[Senate Hearing 110-1182]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 110-1182

THE DIGITAL TELEVISION TRANSITION: GOVERNMENT AND INDUSTRY PERSPECTIVES

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

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 17, 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
                  Paul Nagle, Republican Chief Counsel















                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on October 17, 2007.................................     1
Statement of Senator Dorgan......................................    29
Statement of Senator Hutchison...................................     2
Statement of Senator Inouye......................................     1
Statement of Senator Klobuchar...................................    26
Statement of Senator McCaskill...................................    24
Statement of Senator Pryor.......................................     3
Statement of Senator Stevens.....................................     2
    Executive Order 13073, effective date February 4, 1998.......    22
Statement of Senator Thune.......................................    86

                               Witnesses

Adelstein, Hon. Jonathan S., Commissioner, Federal Communications 

  Commission.....................................................    11
    Prepared statement...........................................    13
Gieselman, Jon, Senior Vice President, Advertising and Public 
  Relations, DIRECTV, Inc........................................    57
    Prepared statement...........................................    58
Kneuer, Hon. John M.R., Assistant Secretary of Commerce, 
  Communications and Information, National Telecommunications 
  Information Administration, U.S. Department of Commerce........     3
    Prepared statement...........................................     6
Lawson, John M., President and CEO, The Association of Public 
  Television Stations............................................    45
    Prepared statement...........................................    46
McSlarrow, Kyle E., President and CEO, National Cable & 
  Telecommunications Association.................................    42
    Prepared statement...........................................    43
Pearl, Marc A., Executive Director, Consumer Electronics 
  Retailers Coalition............................................    63
    Prepared statement...........................................    65
Rehr, David K., President and CEO, National Association of 
  Broadcasters,..................................................    32
    Prepared statement...........................................    34

                                Appendix

Letter, dated October 16, 2007, to Hon. Kevin J. Martin, from 
  Michael Vitelli, Senior Vice President, Merchandising and Paula 
  Prahl, Vice President, Public Affairs, Best Buy Co., Inc.......   105
Letter, dated October 16, 2007, to Hon. Kevin J. Martin, from 
  Nathan K. Garvis, Vice President, Government Affairs, Target 
  Corporation....................................................   107
Letter, dated October 16, 2007, to Hon. Kevin J. Martin, from 
  Reginald D. Hedgebeth, Senior Vice President, General Counsel & 
  Secretary, Circuit City Stores, Inc............................   108
Response to written questions submitted by Hon. Maria Cantwell 
  to:
    Hon. Jonathan S. Adelstein...................................    93
    Jon Gieselman................................................   101
    Hon. John M.R. Kneuer........................................    92
    John M. Lawson...............................................    99
    Kyle E. McSlarrow............................................    98
    Marc A. Pearl................................................   103
    David K. Rehr................................................    95
Response to written questions submitted by Hon. Daniel K. Inouye 
  to:
    Hon. Jonathan S. Adelstein...................................    92
    Jon Gieselman................................................   100
    Hon. John M.R. Kneuer........................................    91
    John M. Lawson...............................................    98
    Kyle E. McSlarrow............................................    96
    Marc A. Pearl................................................   101
    David K. Rehr................................................    94
Response to written questions submitted by Hon. John D. 
  Rockefeller IV to:
    Kyle E. McSlarrow............................................    97
    David K. Rehr................................................    94

 
THE DIGITAL TELEVISION TRANSITION: GOVERNMENT AND INDUSTRY PERSPECTIVES

                              ----------                              


                      WEDNESDAY, OCTOBER 17, 2007

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:35 p.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. The hearing will come to order. I'm sorry I'm 
a bit late, but his holiness the fourteenth Dalai Lama received 
the Congressional Gold Medal and the ceremony just ended.
    February 17, 2009, that's a date that we must all remember. 
A revolution is coming to TV sets across this country, because 
in fewer than 500 days TV broadcasters will switch from analog 
to digital signals. This change holds tremendous promise. 
Viewers can expect sharper pictures, crisper sound, and whole 
new channels through multicasting. The switch to digital also 
means more spectrum for our Nation's first responders.
    These are all good things. Like with many revolutions, 
however, these rewards come with an undercurrent of risk. As 
many as 21 million households rely exclusively on over-the-air 
TV. If their sets go dark, they'll be disconnected from news, 
public safety announcements, and community information. To 
prevent this from happening, we have task forces, expos, 
workshops, and an industry-led publicity campaign. Despite 
these efforts, the American public is still not well educated 
about the transition, the coupon program, where to find boxes, 
and how to attach them to their sets.
    In too many ways, our transition from analog can go 
askance. Instead of a digital revolution, we may find ourselves 
in a digital disaster.
    The time has come to manage the mechanics of the DTV 
transition with the American public in mind. First we must 
develop a Federal interagency DTV task force to marshall 
resources across the government and maximize our chances for a 
smooth transition.
    Second, we need to recognize that national messages will 
only take us so far. What works in Houston may not work in 
Honolulu. Questions about the impact of tower construction and 
the presence of translator stations require local answers. We 
need the equivalent of DTV ``block captains'' who are ready, 
willing, and able to provide this information in every 
designated media market in this country.
    Finally, we must identify ways to measure our progress in 
each market in this country. Then we must use this data to 
determine what further efforts are needed.
    So I look forward to working with our witnesses to ensure 
that in the digital revolution of our time no citizen is left 
behind.
    May I call upon the Vice Chairman of the Committee, Senator 
Stevens.

                STATEMENT OF HON. TED STEVENS, 
                    U.S. SENATOR FROM ALASKA

    Senator Stevens. Thank you very much, Mr. Chairman. We 
welcome our witnesses and I thank you for holding this very 
important hearing. The digital transition bill will be a very 
positive milestone for this country. Up our way we call them 
mileposts so we can see them in the winter time. But as this 
milepost of February 17, 2009, approaches, it's critical that 
Congress maintain an active oversight role to ensure that 
consumers are properly educated about this transition and know 
how to avail themselves of the converter boxes under the 
program.
    This transition will reap important benefits for all 
Americans, especially with respect to public safety because 
public safety will, as you said, receive much of the needed 
spectrum, the 24 megaHertz. Additionally, proceeds from the 
auction of the remaining spectrum will be vital to various 
programs, such as $1 billion for interoperability grants, $1.5 
billion for the converter box program, and over $7 billion for 
deficit reduction, and, if it's still there, $43.5 million for 
E-911.
    This hearing I hope will focus on how the government and 
industry can work together to educate the public about the 
transition. The announcement first from the cable industry and 
now from the broadcasters regarding the education and outreach 
program is very positive news, I think. I'm also encouraged to 
hear that NTIA has been moving along with an aggressive 
schedule to administer the converter box program. It's my 
understanding that two models of these converter boxes have 
already been certified as eligible to participate in that 
program.
    We look forward to hearing how the witnesses will work 
together to ensure these converter boxes make their way to all 
who will need them, especially vulnerable populations like 
senior citizens and people in remote areas. I assure you that 
none are more remote than my Alaskan villages, so we're hopeful 
you'll comment upon that.
    Thank you very much.
    The Chairman. Thank you, sir.
    Senator Hutchison?

            STATEMENT OF HON. KAY BAILEY HUTCHISON, 
                    U.S. SENATOR FROM TEXAS

    Senator Hutchison. Well, thank you, Mr. Chairman. I too am 
very pleased that you are holding this hearing, because I think 
there are so many people who are going to be stunned when 
February 17 comes and they are all of a sudden looking at a 
snowy screen. I think the efforts of the FCC as well as our 
committee to begin some program of education is going to be 
helpful.
    I wanted to bring up a unique issue that affects the border 
states. I don't know if it affects the Canadian border states, 
but it does affect the Mexican-United States border. That is 
where the Mexican stations will continue to broadcast in analog 
and our digital transition would take place on February 17 and 
we could have a number of American stations at a severe 
disadvantage, if not a complete halt of their business, if we 
have not had either a very successful education effort or some 
kind of mitigation for the border area.
    Many of our broadcasters are simulcasting. They have both 
digital and analog. But if we lose analog and the Mexican 
stations continue, I think it could be a financial hardship on 
our stations. So I hope that as we move along on trying to 
educate our consumers about the transition that we might 
address some extra help for these stations that are on the 
border with Mexico. And if it applies to Canada as well, that 
would certainly be warranted. But I know that some of my 
broadcasters in the border area are very, very concerned about 
this.
    So I thank you for this and I hope that, working with the 
FCC, we can take every step to educate our consumers and begin 
the process of letting people know what is going to happen so 
they can prepare with their television sets.
    The Chairman. Thank you.
    Senator Pryor?

                 STATEMENT OF HON. MARK PRYOR, 
                   U.S. SENATOR FROM ARKANSAS

    Senator Pryor. Thank you, Mr. Chairman. I don't have a 
statement other than to thank you, the two Co-Chairmen, if you 
will, for having this, and to say how much I appreciate it and 
it's important; and also to thank Commissioner Adelstein for 
coming to Little Rock several weeks ago to participate in a 
field hearing of the Commerce Committee. So thank you and 
welcome back to the Committee.
    The Chairman. Thank you.
    At today's hearing we have two panels. The first panel: the 
Assistant Secretary of Commerce, Communications, and 
Information, National Telecommunications Information 
Administration, the Honorable John Kneuer; and Commissioner of 
the Federal Communications Commission, the Honorable Jonathan 
Adelstein.
    Secretary Kneuer?

