low-income consumer
representatives and other public interest organizations that may
represent underserved customers or those living in rural areas. The
purpose of this workshop will be to provide an opportunity for all
interested parties to jointly discuss the challenges associated with
the upcoming transition and explore ways in which these organizations
can work together, in conjunction with the Commission, to develop
coordinated consumer education activities.
In addition to furthering the activities already discussed, the
additional funding we have requested from Congress will allow us to
undertake several new initiatives that will greatly enhance our efforts
to reach those consumers who currently rely upon over-the-air service.
For example, in order to reach consumers more directly, additional
funds would allow us to expand our dissemination of published materials
through targeted direct mailings of DTV-related information to hundreds
of thousands of households, with a focus on underserved communities and
senior citizens. And, we could translate our DTV consumer education
materials into languages other than Spanish, possibly including French
and Mandarin, and distribute these materials through government and
community organizations serving immigrants and non-English speaking
consumers.
Conclusion
In conclusion, the Commission is committed to ensuring that
Americans are not left in the dark after the DTV transition. Through
all of our activities--policy, enforcement, and consumer outreach--the
Commission is dedicated to minimizing the negative impact of the
upcoming transition. We look forward to working closely with Congress,
other agencies, and industry and consumer groups during the next 18
months to minimize the burden on consumers and ensure that all
consumers reap the benefits of the digital transition. As the deadline
approaches, we plan to continue our close coordination with the NTIA
and the DTV Transition Coalition and to accelerate our consumer
education and outreach initiatives, as funding permits, to ensure that
all Americans are aware of the transition and understand what steps
they need to take in order to continue watching TV when analog
broadcasting ends.
The Chairman. I thank you very much.
Mr. Secretary, Ms. Seidel, your testimony suggests that
much is being done. However, recent polls taken in the United
States suggest that anywhere from 60 to 90 percent of our
fellow Americans are not aware of this transition. Yet, on the
other hand, we have been told that, in the British Isles in the
United Kingdom, about 80 percent of their citizens are aware of
the transition. Is there something they're doing right, and
we're not doing?
Mr. Secretary?
Mr. Kneuer. Well, I think, if you're looking at whether or
not consumers are aware of the actual date that this transition
concludes, in February of 2009, I'm not surprised that there is
less awareness of that. I expect, as our public education
campaigns ramp up, and as the broadcasters' campaigns ramp up,
awareness of the conclusion of this transition will improve.
But I think there are tens of millions of American households
that are currently aware of digital television and high-
definition television. By the end of this year, the reports
are, there will be 85 million DTVs sold and in households
across America. So, I think Americans are getting very broadly
aware of, and accepting of, DTV, but we certainly have more
work to do over the next 18 months to make sure that they are
aware that this transition will come to a conclusion in
February of 2009.
The Chairman. Ms. Seidel, do you have any suggestions?
Ms. Seidel. I agree with Mr. Kneuer, in that, certainly as
we ramp up and accelerate our educational programs and our
consumer outreach, we think that the awareness will increase.
We think that the efforts we have undertaken so far have
increased awareness, but recognize there is still much to do.
We are hoping, for example--the Chairman just announced the
new membership of our Consumer Advisory Committee, and he
tasked it with its primary focus being on the DTV transition
and helping us help to ensure that all consumers are made
aware. And we have a broad array of organizations that are
represented there on the membership, including AARP, including
organizations representing people who are disabled, and
including organizations representing people from rural
communities and other consumer groups. So, we think that we
will receive input that will help us find and develop
partnerships with others, to help us get the word out and
increase awareness as the transition nears.
The Chairman. We have provided $5 million for the education
program on the transition. On the other hand, the British have
provided $400 million for similar education, with a smaller
population. Do you think $5 million is adequate, Mr. Secretary?
Mr. Kneuer. Five million dollars is certainly a limited
pool of money to do a broad nationwide education campaign, but
I think it was at least implicitly understood by setting that
amount that the vast majority of the public education would be
performed by those industries that have an interest in this
transition: the broadcasters, the cable industry, and the
consumer electronics industries. And they have committed to
conducting a very active and broad consumer education campaign.
We're focusing our $5 million on making people aware of the
existence of our coupon program, that there is, in fact,
financial assistance for those consumers who need assistance
with the transition and haven't effected the transition in some
other way on their own. We're going to be issuing a contract,
middle of next month, where, included in that, will be the
funding of that $5 million for that broad consumer education
campaign.
The Chairman. I thank you very much.
Senator Stevens?
STATEMENT OF HON. TED STEVENS,
U.S. SENATOR FROM ALASKA
Senator Stevens. Well, thank you very much.
One of the things I pointed out in the statement I put in
the record is that we have tied this coming auction to the
whole subject of the changeover in DTV. We have provided that,
as the money comes in from the auction, it's automatically
available from the Treasury; a billion dollars for
interoperability grants, $1\1/2\ billion for a converter box
program, $7.3 billion for deficit reduction. And then we go
into a cascade of funds, thereafter, from the auction.
Now, Secretary Kneuer, it was our estimate that the auction
would raise in excess of $10 billion. And--based on that
estimate, we made these allocations. There is money for public
safety programs, as well as wireless alerts, and E-911. The
whole concept related to DTV conversion and the availability of
funds in order to go into the emergency side is tied to this
auction.
Now, let me ask you this. Do you think the current auction
rules proposed by the FCC are going to undermine that value?
Should we look forward to having less money come from the
auction because of the change of the rules proposed by the FCC
now?
Mr. Kneuer. I think we've had the highest degree of success
in auctions where we provided maximum flexibility, from a
technology standpoint, from service-providing standpoint. You
know, the auction that we concluded last year, for the AWS
auction, raised $14 billion. And I think maximum flexibility
does tend to lead to maximum revenues.
Senator Stevens. Well, should we be thinking--I'm sure the
Chairman has mentioned, already--should we be thinking about
finding ways to finance a part of the public information
program because of the reduction in funds available from this
auction?
Mr. Kneuer. I would hesitate to make a guess of what the
actual auction revenues would be. You know, I would look to OMB
and CBO and others to come up with actual scores. I am very
mindful of the fact that the money that we're currently
spending, we've borrowed from the Treasury. This is in
anticipation of those revenues coming in, when--like you said,
our first obligation when the auction revenues come in is to
provide $7.2 billion to the Treasury for deficit reduction.
Then we can pay back the money that we've already borrowed,
and, to a large degree, already spent. So, I'm very focused on
making sure that we do have auction receipts that will cover
all these expenditures under the statute.
Senator Stevens. In that legislation, we gave several
entities the right to borrow against the money that would be in
the Treasury once this auction took place. I'm a little worried
about it. Not just a little. Senator Inouye and I started the
auction concept. The first time we had an auction, it was
estimated that we'd bring in somewhere less than a billion
dollars; I think it was a little over half a billion dollars.
That brought in $17 billion, as I recall. And now we have an
estimate that it is at least $10 billion. Based upon that
conservative side of $10 billion, Congress, at our request,
made these allocation of funds in advance, and gave people--
gave entities--the right to borrow against those funds based
upon the timing of this auction. Now, I'm sort of worried about
the fact that there is an undercurrent here now that, maybe,
because the public isn't ready for this auction--this
transition, we should delay the auction, or we should delay the
transition date. That either one is going to cost the taxpayers
money, in my opinion, in the long run. Because if we don't get
the money from the auction, we're going to have to pay back the
money you've borrowed from the Treasury. And that's going to be
a real battle up here, I think.
What about the converter box program? As I said, that is
basically going to be financed by the auction. What are you
doing now to reach out to places in rural Alaska or rural
America, to make sure people understand about the necessity to
have those boxes?
Mr. Kneuer. Absolutely. We're going to be issuing the
contract for the vendor who will perform the management of the
coupon program, including the consumer education efforts. When
we put out our Request for Proposals for that contract, the
things we focused on, and asked the vendors to focus on, were
their proposals to reach out to rural America, to reach out to
retailers to participate in this program, not just big-box
retailers and large nationwide chains, but also give us
proposals on how they intend to reach out to rural retailers
and smaller businesses. We've been working with the Alaskan
Native Broadcast Corporation and Native Voice One to reach out
to tribal communities. We clearly have a focus, given the
limited amount of resources that we have in this program for
consumer education, to make sure that those monies are focused,
to the extent possible, on rural, hard-to-reach, hard-to-serve
communities.
Senator Stevens. Ms. Seidel, I don't know what your
responsibilities are, vis-a-vis the Commission itself, to talk
to them about the relationship between these proposed changes
and the responsibility of the FCC, as far as the transition is
concerned. Tell me, do you advise the Commission on the impact
of some of the proposed changes and what they might do to
consumers?
Ms. Seidel. In terms of--if you're talking about the
specifics of the particulars of the 700 MHz auction, that is a
proceeding that is handled by our Wireless Bureau, which Fred
Campbell heads up. Based on the discussion and the exchange a
few minutes ago, I will certainly take your suggestions and
your concerns back to the Bureau. If you had particular
questions about consumer outreach and how we are undertaking to
reach rural communities and communities in Alaska and other
places, I'm happy to provide you with some suggestions of
things that we have been doing in that regard.
Senator Stevens. Well, my feeling is that maximum
flexibility leads to the maximum amount of funds coming in from
the auction, and if the maximum amount of funds are there,
we're going to have all this cascade of funds that Congress has
already provided to the transition. Now, again, I can't get
involved in some of your in-house conversations, but do you
believe the Commission's aware of the connection between
flexibility and the amount of funds that come in?
Ms. Seidel. Oh, certainly. Consumer awareness and making
sure that we promote the digital television transition and
reach all consumers, especially those that are hard to reach,
is a priority for the Chairman, and certainly the 700 MHz
auction is a priority for the Chairman. So, certainly I think
the interrelationship between those two is something that is,
you know, constantly discussed.
Senator Stevens. Well, I've got to confess, I'm sorry, now,
we agreed to the concept of 7.3 billion for deficit reduction
before some of these other matters are dealt with, including
paying back some of the money that has already been borrowed
from the allocations of funds that are below that, in terms of
looking at the total amount that's brought in.
I hope people are aware of the connection between this
auction and the transition. The----
Please, I've got enough already. Thank you.
[Laughter.]
Senator Stevens. I do think that we have--the greatest
problem right now is the distribution of these converter boxes
to rural America. If there is anyplace rural in America, it is
Alaska, 241 small villages out there, and a whole series of
small communities that are not villages, they're not tribes and
tribal villages. It just seems to me that we've got to have a
greater awareness of the problems.
Senator Inouye's Hawaii, most people don't realize that the
ring of islands around there--actually, if you put a circle
around Hawaii, it's larger than Alaska. But there is a lot of
water in between.
[Laughter.]
Senator Stevens. But the problems of distribution are the
same. Their communications are different, their means of
transportation--70 percent of our villages can be reached only
by air, year round, and we've got a problem of dealing with
them, in terms of converter boxes. So, I just don't think that
the people that are suggesting a delay understand what the
impact of that delay is going to be on places like Alaska. And
I don't think the FCC understands that this rattling the cage
over this, what's going to happen at the auction is doing
anything other than reducing the amount of money we're going to
get in. Now, I hope that people settle down and we keep the
schedule, and the schedule works. I think it will work, and I
think we'll bring in more money than we expect if we don't
rattle this cage any longer.
Thank you, Mr. Chairman.
The Chairman. Thank you.
Senator Sununu?
STATEMENT OF HON. JOHN E. SUNUNU,
U.S. SENATOR FROM NEW HAMPSHIRE
Senator Sununu. Thank you, Mr. Chairman.
First, just a couple of observations, as we didn't all have
opening statements, and I know more formal comments will be
placed in the record.
But I, first, want to make the observation that there is a
little bit of good news here, in that we seem to have moved
past the idea of delaying the transition date. And that's
really only in the last few months that I think we really
nailed that down with the finalization of the regulations. And
I think everyone feels confident that we'll be able to get this
transition done. And, as an advocate of doing it even earlier,
I think the fact that there is so much confidence in holding
that date, at this point, is an indication that we could have
done it even earlier, which would have been good for consumers,
and good for the economy. But I am pleased to know, or to make
the observation that we're beyond a discussion of delay.
Second, I think we need to remember that, among the
greatest beneficiaries of this process will be public safety.
We've got 24 MHz that's going to be put into the hands of
public safety. That's important. It's something I think the
members on this committee strongly support. But it is also
important that, at the end of the day, that 24 MHz is used in--
as efficiently as possible, and that we not burden the public
safety spectrum with regulations, or with mandates, with regard
to the technologies that can be used in providing that spectrum
for public safety.
There's a lot of skepticism about the intelligence of the
American consumer, every time we talk about digital transition,
and I want to stand up for the general intelligence, the
ability, and the flexibility of American consumers. We want to
make sure we have good ad campaigns, good communication, but,
at the end of the day, I remain confident that the video/
television-watching public is going to be able to understand
what's available to them, in the way of technology, to help
with this transition, what's available to them in the way of
products and services, whether it's satellite or cable or fiber
to the home. All of these are going to be able to deal with the
digital transition in a very effective way.
Finally, I think it's important to emphasize that if we
want this to go smoothly, we've got to end the debate about
other regulations in the digital transition. Discussion about
down conversion, discussion about multicarriage or must-carry,
I don't think that's helpful. I think those are the kinds of
11th-hour regulations that will cause problems for consumers,
not because they're not capable or understanding of the
process, but because imposing those regulations at a late date
will change the dynamics of delivering the products, will
change the dynamics of the communications campaign.
So, I think we're on the right track, and I think consumers
are going to be able to handle this well, but I do want to hear
our panelists address a couple of issues. One was touched on
briefly, and that is the ad campaign, the publicity campaign.
The point was made that $5 million is a relatively small
budget, in the way of communications and advertising it and for
Mr. Kneuer. But, as you mentioned, the private sector is going
to play a role here, and it is a little disappointing that we
don't have anyone representing the private sector on either of
these panels, to talk about what they are or aren't doing. How
much are they spending? How do they feel about the consumers
that they serve? Because they're the ones that are going to be
on the front line in dealing with consumers if this transition
isn't handled well. As politicians, we're going to bear some of
the burden and the blame if the process doesn't go well, but
that's different than dealing with 5 million or 10 million or
20 million subscribers or viewers that might not be happy with
the process.
So, I would like you to address the issue of private-sector
support. What do you see out there now? And have you made any
effort to estimate how much will be spent by distributors,
content providers, and broadcasters in their effort?
Mr. Kneuer. Sure. The people who are going to be most
affected by this, these are the broadcasters' customers. There
are massive market incentives for the broadcasters to reach out
to their customers and continue to have contact with their
customers after the transition. So, there is absolutely going
to be a large, concerted campaign, not just by the
broadcasters, but also by the cable industry, the consumer
electronics industry. I talked a little bit in my testimony
about this DTV Coalition, that started with those three, and
now includes over 120 members. It's not just the market
participants in these industries that are taking part in this
coalition now, but also those organizations that have special
missions to serve special constituencies and identify groups
that may be difficult to reach.