          STATEMENT OF HON. JOHN M.R. KNEUR, ASSISTANT

         SECRETARY FOR COMMUNICATIONS AND INFORMATION,

          NATIONAL TELECOMMUNICATIONS AND INFORMATION

          ADMINISTRATION, U.S. DEPARTMENT OF COMMERCE

    Mr. Kneuer. Thank you, Chairman Inouye and Vice Chairman 
Stevens, members of the Committee. I'm pleased to be back 
before you and testify again. I'm also pleased to report that 
NTIA is making great strides in accomplishing the tasks laid 
out by the Congress in the Digital Television Transition and 
Public Safety Act.
    As you know, the DTV Act required NTIA to establish and 
implement a program allowing eligible U.S. households to obtain 
up to two coupons of $40 each that can be applied toward the 
purchase of digital-to-analog converter boxes. When I last 
testified before this committee, NTIA's converter box program 
was in its early stages and members of this committee 
appropriately asked important questions about how the program 
would ultimately unfold.
    Specifically, members wanted to know who would be 
responsible for issuing coupons to consumers, would 
manufacturers produce boxes to meet consumer demand, would 
enough retailers participate in the program so that boxes would 
be widely available, and, most significantly, how could we 
possibly educate the American public with the $5 million made 
available for consumer outreach under the statute.
    Today I am pleased to report that NTIA, in coordination 
with other government agencies and in collaboration with a 
broad array of market participants, service organizations, and 
consumer advocacy groups, has made enormous strides to ensure 
the converter box program is run effectively, that consumers 
will have widespread access to coupon-eligible converter boxes, 
that the television viewing public is well informed about the 
transition and their options, and that those members of our 
society with special needs get access to the assistance they 
need to continue to have access to over-the-air television.
    On August 15, NTIA awarded a contract to IBM to manage 
three broad functional aspects of the coupon program: systems 
processing, financial processing, and consumer education and 
communications. Under the contract, IBM is leading a team of 
partners that includes corporate lodging consultants, which is 
responsible for retailer management, coupon redemption and 
payment; Epiq Systems, which is handling coupon distribution 
and consumer support; and Ketchum Inc., a global public 
relations firm that is leading the consumer education program. 
Each of these companies has extensive experience in its 
functional areas and has successfully implemented large, 
complex national programs.
    NTIA is on schedule to meet its obligations under the act. 
Beginning January 1, 2008, and continuing through March 31, 
2009, consumers will be able to request up to two $40 coupons 
per household to purchase approved DTV converter boxes.
    NTIA has adopted rules to provide guidance to converter box 
manufacturers regarding the submission of test results and 
sample equipment for evaluation and certification. Pursuant to 
NTIA's regulations, certified converter boxes will possess 
performance features based on industry-accepted DTV standards 
as well as FCC requirements for television products. The 
regulations require, for example, that NTIA-certified 
converters comply with the FCC's parental control, or V-Chip 
rules, emergency alert systems, and closed captioning 
requirements for the hearing impaired.
    NTIA has certified digital-to-analog converter box models 
from multiple manufacturers and equipment from other vendors is 
currently being evaluated. I'm pleased with the number of 
manufacturers that have filed notices of intent to submit boxes 
for testing and I expect more boxes will be certified over the 
weeks leading up to the transition. A list of certified 
converter boxes, including make and model number, will be 
distributed to consumers with the coupon that they requested 
from NTIA.
    We've also been working closely with retailers to ensure 
that consumers will be able to easily obtain converter boxes 
during the transition period. NTIA is actively working to make 
the program accessible and attractive to a full range of 
retailers in order to gain participation not only from large 
chains, but from regional outlets and small independent local 
stores as well. This month alone we will send approximately 
25,000 letters to smaller retailers so they are informed of the 
program and how they can participate.
    At our Public Meeting and Expo on September 25, RadioShack 
with 4,400 company-owned stores and 1,600 franchisees announced 
its intent to participate in the coupon program, and just this 
morning Best Buy made a similar announcement and commitment to 
or an intention to have coupon-eligible boxes in their stores 
by early 2008.
    To maximize the value of the $5 million in consumer 
education funds provided to NTIA, we've been working in 
partnership with Federal, State, and local government as well 
as community and social service organizations to leverage 
support from a diverse range of stakeholders. In particular, 
the industries most directly affected by the transition, the 
broadcast, cable, and consumer electronics industries, are 
actively informing their viewers, subscribers, and customers 
about the February 17, 2009, transition date and the variety of 
options that consumers have to respond to it.
    Last month the National Cable & Telecommunications 
Association announced a $200 million campaign to raise 
awareness and on Monday of this week the National Association 
of Broadcasters launched its marketing campaign valued at 
nearly $700 million. The Consumer Electronics Association is 
also running radio spots and has developed consumer-friendly 
tools, including a video that helps consumers understand their 
options to make the transition.
    Now, in addition to the broad public education campaign, 
NTIA recognizes that certain segments of our society are more 
directly impacted by the DTV transition and may be the least 
equipped to manage it on their own. Accordingly, NTIA has 
identified five target groups for particular consumer education 
efforts: seniors, the economically disadvantaged, rural 
residents, people with disabilities, and minorities. These 
groups depend on over-the-air television to a greater extent 
than does the general public and NTIA will carefully design and 
market test its consumer education materials to ensure that the 
materials are accessible to these targeted communities.
    In addition, NTIA is working in partnership with trusted 
intermediaries for these groups in order to get the word out 
and provide help in obtaining and installing converter boxes. 
By educating those groups and service organizations that 
already reach and assist these targeted communities, we will 
maximize available resources to ensure that the DTV transition 
assistance gets to those who need it most.
    Working together in a broad public-private partnership 
including NTIA, the FCC, more than a dozen Federal Government 
departments and agencies, market participants, and literally 
hundreds of nonprofit and service organizations, I am confident 
that we as a nation will conclude this transition smoothly, 
that consumers will be well informed, and that financial and 
other assistance will be available to those who need it.
    Thank you and I welcome any of 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. I am pleased to report that 
the National Telecommunications and Information Administration (NTIA) 
is making great strides in accomplishing the tasks laid out by Congress 
in the Digital Television Transition and Public Safety Act of 2005 
(``DTV Act'' or ``Act''). The Digital-to-Analog Converter Box Coupon 
Program has been established, consumer education efforts are increasing 
daily, and our collaboration with public and private sector 
organizations is expanding to ensure that all Americans will be 
prepared for the digital transition.
NTIA Continues to Make Significant Progress in Fulfilling the 
        Requirements of the DTV Act
    As you know, the DTV Act required NTIA to establish and implement a 
program allowing eligible U.S. households to obtain up to two coupons 
of $40 each to be applied toward the purchase of digital-to-analog 
converter boxes that will convert digital broadcast signals for display 
on analog television sets. NTIA is on schedule to meet its obligations 
under the Act. Beginning January 1, 2008, and continuing through March 
31, 2009, consumers will be able to request up to two $40 coupons per 
household to purchase an approved DTV converter box.
    The application process will be simple and straightforward, and 
will respect individual privacy. The coupon application asks for only 
the information necessary to fulfill the request, i.e., the requestor's 
name, address, and the number of coupons requested. The only other 
question NTIA will ask is whether the household receives an over-the-
air signal or subscribes to a pay service. Applications will be widely 
available. Consumers can request them online, over the phone, via fax, 
or through the mail. In addition, participating libraries will stock 
the applications, and library employees will help patrons fill them 
out.
    While much work remains to be done, NTIA has nevertheless made 
great strides toward ensuring the success of the Coupon Program and 
with it, the success of the DTV transition. As detailed more fully 
below, we have awarded and are currently implementing a major contract 
for Coupon Program operational support. We have also built the 
infrastructure to ensure that technically-reliable, coupon-eligible 
converter boxes are available to consumers when coupon issuance begins. 
NTIA is also working in collaboration with our partners in the public 
and private sectors, and we have made great progress in planning and 
beginning to implement the campaign to educate consumers about the DTV 
transition and the Coupon Program.
A Strong Foundation for Program Support Has Been Established
    To procure the expert assistance needed to administer the diverse 
operational elements associated with the Act's requirements, on August 
15th, NTIA awarded a contract to IBM to manage three broad, functional 
aspects of the Coupon Program: (1) systems processing (e.g., 
determining consumer eligibility, distributing and activating coupons, 
certifying retailers, and providing training materials); (2) financial 
processing (e.g., administering the processes to authorize coupons for 
redemption and ensure payment to retailers, and performing independent 
auditing); and (3) consumer education and communications. Under the 
contract, IBM is leading a team of partners that includes Corporate 
Lodging Consultants, which is responsible for retailer management, 
coupon redemption and payment; Epiq Systems, which is handling coupon 
distribution and consumer support; and Ketchum, Inc., a global public 
relations firm that is leading the consumer education program. Each of 
these companies has extensive experience in its functional areas and 
has successfully implemented large and complex national programs.
    The contract is performance-based. NTIA has specified Program 
requirements while allowing IBM to determine how best to achieve those 
outcomes. Payments are tied to IBM's satisfactory accomplishment of 
certain milestones. NTIA is working in close coordination with IBM's 
team to ensure that Program goals are met in a timely manner and 
according to agreed upon quality standards. The total contract amount 
is $119,986,468, which includes $84,990,343 for the initial phase and 
$34,978,125 for a contingent phase provided for in the DTV Act.
    NTIA and IBM are working diligently to ensure that the Program is 
operational and ready to accept consumers' applications for coupons on 
January 1, 2008. In addition, as discussed below, we are also working 
closely with broadcasters, consumer electronics manufacturers, 
retailers, and the Federal Communications Commission (``FCC'' or 
``Commission'') to ensure that consumers will have access to reliable 
converter boxes when coupons become available.
The Framework to Ensure Availability of Converter Boxes Is in Place
Testing and Certification
    NTIA has adopted rules to provide guidance to converter box 
manufacturers regarding the submission of test results and sample 
equipment for evaluation and certification. Those rules require 
manufacturers to provide notice of their intention to provide converter 
boxes for review and certification. Upon receipt of such a notice, NTIA 
accepts test results from each manufacturer to evaluate whether the 
manufacturer's testing meets NTIA's specifications.
    Pursuant to a Memorandum of Understanding between the agencies, the 
FCC is providing testing services to evaluate the converter boxes prior 
to their certification by NTIA. Once NTIA has determined that a 
manufacturer's own testing meets our specifications, the manufacturer 
submits a sample converter unit for independent testing by the FCC 
laboratory, which assesses the equipment against all twenty-four of the 
specifications in NTIA's Final Rule. This process is modeled on the 
recommendations of consumer electronics manufacturers along with 
broadcasters who want to make sure viewers have reliable television 
service using converters.
    NTIA last month certified two digital-to-analog converter box 
models to be manufactured by Digital Stream Technology, Inc., and 
equipment from other vendors is presently being evaluated. I am pleased 
with the number of manufacturers that have filed Notices of Intent and 
test submissions, and I expect more boxes will be certified over the 
weeks leading up to the transition. A list of certified converter 
boxes, including make and model numbers, will be maintained by NTIA and 
will be distributed to participating retailers and available to 
consumers.
    Pursuant to NTIA's regulations, certified converter boxes will 
possess performance features based on industry-accepted DTV standards 
as well as some of the FCC requirements for television products. The 
regulations require, for example, that NTIA-certified converters comply 
with the FCC's parental control or V-Chip rule, emergency alert system 
rule, and closed-captioning requirements for converters. NTIA's rules 
for the Program also permit (but do not require) converter boxes to 
include certain features that might improve converter performance in 
certain conditions or for certain segments of the audience (e.g., a 
``smart antenna'' port to enable consumers to connect an electronically 
tuned antenna for better reception; ``pass through'' of the analog 
signals that television translator stations will continue to broadcast 
in rural areas; and inclusion of a patented BTSC audio feature that 
enhances audio and supports new services such as video description). 
Software downloads and compliance with ENERGY STAR standards are also 
encouraged as permitted features.
Retailers
    NTIA has also worked diligently with retailers to ensure that 
consumers will be able to easily obtain converter boxes during the 
transition period. At our Public Meeting and Expo on September 25, 
RadioShack--with 4,400 company-owned stores and 1,600 franchisees--
announced that it intends to participate in the Coupon Program and that 
it will likely be ready to serve consumers on January 1st. In addition 
to stocking the converter boxes, RadioShack will train its sales 
associates on the transition and the Coupon Program, as well as engage 
in consumer education efforts both in stores and on its websites. As 
with manufacturers, I expect other retailers to follow RadioShack's 
lead and sign up to participate in the Coupon Program.
    NTIA is actively working to make the Program accessible and 
attractive to a full range of retailers in order to gain participation 
not only from large chains, but from regional outlets and small, 
independent local stores as well. The Coupon Program will offer a 
choice of six different coupon redemption alternatives that will enable 
even the smallest retailers to participate. The options allow 
authorization and redemption to take place through existing credit card 
systems, online, or by phone. While some retailers have indicated that 
they would not be able to modify their sales systems or change 
inventory until after the end of the holiday season in mid-January, 
with the announcement by RadioShack, I am hopeful that other retailers 
will also find it in their interests to join the Program now, order 
inventory, and be ready to serve customers in early 2008.
    Certifying retailers is an important step in preventing waste, 
fraud, and abuse in the Program. Accordingly, NTIA's contract with IBM 
requires IBM to monitor retailer involvement in order to minimize 
waste, fraud, and abuse. IBM will provide NTIA with timely information 
about coupon distribution, redemption, and retailer payment activities 
to be able to detect anomalous consumer or retailer behavior and other 
``red flags'' in the operations.
Consumer Education Initiatives Are Well Underway With Strong Support 
        From 
        Public and Private Sector Partners
General Education Efforts
    As I have said before, the success of the transition will be judged 
by how smoothly and efficiently it occurs, which will depend to a 
critical extent on effective outreach to consumers. NTIA has begun its 
efforts to educate consumers about the transition well ahead of the 
January 1, 2008, start date for the Program.
    To maximize the value of the $5 million in consumer education funds 
provided for in the Act, NTIA has been working through partnerships to 
leverage support from a diverse range of stakeholders. In this regard, 
I would like to acknowledge the support NTIA has received from its many 
nonprofit, industry and government partners that have stepped up to the 
plate to help inform consumers about the digital transition.
    In particular, the industries most directly affected by the 
transition--the broadcast, cable and consumer electronics industries--
are actively informing their viewers, subscribers and customers about 
the February 17, 2009, transition date and the variety of options 
consumers have to respond to it. Last month, the National Cable & 
Telecommunications Association (NCTA) announced a $200 million campaign 
to raise consumer awareness. On Monday, the National Association of 
Broadcasters (NAB) launched its marketing campaign. The Consumer 
Electronics Association (CEA) has also been running radio spots and has 
developed consumer-friendly tools, including a video that helps 
consumers understand their options to make the transition.
    As reflected in the discussion of our partnerships that follows 
below, many other organizations are also contributing to the transition 
education effort in personnel time and other resources. Thus, this 
combined NCTA and NAB investment represents only a subset of the total 
private sector contribution going to support the DTV transition.
    These industry leaders, as well as the Association of Public 
Television Stations (APTS), AARP, and the Leadership Conference on 
Civil Rights, among others, came together in February to launch the DTV 
Transition Coalition. NTIA has worked actively with the Coalition since 
its inception. Now over 160 members strong, the Coalition is working to 
ensure that no consumer is left without broadcast television due to a 
lack of information about the transition. The Coalition website 
(www.dtv
transition.org) includes a DTV Quiz to help consumers sort out whether 
they need to take any action before February 17, 2009, and, if so, the 
choices available to them.
NTIA Education Efforts
    On September 25th, NTIA hosted a DTV Public Meeting and Expo to 
discuss progress in educating the public about the Coupon Program. The 
Public Meeting focused on NTIA's partnerships in the digital transition 
and featured two CEO-level panels from the affected industries and 
leading stakeholders in the transition. The technology Expo included 
exhibits and demonstrations from over a dozen companies and 
organizations featuring products and services to enable consumers to 
make a smooth digital transition. Attendees had the opportunity to see 
first-hand that the sharper picture, multicasting, and basic channel 
guide available with digital television deliver a richer viewing 
experience to over-the-air broadcast consumers than they currently 
receive from analog service.
    While some viewers will purchase new digital television sets to 
take advantage of these features, NTIA recognizes that many other 
consumers will want or need to keep their existing analog televisions 
and continue to receive free over-the-air broadcast programming. For 
this group, the Expo was their first opportunity to view the converter 
boxes, and the response was very positive. NTIA will continue to focus 
its consumer education efforts on households that rely on over-the-air 
television, to inform them about the government assistance available to 
defray the cost of digital-to-analog converter boxes.
Targeted Education Activities
    As we reported to the Committee in July, NTIA has identified five 
target groups for particular consumer education efforts: (1) seniors; 
(2) the economically disadvantaged; (3) rural residents; (4) people 
with disabilities; and (5) minorities. These groups depend on over-the-
air television to a greater extent than does the general population, 
and NTIA will carefully design and market-test its consumer education 
materials to ensure that the materials are accessible to, and can be 
easily understood by, these target communities.
    NTIA is working in partnership with trusted intermediaries for 
these groups in order to get the word out and to provide help in 
obtaining and installing converter boxes. In addition, as I mentioned, 
the global public relations firm Ketchum will develop and implement the 
consumer education program to drive awareness of the Coupon Program. 
Ketchum's recent work informing vulnerable communities about key 
Federal programs has given it deep experience working with many of our 
target populations.
Seniors
    America's seniors make up a large percentage of consumers served by 
governmental, social service, commercial, and nonprofit organizations. 
NTIA is leveraging relationships with these organizations to reach the 
senior constituencies that they serve. For example, NTIA is in 
discussions with the Administration on Aging (AoA) of the U.S. 
Department of Health and Human Services (HHS) to capitalize on the 
agency's credibility and reputation for meeting the needs of seniors 
and their caregivers through a variety of home and community-based 
services. These discussions focus on a variety of activities to ensure 
that seniors, especially those with language barriers or located in 
remote or rural locations, know about and understand the Coupon 
Program. They also encompass various outreach strategies that include 
working in partnership with AoA's national aging services network, 
which reaches into every state, tribe and community in the United 
States.
    For almost a year, NTIA has also been collaborating very closely 
with AARP. Last month, NTIA participated in the AARP Members Convention 
in Boston, and AARP is highlighting the Coupon Program in its 
publications and online newsletters, which reach millions of its 
members. NTIA is also working with Retirement Living TV, a cable 
channel dedicated to entertaining, educating and empowering seniors. 
Early next year, Retirement Living TV will begin its nationwide, mobile 
``Retired & Wired: RLTV Digital Tour'' to educate seniors about their 
digital television options including the Coupon Program. In partnership 
with the American Library Association, NTIA is distributing posters and 
coupon applications to participating libraries and training librarians 
to help patrons, especially seniors, fill out coupon applications.
    In addition to these groups, NTIA also has reached out to establish 
partnerships with other organizations including SeniorNet, an 
organization that supports about 200 senior learning centers across the 
country; the National Caucus and Center of Black Aged, Inc.; and the 
National Indian Council on Aging. At the end of October, NTIA will 
participate in the National Hispanic Council on Aging Conference and 
distribute Spanish-language materials about the transition. Finally, 
last month at our DTV Public Meeting and Expo, Best Buy and Family, 
Career and Community Leaders of America (FCCLA) came together to 
announce a partnership in which students in 7,000 chapters across the 
country will be awarded prizes to develop creative ways to assist 
elderly and rural populations to apply for coupons. These voluntary 
efforts will likely proliferate as the transition date approaches.
The Economically Disadvantaged
    NTIA is working with the HHS's Administration for Children and 
Families to reach over 900 community agencies serving low-income 
families to alert them about the Coupon Program. Other non-profit 
community and social service organizations, including Catholic 
Charities, the Salvation Army, and Community Action Partners are 
already working with the Internal Revenue Service (IRS) to inform their 
constituents about the IRS's Earned Income Tax Credit, and these 
organizations have agreed to allow NTIA to use their existing 
communications channels to distribute information about the Coupon 
Program. Finally, NTIA is also in discussions with U.S. Department of 
Agriculture's (USDA) Food and Nutrition Service (FNS) to include Coupon 
Program materials in communications that go to prospective Food Stamp 
recipients.
Rural Residents
    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). This month, NTIA will 
participate in the Rural Telecommunications Congress Conference in 
Springfield, Illinois and will conduct a workshop for rural community 
leaders so they can spread the word about the Coupon Program locally. 
NTIA has also reached out to the USDA's Cooperative State Research, 
Education, and Extension Service to distribute information to extension 
offices nationwide, and we are in discussions with 4-H to enlist young 
people to volunteer in rural communities to assist people who may need 
this government assistance.
People with Disabilities
    NTIA has been working with organizations such as the American 
Association of People with Disabilities (AAPD), Easter Seals, and the 
Northern Virginia Resource Center for Deaf and Hard of Hearing Persons 
(NVRC) to ensure the Program is accessible to Americans with 
disabilities. As noted above, NTIA's Program rules require that 
eligible converter boxes support closed-captioning services as mandated 
by FCC regulations. NTIA Program staff have met with a handful of 
disability groups, the FCC, and several converter box manufacturers to 
describe these closed captioning features and how to access them 
(either via a ``cc'' button on the remote control or via a menu 
feature). NTIA recently participated in the Telecommunications for the 
Deaf and Hard of Hearing conference in San Francisco on August 24, 
2007.
    To reach the home-bound and those with special needs, NTIA will 
continue to reach out to private and public organizations that provide 
home health care, meals on wheels, senior day care, and other elder 
care services. At the DTV Public Meeting and Expo last month, the U.S. 
Department of Veterans Affairs (VA) announced that it would work with 
NTIA to ensure that digital transition information and Coupon Program 
applications are available in 155 VA hospitals and its 1,000 clinics. 
In addition, the VA will inform its 240,000 employees, 1 million 
volunteers, and more than 1 million veterans not served by the VA about 
the transition and Coupon Program.
Minority Communities
    NTIA continues to expand its outreach efforts into minority 
communities. The NAACP and the Rainbow Push Coalition are together 
planning an extensive outreach strategy to the African American 
community, and last week, NTIA participated on a panel at the 
Congressional Black Caucus Telecommunications Issues Forum, 
``Navigating the Digital Era.''
    As I noted earlier, NTIA will participate later this month in the 
National Hispanic Council on Aging Conference and will distribute 
Spanish language materials about the transition. Last month, NTIA 
participated in the United States Hispanic Chamber of Commerce's Annual 
Convention in San Juan, Puerto Rico, and informed Hispanic retailers 
about how they might participate in the Program and assist NTIA in 
raising awareness among their predominantly Hispanic customers. I 
applaud Univision for announcing on October 1 its national campaign to 
educate Hispanic viewers about the transition. Univision reaches 99 
percent of Hispanic homes and will use both television and grassroots 
events and street fairs to educate Hispanics about the Coupon Program. 
Entravision Communications Corporation will also use its Spanish-
language media assets, including TV and radio stations and outdoor 
billboards, to reach nearly 70 percent of Hispanics about the digital 
transition in 51 primary television station markets across the United 
States.
    NTIA also has printed brochures and other information in five 
languages, in addition to English. Partnering with Panasonic and the 
Southeast Asia Resource Action Center, NTIA has translated Coupon 
Program information for distribution in Chinese, Korean, Vietnamese and 
Filipino communities. The Center will distribute information and will 
encourage the Cambodian-American, Laotian-American, and Vietnamese-
American communities to use the Government's multilingual call center 
to apply for coupons. NTIA is pursuing partnership opportunities with 
Koahnic Broadcast Corporation to disseminate coupon information to 
Alaskan Native villages, as well as with Native Voice One to reach 
tribal reservations through radio communications.
    Moreover, NTIA has extended this multi-lingual approach beyond its 
consumer education activities into the core of Program operations. 
Significantly, through an established partnership with the Language 
Line, the call center that will support the coupon application process 
will be staffed by permanent employees possessing fluency in 23 
languages and depth-of-language in more than 70 other languages.
Government Partnerships
    NTIA has reached out to over 14 Federal Government departments and 
agencies and is committed to leveraging the relationship these groups 
have with our target audiences to maximize the value of the Federal 
investment in this Program. As outlined above, we are already either 
actively collaborating or in discussions with the HHS, USDA, VA, and 
the IRS. Many of these contacts have resulted in clearly defined 
strategies to reach constituents served by these agencies. For example, 
NTIA is partnering with other government departments and agencies to 
use existing publications and electronic newsletters to insert coupon 
information in scheduled mailings, link to the coupon application form 
from their websites, and place coupon application forms at local social 
service offices.
    In addition to these partnerships, 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 the 
five target populations discussed above. NTIA is presently in 
discussions with the Social Security Administration; the White House 
Office of Faith-Based and Community Initiatives; the General Services 
Administration; and several agencies within the Department of Commerce.
    Finally, as noted above, NTIA is 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. To assist consumers who do not have Internet 
access, who are hearing impaired, or who simply prefer to receive 
information about the Coupon Program over the telephone, NTIA has also 
established a toll free number, 1-888-DTV-2009.
    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. Moreover, NTIA has also distributed 
copies of Coupon Program brochures--in both English and Spanish--to 
every member of the House and Senate. We have distributed these 
materials widely to community organizations, constituency groups, and 
industry stakeholders. We hope they will assist you in keeping your own 
constituents informed about the transition and the Coupon Program.
Conclusion
    NTIA recognizes the risks and potential pitfalls associated with a 
consumer education campaign of this magnitude; but the solution is not 
the establishment of a single digital transition authority or single, 
government-mandated message. Broadcasters, cable and satellite service 
providers, consumer electronics manufacturers and retailers, and 
consumer advocates have as important a role to play in educating 
consumers as any government agency does, and as great an incentive to 
become involved. A multiplicity of messages and sources of information 
is critical to a well-informed consuming public. The stakeholders in 
the transition are in the forefront of the education effort through 
their individual commitments as well as collaborations like the Digital 
TV Transition Coalition.
    In conclusion, I want to thank the Committee for the opportunity to 
testify before you again today. I will be happy to answer your 
questions.

    The Chairman. Thank you very much.
    Mr. Commissioner?

STATEMENT OF HON. JONATHAN S. ADELSTEIN, COMMISSIONER, FEDERAL 
                   COMMUNICATIONS COMMISSION

    Commissioner Adelstein. Thank you, Mr. Chairman, Mr. Vice 
Chairman, Senator Hutchison, Senator McCaskill, Senator Pryor. 
Senator Pryor, thank you for inviting me down to Arkansas. It 
was a pleasure to be down there. I hadn't been there since the 
days I worked for your father many years ago. He was one of my 
favorite people in the world, so it was an honor to be back 
dealing with rural broadband issues.
    We have less than 500 days left before full power stations 
cease analog broadcasting. There's a huge amount of work, 
coordination, public education, and assistance ahead of us to 
make sure the transition works for millions of consumers. GAO 
recently testified that no one appears to be in charge of the 
transition. Because nobody's in charge, there is no strategic 
plan, there is no established structure to coordinate the 
national DTV transition. Nobody's ultimately responsible for 
vetting, prioritizing, and implementing ideas from both the 
public and private sectors into a comprehensive and coherent 
plan. We're sending out weak signals so the public isn't 
getting a clear picture.
    Only government can play the role of referee to coordinate 
industry representatives, with sometimes conflicting 
priorities, so they send a clear message. Government can 
encourage a message that serves all consumers and is not skewed 
by self-interest.
    I hear from many perspectives that our government agencies 
themselves aren't coordinated. Our FCC staff performs well 
whenever they're given proper guidance. As GAO testified, the 
FCC remains the best-positioned agency to lead the effort. 
While the FCC staff is working hard, despite some recent 
improvements, the Commission's overall DTV effort is not a 
model of effectiveness.
    Congressional interest and public scrutiny in recent months 
have rightly forced the FCC to expand its overall outreach, 
enforcement, and technical efforts, but much more is needed. 
Poor long-term planning and continued lack of a Federal and 
internal FCC coordination plan have left us in the unfortunate 
position of playing catch-up. Rather than being proactive and 
anticipating problems and concerns and developing an effective 
plan and strategy, we've been reactive.
    For instance, this Commission waited 17 months after 
Congress and this committee enacted the DTV deadline before 
even seeking comment on rules to educate the public. We did so 
then only under significant pressure from Congress. 
Fortunately, the Commission yesterday received the proposed 
final rules for our consideration and they will greatly expand 
our role.
    While some have argued that there is no need for a 
coordinated message, I strongly disagree. Allowing each party 
to follow its own self-interest will lead to public confusion. 
Industry wants to work with us and has shared many thoughtful 
ideas and has made major commitments. They're backing these 
efforts with big money, which will dwarf all other messages 
that the Federal Government might attempt. So the government 
better get much more involved in helping to coordinate those 
campaigns.
    Yes, more resources are needed to expand the scope of our 
governmental efforts. But it's not solely a matter of funding. 
It's primarily a matter of leadership. Here are some steps we 
need to take immediately to get on the right path:
    First, as you indicated, Mr. Chairman, it's long overdue 
for the FCC, NTIA, and other relevant Federal agencies to 
develop a Federal DTV task force. It's needed to clarify the 
message and develop benchmarks and a time line. The private 
sector established a coordinating mechanism. We should do the 
same for the Federal Government. We did it for Y2K and we need 
to do it for DTV.
    Beyond coordinating governmental efforts at all levels as 
well as our own internal efforts, the task force can convene 
joint meetings with the private sector coalition to ensure a 
coherent, consistent message across all channels. And it can 
help to coordinate the many public-private assistance effots 
needed for at-risk communities like the distant villages in 
Alaska that you talked about, Senator Stevens. A task force 
could work with other Federal agencies to integrate DTV 
educational information into many points of contact with 
consumers.
    And we should establish a single toll-free national DTV 
call center. There's no need for two when it's a lot simpler 
for consumers and the government to have one.
    We need to work with all levels of government and the 
private sector to establish a grassroots information and 
technical assistance campaign. The government can't do this by 
itself, but it needs to work with the private sector to make 
this happen, people that are actually on the ground ready to 
help.
    We should target communities with the highest concentration 
of the most vulnerable over-the-air viewers. These include the 
elderly, those with fixed or low incomes, people with 
disabilities, people of color, including non-English speakers, 
rural residents, and tribal communities.
    It needs to establish time lines for training and outreach 
so that people who need help get help. The Commission still has 
a lot of technical work left to help broadcasters continue to 
serve over-the-air viewers throughout the transition. Only 41 
percent of full power TV stations are fully in position to 
broadcast digital only. To help them, we need to quickly 
complete the third DTV periodic review. Border issues, such as 
the one in Texas that you referred to, Senator Hutchison, 
should be included and addressed as part of that effort and 
done, I think, sooner rather than later.
    There is very little time left, but there is enough time if 
we increase the level of coordination and resources dedicated 
to this. The ongoing leadership of this committee, including 
this hearing today, is extremely helpful in focusing our 
efforts.
    Thank you for holding this critical hearing. I think we're 
going to need many more like it to make the DTV transition a 
success for the American people. Thank you for inviting me to 
testify.
    [The prepared statement of Commissioner Adelstein follows:]