I think the good news is that the easiest way, and the best
way, to inform people about a change in television is through
television. So, the broadcasters, by putting on campaigns,
those who rely most on television, watch the most television,
are likely to get the most information about this and
accelerate the transition on their own.
So, I don't have a sense--and I don't know that they have
provided, sort of, a dollar figure, ``We're committing X number
of dollars in PSA announcements,'' and the rest. But they have
been working together, and have made a commitment to an
accelerated broad campaign that will get much larger and much
more intense as we get closer to the transition--get closer to
the conclusion of the transition.
Senator Sununu. The money that's been allocated for
converter boxes, $1.5 billion, was based, in part, on CBO
estimates, and, in part, on the estimates of the number of
households that receive over-the-air signals--over-the-air-only
signals. In our committee memo, it's noted that, according to
the FCC, as of June 2004, less than 15 percent of households
relied exclusively on over-the-air transmission. I can't help
but notice that that number is 3 years old, and it would seem
to me to be quite helpful to have a number that's a little bit
more current. Do either of you have more current figures?
Ms. Seidel?
Ms. Seidel. I would have to check with my colleagues in the
Media Bureau on that, but I certainly can check and get back to
you.
Senator Sununu. Mr. Kneuer?
Mr. Kneuer. We have been looking at numbers from lots of
different sources. There are the FCC numbers. Different
industries come up with different numbers. I've been hesitant
to pick an industry number and say, ``This is absolutely the
right one.'' But the clear trend is that that number is
shrinking, if by nothing else, by the virtue of the tens of
millions of digital sets that are being sold year after year.
So, clearly that number is going down. And, I think, as people
get more aware of the transition, millions of Americans are
effecting the transition on their own, either by buying DTV
sets or subscribing to cable to satellite.
Senator Sununu. Yes, I agree with that answer, but I can't
help be a little bit disappointed that it seems neither the
Senate Commerce Committee, nor the FCC, nor any of the other
sources that we rely on can give us a more updated number than
that June 2004 number. Clearly, it's going down. I think that's
a good thing. And I think, on the whole, the estimates of the
cost of this converter program were probably higher than will
ultimately be the case.
A final point. On the proceeds of the auction that Senator
Stevens raised concerns about, I'm concerned about the proceeds
of the auction. Mr. Kneuer, as you emphasize, the more
regulations, the more encumbrances, the more requirements you
place on those that purchase or win in the auction for
spectrum, the less you're going to get from that auction.
That's an economic fact of life. And it does place some of
these programs at risk. There could ultimately be less in
proceeds, because of the regulations and encumbrances the FCC
is considering on the upcoming auction. That is a reason not to
change the allocations, but not to place the encumbrances on
the auction in the first place. If the goal for the taxpayers,
for the country, for competitive reasons, is to make spectrum
available so that it can be used in innovative and dynamic
ways, then we need to avoid coming up with new ways to regulate
and devalue the spectrum just prior to its auction. That's
certainly something--I feel very strongly--but I'd like to give
you both an opportunity to respond.
Mr. Kneuer, has the administration raised concerns or
voiced opposition to limitations on the 700 MHz spectrum?
Mr. Kneuer. You know, I am, likewise, with regards to the
auction proceeds and the revenues, I think, as Senator Stevens
was saying, we've already borrowed large amounts of money. It's
my signature that's on the promissory note, so getting the
auction revenue in to pay back those notes is of keen
importance to me. I think you're right, that the more
flexibility we put on spectrum in the past--you know, we've had
maximum revenues and lots of innovation--that being said, I
think the situation around 700 remains pretty fluid. There are
still people out there pushing for even more regulation than
the things that have been proposed, whether it be wholesale,
which sounds a lot like regulated resale rather than wholesale.
I think there are people who are expressing concerns about, if
there are constraints on the big block of spectrum, maybe the
incumbents will be forced into, and dominate, the smaller
geographic areas and the smaller blocks. So, I think there is
lots of movement. You're seeing people in the industry still
putting in proposals, so there is lots of movement around this,
as of now.
At the end of the day, I would certainly hope that they
would adopt policies that maximize innovation and maximize
investment and bring in enough revenue that we're going to be
able to cover all these programs and have the $7.2 billion for
deficit reduction.
Senator Sununu. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you very much.
Senator Klobuchar?
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you, Mr. Chair.
And thank you for being here. I would share what Senator
Sununu is saying, that this is an exciting opportunity, with
digital television, but, at the same time, we're only 19 months
away, as you know--I assume you have the calendar marked on
your wall--from the February 17, 2009, transition date; and I
was thinking back to Y2K. I was county attorney at the time,
and everyone was hooked up with cell phones that night. It was
New Year's Eve, and I think I talked to our sheriff and our
police chief, and I remember us just waiting for something to
happen, and everything went quite well. And I think part of
that was the planning.
I'm concerned about this, because of the fact that we have
457,000 households--this is according to Nielsen, that are
over-the-air analog TV in Minnesota, and that's just in my
state. And, of course, most of them are rural customers, and
many of them are elderly.
My question, just to follow up on some of the Chairman's
questions, with Great Britain, 80 percent of them know--and I
think our stats show 60 percent of American consumers don't
know, or even higher--and in Great Britain, you have 80 percent
of them aware of the transition. So, what exactly are they
doing differently? Just concisely, what are they doing
differently in Great Britain?
Mr. Kneuer. Well, they've got a very different relationship
with their TVs in Great Britain. They've got a annual tax that
the government reaches out to consumers every year and says,
``This is the amount of money you owe for your television.''
So, the government already has a built-in relationship with
every TV customer. So, that may be one aspect of it.
But, like I said, I'm not surprised that the awareness of
the conclusion of this transition is not extraordinarily high
right now, but I think there is a broad awareness and a broad
acceptance of the DTV transition, and American consumers are
availing themselves, and effecting the transition on their own,
in huge numbers. As we get closer, I think, if the ad campaigns
by the broadcasters and others focus on, as we get closer,
ramping up, making people aware, that, you know, the end is, in
fact, coming.
Senator Klobuchar. So, is there a commitment that the
broadcasters are going to be making these--doing these ads and
commercials?
Mr. Kneuer. Well, they've made public announcements and
commitments. I don't have regulatory authority. I think the
Commission is introducing rulemakings on specific commitments
on the amount of public awareness that they'll be required to
do. But certainly it is not only their responsibility, but it's
in their own best interest to make sure that their customers
are aware of this and that they retain access to those
customers after the transition.
Senator Klobuchar. Maybe this is for Ms. Seidel. This might
be a naive question, but is there a way to target the
advertising to the analog TV customers?
Ms. Seidel. I think, in talking with the Digital Television
Transition Coalition, and in talking to NAB in that respect, as
well, my understanding is that there is a fair amount of
research underway to try to target in more detail exactly where
those over-the-air households are. And I've received or, I've
seen some statistics, thus far, that are by state, and
percentages of the population within each state that are over-
the-air viewers. And my understanding is that members of the
coalition are trying to get that down to a more granular level,
and getting it down by county, and that they feel confident
they'll be able to get that figure by county. And then, you
know, we would target--certainly, the Commission would be
looking to target our outreach in those counties and in those
areas where that percentage is relatively high, and starting
there.
Senator Klobuchar. OK. And then----
Ms. Seidel. But----
Senator Klobuchar.--you know, I'm--go ahead.
Ms. Seidel. Oh, excuse me.
Back to what Mr. Kneuer said, though, the item, that I
mentioned earlier in my remarks, that the Commission is
considering, does ask questions about whether the broadcasters
should be required to report on their outreach efforts to date,
and whether there should be other types of industry-required
reporting or actions to help further outreach on the private
sector.
Senator Klobuchar. And when will the Commission complete
this consideration?
Ms. Seidel. My understanding is that the Commission has
adopted the item and is endeavoring to get it released as
quickly as possible, so that will be in the very near term.
Senator Klobuchar. Then my last group of questions are
about the rural customers. And, as we know, they
disproportionately rely on this. It's my understanding that
they will most likely have to rely on a coupon program to get a
converter box. I'm trying to imagine how this will work, in
practice. You know, what's going to happen to those that are
not near an electronics retailer? We have some counties in
Minnesota that it can take hours to get to a electronics
retailer. So, how are they going to get the converter box? Is
there going to be a mail-order system? Or what's going on to
help them to get these boxes?
Mr. Kneuer. The coupon program is designed to reach all of
those kinds of consumers. With regards to retailers, we want to
make sure that we have an outreach to retailers that goes
beyond just the big nationwide chains and the large consumer
electronics. So, we've allowed for retailer participation from
mail-order, over the Internet, as well as traditional brick-
and-mortar, and we've also required that the vendor who's going
to fulfill the coupon program for us has a plan to reach out to
some of those nontraditional retailers to make sure that the
same sorts of retailers that your constituents rely on for all
of their day-to-day needs will also be able to participate in
the coupon program.
Senator Klobuchar. Thank you very much.
The Chairman. Thank you very much.
Senator McCaskill?
STATEMENT OF HON. CLAIRE McCASKILL,
U.S. SENATOR FROM MISSOURI
Senator McCaskill. Thank you, Mr. Chairman.
I'm concerned that, as of fairly recent data from Nielsen
and the broadcasters, one in five Missourians is getting over-
the-air signal right now. I mean, frankly, this scares me,
politically. I mean, there is no anger that comes close to the
anger of an American who can't get television.
[Laughter.]
Senator McCaskill. And I know who they're going to blame.
They're not going to call you, Mr. Kneuer. And they're not
going to call you, Ms. Seidel. But you know who they're going
to call? They're going to call me, and they're going to be mad.
So, I am very discouraged that we don't have more finite
answers this morning. I mean, we're talking about something--I
mean, this is like tomorrow, if we're talking about government
time.
[Laughter.]
Senator McCaskill. I mean, the idea that this rule hasn't
been finalized yet as to what we can even expect, in terms of
PSAs and bill inserts, really worries me. Can you tell us what
the Commission--are they going to require the broadcasters to
begin PSAs at a certain date? Are they going to require bill
inserts anywhere, in terms of that? I mean, do we know what
they're going to require, the Commission?
Ms. Seidel. Because that proceeding--the item has not been
released, and the text of it will be released soon--I think it
would be premature for me, and because I was not part of the
staff that worked on that proceeding, I can't really tell you
the specifics, but it would seek comment on issues such as
those. But, in addition, I can talk to you a little bit about
the concerns you raised about outreach and how people are going
to be made aware.
I think your point's well taken, that it will be very
challenging to directly touch every single American about the
transition and make sure--or make sure the ones we're touching
are the ones that are the consumers who rely exclusively on
over-the-air. That's why part of the Commission's approach to
this has been, not only just developing the materials and
making sure that we distribute them to consumers who call, or
consumers who write us, or e-mail us, but making sure that we
establish partnerships with groups all around the country that
serve and/or have members who are part of the group--the
communities we think will be most difficult to reach, including
people in rural areas and senior citizens, people in tribal
areas. We had a very productive Indian telecommunications
initiative earlier in the month, where we had over 78
different--I believe it was 78 different tribes there
representing over 30 tribal nations, and we had radio
stations--tribal radio stations and tribal broadcast stations
who agreed to work with us to make sure the word got out to
those hard-to-reach----
Senator McCaskill. I think that's fine. But let me disagree
with you. And I don't have a lot of time, and I've got several
questions. You know, it's not hard to educate the United States
of America. It's called--you do it over television. You know,
look around this room, and you'll see people that spent a great
deal of their lives raising money in order to communicate over
television. We know how to reach people through television. And
what I'm frustrated about is that these PSAs and this
education--I mean, you all are supposed to be the experts on
educating consumers on this transition, but yet, no one can
give us definite answers when broadcast education is going to
begin with public service announcements. I would appreciate,
just as soon as either one of you know--when there is any kind
of requirement that these broadcast announcements are going to
begin so that people will understand.
Let me move to the boxes. Has NTIA field tested any of
these boxes yet?
Mr. Kneuer. We've received--under our regs, manufacturers
that wanted to submit a box have to submit an expression of
interest in detail saying that, ``We intend to build the boxes,
and we intend to participate in the program,'' 60 days prior to
submitting a box to us. We've received a large volume of those
expressions. We have some boxes already in. We've got an MOU
with the FCC that we will be using their labs, in coordination
with us, to verify the boxes, to make sure that the boxes that
enter the marketplace actually meet our specs and are
functional.
Senator McCaskill. I take it----
Mr. Kneuer. But we've had----
Senator McCaskill.--that is no.
Mr. Kneuer. We have--we do have boxes that are--have been
submitted. We have not----
Senator McCaskill. Have they----
Mr. Kneuer. We have not----
Senator McCaskill.--been field tested yet?
Mr. Kneuer. I don't know the status of the actual testing,
but all that is ongoing.
Senator McCaskill. OK. I would love to know if any of the
boxes have, in fact, been field tested and what the results of
those field tests were. The only thing that's going to make
people madder is if they get these coupons, and they get the
boxes, and then their signal is degraded and they don't get a
good signal. And so, I would like to know what the specific
plans are for field testing, and what the results of those
field tests are.
It's my understanding these coupons are going to be
available January 1.
Mr. Kneuer. Yes.
Senator McCaskill. So, we're talking literally 6 months
from now.
Mr. Kneuer. Yes.
Senator McCaskill. It's also my understanding that we
couldn't get Best Buy's CEO, in the House, to even commit that
he would put coupon-eligible boxes in all of his stores. Do we
have any commitment from the retailers of America as to the
availability of these boxes? And the second part of my question
is, do we have any plans underway to protect seniors? Because
this is going to be an area that will be very easy for the
elderly to be preyed upon with people handing out coupons that
aren't real, providing boxes that don't work. So, I'm concerned
that since we're going to start handing these coupons out in 6
months, and we don't even have a rule we can talk about in
public yet as to how we're going to tell people about the
coupons, but yet, we're going to have the coupons available in
6 months. I mean, I am really worried about this.
Mr. Kneuer. To the point on the boxes, the details on what
the field tests are, what the requirements of--all of those
were published in our rule. They're transparent. We'll get you
the information on that.
And, as we conclude testing, and we approve boxes, that
information will be made public. So, all that information will
come out on a rolling basis as they enter the market. Multiple
manufacturers are on the record saying they intend to have
these boxes in the marketplace, so I'm confident, given the
resources that we've put into the program, there is a billion-
dollar marketplace for this. There have been very broad
expressions of interest by the manufacturers that there will be
boxes in the marketplace.
As far as the retailers, as I said, we're going to be
issuing our contract with the vendor in the middle of next
month. Part of our agreement--part of the request that we put
in to the vendors that would fulfill that contract is outreach
to the retailers to make sure that they are getting as many
retailers as possible to get into--participate in the program.