    Prepared Statement of Hon. Jonathan S. Adelstein, Commissioner, 
                   Federal Communications Commission
    Mr. Chairman, Mr. Vice Chairman, and Members of the Committee, 
thank you for inviting me to appear before you to discuss the 
transition from analog to digital broadcast television (DTV). With less 
than 500 days before February 17, 2009--the day Congress has required 
full-power stations to cease analog transmission and to broadcast 
exclusively in digital--there is plenty of remaining work, 
coordination, and public education and assistance to ensure a smooth 
and seamless transition. I will provide a frank assessment of our 
national level of preparedness from the perspective of a principal 
Federal agency involved in the DTV transition.
    As a member of the Federal Communications Commission (FCC), I can 
attest that the FCC staff possesses and has demonstrated the requisite 
talent, skills and expertise to help guide this Nation through the 
rough patches of the DTV transition. While the Government 
Accountability Office (GAO) recently testified that no one appears to 
be in charge of the transition, and I believe that remains the case, 
the FCC's Media, Enforcement, and Consumer and Governmental Affairs 
Bureaus have performed admirably whenever they have been provided the 
proper guidance. As GAO testified, the FCC remains the best positioned 
agency to lead the effort.
    Last month, I testified before Chairman Kohl and the Senate Special 
Committee on Aging about the need for the Federal Government to 
establish a coherent, coordinated plan to ensure that millions of 
elderly Americans are not left out during the DTV transition. I raised 
concerns about the adequacy of the Commission's DTV outreach and 
education efforts. Chairman Kohl has introduced legislation responsive 
to the issues raised at the hearing.
    Since then, the FCC staff has been hard at work. The Consumer and 
Governmental Affairs Bureau (CGB), our outreach and consumer education 
specialist, hosted a well-attended consumer workshop last month, and 
plans to host additional workshops and special awareness sessions that 
will focus on high-risk communities, such as seniors, people of color, 
non-English speakers, people with disabilities, and those living in 
rural and low-income areas. CGB is also planning media activities, 
including increased outreach to the Latino community and to tech-savvy 
school children who can educate their parents and grandparents. Our 
field staff has engaged in extensive outreach to senior citizens across 
the country.
    In addition to this outreach, the FCC's Enforcement Bureau has been 
aggressively enforcing our requirement that all TV receivers with an 
analog-only tuner must be labeled in retail stores. To date, FCC field 
agents have performed approximately 1,275 inspections, and the Bureau 
has issued 278 citations and dozens of Notices of Apparent Liability. 
The Media Bureau continues to work on the technical aspects of the 
actual transition. The Commission recently took steps to ensure cable 
subscribers are not disenfranchised after the transition. The Bureau is 
currently working on recommending similar steps to protect over-the-air 
viewers--some of the most vulnerable members of society--during and 
after the transition.
    Congressional interest and public scrutiny in recent months have 
indeed prompted the FCC to expand its overall outreach, enforcement and 
technical efforts, but more improvements are needed. Notwithstanding 
FCC staff's efforts, and despite some recent improvements, the 
Commission's overall DTV effort is not a model of effectiveness.
    The Commission's poor long-term planning and the continued lack of 
a national, Federal and internal FCC coordination plan have left us in 
the unfortunate position of playing catch-up. Rather than being 
proactive--anticipating problems and concerns, and developing an 
effective strategy--Commission action has been noticeably reactive. For 
instance, while Congress and particularly this Committee worked hard to 
get the DTV transition deadline date passed and then signed into law by 
the President on February 8, 2006, the Commission waited 17 months 
before it even sought comment on the need for rules to educate the 
public about the transition. The Commission finally proposed consumer 
education rules for the broadcast, cable and consumer electronics 
industries only after several Members of Congress inquired and strongly 
encouraged us to do so.\1\ Fortunately, the full Commission yesterday 
received proposed final rules for our consideration that will greatly 
expand our role. So while 17 months of inaction are behind us, we now 
need to address the problem by planning adequately for the 16 months 
left in the transition. I will continue to work diligently with this 
Committee and all of my colleagues to ensure that we use the remaining 
489 days effectively.
---------------------------------------------------------------------------
    \1\ See Letter from The Honorable John D. Dingell, Chairman, 
Committee on Energy and Commerce; and The Honorable Edward J. Markey, 
Chairman, Subcommittee on Telecommunications and the Internet, U.S. 
House of Representatives, dated May 24, 2007; The Honorable Herb Kohl, 
Chairman, Special Committee on Aging, U.S. Senate, dated May 25, 2007; 
and The Honorable Gordon H. Smith and Mark L. Pryor, U.S. Senate, dated 
July 13, 2007. See also Speech of Jonathan S. Adelstein, Commissioner, 
FCC, ``I Want My DTV: Building a National DTV Consumer Education 
Campaign,'' CEA Entertainment Technology Policy Summit, Washington, 
D.C., dated March 15, 2006.
---------------------------------------------------------------------------
    An example of the Commission's lack of planning and coordination is 
illustrated in its failure to inform the public that not all analog 
broadcast transmission actually ceases on February 17, 2009. For 
millions of Americans, particularly over-the-air Spanish-speaking 
viewers and many rural residents, who rely on the over 4,700 low-power, 
Class A and translator television stations in the U.S., analog 
broadcasting will continue. In many urban and rural cities, popular 
Spanish language networks like Telemundo and Azteca, and quality 
stations that often are a main source for critical local news and 
information, are not required to convert their facilities to digital by 
the deadline.
    Recently, the Community Broadcasters Association (CBA) brought this 
fact to the attention of the FCC's outreach and consumer education 
specialists. CBA expressed concern that ``publicity about the digital 
television transaction will be misleading if it suggests that no over-
the-air analog television service will be available'' after the 
deadline for full-power stations.
    In response to this concern, the FCC hastily issued a consumer 
advisory on its website to inform the public about this forgotten, but 
important, aspect of the DTV transition.
    Some of the information about the transition has in fact been 
inaccurate. Even the FCC's own public materials have declared that 
``everything you see will be DTV,'' and ``last day of analog 
broadcasting,'' or ``analog broadcasting ends February 17, 2009.'' As 
the expert agency, we must find a way to better convey some of the 
important nuances of the transition. Of course, with only 16 months 
left, this task becomes extremely difficult.
    Some of the industry's information has been imperfect as well. For 
example, I shared Senator Claire McCaskill's concerns about the cable 
industry's first round of DTV ads, which were more akin to commercials 
for cable service rather than public service announcements (PSAs). 
Also, an ongoing field study by U.S. Public Interest Research Group is 
finding that some consumer electronics retailers are misleading 
consumers.
    While some have argued that there is not a need for a coordinated, 
coherent message and that perhaps an uncoordinated, dissimilar message 
from each affected industry is a better approach, I strongly disagree. 
Applying that reasoning to low-power, Class A and translator stations, 
it would be perfectly appropriate for community broadcasters to embark 
on a consumer education campaign that informs viewers that the DTV 
transition will not result in the end of analog broadcasting and they 
can continue to watch their channels. Such a message would be accurate, 
but it would conflict with the broader DTV transition message. 
Similarly, cable operators could simply encourage their subscribers to 
rent a set-top box for every TV set in the household. Consumer 
electronics retailers could encourage consumers to purchase HDTV sets. 
And broadcasters would simply inform their consumers they no longer 
need subscription services once quality digital broadcasting arrives. 
Such disparate, uncoordinated messages would be ingredients for a 
disaster. I am pleased that these industries have not taken that 
approach and have behaved much more responsibly. But, as industry 
representatives have told me repeatedly, more guidance, coordination 
and leadership from the Federal Government, and particularly the FCC, 
would be helpful.
    In my own outreach, I have found the broadcasters, cable operators, 
and consumer electronics manufacturers and retailers eager to develop a 
meaningful partnership with the Federal Government. For instance, after 
my criticism of the cable industry's first round of PSAs, the industry 
sought my guidance in developing future PSAs. The cable industry was 
receptive to all of my suggestions, including a technical correction. 
But rather than the ad hoc approach of individual commissioners 
reviewing scripts, it would have been preferable for an FCC DTV 
education specialist to work with each industry as they are developing 
PSAs based on a clear message vetted by the Commission and other 
agencies involved. To my knowledge, the Commission has not even asked 
to look at them. I am not suggesting we dictate the message verbatim, 
but rather that we offer suggestions to help coordinate it. Our 
industry partners are very receptive to such a cooperative approach.
    Since a hard deadline has been enacted into law, I have not found 
an unwillingness to coordinate or a lack of informed and thoughtful 
ideas about how to reach and educate the American people. Rather, there 
has been a remarkable lack of leadership and coordination.
    Specifically, there is no structure established that is responsible 
for coordinating the national DTV transition effort and for vetting, 
prioritizing and implementing ideas from both the public and private 
sectors into a comprehensive, coherent and coordinated plan. Only the 
government can play the role of referee to ensure that industry 
representatives with sometimes conflicting priorities are coordinated 
to send a clear message that serves all consumers and is not skewed by 
self-interests.
    More resources are needed to expand the scope and depth of our 
efforts, but it is not solely a matter of funding to raise the 
awareness of Americans, particularly at-risk groups such as the 
elderly, low-income families, rural residents, people with 
disabilities, minority groups and non-English speakers. First, it is a 
matter of coordination and prioritization. Then, it is a matter of 
implementation.
    In terms of actually helping at-risk consumers adapt to the new 
technology, we have not even begun to plan properly for the scope of 
the issues we will confront. For example, millions of seniors and 
Americans with disabilities will need specific help in obtaining and 
installing converter boxes. While volunteer efforts are now being 
contemplated, it will require enormous coordination and government 
involvement by, for example, Area Agencies on Aging who interact on a 
daily basis with seniors. But without training, resources and 
coordination, those efforts will be overwhelmed by the demands. The 
time for planning is now, not right before disaster strikes.
    It is my firm belief that we need a national DTV outreach, 
education and implementation plan that coordinates the efforts and 
messages of all stakeholders. Here are some next steps that I believe 
we need to take, immediately, to get on the path of reaching and 
educating people in the more than 111 million U.S. television 
households.
    Create Federal DTV Transition Task Force. It is long overdue for 
the FCC, NTIA and other relevant Federal agencies to formalize their 
relationship and develop a Federal DTV Transition Task Force with 
representation from the leadership of each agency. This multi-agency 
task force would develop benchmarks and a timeline to achieve 
nationwide awareness of the DTV transition. It would be accountable to 
Congress. The private sector has established a coordinating mechanism 
through the DTV Transition Coalition, and it is high time we do the 
same for the Federal Government.
    The task force would need staff. The FCC, for example, should 
detail staff to the task force from CGB, the Media, Enforcement, and 
Public Safety and Homeland Security Bureaus, and the Offices of General 
Counsel and Engineering and Technology. With dedicated staff from 
different agencies, the task force would also serve as the 
clearinghouse for all things related to the DTV transition national 
campaign and for coordinating this network of networks. The aging and 
disabilities communities, for example, would have access to financial 
and human resources to assist these at-risk groups in making the 
transition. The task force would be able to coordinate with public and 
private partners, leverage existing resources and develop a single 
unified Federal message, i.e., develop and use common terminology to 
describe the digital-to-analog converter box program and other DTV 
technology. In addition to coordinating government efforts at all 
levels--including state, regional, local, and tribal governments--the 
task force can convene joint meetings with the private sector DTV 
Transition Coalition to ensure a coherent, consistent message across 
all channels. And it can help coordinate the many public-private 
assistance efforts needed for at-risk communities.
    Maximize Existing Federal Resources. Once a unified Federal message 
has been developed, the task force could then work with other Federal 
agency components, such as the Administration on Aging (AoA), the 
Social Security Administration, Departments of Agriculture, Labor, 
Education, and Health and Human Services, the Bureau of Indian Affairs, 
the U.S. Postal Service and AmeriCorps, to integrate DTV educational 
information into many points of contact with consumers. Relevant 
Federal agency websites and correspondence to citizens' homes, such as 
Social Security mailers and Meals on Wheels deliveries, are golden 
opportunities to educate and inform consumers about different aspects 
of the DTV transition, including the converter box program and the 
analog cut-off date.
    Establish a National DTV Call Center and Hotline. We should 
establish a National DTV Call Center with a multi-lingual staff and a 
national toll-free number that is easy to remember, accessible to 
persons with disabilities, and unassociated with the ongoing, non-DTV 
operations of the FCC. NTIA's toll-free number is a standard recording, 
and some have complained the wait for the FCC's general customer 
helpline is much too long, as it covers many other issues, and 
consequently it is not as useful as it could be. There is no reason for 
two separate toll-free numbers for DTV information when it is easier to 
promote and staff one. Consumer outreach specialists should be able to 
develop a more succinct and consumer-friendly message. The call center 
could also be the point of contact for households in need of local 
assistance to obtain or install converter boxes. We can help state, 
local, and tribal governments connect seniors to community-based 
service providers. This is especially important to seniors, a 
disproportionate number of whom do not have access to the Internet or 
know how to reach our website.
    Launch a Targeted Grassroots Information and Technical Assistance 
Campaign. The task force, working with state, local and tribal 
governments, the DTV Transition Coalition partners, and community-based 
service providers, could target communities with the highest 
concentration of over-the-air viewers, including senior citizens, low-
income, non-English speaking, rural populations and tribal communities. 
It can launch a coordinated grassroots campaign, which would include 
posting signs in supermarkets, retail stores, churches, social service 
organizations, all modes of public transportation and other public 
places. Many at-risk citizens will need help acquiring and hooking up 
their converter boxes, and it remains entirely unclear who is going to 
help them. If it is to be done through volunteers, it will take a vast 
effort to vet and train them. No Federal agency currently has the 
mandate or resources to help people who can't themselves hook up the 
boxes to their TV sets. For example, while the FCC, the AoA and its 
allied aging network--which includes state and local agencies, as well 
as community based service providers like Meals on Wheels--have been in 
very early discussion about various grassroots efforts, no plan is in 
place. People with disabilities experience great difficulty accessing 
closed captions and video descriptions. A technical assistance program 
must be established soon, with timelines for training and outreach to 
ensure people who need help can get it.
    While these steps may require some additional funding from Congress 
or a reallocation of funds already appropriated to the FCC, first and 
foremost, dedicated leadership and focus are required from the FCC--the 
expert agency primarily responsible for the DTV transition.
    Establish Needed Guidance for Broadcasters Soon. In addition to 
these outreach and education initiatives, the Commission must take 
steps to ensure that over-the-air viewers are not disenfranchised 
during or after the DTV transition, and that all full-power stations 
are prepared to cease analog transmission and to operate in digital by 
the end of the transition on February 17, 2009. Accordingly, I believe 
the Commission needs to: (1) complete the Third DTV Periodic Review as 
quickly as possible; and (2) prepare a report to Congress on the status 
of the DTV transition on February 17, 2008--one year before the hard 
deadline.
    Because the law does not provide for any waivers or extension of 
time, February 17th, 2009 is indeed the last day that full-power 
broadcast stations will be allowed to transmit in analog. There are a 
total of 1,812 stations that will be serving the American people after 
the transition but, to date, only 750 are considered to have fully 
completed construction of their digital facilities and are capable to 
broadcast in digital only in the final position from which they will 
broadcast. The remaining stations vary in levels of transition 
preparedness. Some stations need to construct their transmission 
facilities, change their antenna or tower location, or modify their 
transmission power or antenna height, while others may have to 
coordinate with other stations or resolve international coordination 
issues.
    In the Third DTV Periodic Review, the Commission is contemplating 
rules to govern when stations may reduce or cease operation on their 
analog channel and begin operation on their digital channel during the 
DTV transition. The Commission also sought comment on how to ensure 
that broadcasters will complete construction of digital facilities in a 
timely and efficient manner that will reach viewers throughout their 
authorized service areas. These and other important questions, such as 
the deadlines by which stations must construct and operate their DTV 
channels or lose interference protection, must be answered as soon as 
possible. Broadcasters need to know the rules as they invest billions 
into this transition. We have lost valuable time focused on other more 
tangential aspects of the transition while not moving forward on 
clarifying urgent demands on broadcasters to get a huge job done in 
short order.
    The Third DTV Periodic Review also proposed every full-power 
broadcaster would file a form with the Commission that details the 
station's current status and future plans to meet the DTV transition 
deadline. While each individual form would be posted on the 
Commission's website, I believe it is just as important for the 
Commission, Congress and the public to get a comprehensive sense of 
where each full-power broadcast station is 12 month before the end of 
the transition. A report to Congress 1 year before the transition ends 
will provide both the broadcaster and the FCC sufficient time for any 
mid-course correction.
    There is little time left, but I believe it is enough time to 
succeed in establishing a smooth transition if we increase the level of 
coordination and resources dedicated to this undertaking. The ongoing 
leadership of this Committee, including this hearing today, is 
extremely helpful in focusing our efforts. Thank you for holding this 
critical hearing, and I look forward to working with you to make the 
DTV transition successful for the American people.

    The Chairman. There are less than 500 days left until the 
DTV transition. Do you agree with the GAO who says, who's in 
charge? Who is in charge? No one?
    Commissioner Adelstein. That's what the GAO testified. We 
are all doing our own work and there are some discussions among 
us, but there is no single entity in charge. Just as 
significant, GAO testified again this morning that there is no 
plan. How can there be a plan if nobody is in charge? Who is 
going to put together a plan that involves so many different 
Federal agencies? It is not just the FCC and NTIA, but 
literally dozens of different agencies that could be involved.
    The Chairman. You're a member of a very important 
Commission in this position. Who do you believe should be in 
charge?
    Commissioner Adelstein. Again, I will defer to the GAO, who 
testified that they felt that the FCC was best positioned to 
lead the effort, although I think NTIA has a critical role, 
particularly a role given to them explicitly by Congress in 
terms of the converter box program, which we of course have no 
authority to oversee. But to coordinate and to have one body 
coordinating, I think it makes the most sense for it to be the 
FCC.
    The Chairman. Is this a situation where if you don't want 
it, someone else should do it?
    Commissioner Adelstein. Well, I do not know if that is the 
case so much as we haven't thought about it enough or planned 
on it enough and we are not really stepping up to the plate in 
terms of the leadership. I do not know if people are passing 
the buck. Obviously the FCC is extremely busy with a number of 
very important priorities for broadband for this country and 
many other critical issues, and perhaps that's part of it, that 
we are just overwhelmed. But an issue of this importance I 
think really demands that we step up to the plate and do what 
we need to do, and if we need to ask for resources from 
Congress we need to do that.
    The Chairman. NTIA, Mr. Kneuer, do you agree?
    Mr. Kneuer. I think coordination amongst public and private 
actors, amongst the market participants, amongst the various 
Federal entities that have responsibilities for this program, 
is very, very important. I also think that it's ongoing to a 
very large extent. We work closely with the FCC. NTIA and the 
FCC have a Memorandum of Understanding for certification of set 
top boxes. We leverage the resources of their laboratories. 
We're working with more than a dozen other Federal agencies 
that have service responsibilities, whether it's the Veterans 
Affairs or the Administration on Aging and others, identifying 
the resources that they have to bring to bear to help in that 
regard.
    We're working closely with the industry. I think 
Commissioner Adelstein talked about how the private sector has 
their own coordinating body. We're a member of that 
coordinating body and have been since its inception. The FCC is 
a member of that body.
    So I think there is a great deal of coordination that is 
currently going on. Different market participants, different 
Federal agencies, have different responsibilities, have 
different capabilities, have different resources to bring to 
bear on this problem. I am always open to and welcome 
collaboration that will be productive. But I think to a very 
large extent the functional equivalent of a DTV task force 
currently exists.
    The Chairman. You have coordination, but do you believe 
someone should be in charge?
    Mr. Kneuer. I'm not so sure that it's necessary for a 
single entity to be in charge of directing the resources of 
these various constituencies and agencies. It is very, very 
important that we all understand what each of us are doing, the 
resources that we're each bringing to bear and coordinating 
those resources effectively. I think there is a potential down 
side to having a single entity in charge per se because I think 
resources that may be put into the community, into the 
marketplace, may not go for fear of getting in the way or 
waiting for approval from some entity that is in charge.
    But certainly coordination amongst all these different 
entities and these different institutions that have resources 
and have responsibilities and have an interest is very 
important and we're engaging in that kind of coordination every 
day.
    The Chairman. Don't you agree that coordination may take a 
lot of time and some time will come when you have to decide 
whether to go left or right? Do you coordinate that?
    Mr. Kneuer. I think we spend a lot of time in coordination 
and I think it is an efficient and an effective use of our time 
to coordinate. By coordinating with the market participants 
that are investing the better part of a billion dollars in 
consumer education, we get to maximize and leverage the $5 
million that we have. That's a huge force multiplier of the 
resources that the statute provided to us. So it is in our 
interest and certainly a good use of our time to coordinate 
with those parties that are making these large financial 
commitments.
    Coordinating with the other Federal agencies that have 
service responsibilities, whether it's the Veterans Affairs or 
others, who have networks of hundreds of thousands, if not 
millions, of volunteers who serve these constituencies, gives 
our efforts an enormous lift and benefits everyone by taking 
the message and delivering it to those constituencies that they 
serve.
    So there are lots of incentives for us to coordinate and I 
think we've had successful examples of that coordination.
    The Chairman. Mr. Adelstein, are you satisfied?
    Commissioner Adelstein. Well, during the Y2K effort there 
was an enormous interagency effort that was undertaken. Over a 
2-year period there were extensive meetings every 2 weeks at 
the Old Executive Office Building, with all the different 
Federal agencies involved. The result was that we didn't hear a 
lot about it. There was not a disaster.
    If we don't do that here, we may have a real disaster in 
February 2009. The good news would be if we don't have that. I 
mean, nationally, the private and public sector are 
coordinating. We joined fairly recently that coordinating body 
the private sector set up and we just monitor. We're not 
involved.
    There are issues among Federal, State, and local agencies 
that aren't resolved. Even within the FCC, we eliminated our 
own DTV task force. Of all the times to eliminate a task force 
that we had internally to try to coordinate among our many 
different bureaus that have many different responsibilities--we 
have a lot of technical issues, but a lot of outreach issues 
also that aren't being coordinated.
    The message, like in an advertising campaign, needs to be 
consistent, and needs to be coherent. There are different 
targeted messages for individual audiences, but if you ask 
today what's the national message, I don't think we could tell 
you what it is right now. That's because we haven't spent the 
time to make sure that it is coordinated with industry.
    Now, if industry's going to spend hundreds of millions, 
almost a billion, dollars to get the message out, isn't it 
important that we help to coordinate? We don't have to dictate 
to them or they don't have to wait for us, but maybe they 
should run a script by us, for example. I had a script run by 
me by the cable industry. There was a technical error in it and 
they fixed it. But why I am, an individual commissioner, the 
one doing this? I mean, it should be done on a more systematic 
basis, on an organized basis.
    The GAO itself is extremely concerned with the lack of a 
plan and the lack of effective coordinated leadership.
    The Chairman. Thank you.
    Senator Stevens?
    Senator Stevens. Don't you agree, Congress created this 
problem, right? We set the date, so I sort of think it's our 
responsibility to find some way to coordinate. What is wrong 
with the basic structure of the Y2K system, Mr. Kneuer?
    Mr. Kneuer. I think the only thing that's different 
between--and I didn't participate and wasn't a member of the 
Federal interagency working group in response to Y2K. My 
understanding is that the Y2K task force was established by an 
Executive Order. Everything we're doing collectively within the 
Federal Government are the kinds of things that we would do in 
response to an Executive Order. So while there is not a piece 
of paper that says, we hereby create an interagency task force, 
there is in fact interagency collaboration and coordination at 
very high levels.
    We have an Assistant Secretary from the Veterans Affairs 
participating in our program. I've spoken with the Assistant 
Secretary of the Administration on Aging. We've got other 
Federal agencies that have service missions to various 
constituencies and communities and we're working closely with 
them to identify the resources that they have that can be 
brought to bear on this. We work closely with the FCC and the 
FCC staff.
    Significantly, it goes beyond just the Federal Government 
agencies and departments and offices. We're working very 
closely with the industry market participants, whether it's the 
broadcasters or cable or the consumer electronics, as well as 
literally hundreds of nonprofit organizations and community 
organizations that are bringing their resources to bear. We had 
an announcement at the Commerce Department that Best Buy has 
coordinated with a group called the Families, Careers, 
Communities Leaders of America. It is a youth group that has 
220,000 members in 7,000 communities around the country. 
They're partnering with a market participant, Best Buy, to 
develop educational materials that fit those communities.
    We don't have a single national message and I'm not sure 
that we should have a single national message.
    Senator Stevens. Well, respectfully, I don't have too much 
time. Respectfully, it does seem to me that what I'm looking at 
is everyone in the organized areas, the real places of high 
density of population, are going to have their mailboxes 
stuffed full of directions how to take care of this transition, 
and those of us who live out in the rural areas are going to be 
begging someone to tell us what the hell's going on. Pardon 
that phrase.
    But I do believe that it's time that we took a hold of it, 
and I think those of us on this committee ought to just draft a 
joint resolution and say we're going to create one, create some 
way to bring this all together and not have the money that's 
available spent in a redundant fashion, to make sure that what 
the consumer is getting is correct and true and can be followed 
through by the people in industry who are going to carry it 
out.
    I'm afraid that what's going to come out of all this 
coordination we've got is that people here in town are going to 
say how it should be done, but they're going to rely on the 
private sector to do it, but there may not be a meeting of the 
minds as to the instructions they're getting. I think there 
ought to be participation of the private sector, there ought to 
be participation of government, and there certainly ought to be 
participation by the consumer groups to start with, what the 
directions are.
    It shouldn't take too long to work that out. The problem is 
it all happens right at once. If this was a series of changes 
that took place around the country, it wouldn't be even near a 
Y2K situation. But since it all happens on 1 day, it has to be 
done by 1 day, I think that really is going to cause the 
problem.
    So I hope that we can get together and have our staffs draw 
up something to just say, this is the way it's going to be 
done. Now, if the President wants to issue an Executive Order 
to do that, be our guest. I'm not sure that it's the kind of 
thing that ought to be taken on by the Executive Branch, 
however, because it's carrying out a direction of Congress. We 
initiated this and I think we ought to provide the basis for 
coordination.
    Thank you, Mr. Chairman--wait, let me ask one other. What 
do each one of you think is the real obstacle ahead of us? What 
is the real problem in terms of the overall transition?
    Mr. Kneuer. I think until very recently my biggest concerns 
were making sure that we had a well-educated public. But I 
think with the commitments that have been made, we will have a 
well-informed public and a well-informed public will make 
informed decisions about how best to affect the transition.
    Other than that, the real concern is getting to some of 
these targeted groups, making sure that we've got the messages 
and programs that are targeted to rural communities, to people 
with disabilities, to people for whom English is a second 
language or non-English speakers. But that's where I think our 
coordination efforts with various Federal agencies that provide 
services to those communities and the nonprofits and community 
organizations are very important.
    Senator Stevens. Thank you.
    Mr. Adelstein?
    Commissioner Adelstein. I think we need to educate the 
public. John is exactly right. And how are we going to do that? 
There are so many different messages out there that it is not 
clear. A lot of people do not need any help at all and other 
people need an enormous amount of help. We need to target those 
communities that need the help the most. But we can't just tell 
them there is a problem. We need to help them actually do it. 
It's an enormous undertaking. I think it's underestimating how 
much effort it will take.
    If somebody is a Native Alaskan and they're in some remote 
village and they have an analog TV, who's going to help them 
hook it up if they don't know how to hook it up? Is it going to 
be a volunteer and how is it going to be determined who the 
volunteer is, that they're cleared to go into that house, that 
they're properly trained? And there is no Wal-Mart there, so 
where are they going to get it? They can't get it over the 
Internet because they don't have an Internet hookup. I mean, 
there are so many difficult questions.
    Senator Stevens. We do have the Internet. We have more 
Internet than you think.
    Commissioner Adelstein. Oh, but I'm talking about an older 
person who doesn't know how to use computers, that isn't 
computer literate. The people that are the most difficult to 
reach are those who aren't technically savvy, that don't have 
access to that. They could have it, but they probably don't 
because of either their income or their age. So those are the 
folks we have to worry about.
    Right now I don't think there is a coherent plan to get the 
message out to them, nor to implement a plan. So we have a lot 
of work to do to get that up to speed.
    Senator Stevens. I've used my time. Mr. Chairman, I'd like 
to put in the record the Executive Order that Mr. Kneuer talked 
about so everybody can see it.
    The Chairman. Without objection, so ordered.
    [The material previously referred to follows:]