Getting to your point on seniors and fraud, one of the
challenges, and one of the reasons you don't want to allow any
retailer, without any constraints, to participate in the
program, is, you want to have some constraints, to make sure
that these retailers have systems in place to prevent waste,
fraud, and abuse, that they are not coming up with phantom
coupons and defrauding the government.
So, all of those things are, sort of, balanced together in
our rule. But, no, I absolutely agree, it's very important that
we have as broad a cross-section of retailer participation as
possible, that these devices are out there, as widely
distributed as we can get them. That's why we didn't rely
simply on brick-and-mortar, but we're allowing for online
retailers and catalogs. So, I think there will be a broad
distribution of these across, essentially, all communities.
Senator McCaskill. I thank you very much. I appreciate--Mr.
Chairman--I will warn you that, when people start calling in,
I'm giving them your numbers.
[Laughter.]
Senator McCaskill. Thank you.
The Chairman. Thank you very much.
Senator Snowe?
STATEMENT OF HON. OLYMPIA J. SNOWE,
U.S. SENATOR FROM MAINE
Senator Snowe. Thank you, Mr. Chairman.
Well, I know, from the outset, when we considered this
whole transition, almost, I guess, 10 years ago, could be more
than that, that this was one of the driving concerns, the fact
that, you know, we're going to get ahead of the consumer in
this process. And now that we have a definitive time, in terms
of the deadline, and being, you know in 2009, in February 2009,
and you still have 40 million households and, you know, 60 to
70 million television sets that will require this conversion, I
mean, that's a monumental undertaking.
Now, I know that both of your agencies have websites. I'd
be interested in knowing, Mr. Kneuer, if you could explain to
the Committee as to how many people have been visiting your
website. What type of information or feedback are you getting
from consumers? Does it engage the consumer? I know, we have
looked at it, and it seems to be, probably, you know not user-
friendly, in terms of engaging the consumer in how this is all
going to work, more practical information. So, can you describe
what kind of feedback and traffic that you're getting from this
website? Because that's going to be crucial. That can't be the
only thing. That's just one dimension to this enormous problem.
But it's going to be public education, without question.
The Horowitz Associates found that approximately 60 percent
of consumers weren't even familiar with the DDT--DTV transition
that'll affect them in this digital transition, and only 25
percent could even discuss it in any detail. So, we really do
have a long ways to go in this process.
Mr. Kneuer. I'm happy to get you the numbers on the number
of web hits we've had at our webpage, and DTV.gov.
What I can tell you is--based on the most recent meeting of
the broad DTV Transition Coalition that includes the
broadcasters and the industry participants they've got their
own webpages.
Currently, the vast majority of the traffic to their
webpages is being driven by ours. So, consumers are starting
out coming to the Government, looking at DTV.gov. We've got
links to the other commercial sites. My expectation and
anticipation is, as the education campaign ramps up, and the
broadcasters and others engage in their activity, that ratio
will shift dramatically, so consumers will be made aware of the
transition by this broad industry campaign. We intend to
slipstream behind that, making sure that, as they are notifying
people about the broader transition, they are also directing
them to us so they can find out about this program we have that
will give financial assistance to those consumers who need it.
Senator Snowe. Do you have an agency that's designing your
websites? I mean, do you have any--I think, certainly, that you
would want to, you know, probably reexamine it from that
standpoint.
OK. Ms. Seidel?
Ms. Seidel. We have the DTV.gov website, and I can get you
the number of hits and what feedback we have been receiving on
those. I don't have it with me.
But the number of hits to the website have increased
significantly, even from October of this past year. And, in
terms of feedback once people visit it, we do get e-mails from
people about DTV questions. And I don't recall--and we'll
check--but I don't recall input about how to modify the site
itself. But, then again, as I think I mentioned earlier, we are
working with a number of community organizations and
organizations representing the people that you all have talked
about, and one of the things we do ask them is whether there
are ways that we can make our website more friendly. But then,
also, we recognize that not everyone uses the Internet. How
else can we reach the consumers and the constituencies that you
serve?
But we do have, on the DTV.gov website, one of the pieces
to that is a DTV Deputy Program Quiz. We've received very
positive feedback on that piece of it, in particular, because
it is geared toward students, who we know, in many cases, may
be more technologically savvy than their parents and
grandparents, and we go through, What is DTV? And what is the
difference between the different types of DTV? When is the DTV
transition occurring? And what might it mean for you? And what
might you need to do, or your families and your friends and
other ones--other people you know--need to do, to be sure that
you're ready, come February 17, 2009? So, that is one piece of
the website that I know we have gotten very favorable feedback.
But we constantly look for ways to improve it. So, to the
extent you all have suggestions, we would welcome them.
Senator Snowe. Well, do you think $5 million is sufficient
for a national campaign to educate the public?
Ms. Seidel. You know, I would refer to what the Chairman
has said, and I think what we have been endeavoring to do is to
maximize, with the resources that we have, our ability to reach
people. Certainly, to the extent additional resources were made
available, we could enhance the campaign. I think the Chairman
has spoken about some of the things he would do with the
additional 2008 funds, like making sure that we have brochures
and information about the transition in grocery stories in
communities where we know there may be a high percentage of
over-the-air users, and being able to run some print--you know,
doing some PSAs ourselves, and certainly direct mail.
Senator Snowe. Well, you know, given, you know, this
monumental task, and the number of TV sets and households
remaining to make this transition to digital, you know, I would
suggest having some kind of measurement, in terms of deadlines,
to accomplish this goal. Can you measure it by the converter
box purchases? What can you measure it by? And you should have
timelines, frankly, so that it can go through this process
through 2008. Otherwise, you're going to converge, in 2009, and
we're going to have a disaster on our hands.
Mr. Kneuer. We're going to be able to measure the take rate
of the coupons, and then, as the coupons are actually
redeemed--under the statute, the coupons expire after 3 months,
and I think we can expect that a lot of consumers will request
these coupons, go into a retailer, and then decide to take some
other path, either buy a set-top box with more functionality,
buy a television, do something else. That coupon, then, would
not be redeemed. We'll be able to track the coupons going out,
as they're redeemed, and those coupons that aren't redeemed and
expire after 3 months. So, we'll have very real time tracking
of how consumers are taking advantage of our program, where our
resources are, and the amount of money that we have left.
Senator Snowe. Well, you should have a timeline for all
that--I mean, certainly to know how many are outstanding, and
having measurement along the way, so it doesn't all converge in
2009. I mean, you really should have that calendar and
measurement and standards, so that further outreach or other
efforts have to be undertaken in order to accomplish this goal.
One other question. You know, I come from a small rural
state, and the National Association of Broadcasters estimates
that 90 percent of the full-power stations will already be
transmitting both digital and analog, and the conversion will
be fairly seamless, but there are 10 percent or so--and there
are certainly some stations in my state--that will have to have
an immediate flash cut. So, is there a procedure in place to
address that, to make sure that that's seamless, as well?
Mr. Kneuer. On the full-power stations?
Senator Snowe. The smaller stations.
Mr. Kneuer. The low-power stations, we've got additional
programs, under our responsibility, where we will provide
translators for the low-power stations, so that, immediately
upon the transition in 2009, where the high-power stations drop
off, the LPTV stations will be able to have translators to
continue transmitting to their communities. A second program
will give them additional resources, to actually upgrade their
translators to go to all-digital.
Senator Snowe. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you very much.
Senator Cantwell?
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you, Mr. Chairman.
Mr. Kneuer, I'm glad you brought up the coupons, because my
understanding is they are for 90 days, and obviously they'll be
available at the beginning of 2008. So, do you think that all
the set-top boxes will be available for purchase, at that point
in time?
Mr. Kneuer. Certainly we expect there will be set-top boxes
in the marketplace in January of 2008. If, for whatever reason,
we got information there were not boxes available, and
consumers were requesting coupons--the statute requires us to
be able to process coupons as of January 1, 2008--if there was
a disconnect between the availability of boxes, we wouldn't
want consumers to get those coupons, have them expire in 90
days, and not have boxes. So, we would hold, and not deliver,
the coupons to consumers if there was, for some reason, a
disconnect in the supply chain of the boxes.
Senator Cantwell. How are you going to do that?
Mr. Kneuer. We will have information from the retailers,
from the manufacturers, we'll know how many boxes are out
there. If we get an influx of coupon requests, but we have
information that there aren't, in fact, boxes----
Senator Cantwell. Are you going to look up every ZIP Code
and then find a retailer in that neighborhood, and then see,
and, if it is, then you'll send out the coupon, and, if not----
Mr. Kneuer. I wouldn't expect that the supply issues, to
the extent there were any, would be small-market specific.
There would either be a problem that they didn't get the
manufacturing completed, or there was only a few manufacturers
that had gotten boxes done. Like I said, we've had a huge
expression of interest from manufacturers, so I would expect
there to be----
Senator Cantwell. So, you're thinking Wenatchee and
Ellensburg and the Tri-Cities and Walla Walla, and all these
places, they're going to, on January 1, 2008, have available
set-top boxes for purchase.
Mr. Kneuer. That's everything that we've seen in the
response, that there would be boxes in place.
Senator Cantwell. And if they're not, somehow are you going
to look up that ZIP Code, and you're not going to send out the
coupon.
Mr. Kneuer. Those are issues--like I said, if we received
information that there were geographic problems on the
distribution of boxes, we would have to go back to our vendor
and make sure they have systems in place to deal with that.
Senator Cantwell. But there are no inventory requirements,
is that right?
Mr. Kneuer. That's right.
Senator Cantwell. So, what happens if they run out of
stock?
Mr. Kneuer. Like I said, I think our intention, in
designing this program, was to create it, to make it as easy as
possible for manufacturers and retailers to participate, while
doing what's responsible to guard against waste, fraud, and
abuse. So, we have adopted a standard for the boxes that was
the broad industry-suggested standard. We adopted criteria for
retailers that represented a broad consensus among the retail
industry. So, we have, to the extent possible, wanted to
encourage as much marketplace participation as possible, but,
no, we don't have regulatory authority to reach out to every
retailer in American and say, ``Here are the number of boxes
you need to carry. You know, make sure you have this,'' that's
not the way the program is currently set up.
Senator Cantwell. Well, I think you're hearing a lot of
frustration from members. It's one of the reasons I've been
concerned about the dates that we had set for this transition,
is just how long it takes. Just because technology exists
doesn't mean that you can deploy it that quickly. And so, how
we're setting these mandates up, and, if you ask me, there is a
high potential for a train wreck here. You're basically, as we
ask these questions, telling us, ``Well, we've not optimized
the program for that. We optimized the program for the
retailers.'' Well, it's the consumers we're asking to do
something. We're asking them to make a big transition. We're
using resources to try to help that, but a plan that basically
has coupons available, and maybe not products available, and
then the coupon expires, all of this.
So, I think there is a great deal of confusion that could
go on in this plan, and I suggest, Mr. Chairman, that we,
certainly, look at upping the education process of the American
consumer about this. I think the notion that this many people
can transition over to an adoption of new technology without
significant problems is being shortsighted.
But, let me turn to Ms. Seidel for a second, because one of
the other issues is about--you know, I think in our state we
have four different television markets, 36 different television
stations, and over 2,000 translator stations. Some of those
translators are in suburban communities, some of them are in
small rural communities. I'm trying to understand, if you're a
consumer sitting at home and getting a signal from Seattle, but
through a translator station that's saying that you need to
make this switch. Isn't that process going to be confusing for
some people? Because they might actually have a signal that
they never have to switch, or at least there is no deadline in
the legislation that says that they have to switch.
Ms. Seidel. I think the point you raise about that issue
and the potential for confusion is one we've talked about, as
well, and we do envision putting together consumer materials to
help answer questions before they arise, and to build
awareness, and to try to help address questions that the
consumer may have, if that's the situation.
Senator Cantwell. What's the answer you're going to give to
that consumer, who's getting the signal from a Seattle station
that's emphasizing the digital transition and so, they listen
to that, and they go out and make a set-top box purchase; then
they find out from their neighbor, ``Guess what? You never had
to do that. We didn't have to do that, because we have a
translator station here. You didn't have to go make that
purchase.'' So, now they've signed up for digital broadcast,
the extra dollars that it takes to get the digital broadcast,
they went out and made the purchase for the set-top box, and
they find out from their neighbor they didn't have to. How are
you going to deal with that?
Ms. Seidel. Well, I think part of it is an education and
awareness issue. But I do think you're right, that it will be
fact-specific in many cases, so it's hard to do, like, an
across-the-board outreach on an issue that will vary from one
area to another, but those issues--I think they are important
ones, and I think they're ones that will, you know, have the
potential for raising questions for consumers, and certainly
it's one I'll take back and see what more we could do on our
side.
Senator Cantwell. Is there a hard date after which the
television broadcasters--after February 2009, will we still
have analog broadcasts?
Ms. Seidel. On February 17, 2009, analog broadcasting would
cease.
Senator Cantwell. But----
Ms. Seidel. But the low-power--I think, in terms of the
low-power stations, the analog translators, that would be a
different issue, and, I think, related to the question you just
posed.
Senator Cantwell. Again, I'm asking, because, obviously,
these low-powered stations--this notion and the uses of ``white
space'' and where we're going with that. I think having a plan
as it relates to the percentage of, you know, class A and low-
power stations, and what you're really going to do with them--
--
Ms. Seidel. Well, I think probably the best thing for me to
do is to take your questions back to the Media Bureau, who's
looking at those issues, and make sure that we get back to you.
Senator Cantwell. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you very much.
Senator Smith?
STATEMENT OF HON. GORDON H. SMITH,
U.S. SENATOR FROM OREGON
Senator Smith. Thank you, Mr. Chairman.
For the record, I would note that some of the concerns
being expressed--and, I think, specifically by Senator
McCaskill, we included, in last year's bill, a requirement for
broadcasters to inform the public through public service
announcements. And I guess my question is--you know, obviously
they have an incentive to do this, do you know of a date, a
plan of theirs--have they shared it with you--as to when they
begin to meet this requirement to make public service
announcements?
Mr. Kneuer. Not with the level of granularity that would
say, ``On this date, we will commence PSAs at the following
volume, and then we will ramp up to a higher volume, and that,
by the end, we are going to do an explicit number of PSAs and
commit X number of resources.'' They have committed that they
will be conducting a broad campaign that will be based on
polling on awareness, focused on pockets of population, based
on what, the level of penetration, what their awareness is, and
ramping it up as we get closer to the date.
Senator Smith. Well, I--obviously, they understand their
own interests in this, do they not?
Mr. Kneuer. I would think so.
Senator Smith. OK, you've got that--you've gotten that
sense from them.
You know, my own experience, as a dad, is that my kids--and
I suspect all of yours--are really up on this, and they've
already made the transition, and they're already with high
definition, and they're demanding mom and dad get new TVs. And
I know that has happened in our household. But I suspect that
the AARP is correct in their concern about, specifically, the
elderly. I know we're sort of beating a dead horse here,
because we've mentioned this over and over again, but obviously
we mention it because of the obvious concern that many who are
not part of the high-tech age are intimidated by it, don't know
what to do or where to go, and are, frankly, subject to
exploitation through fraudsters and others. And I really think
that needs to be the focus of your efforts.
To that end, Senator Pryor and I sent a letter to Secretary
Gutierrez and to FCC Commissioner Martin--it was to them
jointly--and we asked them to do a number of specific things:
to jointly prepare a program that has an explanation of the DTV
transition, including its effective date and who is affected;
second, instructions to determine whether a television's--a
television will receive a digital signal, and, if not, the
options to ensure reception of a digital signal, and the
related cost; to, third, inform related--information related to
the National Telecommunications and Information Administration
Digital-to-Analog Converter Box Coupon Program; and, fourth,
tips on how to avoid potential fraudulent schemes related to
the DTV transition that may target the elderly.
Do you know whether the commissioner or the Secretary have
responded to that, have you gotten directions to this----
Mr. Kneuer. Well, we've got the letter, and we're preparing
a response for you. Each of the things, that I think you called
out in your letter, are things that we've been looking at and
working on, either directly, through our relationship with
seeking a vendor to fulfill this coupon program for us, or
through our collaboration with other Federal agencies that
have, as a responsibility, reaching out to elderly communities,
our partnership with AARP. So, we'll certainly be getting back
to you with more detail on each of those points. But all of
those things are things that we're focused on.
I think----
Senator Smith. But----
Mr. Kneuer.--one thing--sorry.
Senator Smith. No, go ahead.
Mr. Kneuer. One thing, with regard to seniors and the
elderly, is that relative to other age groups, they actually
watch a little bit more television. And so, to the extent that
most of this campaign----
Senator Smith. I'm not sure that's possible, when I think
about my sons watching.
[Laughter.]
Senator Smith. But you--you're probably----
Mr. Kneuer. It's high-school kids, and----
Senator Smith.--right.
Mr. Kneuer.--then it ramps up. But it's--for 55-64, it's an
average of 2.6 hours a day. By the time you get above 75, it's
more than 4 hours a day. So, they're going to be recipients of
a lot of this broadcast information about that. That being
said, we need to make sure that, as they respond to this, that
they're not taken advantage of, as you said, by people who may
seek to do that.
Senator Smith. Do you have any other comments, Ms. Seidel?
Ms. Seidel. If I might. I do think the--I think the first
couple of points that you mentioned, about having information
available to the elderly that would explain to them how to find
out whether or not what they have is a digital television, or
what they would need to do, and making sure to explain what the
transition is and when the transition date is, and providing
information for them about what options are available for them
to continue viewing broadcast television, come the completion
of the transition--we do have a DTV fact sheet that includes
all of those elements, and it also links to the NTIA website
and information about the coupon--about converter boxes and the
coupon program.
In addition to that, we are definitely emphasizing our
efforts to reach out to organizations that represent the
elderly. And the Leadership Council on Aging, as I understand
it, is an umbrella organization that represents something more
than--close to 60 organizations that help people who are
elderly.
And then, finally, I would say that the Commission is
definitely committed to addressing and investigating any
information that it gets about potential scams that may be
targeting the elderly, and is definitely committed to taking
enforcement action in this regard, just as it has done with
respect to the labeling requirements and violations of the
labeling requirements. So, certainly we understand your
concern.
Senator Smith. Well, thank you for that. I look forward to
a response to the letter and appreciate anything and everything
you do in regards to these very obvious, but very important,
steps that we need to take, as a government, to do our part of
this. I think the number of Senators that have been here this
morning are an indication that we understand, firsthand, that,
while we get lots of calls in our offices about Medicare or
Social Security or veterans issues, ranking right among those
concerns is trouble with their TV sets, and so, that's why we
know the flood that's going to come, and if we can make sure
it's not a tsunami, that would be great.
Thanks.
Mr. Kneuer. If I could put----
The Chairman. Thank you very much.
Mr. Kneuer.--in a plug for our----
The Chairman. Senator Thune?
Mr. Kneuer. As I say, we've supplied our pamphlets, in both
Spanish and English, to every member of the Senate and of the
House of Representatives, supplied a PDF link. So, to the
extent you are getting constituent concerns about this, we've
got information that I think can be helpful.
Ms. Seidel. As do we.
The Chairman. Thank you.
Senator Thune?
STATEMENT OF HON. JOHN THUNE,
U.S. SENATOR FROM SOUTH DAKOTA
Senator Thune. And they're all watching C-SPAN, so they're
going to make sure that they're following all this that has
happened. So----
[Laughter.]
Senator Thune. Thank you, Mr. Chairman and Vice Chairman
Stevens, for holding this hearing. I also want to thank our
witnesses for their testimony.
And the digital transition is coming. It's going to be here
in 18 months, and I think it's important for this committee, as
well as the agencies and groups that are represented on our
witness panels, to do their part in highlighting the coming
transition. There are a lot of other groups--industry groups
that will also be required to play an important role. But, as
we all know, change comes easier for some than others, and our
younger generations are going to be more able to easily adapt
to the digital transition. My daughters seem to intuitively
know how to operate their iPods without reading the
instructions, but our older generations, myself included, I
think will probably find a lot of these changes a little harder
to deal with. And I know the clock on my parents' VCR is still
blinking 12 o'clock, so I think that's probably an indication
of what we may be dealing with.
But, in South Dakota we have 12.2 percent of our households
who rely on free over-the-air broadcast television, which
represents about 36--almost 37,000 households. And I'm sure a
lot of those households are older or lower-income families. And
so, what we're hearing from our witnesses this morning, I
think, reinforces the fact that it's these households that are
going to be most impacted by the digital transition. And it's
my hope that, through efforts like what we're doing here today,
we can highlight the coming transition, help get people
prepared for the change.
I've got a couple of questions. This one, I'll direct to
either of Ms. Seidel or Mr.--do you say it ``Kneuer''?
Mr. Kneuer. Kneuer.
Senator Thune. Kneuer.
Ms. Seidel mentioned, in her testimony, that, as of March
1, 2007, all television receivers shipped in interstate
commerce or imported into the United States must have digital
capabilities. Retailers are obviously still allowed to sell
current inventory. But when do you believe there will be no
more analog televisions for sale?
Ms. Seidel. At this point, I wouldn't speculate but I can
certainly take your question back and see if some of my other
colleagues in the agency have a good estimate for you. But I'm
not sure I would have a good answer for you.
Mr. Kneuer. I'm not sure we have good market data on that.
I think the important thing--and I think the Commission's been
doing good work in this regard--is making sure that the
retailers have clear labeling in the stores. There are
consumers who actually may want one of those old analog TVs
that are cheap, so they can hook it up to a video game or cable
set-top box or whatever it may be. So, there are consumers who
are going in, who, you know, may very well want to make an
informed choice to purchase one of those sets. The critical
thing is that it's an informed choice and that there isn't
confusion in the marketplace as those last sets do move
through.
Senator Thune. In your testimony, Ms. Seidel, you mentioned
that the FCC staff had inspected 1,089 retail stores around the
country to see how well retailers are informing consumers about
the impending transition and complying with the new labeling
requirements, and you mentioned 262 citations that were issued
during those inspections. That's about a 76 percent score for
those retail outlets, those stores. As far as grades go, that's
not quite an F, but it's a long ways from an A or a B. What do
you think needs to be done to improve that labeling compliance
at retail stores?
Ms. Seidel. A couple of things. One thing, I think, which
seems to always occur is, once there are enforcement actions
taken, it does seem to get attention from others, from other
companies around the country. So, I think the fact that
enforcement action has been swift, and has been consistent,
will help.
Second, we have been working with the Consumer Electronics
Retailers Council, who has, in conjunction with the FCC, put
out a joint advisory to the retailers, reminding them of the
labeling obligation and the requirement. And I think that, too,
will help, because we do have the commitment of that
organization to help us in this regard, and I think that, the
consistent and continuous enforcement action, when it's
appropriate, will be helpful.
Senator Thune. What happens when you issue a citation? I
mean, is there some sort of consequence associated with that
for a retailer?
Ms. Seidel. And, again, this is probably a better question
for my colleagues in the Enforcement Bureau, but I used to work
there. The citation indicates that it appears that this
violation has occurred, and warns them that, if it is occurs a
second time, a Notice of Apparent Liability could be issued,
and actual monetary forfeiture issued. So, they have a very
clear incentive, after that citation, to fix the problem. And,
historically, you know, that is generally the case.
Senator Thune. Citation will get their attention----
Ms. Seidel. Yes.
Senator Thune.--in other words. OK. And when you choose are
you selective about how you audit, or is that sort of random
retail stores around the country? And----
Ms. Seidel. That question, I will have to take back to my
colleagues in the Enforcement Bureau and let you know. But I
can tell you that enforcement of these issues is, indeed, a
high priority for the Chairman and the Commission. And so, I
will get the answer to your specific question, but it will be
one that will be ongoing effort.
Senator Thune. We've got a billion and a half allocated for
the Digital Conversion Box Program, and my understanding is
that NTIA is going to use the first $990 million to distribute
$40 coupons to--for converter boxes, on a first-come first-
serve basis. There's no means test and no requirement for a
household to certify that they solely rely on the over-the-air
broadcasts for television viewing. And I guess my question
would be, What was NTIA's rationale for that decision? And, you
know, you've got the other $550-million contingency fund, and
have indicated that that's going to be used differently. My
question, I guess, if you could give us a little bit background
into what your thought process was----
Mr. Kneuer. Sure. I think the----
Senator Thune.--with regard to that.
Mr. Kneuer [continuing]. The legislative history made it
clear that this was intended to be a broad program, that the
transition is essentially going to affect all television
households, so the program should be as broadly applicable as
possible. So, that's why, for the first $990 million, we've
said, essentially, any U.S. household, without any restrictions
of any kind, can participate in the program.
The second pool of money, we had a different criteria for
that, where we have limited access to those dollars to
households that self-certify that they're exclusively over-the-
air, that they don't receive cable or satellite on some set in
the house. Our thinking on that was that to maximize the
possibility--the likelihood that no household--household that
would otherwise lose television service--doesn't have access to
some financial assistance, if they need it. So, if we go
through the first billion dollars, and the money is now limited
to an additional $500 million, make sure that 500 million goes
as far as possible to make sure that no household would
actually lose television service, absent that resource. So,
households that are ineligible for the second $500 million
still have access to television, either through cable or
satellite.
Senator Thune. And do you have pretty firm estimates about
whether that's going to be enough money and, in those two
pools, is going to be sufficient to deal with the----
Mr. Kneuer. Given the take-up of digital televisions--as I
said, the numbers I've seen are that by the end of this year
it'll be more than 85 million digital set-tops in American
households--given the penetration of cable and satellite, given
some of the polling that we've seen with regards to, what do
consumers intend to do at the end of this transition? You know,
you take a focus group, and you educate them, say, ``It's
coming in February, your options are: subscribe to cable,
subscribe to satellite, buy a digital television, buy your own
set-top box that has some degree of functionality beyond what
is eligible under the rule, or participate in this government
program.'' Lots of consumers indicate that they are going to
effectuate this transition on their own. Aside from the
program, even exclusively over-the-air households I think a lot
of consumers are going to take these coupons and go into a
store and say, ``You know what? That digital TV is actually
what I want,'' and the coupon won't be redeemed. So, given the
consumer acceptance of DTV in the marketplace, as we're
currently seeing it, given the options consumers have to effect
the transition on their own, I'm confident that the--with the
full $1.5 billion, we'll have enough money.
Senator Thune. Well, I appreciate your answers to the
questions, and I would just, again, say that this is going to
be--getting this right is going to be important for a lot of--
particularly, seniors, in my state at least--the television is
a kind of a lifeline and--in those--particularly in those cold
winter months, it is especially important. And I think that
making sure that this transition occurs smoothly is going to be
critical. So, I hope that, as it moves forward and--we'll
continue to have, I think--all of us, probably, on this
committee--an ongoing interest in that process, and what we can
do to be helpful.
So, thank you for your testimony.
Mr. Kneuer. Thank you.
Senator Thune. Thank you, Mr. Chairman.
The Chairman. I thank you very much.
Mr. Secretary and Ms. Seidel, I thank you very much for
your testimony, it's been very helpful. Thank you.
Ms. Seidel. Thank you.
Mr. Kneuer. Thank you.
The Chairman. We will be submitting more questions, if we
may.
Our next panel consists of a member of the AARP Board of
Directors, Ms. Nelda Barnett; the President and CEO of the
National Hispanic Media Coalition, Mr. Alex Nogales; the Vice
President/Director of Public Policy of Leadership Conference on
Civil Rights, Ms. Nancy Zirkin.
While they're assembling, I'd like to announce that this
committee will be conducting another hearing in September, and
at that time we will have industry witnesses, including
electronic manufacturers, retailers, broadcasters, and cable.
I'm certain you've been waiting a long time, and I know
that you want to go ahead, so may I call upon Ms. Nelda
Barnett.
STATEMENT OF NELDA BARNETT, MEMBER,
BOARD OF DIRECTORS, AARP
Ms. Barnett. Thank you very much, and good morning. There
it is. I'm sorry.
Good morning, Mr. Chairman and members of the Committee.
Thank you for this opportunity to testify on behalf of AARP.
AARP has been actively engaged in addressing DTV transition
issues before Congress and Federal agencies; in particular,
with the FCC and NTIA. AARP has urged policymakers to lighten
the burden of this transition for all consumers, particularly
older Americans.
Based on data provided by the National Association of
Broadcasters, 38 percent know that there is going to be a
transition, and only 10 percent know what the date is on it.
AARP's testimony centers on five different points and the
impact it will have on the transition for older Americans:
Number one, a large percentage of analog-only households
are older Americans, who will be disproportionately affected by
the DTV transition, and who are not prepared. The approximately
20 million analog-only households should be the primary focus
of education and outreach campaigns. Some 40 percent of these
households include at least one person 50 years of age or
older.
A recent study conducted by CENTRIS reports that older
Americans are more likely to be found in over-the-air
households, and are, therefore, more vulnerable to the
consequences of the digital television transition. In the most
recent quarter of 2007, the study found that 24 percent of
households with Americans 65 and older receive their TV
programming over the air, compared with 19 percent of the
younger population.
The CENTRIS study revealed that 41 percent of older
Americans, as compared to 55 percent of those younger, have
purchased a TV set in the past 3 years. This suggests older
Americans are not likely to be as exposed to DTV transition
messages from electronic retailers.
The second point: Older Americans confront additional
challenges related to obtaining and redeeming converter box
coupons and installing the converter boxes. For older persons,
there are additional challenges involved in the DTV transition
that should be addressed over the next several months. Among
these are mobility issues, infirmity, isolation from other
family members, and distance from retail centers to purchase
the box. It may be difficult, if not impossible, for many older
people to leave their homes to purchase a converter box.
Another hurdle would be the installation process. Moving the TV
to get to the back of the set and connect the box will be
difficult for frail and disabled persons, including many
elderly individuals living on their own.