                         Executive Order 13073
                                  Effective Date: February 04, 1998
    The American people expect reliable service from their Government 
and deserve the confidence that critical government functions dependent 
on electronic systems will be performed accurately and in a timely 
manner. Because of a design feature in many electronic systems, a large 
number of activities in the public and private sectors could be at risk 
beginning in the year 2000. Some computer systems and other electronic 
devices will misinterpret the year ``00'' as 1900, rather than 2000. 
Unless appropriate action is taken, this flaw, known as the ``Y2K 
problem,'' can cause systems that support those functions to compute 
erroneously or simply not run. Minimizing the Y2K problem will require 
a major technological and managerial effort, and it is critical that 
the U.S. Government do its part in addressing this challenge.
    Accordingly, by the authority vested in me as President by the 
Constitution and the laws of the United States of America, it is hereby 
ordered as follows:

    Section 1. Policy. (a) It shall be the policy of the Executive 
Branch that agencies shall:

        (1) assure that no critical Federal program experiences 
        disruption because of the Y2K problem;

        (2) assist and cooperate with State, local, and tribal 
        governments to address the Y2K problem where those governments 
        depend on Federal information or information technology or the 
        Federal Government is dependent on those governments to perform 
        critical missions;

        (3) cooperate with the private sector operator of critical 
        national and local systems, including the banking and financial 
        systems, the telecommunications systems, the public health 
        system, the transportation system, and the electric power 
        generation system, in addressing the Y2K problem; and
        (4) communicate with their foreign counterparts to raise 
        awareness of and generate cooperative international 
        arrangements to address the Y2K problem.

    (b) As used in this order, ``agency'' and ``agencies'' refer to 
Federal agencies that are not in the judicial or legislative branches.

    Sec. 2. Year 2000 Conversion Council. There is hereby established 
the President's Council on Year 2000 Conversion (the ``Council''):

        (a) The Council shall be led by a Chair who shall be an 
        Assistant to the President, and it shall be composed of one 
        representative from each of the executive departments and from 
        such other Federal agencies as may be determined by the Chair 
        of the Council (the ``Chair'').

        (b) The Chair shall appoint a Vice Chair and assign other 
        responsibilities for operations of the council as he or she 
        deems necessary.

        (c) The Chair shall oversee the activities of agencies to 
        assure that their systems operate smoothly through the year 
        2000, act as chief spokesperson on this issue for the Executive 
        Branch in national and international fora, provide policy 
        coordination of Executive Branch activities with State, local, 
        and tribal governments on the Y2K problem, and promote 
        appropriate Federal roles with respect to private sector 
        activities in this area.

        (d) The Chair and the Director of the Office of Management and 
        Budget shall report jointly at least quarterly to me on the 
        progress of agencies in addressing the Y2K problem.

        (e) The Chair shall identify such resources from agencies as 
        the Chair deems necessary for the implementation of the 
        policies set out in this order, consistent with applicable law.

    Sec. 3. Responsibilities of Agency Heads. (a) The head of each 
agency shall:

        (1) assure that efforts to address the Y2K problem receive the 
        highest priority attention in the agency and the agency and the 
        policies established in this order are carried out; and

        (2) cooperate to the fullest extent with the Chair by making 
        available such information, support, and assistance, including 
        personnel, as the Chair may request to support the 
        accomplishment of the tasks assigned herein, consistent with 
        applicable law.

    (b) The heads of executive departments and the agencies designated 
by the Chair under section 2(a) of this order shall identify a 
responsible official to represent the head of the executive department 
or agency on the Council with sufficient authority and experience to 
commit agency resources to address the Y2K problem.
    Sec. 4. Responsibilities of Interagency and Executive Office 
Councils. Interagency Councils and councils within the Executive Office 
of the President, including the President's Management Council, the 
Chief Information Officers Council, the Chief Financial Officers 
Council, the President's Council on Integrity and Efficiency, the 
Executive Council on Integrity and Efficiency, the Executive Council on 
Integrity and Efficiency, the National Science and Technology Council, 
the National Performance Review, the National Economic Council, the 
Domestic Policy Council, and the National Security Council shall 
provide assistance and support to the Chair upon the Chair's request.
    Sec 5. Judicial Review. This Executive Order is intended only to 
improve the internal management of the Executive Branch and does not 
create any right or benefit, substantive or procedural, enforceable at 
law or equity by a party against the United States its agencies, or 
instrumentalities, its officers or employees, or any other person.
                                        William J. Clinton,
                                                   The White House.

    Senator Stevens. I have another fear and that fear is that 
people that live in the big high density areas are going to 
figure out a way to get one of these set-top boxes for every 
room they've got a TV and people that live in rural areas don't 
have enough Santa Clauses to deliver them, all right. The 
problem is how to get this out to the people that really need 
them, which is rural America.
    Thank you Mr. Chairman.
    The Chairman. Thank you very much.
    Senator Pryor?
    Senator Pryor. Thank you, Mr. Chairman.
    I have--let me just give you two a little background on 
Arkansas. We have about 2.7 million people in our state. There 
are 122,000 plus households that rely exclusively on over-the-
air television. There are 214,000 Arkansas families that make 
less than $25,000 a year, 621,000 minorities in the state, 
368,000-plus people who are 65 and older.
    I really have the same question for both of you and that 
is, how worried should I be about this transition, given the 
demographics and some of the numbers in our state? So I'd just 
like to ask the same question of both of you, whoever wants to 
take it first.
    Mr. Kneuer. That's why we targeted those five groups as 
those that need the most education and potentially the most 
assistance, the economically disadvantaged, people in rural 
areas, non-English speakers, seniors, and the disabled. Our 
public education effort is really twofold. It is working with 
the market participants and others who are doing broad consumer 
education, but then also educating those trusted third party 
groups that have as their service mission working with these 
particular constituencies to make sure that as they are 
providing services they know that this is one more service that 
they can provide. So if there are people who are working with 
people with disabilities who need assistance in going to the 
store to get prescription drugs or what have you, that those 
same groups are educated about this program and that they can 
help them with that.
    The same goes with working with the Veterans Affairs and 
those sorts of organizations. To the extent there are 
organizations in Arkansas or in any of your districts that you 
think have resources, those are exactly the kinds of things 
that we want to work into our interagency, intergovernmental 
coordination effort so that we can identify resources and make 
sure that those resources are being brought to bear for these 
particular groups.
    Commissioner Adelstein. I think there are grounds to be 
worried. I think there is a big, big challenge. Rural outreach 
is difficult. Getting to these senior citizens is difficult. 
You have a lot of those issues in Arkansas. There has to be a 
better plan.
    Right now I can't tell you ``here exactly is how we're 
going to do it''. We're kind of doing catch as catch can. I 
think there is an honest effort to try to do the best we can, 
but it's not being done in as coordinated of a fashion as 
necessary and there is no plan. So I can't tell you how it's 
going to happen, that we're going to get to all those people. I 
can't even tell you how exactly the message is going to be 
structured to be most effective.
    So if we don't have a message yet, we don't have a plan, 
and we're 17 months out. It's a little bit worrisome. So 
hopefully we can turn that around.
    Senator Pryor. Thank you.
    Mr. Chairman, that's all I had. Thank you.
    The Chairman. Thank you.
    Senator McCaskill?

              STATEMENT OF HON. CLAIRE McCASKILL, 
                   U.S. SENATOR FROM MISSOURI

    Senator McCaskill. Thank you, Mr. Chairman.
    Thank you, Commissioner Adelstein, for being here today. I 
don't have a lot of questions for you, other than I want to 
make a comment. Harry Truman had a saying that we take pretty 
seriously in Missouri about the buck stopping somewhere. I have 
this horrible feeling the buck's not going to stop anywhere in 
this deal because we're not going to put anybody in charge, and 
then when it goes badly everybody says: Well, it wasn't us, it 
was the FCC; it wasn't us, it was NTIA.
    So it seems to me somebody needs to decide who's going to 
own the buck. And if you can't decide among yourselves, I think 
we've got to figure out a way to decide it for you, because we 
need to know who's accountable. If you've got no problem 
coordinating, you ought not have any problem taking ownership.
    So I would say that as an opening statement since I wasn't 
here for an opening statement. I think what I'm most worried 
about is this idea that there is a down side to having one 
entity in charge and that there is some feeling that you have, 
Mr. Kneuer, about there being coordination now. What is your 
testimony today as to when coupons are going to be available?
    Mr. Kneuer. Consumers can request coupons Januuary 1, 2008.
    Senator McCaskill. That wasn't my question. When will 
coupons be available?
    Mr. Kneuer. If a consumer requests a coupon on January 1, 
2008, we can process and deliver it to them. However, we have 
systems in place so that coupons are mailed when there are 
boxes available and retailers participating. The coupon will be 
delivered with a list of eligible converter boxes and a list of 
available retailers by location.
    If in January, January 1, 2008, there is a gap because the 
coupons expire in 90 days, we won't deliver them until we have 
visibility that there is access to boxes in retailers in that 
community.
    Senator McCaskill. Well, now I'm really worried, because 
I'm looking at the contract with IBM, and I'm going to read 
from the contract that was signed in August: ``Per NTIA's 
guidance, we do not currently plan to begin coupon distribution 
and redemption until April 1, 2008.''
    Now, what you're telling me is that you're testifying--and 
by the way, the cable industry has now got ads up saying 
January 1. But the contract with the contractor that's supposed 
to distribute these coupons specifically says that, per your 
guidance, they're not going to begin distribution and 
redemption until April 1.
    Mr. Kneuer. There are two phases. The next sentence of the 
contract, says, IBM will have completed the OCD much earlier 
and be ready to begin full operational activities before April 
if NTIA directs us to do so. So we have directed them to be 
ready by January 1.
    Senator McCaskill. You know, I got to tell you, Mr. Kneuer, 
this was signed in August. You testified in the Aging Committee 
after this was signed and until I specifically brought this 
wording up to you we've never heard anything about April 1. Now 
we have the contractor who clearly has been told in writing 
that your guidance is they're not going to do it until April 1.
    Why in the world would that be included in the contract if 
that wasn't in fact what you meant when you signed the 
contract?
    Mr. Kneuer. The guidance that we gave was that they be 
ready--says April 1 if they don't have--if the operational 
testing isn't completed.
    Senator McCaskill. That's not what it says. It says ``Per 
NTIA''--I'm reading exactly from the contract: ``Per NTIA's 
guidance, we do not currently plan to begin coupon distribution 
and redemption until April 1, 2008.''
    Mr. Kneuer. ``However''----
    Senator McCaskill. If you direct them to, they could, it 
says.
    Mr. Kneuer. We have directed them.
    Senator McCaskill. This gives the NTIA the flexibility to 
respond to public opinion or other pressures to begin. Now, all 
the people calling my office saying they saw on TV they could 
get a coupon January 1 and nobody's sending it to them and they 
haven't heard anything because these people were told they 
weren't going to send them out until April.
    Mr. Kneuer. If a consumer calls us on January 1, 2008, we 
will process that request and we would be prepared to deliver 
coupons. However, there are manufacturing and retailer issues 
that are beyond our control--supply chain issues with regards 
to boxes and retailers.
    Now, everything I have heard from retailers and from 
manufacturers is that very early in 2008 there will be boxes 
and there will be retailers participating. If there is a gap in 
the very early days of this program, we don't want to send 
consumers coupons that will expire in 90 days.
    Senator McCaskill. I'll come back to this. I think that 
this is a good example of getting all the bad news out there 
now, and if that's in the contract I think we should have been 
told that was in the contract.
    I also think that I would just--this is the only question I 
have and I know my time is up. Do you have a contract with any 
retailer as of today?
    Mr. Kneuer. We have not certified any retailers as of this 
date.
    Senator McCaskill. Thank you very much.
    The Chairman. Thank you.
    Senator Klobuchar?

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Thank you, Mr. Chairman.
    Thank you to our witnesses for being here. I was listening 
to Senator McCaskill talk about Harry Truman's words from her 
State of Missouri and I thought, well, what would I have that 
would fit this situation. And I was reminded of something that 
I've used often that I heard once at the Minnesota State Fair 
when a guy was buying some beer and the other guy looked at the 
beer of the other guy and he said: Your beer is all foam and no 
beer. So not quite as meaningful as Harry Truman. But what I am 
concerned here----
    Senator McCaskill. The buck stops here.
    Senator Klobuchar.--is that we really need to have some 
beer and not just the foam.
    So we have in Minnesota around 430,000 households, many of 
them rural, who rely exclusively on over-the-air television, 
and so that's about a quarter of the households in our State. 
So I'm very concerned that we figure out how to educate these 
people. It has been noted before that a large percentage of the 
households have incomes under $30,000 across the country.
    In light of these statistics, what do you believe is the 
best way to educate these people? I start with you, Mr. Kneuer.
    Mr. Kneuer. Different groups are going to be reached best 
by different messages. That's one of the ways we're using our 
public education money, is to market test these messages to 
different groups. So I don't--and we're currently in the 
process of doing that. We will coordinate and develop different 
messages for seniors, for people in rural communities, for the 
economically disadvantaged, for people who have maybe non-
English speakers. So we are going to coordinate that message 
based on real market research that tells us how best to do 
that.
    Commissioner Adelstein. Senator Klobuchar----
    Senator Klobuchar. Yes?
    Commissioner Adelstein.--I see that Minnesota has the 
fourth highest percentage of over-the-air customers of any 
state in the country. So you have a big issue.
    In terms of answering your question, I think in order to 
educate different groups differently, that is important, but 
like any ad campaign you need to have a consistent message. In 
order for this to sink in, people need to hear repeatedly and 
they need to hear not a dissonant message, but a coherent one. 
So we need to develop a unified coherent message for the vast 
bulk of folks in addition to doing the targeted messages for 
those certain populations that need it.
    I think the message has to be the same across different 
levels of government from the Federal, State, and local, and 
tribal governments.
    We also need to coordinate the efforts of the broadcast 
industry, the cable industry, the satellite industry, and the 
consumer electronics industry. All of them have their own 
interests. All of them are going to have slightly different 
messages that are skewed to their own interests. I'm not saying 
that we need to be the czar who dictates what it is, but when 
we go to them and say, hey--and Senator McCaskill did this at 
the Aging Committee hearing. She was very dissatisfied with an 
advertisement that was put out by the cable industry. You see 
that the more recent cable ad I think is much more responsive, 
it's much better.
    In fact, the cable industry was nice enough--I expressed 
concern in response to your issue at the Aging Committee and 
the cable industry came to me and said: What can we do to help? 
And they actually ran their script by me. I'm not the censor, 
but I gave them a helpful suggestion. They said that all TVs 
are going to be going digital. That's not true. There is low 
power and there are translators and there are class A stations 
that are not going digital. So it was factually incorrect.
    I mentioned this to them. They agreed; we'll take out the 
word ``all.''
    Now, why am I, one commissioner, the person doing this? Why 
is there no established mechanism for making sure: (a) they're 
accurate, (b) they're coordinated, and (c) they're not skewed 
to the self-interest of these different industries, but are 
looking at the broader public interest? I think only the 
government can play that referee role.
    Senator Klobuchar. Thank you.
    Mr. Kneuer, I wanted to follow up on some of the questions 
about the coupon program. I learned that Best Buy, which is a 
Minnesota company, had agreed today to participate in the 
coupon program. So this is different because they have--they 
have not actually signed the contract, but they have agreed to 
participate. Could you explain that to me?
    Mr. Kneuer. Sure. There are--in designing the program, 
retailers obviously are a critical link. They're a critical 
link for distribution, but there is also a risk with retailers. 
So we wanted to create a program where retailers would be 
certified as a means of limiting opportunities for waste, 
fraud, and abuse and also making sure that we had retailers who 
had educated staff who could work with consumers. So there is a 
registration that is required to actually get certified into 
the program. It's not terribly complicated. It's included in 
the contract that we posted.
    That asks to make sure that they have been in the consumer 
electronics business for a year. We can waive that in places in 
rural markets where they may not be focused on purely consumer 
electronics. They have to demonstrate they can train their 
staff. They have to sign into a financial database so they can 
actually get paid directly by the Federal Government.
    So our vendor has been in negotiations and discussions with 
a couple of dozen of the top retailers and it's a matter of 
coordinating with their teams and actually signing off on it.
    Senator Klobuchar. What do you think the best way is to get 
them to sign on?
    Mr. Kneuer. I think we're doing--I think it's in their 
interest to take part in this program. Like I said, when we 
deliver a coupon to consumers they will not only get a list of 
the eligible boxes, they will also get a list of retailers that 
they can go to. Retailers want to be on that list.
    Senator Klobuchar. Well, is it true that a number of them 
are concerned that the terms of the agreement are not yet 
disclosed and that that's slowing down the process?
    Mr. Kneuer. The terms of the agreement are publicly 
available and they've been distributed to retailers--IMB has 
been directly working with a couple of dozen of the large 
retailers. This month we're sending out 25,000 letters to the 
smaller retailers with the terms of the contract, how they can 
participate. So if there is some gap on that we're remedying 
it.
    Senator Klobuchar. Are you going to make them sign it at 
some point? How are we going to make sure that they're all part 
of the program?
    Mr. Kneuer. It's a voluntary program. But like I said, we 
designed a program that would be in their interest to 
participate in. We wanted to have broad participation by 
retailers and not just the big market stores, but rural 
retailers and others. I think there is an incentive for them to 
be there as far as we have a $1.5 billion program that's going 
to give consumers a financial incentive to go and acquire these 
boxes. I think the hard date is going to drive tens of millions 
of consumers to make a decision about the DTV transition. So 
retailers want to participate in the program. They're going to 
want to be on that list that consumers get saying you can go to 
this store in your community.
    Senator Klobuchar. But again, we have to make sure, as 
Commissioner Adelstein was saying, that this information gets 
out there to them, because a number of them, if they still have 
these older TVs, they're probably not wandering into the 
retailers all the time to buy things. So somehow we have to get 
that information to them.
    Thank you.
    The Chairman. Thank you.
    Senator Dorgan?

              STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. Mr. Chairman, thank you.
    I appreciate the questions of my colleagues, and I 
appreciate the two witnesses. I share the concern and the 
seriousness of purpose here on this issue. We have to get this 
right. We have a lot of people that are going to rely on the 
Federal Government and all of the processes to work to get it 
right.
    I want to take my time, however, to talk about something 
else, and I do it only because the opportunity's available and 
I feel like I must do it at this point.
    Commissioner Adelstein, you are here representing the 
Commission, and I was--in these days of YouTube, I was given 
the transcript yesterday of something one of the other 
commissioners had said. I want to quote it, in part. ``The 
Chairman just''--this is another commissioner--``The Chairman 
just announced a new schedule to have an order out by December 
18 on media ownership. We are, hopefully, going to wrap our 
localism and media ownership hearings here in the next month or 
so, according to the Chairman's schedule, with some more 
opportunity for public comment before, perhaps, a December 
order.''
    My understanding of what that suggests is that someone--
Chairman Martin, perhaps--has decided, internally, to begin a 
media ownership proceeding that would end in December of this 
year. Now, I know that has not been made public, that I'm aware 
of. Can you shed any light on that? Is that something you have 
knowledge of, internally?
    Commissioner Adelstein. Well, since you're asking here in 
Congress, I have to answer. One of my colleagues did mention it 
at a previous event, so there has been an effort to try to wrap 
up the media ownership proceeding by the end of the year, by 
December. I'm not sure why the focus is on that date. To me, 
the issue is much more the substance of the matter than it is 
the process. I think there are a lot of issues we need to get 
done before we wrap this up.
    Senator Dorgan. The issue of media ownership--the last 
time, by the way--just to refresh our memories, the last time 
the Commission did this, they decided, in the largest American 
cities, it was perfectly fine for the Federal Communications 
Commission rule--for one entity to own, in the largest American 
cities, eight radio stations, three television stations, the 
cable company, and the dominant newspaper. And that was just 
fine. But, I'll tell you what, it sure isn't fine with me, and 
it wasn't fine with the majority of the U.S. Senate that voted 
on an amendment that I offered, along with Senator Lott, which, 
in effect, was a vote on a legislative veto.
    But I'm just--I would say this, Commissioner, if this is 
where the FCC is headed, if the--if--and, again, I was quoting 
something, I think, by Commissioner McDowell--if, in fact, the 
Chairman has indicated that he intends to do media ownership by 
December of this year, there is going to be a firestorm of 
protest, and I'm going to be carrying the wood. There--we're 
going to have a big debate about this.
    The last time the Commission tried to do that with a 
majority that was going to just run roughshod over everything, 
including not having adequate hearings--now, they have had more 
hearings this time, to be sure, but there has not been a 
conclusion on localism, there has not been a conclusion on the 
proceedings of public interest; there is not possibly time, by 
December 18, I think it was, to come out with the new media 
ownership rules out of the FCC and give any fairness to any 
group of people in this country to have the opportunity to 
comment on rules.
    This is a big deal. We have way too much concentration of 
ownership in this country now; way too much. And the suggestion 
that we should allow greater concentrations of television 
station owners, greater concentration of radio owners--I come 
from a state in which one company bought all six radio stations 
in one of our little towns; one company. And then, to boot, 
let's throw in cross-ownership and let newspapers buy up radio 
and TV stations buy up newspapers. We'll all have a great time. 
Well, I'll tell you what, I think that's counterproductive to 
the public interest in this country.
    And I don't mean to be lecturing you, Mr. Adelstein; I know 
how you have voted on these issues, but I do want to say this 
to the Commission----
    And I am hoping, Mr. Chairman, that we might have an early 
hearing, because I only learned of this, that the Chairman 
apparently is deciding to move at a full gallop now, from now 
until December, on something that's unbelievably important to 
this country. I hope we might do an early hearing.
    The Chairman. You can count on it.
    Senator Dorgan. Well, I appreciate that a lot.
    This is very important. There are a handful of companies in 
this country that determine, in most circumstances, what we 
see, hear, and read--about six. And we don't need further 
concentration. We need greater localism, we need greater 
responsibility in public interest, responsibilities that attach 
to licenses. And I--you know, I know that there are some who 
disagree with me strongly, there are some on your Commission 
that will lead the way toward the same result that turned out 
to be so disastrous a few years ago. I said then that it was a 
big--the most significant cave-in to big interests I've ever 
seen in my life--in the shortest time, I might add. And, you 
know, the Senate expressed itself very strongly in opposition 
to the Commission. The appeals court intervened and remanded it 
back to the Commission.
    But I--Mr. Adelstein, I'm sorry, I don't mean to be in any 
way trying to lecture you about--well, I guess I was, wasn't I?
    [Laughter.]
    Senator Dorgan. I--let me apologize. I don't mean to 
lecture you. I know your feelings about this.
    But I was flabbergasted the other day to learn that there 
is now something underway that would end in December and come 
out with all of these new media rules. This is unbelievably 
important.
    So, thank you for giving me the opportunity to ask you the 
question. I'm sorry to do it in the context of the issue that's 
before us, because that issue is very important, as well. My 
colleagues, Senator McCaskill and Senator Stevens and others, 
have asked the important questions about access and knowledge 
and information and so on.
    So, I feel better now. Thank you very much.
    [Laughter.]
    Commissioner Adelstein. I feel great, too. I think----
    [Laughter.]
    Commissioner Adelstein.--I think it's important--priorities 
that you've laid out here, certainly in terms of the process. 
What's more important is the substance. There are issues of 
localism that we've had pending since 2003, and we've done 
nothing to enhance local service, responsiveness to local 
communities. So, we need to do that first, before we act on the 
ownership rules. We've done nothing to deal with issues of 
concern to minorities and women, who own pitifully small 
numbers of broadcast outlets in this country. Yet, we've tried 
to eliminate the only rule that helped, and we've done nothing 
to try to improve that process. I think that needs to be done 
first.
    Public interest obligations have been pending since 1999, 
with no action. All of these things are gathering dust on the 
shelves of the FCC. I think, before we move forward on the 
issue of media ownership, we need to address these issues in 
order of priority. And clearly these are higher priorities for 
the Commission, traditionally, and for this committee, 
traditionally.
    Senator Dorgan. Well, let me thank Senator Inouye for his 
determination to hold a hearing. I very much appreciate that. I 
think that is in order.
    The Chairman. I've been a politician for over half my life. 
And one of the most important elements in my profession is the 
transmission of information. You advise us that our people are 
adequately informed, advised, and educated. And yet, on the eve 
of December 7, 1941, the 50th anniversary of that date, in the 
summer of 1991, a poll was taken among high school seniors 
asked, What is the significance of December 7, 1941? And over 
half could not respond, they didn't know what it was.
    Recently, another poll was taken to ask the people of the 
United States, all adults, about World War II. Half the people 
say, ``What's that?'' They hadn't heard about concentration 
camps, they hadn't heard about Hitler, Tojo, Mussolini, they 
hadn't heard about World War II.
    And then, we have the media, very active. The last time I 
looked at my TV set, we had 300 channels or something like 
that. Maybe mine is a cheaper one. They have 500 now. I know 
more about Britney Spears----
    [Laughter.]
    The Chairman.--O.J. Simpson--I've never met them, but----
    Senator McCaskill. And Ellen's dog.
    The Chairman. That's right.
    Senator Dorgan. Paris Hilton.
    The Chairman. Paris Hilton. I know about their tattoos and 
everything else.
    [Laughter.]
    The Chairman. But I don't know news, what's happening in 
the world. And it's not getting better with all this 
concentration of biased news, focused news. So, I'm with him. 
We'll have a hearing.
    And I think it's about time we start really working on this 
February 17, 2009, because if we're going on the basis that the 
people are well informed, you will have a disaster on February 
18, 2009, and then you will hear people screaming--not at you, 
but at us. And, believe me, we don't like it.
    So, I don't know what we're going to do. And the worst 
thing you can do is to let us run it. But if you don't run it, 
we will run it, people like us here. It's a helluva thought, 
but it could happen.
    So, with that, I thank you very much for your patience and 
understanding.
    And it's my privilege to call upon our next panel.
    I'd like to thank the first panel.
    The next panel is made up of the President and CEO of the 
National Association of Broadcasters, Mr. David Rehr; the 
President and CEO, National Cable Television Association, Mr. 
Kyle McSlarrow; the President and CEO of the Association of 
Public Television Stations, Mr. John Lawson; the Senior Vice 
President, Advertising and Public Relations, DIRECTV, Mr. Jon 
Gieselman; Executive Director, Consumer Electronics Retailers 
Coalition, Mr. Mark Pearl.
    Well, I thank you very much for being with us.
    May I first call upon the President and CEO of the National 
Association of Broadcasters, Mr. David Rehr.

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

    Mr. Rehr. Good afternoon, Chairman Inouye, Vice Chairman 
Stevens, and members of the Committee.
    My name is David Rehr, and I am President and CEO of the 
National Association of Broadcasters, a trade association that 
represents over 8,300 free over-the-air radio and television 
stations and networks. I would like to thank you for holding 
this hearing today.
    In 489 days, American broadcasters and TV viewers will 
complete the most significant advancement of television 
technology since the advent of color TV, and, in return, TV 
viewers will receive the crystal pictures and phenomenal sound 
of digital television. I would like to make four points today 
with regards to broadcasters' commitment to an effective 
transition.
    One, on Monday, October 15th, NAB, along with Starcom 
MediaVest Group, the largest media services organization in the 
country, unveiled the largest volunteer effort in television 
history to educate viewers on the switch. This $697 million 
consumer campaign will consist of DTV action spots, crawls, 30-
minute educational programs, a 100-day countdown clock to the 
February 2009 deadline, the DTV road show ``Trekkers'' that 
will visit over 600 locations nationwide, a DTV Speakers Bureau 
that will book over 8,000 events at senior centers, Kiwanis 
Clubs, and church and community centers. We will have banner 
ads on our station websites, earn media through newspaper 
coverage, as well as news tickers.
    The $697 million valuation does not include our work with 
our network and syndication partners to include DTV messages in 
storylines of popular television shows. It does not include 
radio marketing, although we expect radio stations will be part 
of this effort. It does not include the expected use of outdoor 
advertising or countless news stories on morning and evening 
newscasts. Already, every broadcast network is participating in 
this campaign, along with 95 broadcasting companies 
representing 939 television stations nationwide, and we expect 
more, and they are joining, as we move forward.
    The combined elements of this multi-platform, multifaceted 
marketing campaign will reach nearly all television viewers and 
will generate 98 billion impressions. In the current multimedia 
environment, impressions are the currency of an effective 
marketing campaign.
    Two, it is important to note that Monday's announcement 
builds on earlier work. NAB has already produced and 
distributed DTV action spots in English and Spanish, in HD and 
standard definition, and with closed captioning. These action 
spots were sent to every station in the country, member or 
nonmember. We have a full-time staff dedicated solely on the 
DTV transition. We have conducted a myriad of studies, focus 
groups, and sought international research on other countries 
that have, or are in the midst of, a similar transition, and 
we've also contacted the Y2K Czar to gain insights from him. We 
have a bilingual website--DTVanswers.com--and our industry and 
government coalition has nearly 180 diverse groups and 
organizations.
    NAB has provided toolkits to every Member of Congress, and 
we've held Congressional staff briefings on how Members can 
educate their constituents.
    Third, I would encourage members of this committee to not 
jeopardize the success of the digital transition by opening up 
the television broadcast spectrum to personal and portable 
unlicensed devices that the FCC testing has found to cause 
harmful interference. Allowing those devices into the TV band 
will be detrimental to the DTV transition, and has the 
potential to render it a failure.
    Fourth, America's broadcasters believe that we need a 
vibrant private-public partnership to ensure this transition is 
as seamless as possible for viewers. What we need, and what you 
on this committee have provided, is a sense of urgency. We all 
need to be working together with a shared goal and purpose and 
speed. And we, at the NAB, are committed to that.
    I want to applaud Chairman Inouye for including a DTV link 
on the Committee website, Vice Chairman Stevens for including a 
similar link on his Senate website, and all of the Committee 
members who have taken steps to educate constituents in their 
states. Your constituents are our viewers, and we need to 
continue to work together to make this transition a success. 
19.6 million households rely on over-the-air television, 69 
million TVs will be impacted, and we want to continue to 
provide American TV viewers the outstanding broadcast content 
they expect.
    Thank you, and I look forward to answering any questions 
you may have.
    [The prepared statement of Mr. Rehr follows:]

        Prepared Statement of David K. Rehr, President and CEO, 
                  National Association of Broadcasters
    Good afternoon Chairman Inouye, Vice Chairman Stevens and fellow 
members of the Committee. My name is David Rehr, and I am testifying 
today on behalf of the National Association of Broadcasters where I 
serve as President and CEO. NAB is a trade association that advocates 
on behalf of more than 8,300 free, diverse local radio and television 
stations and broadcast networks before Congress, the Federal 
Communications Commission and other Federal agencies, and the courts.
    Broadcasters will make certain that over-the-air television viewers 
understand what they need to do to continue to receive their local 
television signals after the switch to digital-only broadcasting on 
February 17, 2009. Local television stations that today keep their 
communities--and your constituents--informed and connected will remain 
a vibrant part of the media landscape in the 21st century. Broadcasters 
at the national, state and local levels have been coordinating 
extensively with government, private industry, membership organizations 
and others to educate all consumers so that they understand the DTV 
transition. These activities began in earnest in 2006 and will continue 
well after the transition on February 17, 2009.\1\
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    \1\ Deficit Reduction Act of 2005, Pub. L. 109-171, Title III,  
3002(a), 3003, 3004, 120 Stat. 21, 22.
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    We all desire a smooth transition to digital with minimum 
disruption to TV viewers. For this to happen, the American public must 
understand what all-digital broadcasting means for them, including the 
many benefits it will bring, the options available to be ready for the 
transition and the appropriate steps to take. To that end, the 
broadcast industry has embarked on an unparalled and unprecedented 
consumer education campaign. This is a multi-faceted, multi-platform 
education campaign that uses all of the tools available to achieve 
success.
    The DTV Education Campaign is designed much like a political 
election where the DTV transition is a candidate that starts with low 
name identification, and must be introduced and promoted among our 
``electorate'' or television viewers. No avenue to reach consumers will 
be left unexplored.\2\ Broadcasters have embarked on an extensive 
education and marketing campaign to ensure we reach all demographics, 
all geographical areas, urban and rural communities, the young and the 
old.
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    \2\ NAB applauds the Federal Communications Commission's (FCC) 
recent action to ensure that cable subscribers will continue to receive 
the broadcast signals in digital and analog as needed. See FCC Adopts 
Rules to Ensure all Cable Customers Receive Local TV Stations After the 
Digital Television Transition, Public Notice, FCC 07-170 (Sept. 11, 
2007).
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    Since late 2006, efforts to educate consumers have been underway, 
spearheaded by a NAB team dedicated solely to digital transition 
education. In the latest deployment of this critical effort, 
broadcasters and networks have unveiled a multi-platform, multifaceted 
marketing effort to complement the variety of other initiatives already 
underway to educate consumers about the Nation's switch to digital 
broadcasting.
    NAB has made a significant investment in staff, having hired a 
five-person, full-time staff dedicated exclusively to DTV transition 
consumer education. The staff has already utilized outside experts to 
conduct significant consumer research, in the form of surveys and focus 
groups to find out as much as possible about the universe of American 
over-the-air, broadcast-only viewers. NAB has also visited and opened 
dialogues with officials running respective DTV campaigns in the United 
Kingdom, Sweden, Austria and Belgium to ascertain how European nations 
are running their transition campaigns. NAB's plan is based upon solid 
consumer understanding, demographic and viewership knowledge, and the 
experience of other global nations.
    NAB has developed and is supporting, www.DTVanswers.com, a 
comprehensive website that is a resource to educate consumers, 
journalists and opinion leaders about the DTV transition. Along with 
the website, NAB will direct our viewership that are not connected to 
the Web to call 1-888-DTV-2009, a government sponsored toll-free number 
equipped with information.
    In addition to NAB's internal efforts, many individual stations are 
already running DTV transition action spots. For example, Raycom Media 
is running a series of these spots under the theme of ``The Big 
Switch.'' Other companies, like Capitol Broadcasting, Post Newsweek, 
Bonneville, Freedom and Dispatch Broadcast Group, are also already 
running DTV spots while many others have aired news stories on the 
subject. Moreover, NAB developed and sent to stations a comprehensive 
video package that includes, among other tools, interview sound bites 
for use in newscasts to tell the DTV story. It includes English and 
Spanish language DTV action spots as one part of our overall 
communications strategy. These spots are closed captioned and include 
the National Telecommunications and Information Administration's (NTIA) 
toll free number.
    With the immense amount of activity broadcasters and their network 
partners are undertaking to educate consumers on the transition, NAB 
engaged Starcom MediaVest Group as a strategic partner to help 
construct the plan and quantify the reach of these initiatives. Starcom 
MediaVest Group is the largest media services organization in the 
country, responsible for more than $16 billion in media spending 
annually. Using their proprietary, state-of-the-art software program--
Tardiis--Starcom MediaVest Group was able to calculate approximate 
impressions and valuations of the consumer education campaign. Given 
the immense differences between communities across the country, it is 
imperative that broadcasters utilize a number of different tools to 
educate their viewers about the transition to digital. A one-size-fits-
all approach to consumer education can not efficiently educate viewers 
whose composites differ from market to market. No one knows how to 
reach television viewers about their viewing experience better than 
their local broadcasters. This education initiative is an important 
part of broadcasters' ongoing commitment to our viewers and our 
communities.
    In preparation for this transition, NAB has developed a 
comprehensive communications and education campaign. The purpose of 
this campaign is to alert the U.S. television viewing public of the 
impending shift and to inform them of the measures they need to take in 
order to ensure that they will be prepared to receive television 
broadcasts once the transition takes place.
    Currently, there are 19.6 million U.S. households that receive 
over-the-air, broadcast-only signals, equating to 17 percent of total 
U.S. households. There are, on average, 2.27 TVs in these households, 
or approximately 45 million television sets that will be affected when 
analog signals are shut off in 2009. In addition, an estimated 24 
million broadcast-only televisions in households also have cable, 
satellite, or Internet connections. In total, nearly 69 million 
television sets may be affected.
Broadcasters' Are Proud To Announce the Launch of Their Comprehensive 
        Education Campaign
    Starcom MediaVest Group, along with NAB, created a dynamic, multi-
channel communication plan that will reach virtually every American 
adult with sufficient frequency to alert and educate them of the 
impending transition to digital television. The plan fully leverages 
all of the assets of the member stations, including commercial 
inventory, online, community events, talent and outdoor advertising. 
Many facets of the campaign have already begun, with encouraging 
results. While NAB and many broadcasters have already begun valuable 
education efforts, we anticipate the next phase of this comprehensive 
plan will begin this week.
    Specialists in media planning and buying, public relations and 
event marketing have developed programs that will surround the TV 
viewing public with informative communications, many of which will be 
hands-on in nature.
    NAB has already crafted communications materials, including:

   DTV Action Spots, in English and Spanish;

   Video packages for the stations and their news departments, 
        including B-roll footage and other graphic elements that can be 
        used by the stations in the development and editing of their 
        stories regarding the digital transition;

   Tool kits for Federal and state policymakers complete with 
        presentations and Web banners; and

   Brochures and collateral materials that have been 
        distributed through coalition partners and at trade shows.

    The above materials are being produced and delivered to all of 
NAB's 1,169 member stations. In addition, NAB has made these materials 
available to non-member commercial and noncommercial stations as well. 
NAB will also produce a 30-minute educational program ready for airing 
on local stations.
    In order to seed the campaign message, member stations and networks 
will consider a comprehensive program of DTV action spots, air time and 
other on-air features. The program is based upon a combination of 
quarterly DTV action spot commitments, airing of the 30-minute 
educational program, airing of informational messages through crawls, 
snipes and newstickers, and other impactful features, such as a 100 day 
``count down'' program to be included in all local news broadcasts.
    Word-of-mouth and other techniques that can spread the word 
``virally'' are critical for the success of educational campaigns. NAB 
has developed a program of grassroots initiatives that will provide 
community-level activities to drive the message home. NAB has already 
recruited a 700-person speaker's bureau for an anticipated 8,000 
speaking engagements to local high schools, senior centers, and other 
groups at the local level. Two customized tour trucks, designed to look 
like a television on wheels, will be criss-crossing the country, 
stopping at more than 600 local events in over 200 markets. Hands-on 
education and instruction regarding digital converters will be 
conducted at these events.
    In addition, NAB helped form a coalition with the National Cable & 
Telecommunications Association (NCTA) and the Consumer Electronics 
Association (CEA) that now boasts over 170 organizations (Attachment A) 
to help get the word out regarding the digital transition. Please find 
attached a list of these members. Each of these organizations has 
agreed to utilize their existing communications materials to 
communicate the news of the transition to their membership. Moreover, 
NAB's DTV staff has been teaming with coalition partners to exhibit and 
distribute information at their annual conferences and trade shows. 
These types of grassroots efforts will be extremely important to 
provide further context to the transition message and will enhance the 
understanding of the on-air campaign. Starcom endorsed these efforts, 
recognizing that they will provide incremental activities to some of 
the disproportionately affected groups: senior citizens, minority 
populations, lower-income constituents and rural populations. Media 
coverage of the transition story, in addition to coverage of many of 
the grassroots components, is anticipated to be significant. This 
transition affects many Americans and is duly newsworthy. To make sure 
that the DTV transition is being covered both accurately and 
ubiquitously by America's reporters, NAB has briefed reporters from 
major news organizations and plans to facilitate reporter briefings in 
all 50 states. NAB will push local news ``hooks'' into stories in major 
metro areas, suburban areas and into the heartland. We anticipate 
significant news coverage across local television, radio, newspaper and 
TV, as well as radio and newspaper websites. As the media marketplace 
continues to evolve to meet consumer needs, we will leverage stations 
outdoor and online assets.
    Starcom proposed that a combination of streaming and display 
advertising share-of-voice be donated on the station's websites to 
support the transition campaign. Significant exposures are anticipated 
from this component of the campaign, extending the overall reach of the 
message.
    Finally, paid media will be utilized to supplement activities in 
key markets where public awareness of the transition lags. Newspaper 
activities, efforts at public transportation hubs and at key retailers 
have been recommended in these areas.
Plan Delivery--The Road to 98 Billion Impressions
    NAB's plan will drive the message of digital transition across 
numerous consumer media touch-points. By engaging consumers via 
television, in the news media, online, through outdoor efforts and in 
direct, grassroots events, the message will be seeded and communicated 
much more effectively than through television advertising alone. 
Starcom has quantified and estimated the overall delivery of this 
campaign utilizing the agency's industry-leading tools. Starcom 
projects that the wide-ranging campaign that NAB announced on Monday, 
October 15 will be worth an estimated $697 million and will begin 
immediately (Attachment B). The multi-platform, multifaceted campaign 
marks the latest phase of the industry's DTV consumer education 
initiatives, which began in 2006.
    Broadcast networks and television stations across the United States 
have been working closely together to coordinate initiatives for the 
campaign, which includes 95 companies and 939 television stations 
nationwide. The combined elements of the DTV campaign will reach nearly 
all television viewers and generate 98 billion audience impressions \3\ 
during the course of the campaign, which will run through February 17, 
2009, when all full-power television stations must turn off their 
analog signals and begin broadcasting exclusively in the digital 
format. This is an unprecedented event. Every major network and every 
major television company has lent its name in support of this campaign. 
We expect more to join as we move forward. Each and every broadcaster 
who is joining us in this effort is committed to ensuring no consumer 
is left without television reception after the transition.
---------------------------------------------------------------------------
    \3\ Impressions: The number of times an advertising schedule is 
seen over time. The number of gross impressions may exceed the size of 
the population since audience members may be duplicated. Webster, James 
G., Phalen, Patricia F. & Lichty, Lawrence W. (2000). Ratings Analysis 
The Theory and Practice of Audience Research (2nd ed.) Mahwah, NJ: 
Lawrence Erlbaum Associates.
---------------------------------------------------------------------------
    NAB will also work to ensure that all Americans, including the 
estimated 25 to 30 million persons who are deaf or hard of hearing, 
will be able to view the DTV action spots and other related-programming 
material. And of course, all NAB-produced video footage that contains 
audio statements will include closed captioning.
    Despite the comprehensive nature of this multiplatform campaign, 
the value of this effort is a very conservative estimate, given that 
many elements that will be utilized to reach consumers were not 
included in the impression and value quantification. The more than $697 
million value of this multi-faceted television campaign does not even 
take into account the broad reach of other platforms that television 
broadcasters will utilize to reach all consumers with information about 
the transition to digital television. Not included in the campaign 
valuations is the invaluable reach of local news programming. Numerous 
local television news teams throughout the country will be covering the 
transition to digital as part of their effort to ensure their viewers 
are aware of news that personally affects their day to day activities. 
In addition to this, broadcasters will be working with their network 
and syndication partners to include messages about the digital 
transition in story lines and content of the most popular television 
shows.
    NAB will supply stations with :15, :30 and :60 second DTV action 
spots, as well as scripts for live talent reads. NAB is also providing 
stations with Web banners and information about the transition and the 
easy steps to upgrade to digital. Broadcasters will also be working 
with their counterparts at college television and radio stations to 
ensure messages about the mandatory upgrade to digital penetrate all 
audiences. Radio broadcasters will also join the effort to educate 
America's consumers about the transition to digital television.
    NAB will harness the power of outdoor media by working closely with 
CBS, Clear Channel and other outdoor media providers to reach consumers 
with information about the transition and drive them to the website: 
www.DTVanswers.com for additional information in preparing to upgrade.
Don't Jeopardize the Transition to Digital Television With Unlicensed 
        Devices in the Television Broadcast Spectrum
    We caution that opening up the digital broadcast spectrum to 
portable unlicensed devices at this time would turn the DTV transition 
on its head and could lead to tremendous consumer confusion. We are 
very concerned that allowing these devices in the television band will 
jeopardize the success of the transition and could cause permanent 
damage to the over-the-air digital broadcast system. Some Silicon 
Valley companies want to allow millions of transmitting devices to 
operate on television frequencies, without a license. We hope you will 
agree that our country should enact policies that facilitate the 
deployment of rural broadband without permanently endangering reception 
on millions of new digital television sets and government subsidized 
digital-to-analog converter boxes.
    In closing, we firmly believe that the benefits of this 
transition--including a clearer television picture, better sound and 
more channels--will endear Americans to the switch to digital so that 
while the technological change may involve some hassle, it will be 
worth the effort in the long run.
    I would like to thank Chairman Inouye and Vice Chairman Stevens on 
their leadership on our monumental switch to digital television. We 
look forward to working with both of you and other members of this 
Committee as we approach 2009 to ensure that no Americans lose free, 
over-the-air television reception.
                              Attachment A
DTV Transition Coalition Members (As of October 15, 2007)
AARP
Advanced Television Systems Committee
Affinity Marketing
Alabama Broadcasters Association
Alaska Broadcasters Association
Alliance for Public Technology
Alliance for Rural Television (ART)
American Association of People with Disabilities (AAPD)
American Cable Association (ACA)
American Legislative Exchange Council (ALEC)
American Library Association (ALA)
Archway Marketing Services
Arizona Broadcasters Association
Arizona-New Mexico Cable Communications Association
Arkansas Broadcasters Association
Association of Cable Communicators
Association for Maximum Service Television, Inc. (MSTV)
Association of Public Television Stations (APTS)
Audio Quest
Best Buy
Black Leadership Forum Inc.
Broadcom
Call For Action
Cable Telecommunications Association of New York, Inc.
Cable and Telecommunications Association for Marketing
Cable Television Association of Georgia
California Broadcasters Association
Care2
CENTRIS
Circuit City
Cisco Systems, Inc.
CNET
Colorado Broadcasters Association
Community Broadcasters Association
Congressional Black Caucus
Congressional Hispanic Caucus
Connecticut Broadcasters Association
Consumer Action
Consumer Electronic Retailers Coalition (CERC)
Consumer Electronics Association (CEA)
Consumers for Competitve Choice
Corporation for Public Broadcasting
Councilmember Mary Cheh's Office
CTAM: Cable & Telecommunications Association for Marketing
Custom Electronic Design & Installation Association (CEDIA)
DIRECTV
Disney
Effros Communications
Electronic Industries Alliance (EIA)
Entertainment Industries Council, Inc. (EIC)
Federal Citizens Information Center
Federal Communications Commission
Florida Association of Broadcasters
Georgia Association of Broadcasters
Goodwill Industries International
Greater New Orleans Broadcasters Association (GNOBA)
Hawaii Association of Broadcasters
High Tech DTV Coalition
Home Theater Specialists of America (HTSA)
Idaho State Broadcasters Association
Illinois Broadcasters Association
Indiana Broadcasters Association
Information Technology Industry Council (ITIC)
Iowa Broadcasters Association
Iowa Cable & Telecommunications Association, Inc.
Kansas Association of Broadcasters
KA6UTC
KCET
Kentucky Broadcasters Association
Kinsella/Novak Communications, LLC
KTSF
Latinos in Information Sciences and Technology Association
Leadership Conference on Civil Rights (LCCR)
League of United Latin American Citizens
LG Electronics
Louisana Association of Broadcasters
Louisiana Cable & Telecommunications Association
Maine Association of Broadcasters
Maryland/D.C./Delaware Broadcasters Association
Massachusetts Broadcasters Association
Media Freedom Project
MediaTides LLC
Mexican American Opportunity Foundation
Microtune
Michigan Association of Broadcasters
Minnesota Broadcasters Association
Minority Media Telecommunications Council
Mississippi Association of Broadcasters
Missouri Broadcasters Association
Montana Broadcasters Association
National Alliance of State Broadcast Associations (NASBA)
National Association of Black Journalists (NABJ)
National Association of Black Owned Broadcasters
National Association of Broadcasters (NAB)
National Association of Consumer Agency Administrators (NACAA)
National Association of Counties (NACo)
National Association of Latino Elected Officials
National Association of Latino Independent Producers
National Association of Manufacturers (NAM)
National Association of Neigborhoods
National Association of Regulatory Utility Commissioners
National Association of Residential Property Managers (NARPM)
National Association of Telecommunications and Advisors (NATOA)
National Black Church Initiative
National Cable & Telecommunications Association (NCTA)
National Coalition of Black Civic Participation
National Council of LaRaza
National Grange
National Fair Housing Alliance
National Grocers Association (NGA)
National Hispanic Media Coalition
National Newspaper Publishers Association News Service
National Organization of Black County Officials
National Religious Broadcasters (NRB)
National Urban League (NUL)
Navigant Consulting, Inc.
Nebraska Broadcasters Association
Nevada Broadcasters Association
New Hampshire Association of Broadcasters
New Jersey Broadcasters Association
New Mexico Broadcasters Association
New York State Broadcasters Association
Nielsen Company
North American Retail Dealers Association (NARDA)
North Carolina Association of Broadcasters
North Dakota Broadcasters Association
Ohio Association of Broadcasters
Ohio Cable Telecommunications Assn. (Stoddard)
Oklahoma Association of Broadcasters
Oregon Association of Broadcasters
Panasonic Corporation of North America
Pennsylvania Association of Broadcasters
Philips Consumer Electronics
Plasma Display Coalition
Public Broadcasting Service (PBS)
Qualcomm
RCA/Audio Video
Rainbow PUSH Coalition
RadioShack
Retail Industry Leaders Association
Retirement Living TV
Rhode Island Broadcasters Association
Samsung Electronics
Satellite Broadcasting and Communications Association (SBCA)
South Carolina Broadcasters Association
South Dakota Broadcasters Association
Target
Telecommunications Industry Association (TIA)
Tennessee Association of Broadcasters
Terrestrial Digital
Texas Association of Broadcasters
Texas Cable & Telecommunications Association
Texas Instruments
THAT Corp.
Thomson
TitanTV Media
U.S. Chamber of Commerce
Universal Remote Control
Utah Broadcasters Association
Verizon
Vermont Association of Broadcasters
Virginia Association of Broadcasters
Voices of September 11th
Wal-Mart
Washington State Association of Broadcasters
Washington Urban League
Wineguard Company
Wisconsin Cable Communications Association
Wisconsin Broadcasters Association
WLMB TV40
Wyoming Association of Broadcasters
                              Attachment B
For Immediate Release
                                                   October 15, 2007
Contact: Shermaze Ingram, NAB
Alisa Monnier, Starcom MediaVest Group
Broadcasters Announce Comprehensive $697 Million Campaign to Educate 
        Consumers About the February 17, 2009 Transition to Digital 
        Television (DTV)
Campaign Complements Variety of Other Initiatives
High-Res Photos from Today's News Conference Will be Available at 
        http://www.dtvanswers.com/dtv_news
    Washington, D.C.--Demonstrating their commitment to helping viewers 
prepare for the transition from analog to digital television (DTV), 
broadcasters today announced a comprehensive $697 million consumer 
education campaign. The multiplatform, multifaceted campaign marks the 
second phase of the industry's DTV consumer education initiatives, 
which began in late 2006.
    Broadcast networks and television stations nationwide have been 
working closely together to coordinate initiatives for the campaign, 
which will include:

   ``DTV Action'' television spots.

   Crawls, snipes and/or news tickers during programming.

   30-minute educational programs about DTV.

   100-day countdown to the February 17, 2009 DTV deadline.

   Public relations elements, including earned media coverage 
        in newspapers and online.

   DTV Road Show that will visit 600 locations nationwide.

   DTV Speakers Bureau that will reach one million consumers.

   Online banner ads on TV station websites.

    The combined elements of the DTV campaign will reach nearly all 
television viewers and generate 98 billion audience impressions during 
the course of the campaign, which will run through February 17, 2009, 
when all television stations must turn off their analog signals and 
begin broadcasting exclusively in the digital format.
    ``I am proud that NAB is leading what may be the largest volunteer 
effort in the history of television, with literally every market and 
network involved,'' said Jack Sander, Chairman of NAB's Joint Board of 
Directors. ``This effort illustrates the continuing commitment by 
broadcasters to educating all television viewers about the DTV 
transition.''
    Every broadcast network is participating in the campaign, along 
with 95 broadcasting companies representing 939 television stations 
nationwide. Many other stations are expected to participate in the 
campaign. (Complete list is attached.)
    With the immense amount of activity broadcasters and their network 
partners are undertaking to educate consumers on the digital 
transition, NAB engaged Starcom MediaVest Group as a strategic partner 
to help construct the plan and quantify the reach of these initiatives. 
Starcom MediaVest Group is the largest media services organization in 
the country, responsible for more than $16 billion in media spending 
annually. Using their proprietary, state-of-the-art software program, 
Tardiis, Starcom MediaVest Group was able to calculate approximate 
impressions and valuations of the consumer education campaign.
    ``The broadcasting community is wholly dedicated to making sure no 
television viewer loses access to free, over-the-air broadcast 
television due to a lack of information about the switch to digital 
television, said David K. Rehr, President and CEO of NAB. ``This next 
phase of our DTV consumer education campaign will take our current 
initiatives to the next level, and further increase the frequency of 
messages viewers receive about the transition to digital.''
Endorsements
    While all broadcasters will be engaged in digital television 
transition consumer education efforts, the following companies have 
specifically endorsed this multifaceted campaign and are committed to 
working with our private and public sector partners to lead the way to 
ensure that no consumer is left without access to television due to a 
lack of information about the transition to digital.

------------------------------------------------------------------------
                Company                       Stations  represented
------------------------------------------------------------------------
ABC Owned Television Stations           10
ABC Television Network                  ................................
ACME Communications                     7
Bahakel Communications Television       6
Banks Broadcasting                      1
Barrington Broadcasting Group           17
Belo Corporation                        19
Block Communications Inc.               5
Bonneville International/KSL TV         1
Bonten Media Group                      8
California Oregon Broadcasting          3
Capitol Broadcasting Co., Inc.          4
CBS Television Network                  ................................
CBS Television Stations                 29
Channel 2 Broadcasting Co./KTUU-TV      1
Citadel Communications Co., Ltd.        4
Cordillera Communications               11
Cox Television                          14
CW Network                              ................................
Davis Television                        1
Dispatch Broadcast Group                2
Diversified Communications              2
Drewry Group                            5
Duhamel Broadcasting Entprses.          4
Emmis Communications Television         1
Entravision Communications Corp.        17
Equity Broadcasting Group               18
EW Scripps Company                      10
Fisher Broadcasting                     12
Fox Television Network                  ................................
Fox Television Stations Inc.            37
Freedom Communications                  9
Gannett Broadcasting                    23
Granite Broadcasting Corporation        10
Gray Television                         33
Hearst-Argyle Television, Inc.          36
Heritage Broadcasting Co.               2
Hoak Media, LLC                         15
Hubbard Broadcasting                    13
ION Media Network                       ................................
ION Media Network Television Stations   56
Iowa Public Television                  8
Journal Broadcast Group                 9
Landmark Communications                 2
LIN TV Corporation                      32
Lincoln Financial Media                 3
Lockwood Broadcasting                   3
Malara Broadcast Group                  2
Maryland Public Broadcasting            5
Max Media LLC                           9
McGraw-Hill Broadcasting Group          4
McKinnon Broadcasting, Inc.             3
Media General Broadcast Group           21
Mel Wheeler, Inc.                       2
Meredith Corporation Broadcasting       12
 Group
Morgan Murphy Media                     5
My Network TV                           ................................
NBC Universal Television Network        ................................
NBC Universal Television Stations       12
Nebraska Educational                    8
 Telecommunications Comm.
News-Press & Gazette                    6
NexStar Broadcasting Group, Inc.        31
Northern California Public              3
 Broadcasting Inc.
Northwest Broadcasting, Inc.            5
Pappas Telecasting Companies            17
Post-Newsweek Stations, Inc.            6
Prime Cities Broadcasting               2
Quincy Newspapers, Inc.                 11
Ramar Communications                    4
Raycom Media, Inc.                      35
Red River Broadcast Company, LLC        7
Rogers State University Public TV       1
Saga Communications, LLC                3
Sagamore Hill Broadcasting              8
Sarkes Tarzian Television               2
Schurz Communications, Inc.             9
ShootingStar Broadcasting               1
Sinclair Broadcast Group                51
Southeastern Media Holdings, LLC        3
Southern Broadcast Corporation          3
Sunbeam Television Corporation          3
Sunbelt Communications Company          15
Telemundo Group, Inc.                   15
Telemundo Network                       ................................
The Victory Television Network          3
Tribune Broadcasting Company            24
Trinity Broadcasting Network            24
United Communications Corp.             2
Univision Communications, Inc.          40
Univision Network                       ................................
Wilson Broadcasting                     1
Woods Communications                    2
West Virginia Media Holding             4
Withers Broadcasting                    3
Young Broadcasting, Inc.                9
------------------------------------------------------------------------
    Total                               939
------------------------------------------------------------------------
Endorsements received as of 11:30 a.m. ET October 15, 2007.


    The Chairman. Thank you very much.
    May I now call upon Mr. McSlarrow.

  STATEMENT OF KYLE E. McSLARROW, PRESIDENT AND CEO, NATIONAL 
             CABLE & TELECOMMUNICATIONS ASSOCIATION

    Mr. McSlarrow. Mr. Chairman, Mr. Vice Chairman, Senator 
McCaskill, thank you very much for asking me to be here today.
    Two years ago, a little over, I testified before this 
committee, and there were two overarching issues, with respect 
to the cable industry, involving the digital transition. And, 
even though this is, obviously, a broadcaster digital 
transition, we made two commitments to you. One was that we 
would not just participate in, but we would lead, an education 
campaign for all Americans so that they'd understand the 
transition is coming, what the impact will be for owners of 
analog, rabbit-ear televisions, and how those consumers could 
get help, and where they could go to get more information on 
how to manage the transition.
    We were pleased, in early September, to announce a 
multifaceted campaign, including a $200 million television 
campaign in both English and Spanish. We're actually now 
starting, this week, our second run of advertising spots. And, 
throughout all of that, we are working not just with the FCC 
and the NTIA, but our coalition partners--and, obviously, as 
Commissioner Adelstein mentioned, working with FCC 
commissioners and Members of Congress and your staffs to get 
input as to what direction we should go with the advertising 
campaign.
    The second commitment we made was recognizing that what's 
unique about this transition is that the broadcasters literally 
stop broadcasting in analog, and now will broadcast exclusively 
in digital. We had an issue with what we do with about 45 
percent of our customers who receive and are analog-only 
customers. And we made a commitment that we would try to ensure 
that the transition was seamless. Working with you, Mr. 
Chairman, and Mr. Vice Chairman, particularly, we were able to 
develop a plan so that we could transmit in both digital and 
analog, and the FCC, as you undoubtedly know, recently adopted 
an order producing that result. So, in both categories, in 
terms of education and in terms of ensuring that all of our 
customers receive all of the signals, I think we are well on 
our way.
    Finally, as the earlier panel demonstrated, there is still 
a lot more work to be done. The cable industry, as I know, with 
my colleagues here, stands ready to do what we can to help. We 
want to be a partner with the government. I think a certain 
amount of accountability would be a great thing to have 
injected into the process. And we understand that we are the 
last line between the decisions that policymakers make and our 
customers, and we want to do right by our customers, working 
with you.
    So, thank you for your leadership.
    [The prepared statement of Mr. McSlarrow follows:]

      Prepared Statement of Kyle E. McSlarrow, President and CEO, 
            National Cable & Telecommunications Association
    Chairman Inouye, Vice Chairman Stevens and Members of the 
Committee, my name is Kyle McSlarrow and I am President and CEO of the 
National Cable & Telecommunications Association. NCTA represents cable 
operators serving more than 90 percent of the Nation's cable TV 
households and more than 200 cable program networks. The cable industry 
is also the Nation's largest broadband provider of high speed Internet 
access after investing $110 billion to build out a two-way interactive 
network with fiber optic technology. Cable companies also provide 
state-of-the-art digital telephone service to millions of American 
consumers.
    In roughly 15 months, this country will embark on a dramatic change 
in over-the-air broadcast television. A successful transition to an all 
digital broadcast system will make valuable spectrum available for 
public safety, increase choice and competition through wireless 
broadband services, and deliver significant benefits to television 
viewers.
    Nearly 2 years ago, I testified before this Committee and made one 
overarching commitment to you. Although this is a broadcast television 
transition, the hard date of February 17, 2009 represents a unique 
moment and a unique opportunity, and I committed to you that the cable 
industry would do its part to ensure the transition's success in two 
significant ways.
    First, despite our firm and long-held view about the Constitutional 
infirmities of a government-mandated regime that requires cable 
operators to carry all must carry broadcast stations in both digital 
and analog formats, we committed to provide a seamless transition for 
all of our consumers, analog and digital alike. As you will recall, we 
worked with you to include a carriage commitment in the bill that 
passed out of this Committee in June 2006, but the bill was not 
subsequently considered on the Senate floor.
    Since that time, Mr. Chairman, we worked with you and Senator 
Stevens, your staffs, and other members of this Committee to craft a 3-
year voluntary carriage commitment. The FCC recently approved an order 
the outline of which mirrors our voluntary 3 year plan. The FCC's order 
is, however, deficient in one major respect. Instead of taking into 
account the circumstances of small operators and cable systems with low 
capacity with an exemption as this Committee did on a bipartisan basis 
in 2006, the FCC order largely punts this question to a further notice 
of rulemaking.\1\ This Committee has previously recognized that the 
imposition of dual carriage mandates on low capacity systems adversely 
affects other important goals like the continued rollout of broadband 
to rural America. The FCC should act now to approve a simple exemption 
that takes into account the circumstances of small operators and low 
capacity systems.
---------------------------------------------------------------------------
    \1\ The FCC did include a process whereby operators with systems of 
552 MHz or less of capacity could apply for waivers, but given the 
FCC's poor record on waiver requests in other contexts, this is little 
more than window dressing and unnecessarily burdensome.
---------------------------------------------------------------------------
    Mr. Chairman, our second commitment was that we would help lead, 
not just participate in, a nationwide consumer campaign to alert all 
Americans about the digital transition and educate consumers about the 
tools available to help manage the transition.
    Together with the NAB, CEA, consumer retailers, public 
broadcasters, and other key groups, NCTA is proud to have founded the 
DTV Transition Coalition last year. And we remain committed to working 
with this Coalition and with many other consumer and interested 
organizations to educate the millions of Americans who will be affected 
by the digital transition.
    In early September of this year, the cable industry launched an 
extensive consumer education campaign. Including English and Spanish 
language TV advertising valued at $200 million over the next year and a 
half, this initiative is designed to reach millions of cable and non-
cable viewers with useful information about the upcoming transition. We 
are now in a second run of advertising spots, with our current spots 
focused on alerting consumers to the NTIA's coupon program for digital-
to-analog converter boxes that starts next January.
    But again, Mr. Chairman, as you and Senator Stevens have advised, 
our commitment extends far beyond just simply running television ads. 
Thus, we have already revamped NCTA's website (www.ncta.com) which now 
focuses predominantly on the digital transition. And we have created 
English and Spanish-language websites linked to our homepage that 
provide consumers with easy-to-understand information, advice and other 
information about the transition, including links to other government, 
consumer and industry websites focused on the transition. In addition 
we will:

   Send educational messages and reminders about the transition 
        to all cable customers through monthly statements on invoices 
        and ``bill stuffers'' in cable bills, including information 
        about NTIA's coupon program once the coupons become available;

   Create local origination and on-demand programming to 
        provide tutorials on the benefits of the digital transition, 
        and how cable can help customers navigate through it;

   Create and distribute to all our companies a customer 
        communication ``tool kit'' which will include:

        --invoice messages to be included on billing statements;

        --electronic messages for digital cable boxes;

        --on-screen scrolls for local origination channels;

        --telephone ``on-hold'' messaging for customer call centers;

        --sample e-mails to be sent to broadband customers; and

        --website ``banners'' for MSO and network websites.