Number three, coupons should not be distributed until
sufficient numbers of converter boxes are available for
purchase in retail stores. A mechanism should be implemented to
inform consumers about local stores that have the coupon-
qualified boxes in stock.
Number four, older Americans are particularly vulnerable to
potential coupon fraud and abuse, and could be subjected to
retailers' up-selling efforts. It is also critical that steps
be taken to protect consumers against scam artists who could
sell unsuspecting consumers counterfeit or illegally duplicated
converter box coupons. There may also be efforts to sell
legitimate free converter box coupons. Further, consumers will
need clear information to prepare for the possibility of
retailers up-selling.
The fifth one, a coordinated outreach and education
campaign should include Federal, State, and local agencies, and
programs serving consumers who have the greatest risk of losing
their broadcast television service, particularly vulnerable
population groups, such as the low-income and the older people.
In conclusion, on the morning of February 18, 2009,
consumers in households around the country could discover that
they are unable to view their regular morning TV programs.
These consumers will be confused, frustrated, and angry that
this important information and entertainment source in their
home is no longer operational, through no fault of their own.
We all have an important role to play in keeping consumers
connected. AARP is committed to doing their part to educate the
nearly 39 million AARP members around the country about the DTV
transition and Converter Box Coupon Program. AARP and the older
Americans we represent are also counting on policymakers to
take the necessary steps to ensure that all consumers,
regardless of age, income, native language, and other factors,
stay connected.
Thank you, sir.
[The prepared statement of Ms. Barnett follows:]
Prepared Statement of Nelda Barnett, Member, Board of Directors, AARP
Good morning. Mr. Chairman and members of the Committee, thank you
for this opportunity to testify today on behalf of AARP regarding
consumer issues related to the digital television transition. My name
is Nelda Barnett. I'm from Owensboro, Kentucky, and I am a member of
AARP's Board of Directors.
AARP has been actively engaged in addressing DTV transition issues
before Congress and Federal Government agencies. We have worked closely
with the Federal Communications Commission (FCC) and the National
Telecommunications and Information Administration (NTIA), holding
numerous meetings with senior officials to discuss AARP's concerns
regarding the DTV transition. AARP has urged policymakers to mitigate
the burden of this transition for all consumers, particularly older
Americans. We supported the establishment of the converter box coupon
program and we continue to call attention to the importance of
comprehensive consumer education and outreach to inform all affected
individuals about the DTV transition and converter box coupon program.
My remarks this morning will focus on the following issues
concerning the transition's impact on older Americans.
1. A large percentage of analog-only households are older
Americans who will be disproportionately impacted by the DTV
transition and who are not prepared for the transition;
2. Older Americans confront additional challenges related to
obtaining and redeeming converter box coupons, and installing
the converter boxes;
3. Coupons should not be distributed until sufficient numbers
of converter boxes are available for purchase at retail stores.
There should be a mechanism implemented to inform consumers
about local stores that have the coupon-qualified converter
boxes in stock.
4. Older Americans are particularly vulnerable to potential
coupon fraud and abuse and could be subjected to retailers'
``upselling'' efforts.
5. A coordinated outreach and education campaign should include
Federal and state agencies and programs serving consumers who
are at the greatest risking of losing their broadcast
television service, particularly vulnerable population groups
such as older Americans.
Background
Older Americans have had a growing reliance on television
technology. TV offers more than just entertainment. For older
Americans, television can be a primary connection to the outside
world--providing life-saving weather forecasts, public safety
announcements, information on government and politics, and community
news. In fact, Americans aged 50 and above watch the greatest average
number of hours of television a day, almost 5.5 hours.\1\
---------------------------------------------------------------------------
\1\ Nielsen Media Research, 2005.
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The transition to digital television will offer consumers real
benefits: better-quality transmission and a wider range of programming
options. However, as Congress has recognized, there are significant
costs associated with this transition. Consumers with analog sets will
need to purchase a new set with an integrated digital component,
connect the set to a cable or satellite service, or purchase a
converter box. These costs are not inconsequential. But for older
Americans additional, non-monetary costs may be especially challenging:
the inconvenience of searching for an available converter box,
potential difficulties in attaching the converter box to the back of
their set, and confusion regarding the transition itself.
1. A large percentage of analog-only households are older Americans
who will be disproportionately impacted by the DTV transition and who
are not prepared for the transition.
According to a 2004 survey,\2\ about 21 million households rely on
over-the-air (OTA) broadcast-only television. A more recent Nielsen
Media Research report estimates that the current number of OTA
households is approximately 20 million. These are the consumers who
will be without television service at the point of the transition, and
they should be the primary focus of any education and outreach
campaign, and the priority households for receipt of the converter box
coupons. The GAO reported that of these OTA households, about 48
percent have incomes under $30,000. Moreover, approximately 8 million--
or 40 percent--of these households include at least one person over the
age of 50.\3\
---------------------------------------------------------------------------
\2\ Knowledge Networks/SRI, Home Technology Monitor Ownership
Survey, Spring 2004.
\3\ Nielsen Media Research TV Household Estimates, 2003-2004.
---------------------------------------------------------------------------
Recently, CENTRIS released data from a survey \4\ conducted to
assess the probability that older Americans are more likely to be found
in over-the-air households and are therefore more vulnerable to the
consequences of the digital TV transition. The survey's findings
revealed that older Americans:
---------------------------------------------------------------------------
\4\ CENTRIS, Analysis of Older Americans and the Digital TV
Transition, July 2007.
---------------------------------------------------------------------------
1. Over age 65 are more likely to be found in OTA households;
2. As a group, are less likely to have purchased a new TV in
the past 3 years;
3. Are less likely to have HDTV capabilities in their
households; and
4. Are less likely to own a digital TV.
The survey analysis conducted by CENTRIS concluded:
Older Americans over 65 are a more vulnerable group with
respect to maintaining television services as the digital
transition is completed;
Older Americans will not be as exposed to DTV transition
messages from electronic retailers as will younger members of
the population; and
The population of older Americans will need special focus in
efforts to educate the public with respect to the end of the
DTV transition.
2. Older Americans confront additional challenges related to
obtaining and redeeming converter box coupons, and in installing the
converter boxes.
There are additional challenges involved with the transition to DTV
that confront older Americans, and they should be addressed over the
course of the next several months. Among these may be mobility issues,
infirmity, isolation from other family members, and distance from
retail centers in rural communities. It may be difficult, if not
impossible, for many older Americans to leave their home to purchase a
converter box. Although it may be possible to purchase the converter
box online, there are a number of older Americans who do not have
Internet access in their home.
Another potential barrier for all consumers will be the converter
box installation process. Assuming the consumer is able to request
coupons and purchase the converter box, the next hurdle will be the
installation. The process could require moving the television to get to
the back of the set and connect the box, which could be difficult for
frail or disabled persons, including many older Americans living on
their own. Of course, there is also the possibility that the actual
connection process required will be difficult for some to master.
AARP urges Congress to work with the appropriate Federal agencies
to address these issues in the next several months, to assist older
Americans and other vulnerable individuals with these challenges.
3. Coupons should not be distributed until sufficient numbers of
converter boxes are available for purchase at retail stores. A
mechanism should be implemented to inform consumers about local stores
that have the coupon-qualified converter boxes in stock.
The success of the converter box coupon program involves some
uncertain timing elements. There are some consumers who will act
expeditiously, perhaps in response to initial consumer outreach and
education campaigns, and request converter box coupons when they first
become available in January 2008. According to NTIA's rules, the
coupons will expire 90 days after they are mailed to the requesting
households. AARP has heard from a variety of sources that the converter
boxes may not actually be available in electronic retail establishments
until April of 2008. If a consumer receives the coupon in early
January, it could actually expire prior to the availability of
converter boxes in stores. It is critical that NTIA coordinate the
distribution of the coupons with the availability of the converter
boxes for purchase in stores.
AARP is also concerned that older Americans, particularly those
with limited mobility, may have to travel to several retail
establishments before locating a store that has coupon-qualified
converter boxes on the shelves. In any one community, there could be a
limited number of electronics stores that would stock the boxes for
sale, and some stores may carry only a limited number of boxes. The
NTIA will need to work with the selected coupon vendor to design a
mechanism to track the locations of stores that have stocked the
coupon-qualified boxes for purchase, and update this information on a
regular basis. Consumers should be able to access this information and
locate the store in their area with boxes in stock, by calling a toll-
free number as well as by going to an Internet website.
4. Older Americans are particularly vulnerable to potential coupon
fraud and abuse and could be subjected to retailers' ``upselling''
efforts.
As recent consumer protection history has shown, whenever there is
an opportunity for scam artists to take advantage of the consumer, it
will happen. The converter box coupon program provides such an
opportunity. It is critical that the necessary steps be taken to
protect consumers against scam artists who could sell unsuspecting
consumers counterfeit or illegally duplicated converter box coupons.
Assuming such steps are taken, there will still be an opportunity for
legitimate free converter box coupons to be offered for sale. Assisting
consumers to avoid this unnecessary extra cost will require educational
materials to inform consumers as to how they can receive a valid
coupon, and to offer tips on how to avoid scam artists.
Consumers will need to be savvy shoppers to understand, and perhaps
reject, anticipated efforts by retailers to sell enhanced converter
boxes that do not qualify for the coupon discount, or encourage
consumers to purchase new, digital sets. The process of ``upselling''
can be avoided by providing consumers with clear information on the
types of converter boxes qualifying for use of the coupon, and for tips
on what they need in their home to continue television reception.
5. A coordinated outreach and education campaign should include
Federal and state agencies and programs serving consumers who have the
greatest risking of losing their broadcast television service,
particularly vulnerable population groups such as low income and older
Americans.
Congress should work with the NTIA and FCC to construct a
coordinated effort to educate the public about the transition with
other Federal, state and local government agencies that serve
vulnerable population groups, including older Americans and low-income
households.
There are a number of Federal assistance programs, such as those
administered by the U.S. Department of Health and Human Services, that
could be tapped to help. For example, the aging network represents a
great resource. The Administration on Aging, State Units, and Area
Agencies on Aging (AAA's), along with the wide range of service
providers they fund, such as Meals on Wheels and local senior centers,
could play critical roles in education and outreach.
Low income assistance programs, such as Supplemental Security
Income (SSI), the Low Income Home Energy Assistance Program (LIHEAP)
and the Commodity Supplemental Food Program, should also be engaged in
distributing information to the low income population most vulnerable
in this transition. Congress should request a specific plan that
addresses the coordination of efforts among these, and other government
agencies.
AARP recognizes that the task of educating the general public about
the DTV is enormous--and the $5 million designated by Congress for
consumer outreach and education related to the converter box coupon
program is inconsequential, given the task at hand. However, these are
the resources that are available and many organizations will need to
step up to inform their own members. AARP is committed to doing our
part to educate the 38 million AARP members around the country about
the DTV transition and the converter box coupon program.
AARP has several publications, including the AARP Magazine and
Bulletin that reach over 24 million households. In addition, the AARP
Spanish language magazine, Segunda Juventud, is distributed to over 1
million Spanish-speaking older Americans. AARP is also planning other
media activities and an outreach campaign to inform and educate mid-
life and older American members. Materials will be prepared and
distributed to AARP state offices and volunteer chapters, to implement
a coordinated outreach plan to extend AARP's reach into the community
at-large.
Conclusion
On the morning of February 18, 2009, just a little over eighteen
months from today, consumers in households around the country could
discover that they are unable to view their regular morning television
programs. These consumers will be confused, frustrated, and angry that
this important information and entertainment source in their household
is no longer operational, through no fault of their own. Thousands of
telephones will ring in communities around the country as well as right
here in hundreds of Congressional offices. Constituents will call their
elected officials to complain and ask: ``What has happened to my
television set?''
We all have an important role to play in keeping consumers
connected. AARP is committed to doing its part. AARP, and the older
Americans we represent, are also counting on policymakers to take the
necessary steps that will ensure all consumers, regardless of age,
income, native language, or other factors, stay connected.
The Chairman. I thank you very much.
May I call upon Mr. Nogales.
STATEMENT OF ALEX NOGALES, PRESIDENT AND CEO, NATIONAL HISPANIC
MEDIA COALITION
Mr. Nogales. Thank you, Senator.
Mr. Chairman and members of the Committee, thank you for
giving me the opportunity to speak to you, on behalf of the
National Hispanic Media Coalition, on preparing consumers for
the digital television transition. NHMC has 13 chapters across
the Nation, and is also secretariat for the National Latino
Media Council, which consists of 17 of the largest Latino civil
rights and advocacy organizations across the Nation.
We joined the DTV Transition Coalition, and have been
working with Consumer Electronics Retailers Coalition on their
Spanish-language translations as part of their outreach, as
well as on the outreach itself.
You have my complete statement on record, but allow me to
highlight the following points:
The DTV transition consumer educational program is grossly
underfunded, and needs to be supplemented. The $5 million
allocated to NTIA, and the $2 million that the FCC has for
consumer education, translates to 2 and half cents per person
for 300 million people here in the United States. When Berlin,
Germany, made the transition with less than 1 million people,
it spent 33 cents per person. What a difference!
Consumers need to be informed on the basics, such as:
How to figure out if they have an analog or digital
television set. I don't know. And I know very few people that
know the difference.
Two, that their analog TV sets will go dark in less than 2
years without a converter box, if they are not connected to
cable or satellite services.
Three, they need to know that they don't need to purchase a
new television set, that over-the-air television will continue
to be free, will offer them many more channels, and will give
them a better picture, even on an older set.
Four, consumers need to be able to access user-friendly
instructions on how to connect the converter boxes to their
television sets, and be able to contact a live person to help
them with the connections if they have difficulties.
Since a predominantly high number of Spanish speakers will
be impacted by this transition, bilingual and bicultural staff
is essential. We have the number of 21 million households that
have rabbit ears, at this point. A full third of those, 7
million, are Latinos. For any educational campaign to be
effective, it's not only relevant that the person be able to
speak the language, but also understand the culture. English-
written materials should not be translated to Spanish, as they
are seldom culturally effective. Materials to the Spanish-
speaker should be original, and the appropriate place to
advertise to Latinos should be fully considered. For example,
Latinos, more than anyone else, consume a great deal of radio
programming because of the fact that many of our jobs are
outdoors.
Already, we have seen coordination problems that can come
up in major national campaigns that involve translation.
Specifically, ``converter boxes'' was translated in four
different ways by the NAB, the DTV Transition Coalition, the
National Telecommunication and Information Administration,
NTIA, and the Federal Communications Commission. In fact, the
FCC was using two different terms for the boxes. It is
imperative that we avoid confusing the consumer by using
different terms for key terms. Let's agree on a translation,
and remain consistent. We prefer ``caja convertidora,'' because
it is a precise translation of ``converter boxes'' and easy for
the Spanish consumer to understand.
I wish, Mr. Chairman, that I was as optimistic as some of
the other witnesses have been, in terms of this being a smooth
transition. I am not. I just came from a meeting of the
National Latino Media Council membership, and, I have to tell
you, out of the eight people that were there--they're all very
sophisticated, very smart individuals in the entertainment and
also in the newspaper business--and not one of them really knew
very much about the digital transition. They knew the term, but
they don't know the mechanics.
As to the advertising, we can't really leave it to cable,
and we can't really leave it to the broadcasters. As you have
heard, there is no firm date as to when they are going to start
with their PSAs. I don't doubt their intentions. I don't doubt
their intentions at all, but the fact of the matter remains
that they still cannot give us a date when they're going to
start their advertising campaign, their PSAs, and everything
else. So, that being the case, there are no firm dates, and
we're all kind of in the air that this is going to occur.
Now, I have it not only from the NAB that this is the case,
but also from the presidents of several of the organizations
involved, both the Spanish-language and English-language
networks. They're going so fast with their business, and they
live and die, as you know, by the overnight ratings, and they
have their hands full. So, this is a priority, but a priority
that they keep thinking, that is way down in the future, not
realizing that it's happening in 18 months. So, until we have
timeframes that tell us specifically when this is going to
begin, I can tell you that I'm not optimistic at all that we're
going to reach the American public.
Thank you.
[The prepared statement of Mr. Nogales follows:]
Prepared Statement of Alex Nogales, President and CEO,
National Hispanic Media Coalition
Mr. Chairman and members of the Committee, thank you for giving me
the opportunity to speak to you today on behalf of the National
Hispanic Media Coalition's (NHMC) regarding preparing consumers for the
Digital Television Transition.
My name is Alex Nogales; I am the President and CEO of NHMC. NHMC
is a 21-year-old non-profit Latino civil rights, media advocacy
organization based in Los Angeles, California. We have 13 chapters
nationwide and our mission is to: (1) improve the image of American
Latinos as portrayed by the media; (2) increase the number of American
Latinos employed in all facets of media; and (3) advocate for media and
telecommunications policies that benefit the Latino community. NHMC is
also the Secretariat for the National Latino Media Council, a national
coalition comprised of 15 of the largest Latino Civil Rights Advocacy
groups in the Nation. Additionally, NHMC is an Executive Committee
Member of the Media and Democracy Coalition, a national coalition
comprised of many of the largest mainstream media advocacy groups in
the Nation. Recently, NHMC joined the DTV Transition Coalition
membership.
As you know, the transition from analog to digital television
brings great opportunities but also great challenges. In 2005, the
Government Accountability Office (GAO) reported that 21 million U.S.
households rely solely on over-the-air television. Of these households,
about 48 percent earn less than $30,000 per year per household. These
21 million households include a disproportionate number of Spanish
language speakers: one-third or 7 million people who will be impacted
by the digital transition are Spanish language speakers. It is also
estimated that one-third of the 21 million households include residents
over the age of fifty, many of whom live on fixed-incomes; millions of
these households will be in rural areas or will include persons with
disabilities. Further, according to the National Association of
Broadcasters (NAB), African-American households are 22 percent more
likely to rely exclusively on over-the-air reception. In summary,
households impacted by the digital transition will be minorities, low-
income families, living on a fixed-income, and requiring a well-defined
and more specific educational outreach campaign then the overall
population requires. I will refer to the groups that I just mentioned
as our target groups or target population.
A more specific educational outreach campaign to these target
populations must be pro-active, consumer-friendly and culturally,
linguistically sensitive. Appropriate outreach to disabled, minority,
rural, low-income and senior citizens is essential. For example, the
public service announcements promoting this initiative must include
closed captioning for the hearing impaired and should be available in
Spanish as well as other relevant languages. The call-in centers
handling the voucher questions must include live-operators that include
Spanish-speakers, wait time should not go over 10 minutes and must
accommodate telecom relay services that make it easier for the deaf to
communicate by phone. And it is not sufficient to translate the English
materials to Spanish. Those doing the outreach must communicate with
Spanish speakers in a manner where their message will be understood.
Cultural awareness here is fundamental for the outreach campaign to be
successful. Already, we have seen coordination problems that can come
up in major national campaigns that involve translation. ``Converter
boxes'' was translated in four different ways by the NAB, the DTV
Transition Coalition, the National Telecommunications and Information
Administration (NTIA), and the Federal Communications Commission (FCC).
The FCC was actually using two different terms for the boxes. It is
imperative that we avoid confusing the consumer by using different
words for key terms. Let's agree on a translation and remain
consistent. We prefer ``caja convertidora'' because it is a precise
translation of converter boxes and easy for the Spanish consumer to
understand.
Congress allocated $5 million to NTIA to educate consumers about
the DTV coupon program. The FCC has only requested $1.5 million for
consumer education effort in its 2008 budget request. That's a total of
$6.5 million to educate 300 million people, about 2 cents per person.
This is a seriously under-funded consumer education program. When
Berlin, Germany transitioned to DTV, it spent $984,000 to educate about
three million people, or 33 cents per person. Why is the City of Berlin
willing to make this expenditure on its citizens, but our Nation is
not? Furthermore, the FCC does not plan to begin its public education
campaign until 2008, when the converter box coupons and the boxes are
expected to be available on January 1, 2008. In our opinion, the FCC
campaign is starting a year late. Consumers need to know about the DTV
transition generally, and the coupon program specifically, as soon as
possible, but certainly well before NTIA makes the coupons available to
the public. We need to start seeing Y2K-level consumer education
efforts soon or you will have a big problem on your hands. Consumers
need to be aware of how the transition will impact them. They need to
know (1) how to figure out if they have an analog or digital TV; (2)
that their analog TV sets will go dark in less than 2 years without a
converter box if they are not connected to cable or satellite service;
(3) they need to know that they don't need to purchase a new TV set,
that over-the-air television will continue to be free, will offer them
many more channels and will give them a better picture even on an older
set; (4) consumers need to be able to access user-friendly instructions
on how to connect the converter boxes to their TV sets and be able to
contact a live person to help them with the connection if they have
difficulties .
We strongly encourage the NTIA to bring in community based
organizations (CBOs) that represent the disabled, minority, rural and
senior advocates that will help develop a thorough outreach plan to
ensure that the outreach and educational component of this program is
solid and has no holes. We can't afford to make mistakes on a program
that is a first-come, first-serve program where the populations that
are in most need of these coupons run the risk of being the last to
hear about the program.
NAB estimates that about 5 percent of the population knows that the
digital transition is taking place. I suspect the NAB is being
optimistic. Not many people outside the Beltway have heard about the
digital transition and its possible impact on their households. Not
enough has been done so far to educate our target groups that this
historic change is taking place and that their over-the-air televisions
will go dark after February 17, 2009 without a converter box. The
outreach program needs to start today and more effort needs to be made
by the NTIA, FCC and the DTV Transition Coalition to reach community-
based organizations that focus on the target groups. We need more
people outside of D.C. to know about the transition and be able to
communicate in a clear and understandable manner to those that will be
impacted.
Finally, NHMC objects to the two-phase plan that NTIA is proposing
for the distribution of the coupons. In the first phase, where
$990,000,000 is allocated, all U.S. households will be able to apply
for up to two $40 coupons per household to purchase converter boxes.
The second phase is only open to households that certify in writing
that they rely on over-the-air reception. Once the $990,000,000 is
spent, those that apply late or do not find out about the coupon
program in time will be burdened by an added certification that may
deter them from applying. Changing eligibility mid-course will result
in needless customer confusion. Indeed, the certification will be a
deterrent to low-income families, especially those that do not
predominantly speak the English language. Ladies and gentleman, I have
no doubt that the disenfranchised population that will be the most
impacted by the digital transition will be the last to apply for the
coupons. This being the case, having to certify in writing that they
rely on over-the-air reception is just adding an additional burden that
will discourage many of them from applying for the converter boxes. A
two phase-plan with an added burden for those that are hardest to reach
doesn't make a lot of sense. If the reason for this two-phase system is
because NTIA thinks there is a likelihood that the program will run out
of funds before all the impacted households have obtained their
coupons, then NTIA should go back to Congress and ask for additional
funding.
Summary
The DTV Transition consumer educational program is grossly
under-funded and needs to be supplemented.
We need to start seeing Y2K-level efforts for the DTV
Transition. Efforts must be pro-active, consumer-friendly and
culturally sensitive and they need to begin now. Efforts should
include a well-coordinated campaign that includes CBOs working
closely with the NTIA.
Since a predominantly high number of Spanish-speakers will
be impacted by this transition, bilingual and bi-cultural staff
is essential. For any educational campaign to be effective it's
not only relevant that the person be able to speak the language
but also understand the culture.
English-written materials should not be translated to
Spanish as they are seldom culturally effective. Materials to
the Spanish-speaking should be original and the appropriate
place to advertise to Latinos should be carefully considered.
For example, Latinos more then anyone else consume a great deal
of radio programming.
We oppose a two-phase program that adds a burdensome
requirement for those that apply later. The second-phase
certification requirement is in effect a detractor.
The Chairman. I thank you very much, Mr. Nogales.
Ms. Zirkin?
STATEMENT OF NANCY M. ZIRKIN, VICE PRESIDENT,
DIRECTOR OF PUBLIC POLICY, LEADERSHIP CONFERENCE ON CIVIL
RIGHTS (LCCR)
Ms. Zirkin. Thank you, Chairman Inouye. And thank you,
Senator Stevens.
I am Nancy Zirkin, and I'm Vice President----
Senator Stevens. Pull the mike up toward you, Ms. Zirkin.
Ms. Zirkin. Is it on?
Senator Stevens. Yes.
Ms. Zirkin. OK. Thank you.
I'm Nancy Zirkin, Vice President and Director of Public
Policy with the Leadership Conference on Civil Rights. Thank
you very much for the opportunity to testify. It's a very
important issue for the Leadership Conference.
LCCR, as many of you know, is our Nation's oldest, largest,
and most diverse coalition of nearly 200 national civil rights
and human rights organizations. LCCR is also a founding member
of the DTV Transition Coalition.
The huge switch from analog into digital TV will have a
profound impact on millions of Americans, as we have heard
throughout this morning, especially seniors, the poor, the
minority communities, people with disabilities, and those for
whom English is not their first language.
And the reality today, as Senator Thune said, is that
everybody needs TV, not just for entertainment, but for news,
both local, national, and worldwide. Imagine 9/11 without TV
coverage and you'll understand how important a working
television is to the 21 million American households who now
rely solely on free analog TV.
LCCR believes that access to communications in the 21st
century is not a luxury, but a fundamental right of every
American. The challenges involved in preparing Americans for
the digital TV transition are of such magnitude that a strong
Congressional response is required. I think Senator McCaskill
had it right; in the end, voters will look to Congress if their
TVs go dark.
LCCR applauds Congress, and both of you, for your
leadership in this transition, and for recognizing the need for
government support to help consumers know about the coupon
program, and about covering the cost for the transition for the
converter boxes. But we are troubled. The $5 million allotted
by Congress to educate consumers about the coupon program is
not nearly enough to support the kind of public education
campaign that we all know is required. Public education
campaigns are not unlike State election campaigns, where people
running for office try to educate, across the board. The actual
cost of Senate campaigns last year in California, Ohio,
Pennsylvania, three states whose combined population is about
21 million households, was $39 million, way more than the $5
million allocated for the transition.
Our fear is that the people who will be most affected by
the change won't hear about it and, therefore, won't have
access to the coupons. We are also concerned that our most
vulnerable populations will be the least likely to receive the
first-come, first-serve limited number of coupons for the
converter boxes. That is, unless Congress ensures that a
comprehensive, coordinated, national consumer education effort
focuses on both the transition and the coupon program to be
administered by NTIA.
We heard Mr. Kneuer's assertion on monitoring the program,
but we believe Congress must determine that the coupons are
going to those who need them most. Sufficient independent
research is required to determine, early on, who is taking
advantage of the coupon program, so that NTIA knows how to
respond, or whether and where to deploy additional funds for
the program. We believe that the government can play an
important role in conducting this research through the GAO,
with Congress tracking the whole process.
NTIA and FCC have stated their commitment to educating all
consumers about the transition and the coupon program, but a
public education effort must be done by all agencies. Each
agency should serve as a site where the coupons could be
distributed. These efforts should be replicated at the State
and local level.
Unless the very people in underserved communities who rely
on free TV are reached early, they will be left with only
unaffordable actions. It is a complete luxury for them to have
a set-top box or to have to afford even a converter box. It is
equivalent to 1 week's food for a poor family. Congress can
make sure that that does not happen.
Finally, let me say that LCCR, through our member
organizations representing over 60 million Americans, will do
our part to educate consumers, but we and the DTV Transition
Coalition cannot do it without additional help and oversight
from the Congress and NTIA.
Thank you very much.
[The prepared statement of Ms. Zirkin follows:]
Prepared Statement of Nancy M. Zirkin, Vice President, Director of
Public Policy, Leadership Conference on Civil Rights (LCCR)
Chairman Inouye, Ranking Member Stevens, and members of the
Committee: I am Nancy Zirkin, vice president and director of public
policy of the Leadership Conference on Civil Rights (LCCR). Thank you
for the opportunity to testify in today's hearing on preparing
consumers for the digital television transition.
LCCR is the Nation's oldest and most diverse coalition of civil
rights organizations. Founded in 1950 by Arnold Aronson, A. Philip
Randolph, and Roy Wilkins, the Leadership Conference seeks to further
the goal of equality under law through legislative advocacy and public
education. LCCR consists of approximately 200 national organizations
representing persons of color, women, children, organized labor,
persons with disabilities, the elderly, gays and lesbians, and major
religious groups. Additionally, LCCR is a founding member of the DTV
Transition Coalition, a large coalition that includes as members the
Federal Communications Commission, the U.S. Department of Commerce,
industry groups, grassroots and membership organizations,
manufacturers, retailers, trade associations, civil rights
organizations, and community groups. I am privileged to represent the
civil and human rights community in submitting testimony for the record
to the Committee.
Today, I would like to discuss what the government-mandated
transition to digital television means for the communities LCCR
represents, and what needs to be done to ensure than no community is
left in the dark. Will all Americans be sufficiently educated about the
transition, so that they will be able to make it relatively easy and
without undue economic burden? Moreover, will all Americans actually
receive the benefits of digital television, including High Definition
Television and multicasting, or will they be deprived of these
remarkable technological advances?
While a wide range of private stakeholders in the broadcasting,
cable, retail, and manufacturing industries are already working hard to
address the impact of the transition, LCCR believes that the challenges
involved in preparing Americans for the digital television transition
are of such magnitude that a strong Congressional response is required.
What's at Stake
Making the transition to digital is not simply a matter of being
able to watch wrestling, or American Idol, or reruns of Friends. At
stake in the transition to digital television is the ability of the
Nation's most vulnerable populations to maintain uninterrupted access
to their key source of news and information and emergency warnings:
free, over-the-air television. It would be a great tragedy if the
millions of Americans who rely on free TV wake up after February 17,
2009 and find that their TVs simply don't work.