    I would note that many of these ideas came from members of this 
Committee. And we remain open to other ideas on how we can help. Thus, 
we are currently working with a variety of consumer groups and 
grassroots organizations with varied memberships and constituencies to 
see how we can help through other media, such as print or other forms 
of communication.
    Chairman Inouye, Vice Chairman Stevens, I would like to thank you, 
and all the Members of this Committee who have worked so hard to keep 
this issue in the forefront. I am proud of all that the cable industry 
is doing voluntarily to help ensure that the transition to digital 
broadcasting is a success, and I look forward to continuing to work 
with this Committee as we approach the date of the transition. I would 
be pleased to answer any questions you may have.

    The Chairman. Thank you very much.
    May I now call on Mr. Lawson.

        STATEMENT OF JOHN M. LAWSON, PRESIDENT AND CEO, 
         THE ASSOCIATION OF PUBLIC TELEVISION STATIONS

    Mr. Lawson. Mr. Chairman, Mr. Vice Chairman, members of the 
Committee, thank you for inviting me to testify.
    Public television strongly supports the DTV transition, as 
we have from day one, by word and deed. In the past, I've 
testified before this committee on the transition. Today, it's 
different. The hard date is 16 months away, the time for action 
is now.
    This past Monday, we joined with the NAB and announced a 
major commitment of air time by local public stations to inform 
consumers of the analog switch-off and what steps they need to 
take. Given public television's limited time for underwriting 
credits, this is a major contribution. In fact, the economic 
value of this commitment exceeds $50 million.
    However, we believe the success of the transition still 
faces unnecessary risk. Air time and websites are not enough. 
I'm not aware of a single Member of Congress who was elected 
with TV spots, alone. Direct mail, town meetings, events at 
senior centers, phone banks, hands-on assistance are all 
necessary components of a successful conversion campaign.
    To illustrate the challenge, our latest survey research 
indicates that more than 50 percent of Americans have no idea 
that the transition is even occurring. Even fewer have 
awareness of the options available to them to continue their 
television service. Additionally, few people--to your point, 
Mr. Chairman--understand why they are being forced to make a 
change. The majority of people surveyed said the Federal 
Government itself is on the wrong track when it comes to the 
transition. That distrust is even greater among people who have 
the least awareness of the switch-off.
    So, based upon our survey data and other findings, we 
recommend the following actions by Congress and other key 
players:
    First, Congress should make a real financial commitment in 
consumer education. Congress has set aside only $5 million, and 
that is narrowly limited to education about the NTIA coupon 
program. Yet, the Federal Treasury is expected to net, at 
minimum, $12.5 billion from the spectrum auction. A greater 
investment in marketing, so that spectrum actually becomes 
available, is just a sound business decision.
    To fund a true grassroots campaign, we are asking Congress 
to invest an additional $20 million, at least. Our efforts, in 
concert with other not-for-profits, would focus on reaching the 
most vulnerable Americans, including the elderly. We applaud 
Senator Kohl and the Aging Committee for their work in this 
area, but it's crucial that most of these funds be obligated in 
this appropriation cycle, because the analog switch-off is so 
close.
    Second, Congress and the FCC must ensure that the digital 
signals of local public stations are carried by satellite 
providers. Beginning in 2005, we have reached landmark private 
agreements with the NCTA, ACA, and Verizon to carry the HD and 
multicast programming from all public stations.
    From DBS, however, the situation is far different. Neither 
DIRECTV nor EchoStar are carrying the HD signals of a single 
public television station that we know of, let alone our 
multicasting. However, both companies are carrying the local HD 
signals of the commercial network affiliates. We would prefer a 
private-carriage agreement, but we are running out of time. 
Although we have made some progress with DIRECTV and we believe 
that they are negotiating in good faith, an agreement is not in 
hand. Our negotiations with EchoStar have gone nowhere. We need 
Congress to help ensure that the American people have access to 
their public television.
    Third, as the FCC continues testing of unlicensed devices 
intended for the broadcast white spaces, we ask Congress to 
conduct vigilant oversight. The end game of this transition is 
exactly the wrong time to introduce thousands of devices that 
have the potential to destroy the pictures that consumers see 
on their DTV-enabled sets.
    Fourth, we call on Congress to ensure that the FCC 
expedites rules for digital translators which are long overdue.
    Finally, we urge Congress to continue to support public 
television in creating the new content and services that will 
drive consumer demand for DTV.
    Mr. Chairman and Mr. Vice Chairman, in an era when media 
ownership is concentrated in fewer and fewer hands, public 
stations are the last locally owned and operated media outlets 
in many communities, and free over-the-air television, both 
public and commercial, is essential to the health of this 
Nation's media marketplace and our democracy. The key policy 
goal of this transition must be the preservation of free over-
the-air television, including public television, for our 
country.
    In conclusion, we appreciate your lifelong support for 
public television and radio. We also share your desire for a 
successful transition. Our recommendations today are delivered 
in the spirit of making this transition successful.
    I look forward to your questions. Also, Mr. Chairman, I'm 
prepared to conduct a short demonstration of DTV, using a 
digital-to-analog converter box, after the panel or whenever 
you're ready.
    [The prepared statement of Mr. Lawson follows:]

       Prepared Statement of John M. Lawson, President and CEO, 
             The Association of Public Television Stations
Overview
    Public Television strongly supports the digital transition, as we 
have by word and deed from the very beginning. Public Television 
stations have spent a decade educating state and local governments, the 
Federal Government, local donors and our viewers nationwide about the 
benefits of digital television and its impact on the citizens we serve. 
This effort raised over $1.3 billion for the digital conversion of our 
facilities, enabling Public Television stations to roll out a new 
generation of consumer friendly channels and services.
    Public Television is committed to a vibrant transition and our 
stations are doing all they can to ensure a successful transition. To 
that end, this past Monday, we announced our commitment to a consumer 
education campaign that dedicates airtime, as well as print and 
Internet resources. This campaign includes DTV action spots across 
daytime, prime time and weekend time periods. This campaign represents 
a $50 million commitment by Public Television and will result in 3 
billion impressions on the American public. Additionally, our stations 
will produce long form programming and disseminate information on their 
websites and in their program guides. Given Public Television's very 
limited number of non-programming minutes, this commitment represents a 
significant percentage of available time. With adequate resources, 
Public Television stations and our not-for-profit partners are uniquely 
positioned to go beyond this on-air commitment to provide direct, on-
the-ground educational outreach to the American public to guide them 
through this transition.
    We believe that developing and promoting the consumer benefits of 
DTV is the best way to drive the transition and preserve free, over-
the-air television. The message needs to be clear that digital 
television provides a future of expanded programming and services to 
benefit all consumers. Simply highlighting the potential loss of 
service if consumers do nothing will not drive the kind of enthusiasm 
and momentum needed to ensure a smooth transition that the American 
public fully supports. No sector of the communications industry has 
embraced the promise of DTV more robustly than Public Television. An 
investment in the new generation of digital content and services from 
Public Television is a very effective way to increase value for the 
consumer and move the transition forward, as we have seen in other 
countries, notably the United Kingdom.
    However, we believe the success of this transition faces 
unnecessary risk. Time still remains to address and mitigate the 
factors that are contributing to this risk, but with only 16 months and 
effectively one Federal budget cycle remaining before analog television 
broadcasting is mandated to end, the window for action is closing. Our 
latest survey research indicates that more than 50 percent of Americans 
have no idea that the transition is occurring. Additionally, the 
majority of recent survey participants said the Federal Government is 
on the ``wrong track'' when it comes to the transition. That distrust 
is even greater among people who have the least awareness of the 
transition.
    When Congress enacted the recent Medicare prescription drug 
benefit, the Department of Health and Human Services obligated 
approximately $109 million to advertise, educate and inform 
beneficiaries about the Medicare Part D program. This equates to 
approximately $3.11 per senior. In comparison, Congress has set aside 
only $5 million for DTV transition consumer education, and that is 
narrowly limited to education about the NTIA set-top box coupon 
program. This equates to approximately $0.08 per over-the-air 
individual. This funding is woefully inadequate, especially when one 
factors into account the $12.5 billion the Federal Government is 
expected to receive in revenue, at minimum, from the spectrum auction.
    We are requesting, as we have since 2005, that the Federal 
Government invest meaningfully in a comprehensive consumer education 
campaign. The analog switch-off is not exactly market driven. Despite 
the enormous sums spent by industry stakeholders on the development and 
rollout of digital television, there is no dispute that for the past 20 
years, the DTV transition has been a matter of industrial policy. Now, 
the Federal Government, as a primary beneficiary of the transition, 
must ensure that the transition is completed successfully. This 
requires that additional, meaningful Federal resources are invested in 
consumer education. At an absolute minimum, we believe that an 
additional $20 million in Federal funding is needed for community 
outreach where seniors, non-English speaking people and other 
vulnerable populations reside.
    We also believe that it makes enormous sense for the high-
technology companies that have pushed relentlessly for a national 
``hard date'' and who will have massive investments in the spectrum at 
stake to assume some responsibility in educating Americans about the 
conversion deadline. They need to help us ensure that February 17, 2009 
is nothing more than ``just another Tuesday.'' After all, if the 
transition is not successful--and multitudes of Americans experience a 
Tuesday they will never forget--all these investments will be put at 
great risk.
    Finally, it is essential that the transition preserves and protects 
high-quality local media, programming and services. We already have a 
landmark agreement with the cable industry to carry our new digital 
signals. We need the same with direct broadcast satellite companies. 
And it is very important that consumers are protected from harmful 
interference to their DTV reception by the premature introduction of 
unlicensed devices into the broadcast band.
Public Television's Consistent Support of the Transition
    Even though my remarks today advocate changes in the Federal 
Government's approach to the transition, nothing in my testimony should 
be interpreted as opposition to the ``hard date'' to end analog 
broadcasting. In fact, our recommendations are all intended to increase 
the odds that the transition, as scheduled, will be successful. Our 
call for a much greater investment in consumer education is nothing 
new. For example, in my testimony to the Commerce Committee in July 
2005, we supported a hard date and called for a ``Y2K-level'' effort 
around consumer awareness for a successful transition. I also pointed 
to the unsuccessful attempt in the 1960s and 1970s to convert America 
to the metric system as a reminder that consumer education campaigns 
can, and do, fail.
    So, I want to reiterate Public Television's support for the hard 
date to terminate analog broadcasting in February 2009. Stringing out 
analog broadcasting would be highly detrimental to Public Television. 
Currently, our stations are spending $32 million annually just for 
electricity to run their analog transmitters, and another $20 million 
to maintain them. This is money that should be going to programming and 
services, not to the power bill and the production of more greenhouse 
gases.
    Public Television has supported a successful transition because of 
the tremendous service opportunities digital television broadcasting 
has created. DTV is enabling public broadcasters to rollout a new 
generation of programming and services for the American public and, in 
effect, reinvent public service media for the digital age. We are 
already beginning to realize this tremendous potential as local 
stations provide not only high-definition programming, but multiple new 
standard definition channels and new datacasting services, all 
simultaneously.
    Public Television stations have embraced the opportunities 
presented by digital, offering new digital channels such as World (an 
aggregation of public affairs programs), Create (lifestyle and how-to-
programs) and V-Me (our first Spanish language Public Television 
channel). In addition, new localized content is being produced by 
Public Television stations to meet the interests and needs of their 
local communities.
    We are also using DTV to enhance public alert and warning. In April 
2007, APTS and the Department of Homeland Security/FEMA began the 
national deployment of the Digital Emergency Alert System (DEAS). Once 
fully implemented, Public Television's digital television 
infrastructure will facilitate the delivery of Presidential emergency 
alert messages to digital televisions, radios, cell phones, PDAs and 
computers.
    This DEAS deployment is a testament to the wide-range of expanded 
opportunities digital transmission presents, and we look forward to 
working with Congress to find other opportunities to expand the 
successful DEAS model in addressing disaster and homeland security 
needs throughout the country. In particular, I would like to commend 
Senator DeMint for his leadership in authoring the WARN Act, which laid 
the groundwork for an expansion of the emergency alert system to 
commercial mobile service providers.
    Recent breakthroughs also allow for the delivery of video 
programming on mobile devices using local stations' DTV signals. Public 
Television has been a full partner in developing this new platform, 
including our membership in the newly-formed Open Mobile Video 
Coalition.
    These new digital services are the future of noncommercial, public 
service media in America, and our stations are eager to phaseout our 
legacy analog services and focus on this digital future.
Polling Data: 21.5 Million Households at Risk
    Public Television is fully committed to the digital future. 
However, we are gravely concerned that many of the 21.5 million 
American TV households who depend upon over-the-air broadcasting to 
receive our programming will be stranded if we proceed with an under-
funded consumer education campaign and an unmanaged transition process.
    Beginning in November 2006, APTS commissioned the polling firm 
CENTRIS--which specializes in tracking consumer use of electronics 
products and services--to conduct scientific surveys of American 
television consumers to guide us in our transition efforts. I am happy 
to share our latest findings from the third quarter of 2007 with the 
Committee this afternoon:

   More than half of all surveyed Americans (51 percent) say 
        they have ``no idea'' the transition is taking place. This is a 
        10 percentage point improvement from the last quarter of 2006, 
        but it is still unacceptable.

   Only 7 percent of survey respondents, when asked when the 
        transition would end, could accurately answer ``between one and 
        two years.''

   There is great confusion about what consumers will do to 
        deal with the transition. More than half of all respondents (54 
        percent) say they either ``don't know'' what they will do or 
        will ``do nothing'' to receive television after the transition.

   Every Federal office holder has a stake in the success of 
        the DTV transition. Of those surveyed, 55 percent of 
        participants said the government was on the ``wrong track'' 
        with the transition.

   The more consumers reported knowing about the transition, 
        the more likely they were to say the government was on the 
        ``right track.'' Of those who were ``aware'' 22 percent said 
        the government was on the ``right track.'' Only 7 percent of 
        ``unaware'' said the government was on the ``right track.

   The CENTRIS data confirms that older Americans are at a 
        disproportionately greater risk of being left behind when the 
        conversion occurs. Older Americans (24 percent) are more likely 
        to receive their signals via an over-the-air antenna than are 
        Americans under 65 (19 percent).

   Over the past 3 years, older Americans (41 percent) have 
        bought newer TV sets at a much slower pace than Americans under 
        65 (55 percent), which puts them at a disadvantage of having 
        little exposure to newer digital technology and point-of-sale 
        information.

   The number of over-the-air households has changed little 
        since 2004. It currently stands at approximately 21.5 million 
        households, which represent approximately 61 million 
        individuals.

Recommendations for Action in Time Remaining
    Based upon this survey data and other findings, we recommend the 
following actions by Congress and other key players in the DTV 
transition.
    1. Congress must provide a real financial investment in consumer 
education. It is clear that the Administration will never allocate, nor 
even request, funding for this basic necessity of a national DTV 
consumer education campaign. As such, we call on Congress, as we have 
for infrastructure conversion funds, to allocate resources for consumer 
education. We are not talking about a new, permanent Federal program, 
but a one-time, substantial outlay in basic public education 
activities.
    I have outlined how Public Television, along with our commercial 
colleagues, will invest significant resources in DTV consumer 
education. However, our efforts alone will not be enough. I'm not aware 
of a single Member of Congress who was elected through TV spots alone. 
Direct mail, town meetings, events at senior centers, phone banks and 
similar tactics are all necessary components of a successful campaign. 
The government itself is a major stakeholder and must provide 
additional funds for a comprehensive grassroots campaign.
    To fund the appropriate level of activities needed to undertake the 
campaign, we ask Congress to invest a minimum of $20 million for 
grassroots consumer education and outreach. These funds would be 
distributed through our local public stations and our not-for-profit 
partners in the community.
    Public Television is perfectly suited to undertake this endeavor, 
as we have been at the frontline of educating elected officials, 
corporations and our viewers about the transition for the past decade. 
Additionally, by virtue of their educational mission to address 
underserved populations through broadcast media and person-to-person 
outreach, local Public Television stations have deep and effective ties 
to the many local institutions, organizations, advocacy groups and 
service providers that directly communicate with these constituents.
    Public Television stations also possess an unparalleled universal 
broadcast coverage (99 percent of American households in analog and 
currently 96 percent in digital), a local presence in each community, a 
nonprofit educational mission and a history of effective outreach 
projects that bring information and guidance to Americans beyond the 
television screen. It is also clear that Public Television has 
America's trust, as reflected by four consecutive years of Roper polls, 
which ranked Public Television as the most trusted institution in our 
country.
    This combined experience and high level of public trust provide us 
with the expertise and tools necessary for managing a national 
grassroots consumer education campaign. We are prepared and eager to 
undergo this campaign, but it will take a commitment by Congress to 
make adequate investments in consumer education to ensure that no 
viewer is left behind.
    2. We call on Congress to ensure digital carriage of local Public 
Television stations by direct broadcast satellite (DBS) companies. 
Localism is at the heart of public broadcasting, but the multitude and 
diversity of local voices are threatened by a transition to digital 
that does not guarantee carriage by DIRECTV and EchoStar, which 
together serve nearly 30 million customers.
    In FCC filings, both DIRECTV and EchoStar have questioned the 
Commission's authority to require satellite carriage of digital 
stations, and have made clear their preference to carry, at the most, a 
single SD stream instead of HD and multicast programming. This is 
unacceptable.
    In 2005, Public Television negotiated a historic agreement with the 
National Cable & Telecommunications Association to ensure HD and 
multicast carriage on major cable systems. In August 2007, we finalized 
a similar agreement with the American Cable Association, which is 
pending ratification by ACA members. An agreement has also been reached 
with Verizon.
    To better compete with the growing array of digital programming 
offered by cable systems throughout the country, DBS providers have 
introduced both national and local digital programming in numerous 
markets. DIRECTV and EchoStar have aggressive plans to expand the 
carriage of local digital stations to new markets in the near future.
    However, in those markets where local digital signals are being 
carried, neither DIRECTV nor EchoStar is carrying the HD signals of a 
single Public Television Station. In these markets, both companies are 
carrying the local HD signals of NBC, CBS, FOX and ABC.
    Mr. Chairman and Mr. Vice Chairman, there is a gaping hole in 
guaranteed digital carriage of our local stations when it comes to 
satellite. Yet, we know that many communities rely on satellite as 
their only available source of subscription television services and, in 
some cases, is the only way they can get any local TV service. Without 
guaranteed carriage of our Public Television stations in the 
communities served by DBS providers, consumers in those communities are 
at risk of losing local television service and missing out on the 
expanded digital services Public Television stations are offering.
    We would prefer a privately negotiated carriage agreement, but we 
are running out of time. Although we have made some progress with 
DIRECTV, we still do not have an agreement. Our negotiations with 
EchoStar have gone nowhere.
    In an era when media ownership is concentrated in fewer and fewer 
hands, Public Television stations are the last locally owned and 
operated media outlets in many communities across America. We call on 
Congress to help us ensure that these local stations are carried on 
satellite services, so that all Americans, no matter how they receive 
their television signals, are able to watch the programming they helped 
fund.
    3. Similarly, protecting the consumer's ability to receive high-
quality local television transmissions is essential to ensuring a 
vibrant transition to digital. As the FCC continues to conduct testing 
of unlicensed devices intended for operation in the broadcast ``white 
spaces,'' Congress must conduct vigilant oversight. No unlicensed 
devices should be deployed until there is certainty that they will 
avoid harmful interference to DTV broadcast services. The middle of 
this digital transition is exactly the wrong time to introduce 
thousands of devices that have the potential to destroy the pictures 
that consumers see on their DTV enabled sets. The planned transmission 
of video to mobile devices through DTV transmission raises the 
requirements for non-interference even higher.
    4. We call on Congress to ensure that the FCC expedites rules for 
digital translators. Mr. Chairman and Mr. Vice Chairman, there is an 
untold story when it comes to viewers served by translators. Without 
channel assignments and final rules for the conversion of these 
translators, which relay television signals to rural and mountainous 
areas, many of our stations are in limbo with regard to serving all of 
their viewers. Some stations are planning on down-converting their 
signals while others plan on a ``flash-cut'' to digital, but stations 
lack clear guidance on how to deliver broadcast signals to viewers 
dependent on translators. In addition, this is another area where 
consumer education is critical.
    5. Finally, we urge Congress to continue to support Public 
Television in creating the new content and services that will drive 
consumer demand for DTV. We believe that stressing the consumer 
benefits of DTV is the best way to move the transition forward and 
preserve free, over-the-air television. An investment in the new 
generation of digital content and services from public digital 
television is an extremely effective way to increase consumer benefits, 
as we have seen in other countries.
    We applaud Congress for preserving advance funding for the 
Corporation for Public Broadcasting (CPB) in the House and Senate 
Budget Resolutions, as well as the Labor-HHS-Education bill as reported 
by the Appropriations Committees in both chambers and passed by the 
House. This has provided the first increase in the regular CPB 
appropriation in 4 years. But our funding since 2001 has not kept up 
with inflation, let alone provided for the new digital content that 
will help drive the transition for television viewers nationwide. We 
hope that Congress can continue to grow CPB funding in future years.
    We also applaud Congress and the members of this Committee in 
particular for your foresight in recognizing the value of new digital 
programming and services for your constituents. As such, you made a 
significant investment in Public Television's infrastructure that will 
help to ensure those services are delivered into every home in America. 
As stations' digital infrastructure needs ramp down, a new challenge 
beckons. We call on Congress to make the same commitment to the future 
of digital services by transitioning its investment in infrastructure 
into an investment in new digital public broadcasting content.
    Congress took the first step in this direction by endorsing the 
American Archive, an initiative to preserve, digitize and make widely 
available public broadcasting content from the past half century, as 
well as new digital content created today. The American Archive will 
ensure that the truly amazing amount of public broadcasting programming 
that Americans have paid for does not sit locked away, deteriorating, 
on aging tape and film. This programming represents the most 
comprehensive chronicle of our Nation's history, our people, our 
culture and our democracy. It has enormous continuing value to current 
and future generations and must not be left to fade away.
Preservation of Free, Over-the-Air Television
    As one of the last locally owned and operated media outlets in the 
country, we believe that preservation of free, over-the-air television 
should be a cornerstone public policy goal of Congress and the FCC. 
Over-the-air broadcasting is essential to the health of this Nation's 
media marketplace and our democracy. It provides a powerful tool for 
consumers against the rising cost of cable and satellite. It offers an 
outlet for local voices in diverse communities throughout the Nation. 
Over-the-air television service is freely available to every American 
no matter their income level and is not limited by the carriage 
decisions of cable or satellite. From our perspective, the fundamental 
policy goal of the digital television transition is preservation of 
free, over-the-air television, available now in an exciting, new 
digital format.
    Mr. Chairman and Mr. Vice Chairman, we appreciate your lifelong 
support of Public Television and Radio in our country. We also share 
your desire for a successful digital television transition. Our 
recommendations today are delivered in the spirit of making this 
transition successful. I appreciate this opportunity to testify, and I 
look forward to your questions.
                               Appendix A
United States Map of Over-The-Air Households