A successful digital television transition will require well-
informed consumers who can access what, for many, will be brand new
technology. This cannot occur without a comprehensive, coordinated
national consumer education effort focusing on not only the transition
itself, but also on the coupon program to be administered through the
U.S. Department of Commerce's National Telecommunications and
Information Administration (NTIA).
The need for such an effort is particularly important for the
communities that LCCR member organizations represent. In 2005, the GAO
found that up to 19 percent, or roughly 21 million American households,
rely exclusively on over-the-air, free television. According to the
GAO, 48 percent of households that rely solely on over-the-air
television have incomes under $30,000.
These consumers will face an expensive choice to continue to
receive a television signal: subscribe to cable or satellite, buy a
digital television set, or purchase a digital-to-analog converter box
without assistance from the government through its coupon program. All
of these options cost money. Even an inexpensive converter box can cost
more than a week's food budget for many low-income families and for
many elderly persons living alone and on Social Security.
We are especially concerned because minority and aging households
are disproportionately affected by the transition.
According to the GAO, non-white and Hispanic households are
more likely to rely on over-the-air television than are white
and non-Hispanic households.
Of the 21 million over-the-air households, one-third (or
seven million people) are Spanish-language speakers, according
to the testimony of Alex Nogales, President and CEO of the
National Hispanic Media Coalition, before the House
Subcommittee on Telecommunications and the Internet in March
2007.
Eight million of the 21 million over-the-air households
include at least one person over 50 years of age, according to
the March 2005 testimony of Lavada DeSalles on behalf of AARP,
before the House Subcommittee on Telecommunications and the
Internet.
One-third or more of over-the-air television viewers have
disabilities, according to the American Association of People
with Disabilities.
African Americans make up 23 percent of over-the-air
households, according to the National Association of
Broadcasters.
LCCR believes that access to communications is a fundamental right
of every American. Given the impact the transition will have on all our
most vulnerable communities, LCCR applauds Congress for recognizing the
need for a government compensation program to be administered by NTIA
to assist with the transition. But the process that has been created
raises a number of troubling concerns.
Funding
First and foremost, we are deeply concerned that the $5 million
that Congress has allocated to NTIA to educate consumers about the
coupon program will be woefully inadequate to support the kind of
public education effort that the transition requires. Public education
campaigns are not unlike state election campaigns in terms of scope.
Therefore, consider California, Pennsylvania, and Ohio, whose combined
population is approximately 21 million households--comparable to the
number of households that will likely need to be educated on the
digital television transition. The cost of a Senate campaign in Ohio in
2006 was nearly $9 million; for all three, it was approximately $39
million.
The lack of sufficient resources within the digital television
transition consumer education effort for support of nonprofit, social
justice, or community-based organizations further limits the scope of
public education efforts that will be possible. LCCR is committed to
working with our community-based organizations to make sure their
members know about the transition and the coupon program. However, we
are skeptical about the success of these efforts without additional
resources. We believe that the costs of the digital transition to the
21 million over-the-air households should be paid for by the ample
proceeds generated by the auctions of reclaimed spectrum.
If Congress wants the digital television transition and coupon
program to succeed, it must adequately invest in an educational program
that truly leaves no community behind. We strongly urge Congress to
supplement the amount of funding for consumer education efforts. In the
end, voters will look to Congress if their televisions go dark.
Research and Oversight
In addition to our concerns that those populations most in need
will be least likely to know about the coupon program, LCCR is
concerned that low-income and minority communities, seniors, and people
with disabilities will be least likely to receive the first-come,
first-served limited number of coupons.
NTIA's Digital-to-Analog Converter Box Coupon Program currently
contemplates what is essentially a two-phase process. Under the first
phase, while the initial $990 million allocated for the program is
available, all U.S. households--including cable and satellite
customers--will be eligible to request up to two $40 coupons to
purchase up to two, digital-to-analog converter boxes. Under the second
phase, if NTIA requests the additional $510 million already authorized
by Congress, then households that certify in writing they rely on over-
the-air reception will be eligible for coupons.
LCCR urges Congress to ensure that the transition to digital
television serves to benefit all Americans. In order to do so, there
must be a way for Congress to determine that coupons are going to those
who most need them.
It is too early to comment on the oversight of government-
funded consumer outreach, since the Request for Proposals (RFP)
award to provide services in support of the Digital-to-Analog
Converter Box Coupon Program has not yet been made.
However, it is clear now that we will need sufficient
independent research to determine who is taking advantage of
the coupon program during the first phase of the process, so
that NTIA knows how to respond or whether and where to deploy
additional funds.
The government can play an important role in conducting this
research through the General Accounting Office, with Congress
tracking the progress.
Additional Governmental Outreach
While both NTIA and the Federal Communications Commission are
committed to educating consumers about the transition and the coupon
program, a public education effort of this magnitude should not be
limited to only a few agencies.
Ensuring a successful transition will require public
education at the national, state, and local level.
At a minimum, every Federal agency should be required to
participate in educational outreach, and if possible, serve as
a site where coupons can be distributed.
These efforts should also be replicated at the state and
local level.
Conclusion
I want to acknowledge that despite the great challenges in making
sure that all Americans know about the digital television transition
and the coupon program, the transition presents great opportunities.
Industry, broadcasters, manufacturers, interest groups, and Federal
officials agree that digital TV offers viewers better quality
transmission and a wider range of programming options. Because the
digital signal has the ability to provide so much more information, it
has the ability to provide more services to those who speak languages
other than English and people with disabilities (such as enhanced
closed captioning and video description services). We do not know if
the broadcasters are going to provide such services, but we do know
that there is the potential to do so. Thus, the transition has the
potential to open the door for more Americans to participate fully in
the digital age. This will only be true, however, if all families will
be able to access digital television programming.
Thank you for both the opportunity to speak today and for your
leadership as we move forward in addressing the digital television
transition. I look forward to answering any questions you may have.
The Chairman. I thank you very much.
The population of the United States is about five times the
size of the United Kingdom. the United States will spend $5
million for education. The British Isles are spending $400
million. They will be sending out individuals to vulnerable
households, such as the elderly, to provide them with
individual service for installation and explanation. Their
program of transition will begin in 2008 and end in 2012. Ours
will begin in 2009. They've already started their education
program; in fact, a year ago. So, I can assure you that
Congress has heard your message, and we will do something about
it.
Thank you very much. We have to rush off; a vote is on, and
they're holding it up for us.
Thank you.
[Whereupon, at 11:55 a.m., the hearing was adjourned.]
A P P E N D I X
Prepared Statement of Hon. Frank R. Lautenberg,
U.S. Senator from New Jersey
Thank you, Mr. Chairman, for holding this hearing on the transition
to digital television. We are on the cusp of a revolution in
television.
On February 17, 2009, just a little more than a year and a half
from today, we will make the transition to digital television.
The DTV transition will be the biggest development in television
since color TV. Consumers will enjoy more programming, a clearer
picture, a wider screen, and improved sound quality. And the transition
will free up valuable spectrum that can be used to improve public
safety and to provide wireless broadband service.
But for some consumers, the DTV transition will not mean improved
television service. Instead, it will mean no television service at all.
Those viewers who rely on free over-the-air broadcast television
could see their TV sets go black on February 17, 2009 unless they are
prepared for the transition. Nearly 110,000 New Jersey households rely
on over-the-air television.
We know that these viewers are disproportionately poor and elderly.
These are households that need television for their news and to learn
about everything from local storms to national emergencies. We can't
leave them in the dark.
The National Telecommunications and Information Administration
(NTIA) has a coupon program to help consumers who rely on over-the-air
TV buy converter boxes for their television sets. But that program will
only work if consumers know about it. We need education programs so
that all consumers are ready for the DTV transition.
I am also concerned that, even with the DTV transition 18 months
away, there are analog-only television sets still on the market. I want
to know what is being done to ensure that consumers are fully informed
before they purchase TVs that may not work in the very near future.
The DTV transition presents tremendous opportunities. But we must
make sure that everyone can benefit from it.
Thank you Mr. Chairman.
______
National Telecommunications and Information Administration
Washington, DC, August 30, 2007
Hon. Claire McCaskill,
U.S. Senate,
Washington, DC.
Dear Senator McCaskill:
Thank you for your letter following up on my testimony before the
Senate Commerce, Science, and Transportation Committee hearing held on
July 26, 2007, regarding ``Consumers and the Digital Television
Transition.'' I am pleased to respond to your letter.
NTIA's goals with respect to certifying digital-to-analog converter
boxes that will be eligible for purchase with coupons are twofold: (1)
to ensure that the converter boxes meet the required performance
standards set forth in NTIA's Final Rule (47 C.F.R. 301 Technical
Appendix 1); and (2) to adopt a certification process that will not add
significant costs or delay to the development and production of coupon-
eligible converter boxes. The core technical performance requirements
are based on the Advanced Television Systems Committee (ATSC)
Recommended Practice: Receiver Performance Guidelines ATSC A/74;
Federal Communications Commission (FCC) Rules; and industry standards,
such as those issued by the Consumer Electronics Association (CEA).
NTIA received public comments on its proposed certification process and
carefully considered the suggestions that we adopt the well-established
procedures used by the FCC in certifying certain types of new products.
Field testing was not suggested and is not required in NTIA's Final
Rule. Further, NTIA and FCC engineering specialists have determined
that laboratory tests performed according to the A/74 Guidelines will
reliably predict performance in the field.
Once prototypes are ready, participating manufacturers must conduct
tests or have independent laboratories conduct tests to demonstrate
that each converter model meets the features and performance
specifications set forth in our regulations. The manufacturers are
required to submit detailed certified test results, along with a sample
of the tested equipment, to NTIA and the FCC laboratories. Working
closely with the FCC to review the performance of each converter box
while in the laboratory, NTIA will certify those converter boxes that
meet the requirements. Manufacturers will then be notified as soon as
possible whether or not each model has been certified.
In addition, NTIA plans to purchase and randomly test certified
coupon-eligible converter boxes to ensure that--as manufactured and
marketed--they conform to the certified specifications. If a converter
box is found not to meet NTIA's requirements, that model will no longer
be eligible for the Coupon Program.
NTIA has responded to several technical inquiries and has posted
responses to Frequently Asked Questions on its website to help
manufacturers understand the requirements in order to help them to
comply. Those responses can be found at: http://www.ntia.doc/gov/
dtvcoupon/manufacturerFAQ.html.
With regard to your second inquiry, concerning manufacturers'
prototypes and testing activities, NTIA's Final Rule indicates that the
notices of intent received from manufacturers shall be treated as
business confidential and proprietary information, and states that NTIA
will not release this information unless otherwise required by law.
NTIA has accepted notices of intent, test results, and prototypes from
manufacturers who have relied on NTIA's assurance of confidential
protection for their highly proprietary information. The Coupon Program
relies on the voluntary participation of manufacturers. NTIA has not
requested commitments from any companies to manufacture converter boxes
by a certain date. NTIA is aware, however, that manufacturers are in
the process of negotiating distribution and marketing contracts with
retailers and others. This activity is consistent with our expectation
that converter boxes will be available for purchase by consumers in
early 2008.
NTIA will be very active in the coming months publicizing the
Coupon Program and the coupon-eligible converter boxes. On August 15,
2007, NTIA awarded a contract to IBM to support the Coupon Program.
Among its responsibilities, IBM will work to achieve NTIA's consumer
education objectives with the assistance of an experienced public
relations and communications firm. IBM has hired Ketchum, a global
public relations firm with proven ability to drive consumers to action,
as demonstrated by their leadership in educating more than 40 million
seniors about Medicare's Prescription Drug Coverage.
NTIA's strategic plan includes two objectives that are especially
relevant to achieving a successful digital transition for all
Americans. First, our consumer education resources will focus on
households that rely on over-the-air television. Our research indicates
these households are on average more likely to consist of rural
residents, minorities, the economically disadvantaged, seniors, and
people with disabilities. Therefore, our consumer education activities
will target these groups. Second, our efforts will leverage resources
through partnerships to maximize engagement among diverse stakeholders.
I have enclosed a summary of NTIA's outreach activities to date, which
illustrates some of our partnership activities.
With regard to your request that NTIA secure commitments from the
broadcast community to begin running Public Service Announcements, NTIA
has no statutory or regulatory authority to secure such commitments. As
commercial licensees, broadcasters are regulated by the Federal
Communications Commission. However, NTIA has been working closely with
the DTV Transition Coalition. In a July letter to Senate Commerce
Committee Chairman Inouye, the National Association of Broadcasters
(NAB) addressed your question about the commitment of commercial
broadcasting to produce and air PSAs informing the public about the
digital transition. I would refer you to this letter for the NAB's
specific consumer education plan. In particular, the NAB has committed
to producing four to six on-air announcements on the transition and is
exploring how to best use ``crawls''--that is, DTV-related messages
that scroll across television screens during programming--to alert
consumers to the transition. Based on discussions with the NAB, it is
my understanding that these announcements will begin airing this fall,
before NTIA begins to accept consumers' coupon requests on January 1,
2008.
NTIA has produced and made available on its website a brochure
about the Coupon Program, which we distributed to every member of the
Senate and House. I would welcome Senators and other Members of
Congress linking to this information on their websites. This brochure
is available in English and Spanish at http://www.ntia.doc.gov/
dtvcoupon. I would also invite you and your staff to attend and
participate in NTIA's September 25, 2007, DTV Transition Public
Meeting, Expo and Networking Event, to be held at the U.S. Department
of Commerce. This event will be an important opportunity to hear from
industry CEOs and key constituency groups about their specific plans to
inform consumers about the transition.
I look forward to continuing to work with you and all the Members
of the Committee, and the U.S. Congress, on efforts to ensure a smooth
digital television transition. If you have any questions, please
contact me at (202) 482-1840.
Sincerely,
John M.R. Kneuer,
Assistant Secretary for Communications and Information.
cc: The Hon. Daniel K. Inouye, Chairman, Committee on Commerce, Science
and Transportation, U.S. Senate
The Hon. Ted Stevens, Vice Chairman, Committee on Commerce, Science and
Transportation, U.S. Senate
The Hon. Kevin J. Martin, Chairman, Federal Communications Commission
Attachment
Fact Sheet on NTIA's Outreach Activities Digital-to-Analog Converter
Box Coupon Program
As of August 23, 2007, NTIA is actively seeking partnerships with
over 145 groups and organizations--including 14 Federal Government
departments and agencies and 5 local and state organizations--to work
with us to raise consumer awareness about the Coupon Program and to
prepare our citizens for the transition. NTIA is focusing its consumer
education activities on over-the-air-reliant households who, on
average, are more likely to be (1) elderly; (2) economically
disadvantaged; (3) rural residents; (4) minorities; and (5) people with
disabilities. Some examples of our outreach include:
Senior Outreach
NTIA is working closely with AARP to ensure that the Coupon
Program will be highlighted in their publications and online
newsletters, both in English and Spanish. AARP The Magazine
reaches 22.5 million members and AARP Segunda Jeventud reaches
400,000 members.
NTIA will partner with SeniorNet, an organization that
supports about 200 senior learning centers across the country,
to provide information about the Coupon Program to seniors
through those centers.
During the recent National Cable and Telecommunications
Association convention, Assistant Secretary Kneuer participated
on a panel hosted by Retirement Living TV designed to raise
awareness among seniors of the upcoming digital transition.
Economically Disadvantaged Outreach
NTIA is working with the American Library Association to
distribute posters and coupon applications to participating
libraries, and to train librarians to help its patrons apply
for coupons. For consumers without home Internet access, NTIA
will provide a link to be placed on library terminals that will
enable consumers to quickly go to the coupon application page
and apply online.
Other groups NTIA is actively recruiting include the
Salvation Army, United Way, YMCA, America's Second Harvest, and
Catholic Charities.
NTIA will work with the Community Action Partnership, the
national organization representing the interests of the 1,000
Community Action Agencies (CAAs) working to fight poverty at
the local level.
Minority Outreach
NTIA has reached out to the National Congress of American
Indians, the Pan-Asian Council on Aging, Native American
Council on Aging, The National Caucus and Center on Black
Aging, National Council on Aging, and the National Hispanic
Council on Aging.
NTIA is exploring with Univision (with reach into 99 percent
of Hispanic households) the development of Public Service
Announcements and a ``how to'' video aimed at Hispanic
consumers.
NTIA is partnering with the Southeast Asia Resource Action
Center and Panasonic to produce and distribute brochures in the
most commonly spoken Asian languages, including Chinese,
Vietnamese, Tagalog, and Korean.
Disabled Outreach
NTIA will meet the needs of citizens with special needs to
enable them to take advantage of the Coupon Program. For
example, NTIA's Final Rule requires that manufacturers pass
through Closed Captioning so that this service will be
uninterrupted with the installation of the converter box and
the transition to all-digital broadcasting. NTIA will work with
disability groups to allay concerns that coupon-eligible
converters will not pass through Closed Captioning to display
on existing analog televisions.
NTIA will continue to reach out to private and public
organizations serving the home-bound and people with special
needs. Organizations that provide home health care, meals on
wheels, senior day care, and other elder care services will be
a particular target of our efforts.
NTIA has actively sought the input of disability groups in
the development of its program, including the American
Association of People with Disabilities, the Northern Virginia
Resource Center for Deaf and Hard of Hearing Persons, and
Easter Seals. NTIA participated in the Telecommunications for
the Deaf and Hard of Hearing, Inc. (TDI) conference in San
Francisco on August 24.
Rural Outreach
NTIA is working closely with the Appalachian Regional
Commission (ARC) to provide information packets to 70 councils
of government, local development districts representing 23
million people in 410 counties (42 percent rural).
In October, NTIA will actively participate in the Rural
Telecommunications Congress Conference in Springfield,
Illinois.
NTIA has reached to the U.S. Department of Agriculture
Cooperative State Research, Education, and Extension Service to
distribute information to extension offices nationwide.
Government Outreach
NTIA will leverage relationships with government departments
and agencies to reach constituencies they serve. NTIA will
continue to expand its group of government contacts and expects
to reach millions of households through these initiatives.
NTIA is partnering with departments and agencies to use
their existing publications and electronic newsletters to
insert coupon information in scheduled mailings; link to the
coupon application form from their websites; put coupon
applications at local social service offices; talk about the
program at meetings and conventions; and utilize all existing
communication opportunities to inform them of the Coupon
Program.
NTIA has reached out to the U.S. Department of Agriculture
Food Stamp Program, Center for Medicare & Medicaid, Social
Security Administration, Veterans Affairs, Department of
Education's Faith-Based Office, General Services
Administration, Health and Human Services Administration for
Children & Families, the Administration on Aging, IRS and its
Earned Income Tax Credit section, the USDA's Rural Development
and Cooperative Extension, and the Department of Defense.
NTIA is also reaching out to state and local organizations
to reach people where they live and work. NTIA has initiated
outreach relationships with the National Association of
Counties, National League of Cities, National Council of State
Legislatures, and the National Association of Regulatory
Utility Commissioners.
Publications, Meetings, and Conferences
Assistant Secretary Kneuer will be writing and submitting an
article for publication later this year in the National
Association of Telecommunications Officers and Advisors (NATOA)
Journal: Promoting Community Interests in Communication, The
National Education Association's Today Magazine reaching 3.2
million readers, and the American Library Association's
American Libraries. The article will be timed to reach
consumers around January 1, 2008, when consumers can begin to
request converter coupons.
NTIA staff will continue to attend meetings and conferences
over the next year spreading the word of the transition and the
government program designed to offset the cost of the converter
boxes. For example, NTIA will attend the White House Faith-
Based and Community Initiatives Conference and the AARP
Convention in September and other major conferences focused on
our target groups.
Ease of Information and Application
Brochures, flyers, posters, and applications will be printed
in English and Spanish and other languages as appropriate.
NTIA intends to make the application process as simple and
straightforward as possible for consumers. We will encourage
consumers to apply over the phone using a toll-free number, but
they will also have the option to use the Internet or mail or
fax their applications. The actual coupon application will be
straightforward and will be market tested to ensure it is
understandable and consumer friendly.
NTIA will make the process to use the coupon to purchase and
install a converter box as simple as possible. NTIA will work
with retailers to simplify their processes and encourage
retailers to accept phone orders from consumers to meet the
needs of the home-bound. NTIA will provide a list of retail
outlets selling the converter boxes, including online
retailers, and also a list of approved boxes that can be
purchased with the coupon.
NTIA is working with the Consumer Electronics Association
(CEA) to create an installation video and quick set-up guide to
help seniors set up the converter as effortlessly as possible.
______
Consumer Electronics Association
Arlington, VA, July 26, 2007
Hon. Daniel Inouye,
Chairman,
Committee on Commerce. Science, and Transportation,
U.S. Senate,
Washington, DC.
Hon. Ted Stevens,
Vice Chairman,
Committee on Commerce, Science, and Transportation,
U.S. Senate,
Washington, DC.
Dear Chairman Inouye, Vice Chairman Stevens and Members of the
Committee:
Thank you for holding today's hearing on Preparing Consumers for
the Digital Television Transition. The Consumer Electronics Association
(CEA) has long been committed to ensuring that consumers are informed
about the DTV transition. As the transition date of February 17, 2009
approaches, CEA's tireless efforts to educate consumers are even more
paramount to ensuring a seamless transition. Even as we are less than 2
years away from the transition date, we continue to lead the way with
our efforts.
Currently, CEA's educational tools for retailers and consumers to
use include:
Five websites that promote the DTV transition through consumer and
dealer education:
myCEknowhow: www.myCEknowhow.com. To help consumers navigate
the new features and options made available by digital
television. the CEA and CNET have joined forces to produce
interactive CEknowhow Buying Guides. The Guides, which can be
found on CNET.com and the CEA's consumer information site,
www.myCEknowhow.com. are designed to introduce consumers to
digital television and to ease confusion about the technology
before shoppers even enter the store. Information regarding
NTIA's DTV converter box program also is included in this
program.
Antenna Web: www.antennaweb.org. This website specifically
permits consumers and salespeople to determine the free, over-
the-air DTV signals that can be received at their location and
what type of antenna is needed to do so. The site receives
approximately 100,000 hits per month.
The Connections Guide website is an interactive resource
designed to help consumers better understand how to connect
their audio and video (including DTV) products. This site is
located at: www.ce.org/connections_application/.
CE Know How: www.ceknowhow.com. This is an online retailer
education program that is designed to equip retailers with up-
to-date product category training for sales associates.
CEknowhow.com is customizable, allowing retailers to license
and tailor the program to suit their particular needs. In 2004,
more than 24,000 sales persons completed training via
CEknowhow.com.
In addition to these websites, CEA includes a wealth of information
about HDTV on its own website: www.ce.org/hdtv. In addition, CEA
recently issued a DTV Toolkit for legislators. The Toolkit contains
materials for answering constituent questions about the transition. All
of the materials included in the packet are available on CEA's website:
www.ce.org/hdtv.
We have an ambitious schedule of additional consumer education
education plans for 2007 include producing an HDTV Handbook for
Retailers and Consumers in partnership with Dealerscope and e-Gear. We
also are developing and producing a number of short videos for use on
various websites and for use at retail locations. Video topics will
include a transition overview, setting up a converter box and how to
receive HDTV.
We are updating our Ceknowhow.com consumer website to include
information on the converter box coupon program and DTV labeling
information. In addition, we are translating the website into Spanish.
We are continuing our ongoing media outreach, including press kits
mailing, satellite media tours and matte service articles--in English
and Spanish. As part of this outreach, we are developing public service
announcements about the transition and the coupon program. Further, we
are reaching out to local government officials and libraries to educate
about the transition and where to send their constituents for more
information.
Finally, CEA is exhibiting at a myriad of relevant conferences,
including the National Association of Consumer Advocacy Agencies
(NACAA), National Conference of State Legislatures (NCSL), and Digital
Life in order to explain all aspects of the DTV transition and coupon
program.
We appreciate your interest and support regarding DTV education. We
welcome the Committee's use of our materials to educate constituents
and welcome the opportunity to speak to your constituents at any time.
It is critical that all stakeholders play a part in educating
consumers. CEA is working closely with industry and government partners
and we are proud of our leadership role in the DTV Transition Coalition
(www.dtvtransition.org). It would be extremely helpful for the
Committee to ensure that all stakeholders are involved in reaching out
to our Nation's consumers. CEA remains steadfast in its commitment to
educate consumers about all aspects of the DTV transition.
We respectfully request that this letter be submitted into the
formal record of this today's hearing.
Sincerely,
Gary Shapiro,
President and CEO.
______
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to
Hon. John M.R. Kneuer
Question 1. Your written testimony indicates that NTIA will not
award the contract for administering the converter box coupon program
until mid-August. Will the entity awarded the contract have enough time
to establish the program before coupons become available on January 1,
2008?
Answer. On August 15, NTIA awarded a contract to IBM to provide
end-to-end services for the Coupon Program. NTIA and IBM will be open
for business to accept coupon requests between January 1, 2008 and
March 31, 2009. At that time consumers will be able to call 1-888-DTV-
2009, go online at www.MyDTV2009.gov or mail in their coupon
applications to request their coupons.
Question 2. What is the NTIA doing to work with retail outlets to
ensure that they will display converter boxes conspicuously?
Answer. NTIA has been working aggressively to recruit retailers of
all sizes into the program. Manufacturers and retailers have every
incentive to market and merchandize converter boxes just as they do
their other products. Manufacturers with whom we have spoken plan to
make it clear on the converter box that these are coupon eligible
devices and have been certified by the government. Retailers, such as
Radio Shack, have committed to in-store signage that will inform
consumers about the transition and the benefits of the converter
option. Other major retailers who have expressed their intent to
participate in the Coupon Program include Wal-Mart, Best Buy, and
Circuit City.
Question 3. Are you confident that workable, affordable converter
boxes will be widely available on January 1, 2008?
Answer. Yes. Retailers are ordering converters from manufacturers
in order to be ready to serve consumers after the Holiday 2007 season.
To date, NTIA has certified three models and 18 retailers. Retailers
are responsible for determining when converters will be available in
their stores. Indications are good that they will be ready to sell
converters and redeem coupons in early 2008.
Question 4. How will consumers be able to determine which retailers
carry converter boxes, especially given that many consumers who rely on
over-the-air broadcasting may not have Internet access?
Answer. When NTIA mails out the coupons, we will include an
enclosure in the mailing with important information about the Coupon
Program including a list of nearby certified retailers, linked to
household zip code, as well as makes and models of eligible converter
boxes. NTIA will also provide a list of eligible online retailers.
______
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to
Catherine W. Seidel
Question 1. How many analog-only televisions remain in retailers'
inventories?
Answer. The Commission does not have estimates of the number of
analog-only televisions currently in retailers' inventories. I would
note, however, that industry statistics indicate that shipments of
analog-only television sets to retail outlets have declined
precipitously in recent years. For example, between 2005 and 2006, the
number of analog-only televisions shipped to retail stores dropped from
20.43 million sets to 10.79 million sets. In addition, industry
estimates project that shipments of analog-only television sets this
year will total 1.35 million. Further, we note that, the Nation's
largest consumer electronics retailer, Best Buy, recently announced
that it has pulled all remaining analog television products from store
shelves and will only sell digital television products. See http://
bestbuymedia.tekgroup.com/
article_text/101707_2DNRFCC.pdf.
Question 2. What recourse is there for consumers who unwittingly
buy analog-only televisions because labeling requirements have not been
complied with?
Answer. The Commission is devoting significant resources to
enforcing our labeling requirements. We are doing so in order to
prevent unwitting consumers from purchasing analog televisions. With
respect to the Commission's labeling requirement, the Commission has,
as of October 31, 2007, inspected nearly 1,325 retail stores and
websites and issued nearly 283 citations notifying retailers of
violations for failing to comply with our requirements. Because
retailers are not licensees, we must give them a citation prior to
issuing a Notice of Apparent Liability (NAL). Currently there are NALs
pending against fourteen retailers for apparently violating the
Commission's labeling requirements. These fines, in the aggregate,
total nearly $4 million. In addition, the Enforcement Bureau has issued
another six NALs on delegated authority. It is my hope that through our
vigorous enforcement actions, retailers will take concrete actions to
avoid consumer confusion as the digital transition draws near.
Question 3. Is the FCC working with retailers to educate their
salespeople on how to explain the digital transition to customers?
Answer. In addition to television broadcasters, cable and satellite
providers, and consumer electronics manufacturers, retailers can play
an important role in educating consumers about the transition to
digital broadcast television. For some time now, the Commission has
been working with the Consumer Electronics Retailers Coalition (CERC)
on educating members of the public about the DTV transition. In the
spring of 2006, the FCC, CERC, and the Consumer Electronics Association
(CEA) developed and disseminated a ``Buying a Digital Television'' tip
sheet for consumers. Together with CERC and CEA, we are in the process
of updating the tip sheet with the latest information on DTV. Also, in
June of 2007, the FCC and CERC developed and disseminated a join
``Retailer Advisory on Mandatory Labeling of Consumer Electronics
Products,'' to assist in educating CERC members and members of the
public on the Commission's labeling requirements regarding sales of
analog-only TVs and TV equipment. Additionally, CERC participated in
the Commission's recent DTV Consumer Education Workshop, serving on a
panel that addressed the industry's role in the transition. Further, in
July and August of 2007, CERC distributed over 400 packets of FCC DTV
information at retailer events and conferences. Finally, Chairman
Martin recently circulated a draft Report and Order to the other
Commissioners that, if adopted, would require industry participants to
implement a number of public outreach and education measures to help
ensure that consumers receive timely and accurate information about the
DTV transition. Among other things, the Report and Order contemplates
that the Commission will work closely with NTIA to ensure that retail
outlet personnel are fully trained and that consumers have access to
the information they need to make informed choices.