                               Appendix B
    APTS and PBS Press Release on DTV Consumer Education Initiative
For Immediate Release:
Contact: Tania Panczyk-Collins
APTS and PBS Announce Major Public Television Initiative to Educate 
        Viewers About the DTV Transition
    Washington--October 15, 2007--The Association of Public Television 
Stations (APTS) and PBS announced the next phase of Public Television's 
aggressive campaign to educate viewers about the fast-approaching 
mandatory DTV Transition. Public Television's efforts will focus on the 
hard-to-reach households that receive television only through over-the-
air signals.
    A major component of the campaign includes the commitment by local 
Public Television stations to air multiple DTV Action Spots throughout 
the DTV transition. Lawson said: ``Our stations have committed to air 
DTV Action Spots across daytime, primetime and weekend time periods. 
Over a sixteen-month campaign, this equals more than 3 billion 
broadcast impressions educating viewers about the transition. Given 
Public Television's limited number of non-programming minutes, this 
represents a significant percentage of our available time.''
    Public Television's consumer education campaign will incorporate 
numerous tools developed by APTS, PBS and individual stations in 
addition to broadcast. Lawson said: ``Our stations have committed to 
using their printed program guides, their websites and special mailings 
to extend the reach of their consumer education.'' Information will be 
available through pbs.org, one of the most highly traffic dot-orgs on 
the Web. The value of Public Television's airtime and other resources 
that will be used for the consumer outreach campaign exceeds $50 
million. Public Television's consumer education campaign will touch the 
most difficult-to-reach over-the-air households. For example, over-the-
air viewers are greatly over-represented in Public Television's viewer 
and membership base.
    ``It's an important part of our public service mission that Public 
Television remains accessible to all Americans through free, over-the-
air broadcasting,'' said Paula Kerger, PBS President and CEO. ``Working 
together, Public Television stations and national organizations are 
planning a comprehensive, multi-phase campaign to help everyone make 
the transition, especially those millions of people who rely on over-
the-air exclusively.''
    A recent APTS survey found that broadcasters' consumer awareness 
campaigns are having a positive effect of getting consumers to take 
action. The percentage of respondents who said that they ``don't know'' 
what they will do between now and the transition fell from 31.6 percent 
for those who are unaware to 15.2 percent of those who are aware. 
Lawson said: ``Those who are aware of the transition are more than 
twice as likely to buy a set-top box to continue to receive free, over-
the-air television, versus subscribing to satellite television, the 
next highest response. They are three times as likely to choose free 
television over subscribing to cable.''
    The APTS survey, however, suggests that while increasing consumer 
awareness of the transition is essential, awareness alone is not 
enough. Lawson said: ``Forty percent of Americans who are aware of the 
transition still do not have enough information to enable them to take 
meaningful action. We need a sustained, targeted grassroots consumer 
education initiative to reach this population. And, the government 
needs to invest heavily in it.''
    Lawson said: ``When Congress created Medicare Part D, the 
Department of Health and Human Services obligated almost $109 million 
to advertise, educate and inform beneficiaries. In comparison, Congress 
only set aside $5 million to educate the American public about the 
transition to digital.''
                               Appendix C
                   APTS Consumer Awareness Study Data













    The Chairman. Do it now.
    Mr. Lawson. So, what we have here are two analog television 
sets. These are both Senate-issued sets. I don't know where we 
got them probably from somewhere in the Commerce Committee 
offices. One of them is receiving analog television, the other 
is receiving digital television. They are both using standard 
consumer rabbit-ear antennas. The set-top box, on the left is 
from LG, marketed under the Zenith brand. This is a prototype 
of a model that has been certified by the NTIA, as I understand 
it, and will be available for the coupon program.
    So, this is a very small form factor. This sits right on 
top of the set. And, again, it's using the regular antenna.
    One of the key points is that the way to make the 
transition successful is not so much to focus on people's 
televisions not working after February 2009, but really focus 
on consumer benefits of digital television.
    In the case of public television, we are using our digital 
capacity for high definition, which, even on an analog set, 
looks good, but you can see there is a program guide which 
comes over the air for free with the rest of the signal. WETA, 
right now, is broadcasting three standard-definition channels 
along with the high-definition channel; all using individual 
digital television channels.
    So, here is WETA channel 26.1, and I will simply change the 
channel. This is another WETA standard-definition multicasting 
channel, called ``Create.'' Between DTV transmission and our 
deal with the cable industry, we have spurred the creation of 
new multicasting channels--Create, Travel and Lifestyle. This 
is PBS Kids, another standard definition multicast channel, 
again, free over-the-air. And the third one from WETA is our 
world channel--big in the news and public affairs coverage that 
public television has continued and ramped up. This is a 
rebroadcast of ``The War,'' by Ken Burns.
    So----
    Senator McCaskill. Starring the Chairman, I might add.
    [Laughter.]
    Mr. Lawson. So, I know you've seen this before, but I think 
it's important to remember what this is all about. This is free 
over-the-air television. We're very proud of it. And we'd like 
to make sure that a lot more Senators know that they can get 
this through cable or over the air, and over the air is free.
    The Chairman. Thank you.
    Is that the $40 one?
    Mr. Lawson. Sir?
    The Chairman. Is that $40?
    Mr. Lawson. I'm not sure what the price point will be.
    Mark?
    Mr. Pearl. The--around $65.
    Mr. Lawson. Around $65.
    Mr. Pearl. Minus the $40.
    Mr. Lawson. So, the coupon is a $40 coupon.
    The Chairman. Thank you.
    Mr. Lawson. Thank you.
    The Chairman. Our next witness is Mr. Gieselman, Senior 
Vice President. ``Gizelman?''
    Mr. Gieselman. ``Geezelman.''
    The Chairman. ``Geezelman.''
    Mr. Gieselman. Yes.

STATEMENT OF JON GIESELMAN, SENIOR VICE PRESIDENT, ADVERTISING 
              AND PUBLIC RELATIONS, DIRECTV, INC.

    Mr. Gieselman. Chairman Inouye, Vice Chairman Stevens, 
Senator McCaskill, my name is Jon Gieselman. I'm the Senior 
Vice President of Advertising and Public Relations for DIRECTV. 
Thank you for inviting me to testify about the digital 
television transition.
    Over the next few minutes, I'd like to take this 
opportunity to, first, give you a brief overview of the 
satellite industry's investment in digital television; second, 
describe the impact of the digital transition for satellite 
customers; and, third, explain what DIRECTV will do to alert 
and educate the American public about the digital transition.
    The satellite industry is proud of its leadership in 
digital television. From our very first day of service, both 
DIRECTV and DISH Network were built as all-digital platforms. 
That choice, made on behalf of consumers more than a decade 
ago, has positioned the satellite industry as leaders in the 
digital revolution. Additionally, DIRECTV is now the leading 
high-definition provider, with our recent launch of 72 national 
HD channels and local HD stations in 61 markets. As Senator 
Hollings, on this committee, envisioned in 1997, a high-
definition picture is to this century what color television was 
to the last.
    As a result of this commitment to digital television, 
DIRECTV and DISH Network's combined 31 million satellite 
subscribers have already made the digital conversion. February 
17, 2009, will be just another day for satellite subscribers. 
Their service will not change.
    Because the DIRECTV subscriber already has a set-top box, 
our customers will not need to buy a converter box, nor apply 
for a converter box coupon. Those few DIRECTV customers who 
receive their local broadcast stations over the air rather than 
from our satellites will also be ready. Just as they do today, 
they will use a seamless integrated over-the-air tuner built 
into their set-top box. In short, every DIRECTV subscriber who 
needs a set-top box to view local digital programming will have 
one.
    It is our responsibility--and, quite frankly, in our best 
interest--to make certain every DIRECTV subscriber understands 
their service will not change.
    Early next year, we will begin to communicate two important 
messages to our customers. First, we will make sure they know 
they are set for the transition. Second, DIRECTV is also 
committed to doing its part to assist the estimated 18 to 21 
million households that do not currently subscribe to a pay-TV 
service. Therefore, we will encourage our customers to become 
``digital transition ambassadors'' with family and friends who 
may need help with the transition. We will deliver these 
messages using every point of contact we have with our 
customers--television spots, our customer service agents, our 
installers, direct mail, our website, and e-mails.
    To reach our households and beyond, we are planning 
aggressive public relations advertising and promotional 
campaigns that will begin early next year and run through 2009. 
I will touch on a few key aspects of these campaigns.
    DIRECTV plans to begin its outreach efforts early next year 
with two public service announcements geared toward our 
existing customer base. The first PSA will inform DIRECTV 
customers about the seamless digital transition they will 
undergo as a DIRECTV subscriber. The second PSA will encourage 
our customers to check on their elderly parents, their 
grandparents, neighbors, and friends, including those that are 
not DIRECTV subscribers. This effort will help educate this 
group about the upcoming digital transition and the steps they 
need to take to stay tuned into their favorite television 
programming. We will incorporate the ideas from both of these 
PSAs into a 30-minute long-form program that we will air 
continuously on DIRECTV's customer support channel, beginning 
in April 2008. The program will help our customers guide their 
family and friends through the transition.
    We're also creating a unique educational tool to inform all 
consumers about the digital television transition. Our DIRECTV 
website now features a virtual customer service representative, 
named Diane, who currently provides information about DIRECTV 
services. We're going to take Diane to a whole new level. She 
will become DIRECTV's virtual online educational platform for 
the digital transition, guiding anyone who visits our website 
through the conversion. We plan to drive consumers to our 
website using all points of contact, including social 
networking sites, so they may view Diane and hear what she has 
to say about the upcoming transition.
    Mr. Chairman, members of the Committee, as stated 
throughout this testimony, DIRECTV customers will not be 
affected by the digital transition. This is the most important 
message we can deliver today. But there is still much work to 
be done. We look forward to working with other members of the 
Digital Television Transition Coalition and other interested 
groups and organizations to make the digital transition as 
smooth as possible.
    Thank you for allowing me to speak on this important issue 
today and to talk about DIRECTV's contribution to the 
educational outreach efforts tied to the forthcoming digital 
transition.
    I'd be happy to answer any questions.
    [The prepared statement of Mr. Gieselman follows:]

Prepared Statement of Jon Gieselman, Senior Vice President, Advertising 
                  and Public Relations, DIRECTV, Inc.
    Chairman Inouye, Co-Chairman Stevens and members of the Committee, 
I am Jon Gieselman, Senior Vice President of Advertising and Public 
Relations for DIRECTV, Inc. (DIRECTV). Thank you for inviting DIRECTV 
to discuss the steps we are taking to support the transition to digital 
television.
    First, the satellite industry is proud of its leadership in digital 
television. Our industry has always been about driving competition and 
choice in the video marketplace and a big part of our value proposition 
has been our commitment to digital television. Indeed, we are pioneers 
in this area. From the first day of service, both DIRECTV and DISH 
Network were built as all-digital platforms. That choice, made on 
behalf of consumers over a decade ago, has positioned the satellite 
industry as leaders in the digital revolution.
    Second, as a result, of our commitment to digital television, 
February 17, 2009 will just be another day on the calendar for DIRECTV 
and DISH Network subscribers. Their service will not change. The only 
snow satellite subscribers may see on February 17, 2009 could be that 
falling outside their windows. Their satellite picture will continue be 
digital and crystal clear.
    Third, DIRECTV is extending our commitment to customer service by 
working to educate our customers and also assist over-the-air 
television households through the digital television transition. We 
will provide information about the digital television transition 
including how they may continue to receive local television programming 
over the air and how they may choose to become DIRECTV subscribers.
          * * * * * * *
    Mr. Chairman, for DIRECTV the digital television revolution began 
when Cowboy Malone's, a local retailer in Jackson, Mississippi signed 
up and installed our first customer on June 17, 1994. DIRECTV has been 
all-digital ever since and over 16 million households and small 
businesses have joined the digital television revolution with DIRECTV. 
They enjoy superb picture quality, unmatched programming choice and 
award winning customer service.
    When combined with subscribers of DIRECTV's competitor DISH 
Network, this is even more impressive. Today, 31 million subscribers 
have chosen satellite's 100 percent digital pictures and sound. This 
means that roughly 31 million satellite subscribers have already made 
the digital conversion. They need to do nothing when analog 
broadcasting ends. This is because the satellite industry has invested 
billions of dollars to bring the digital television revolution to 
households and small businesses across America. Indeed, this effort 
goes beyond simply offering digital pictures and sound. DIRECTV is now 
the leading provider of high definition (HD) television service.
    HD content is changing the viewing experience for millions of 
DIRECTV subscribers. HD is creating a new world of entertainment, 
information and education; a world of startling picture and sound 
quality; a world of excitement and engagement; and a world of 
programming choice and diversity. It is a world that DIRECTV is 
bringing to our subscribers through our billion dollar investment in HD 
content and delivery infrastructure. It is a world that Congress 
envisioned when it passed legislation ushering in the DTV conversion. 
So while Senator McCain could then only ``[i]magine last night's All-
Star game broadcast with such stunning clarity that you seem to be 
watching it through a window rather than on a screen,'' he can now see 
that game on DIRECTV.\1\ And while Senator Hollings then thought that 
``high-definition television, not digital television, but digital, 
high-definition television [would be] to the next century what color 
television was to the 1950s and 1960s,'' that day is already here for 
DIRECTV subscribers.\2\ So it is no longer true that Americans would 
someday have ``brilliant, crystal clear video, CD quality surround 
sound, and wide-screen picture that creates a `night-at-the-movies' 
sensation right in one's own living room.'' \3\ DIRECTV subscribers 
have all of this today.
---------------------------------------------------------------------------
    \1\ Transition to HDTV: Hearing on the Transition to Digital 
Television Before the S. Comm. on Commerce, Science and Transportation, 
105th Cong. (1998) (statement of Sen. John McCain).
    \2\ Transition to Digital Television, Hearing of the Senate Comm. 
on Commerce, Science, and Transportation, 105th Cong. (1997) (statement 
of Sen. Ernest Hollings) (internal quotation marks and citation 
omitted).
    \3\ Transition to HDTV: Hearing on the Transition to Digital 
Television Before the S. Comm. on Commerce, Science, and 
Transportation, 105th Cong. (1998) (statement of Thomas B. Patton, Vice 
President, Philips Electronics North America Corp.).
---------------------------------------------------------------------------
    DIRECTV is thus a big part of the highly competitive pay television 
marketplace that is delivering on the goals and expectations of 
Congress and this Committee. Although DIRECTV subscribers enjoy over 
250 channels of 100 percent digital picture and sound, including local 
HD broadcast signals in 61 U.S. cities, we plan to do more to expand 
our HD services. We recently launched one new satellite which allows us 
to offer a wider range of HD channels and services. By year end, 
DIRECTV will retransmit local network HD stations in up to 75 markets. 
By the end of 2008 with the launch of a second HD satellite, we will 
have the capacity to provide 1,500 local HD channels and 150 national 
HD channels. And our national lineup of 72 HD channels already includes 
nearly every major HD channel from Animal Planet HD, Bravo HD and CNBC 
HD to Universal HD, Versus HD and the Weather Channel HD (complete list 
and press release attached).
     Mr. Chairman, DIRECTV is proud of our record of competing in the 
marketplace. We are particularly proud of the fact that our competitive 
position is based largely on our hard-earned reputation for superior 
customer service. At this critical moment of transition for our 
industry and the country, DIRECTV will continue to serve consumers 
diligently by doing everything necessary to ensure that our subscribers 
are ready for the analog-to-digital transition on February 17, 2009. 
DIRECTV subscribers who rely on over-the-air television stations will 
also be ready. Just as they do today, this small subset of our 
subscribers will use a seamless, integrated over-the-air tuner that is 
built into their set-top box. Every DIRECTV subscriber who needs a set 
top box to view local digital programming will have one. Because we are 
taking care of all of our customers with the necessary equipment, the 
National Telecommunications and Information Administration's (NTIA) 
digital-to-analog converter box coupon program will be available to the 
over-the-air households that truly need it.
    With this overview of the satellite industry and DIRECTV as a 
backdrop, we intend to ensure our subscribers know that they have 
already made a seamless transition away from analog broadcasting. 
Toward this goal, we plan several outreach initiatives.
    To help minimize consumer confusion, we will broadcast a clear 
message to our consumers that they should sit back and continue 
enjoying their DIRECTV service through the transition period. We will 
deliver this concise message using nearly every point of contact we 
have with our customers including; customer service agents, retailers, 
installers, on-air announcements, bill-stuffers, our website and e-
mail. We will make certain our customers are aware that they did 
everything they needed to do to prepare for the digital transition the 
day they signed up with DIRECTV. The message will reassure DIRECTV 
subscribers that the only decisions they have to make as their local 
television stations go all-digital, is whether to watch their favorite 
sitcom, nature program or sporting event in 100 percent digital picture 
and sound.
    No matter if they own a 72-inch plasma, a 46-inch LCD or the latest 
DLP, DIRECTV customers will be set for the digital age. Whether their 
television delivers 1080p, 1080i, 720p or 480i, they are set for the 
coming switchover--and the same goes for those who may have a recently 
purchased a 4:3 aspect ratio television with a digital tuner or have an 
older analog television. When our customers signed on to DIRECTV and 
subscribed to our services, they in turn joined the digital television 
revolution.
    Communicating this concise message during the transition period 
should all but eliminate demand from DIRECTV customers for the NTIA's 
digital-to-analog converter box coupon program. Since DIRECTV 
subscribers do not need to purchase digital-to-analog converters, the 
only requirements they must contend with is to surf between channels 
until they find their favorite programming on DIRECTV. Our customers 
will sit back and continue enjoying DIRECTV service through the 
transition period. They will not need to make a retail purchase of a 
converter box, nor apply for a NTIA digital-to-analog converter box 
coupon. We will use e-mail, customer service representatives, 
installers, retailers, bill inserts, our website and on screen messages 
and programming to make sure DIRECTV subscribers know that that they 
are set for the digital television transition. In other words, if our 
comprehensive education efforts are successful, DIRECTV customers will 
not clog the system nor add to the demand encountered during the 
switchover.
    Mr. Chairman, DIRECTV is also committed to doing its part to assist 
the estimated 18 million households that do not subscribe to satellite 
or cable television service. These households rely on over-the-air 
(OTA) reception for local network programming. As you are aware, OTA 
households that have an analog television will need to purchase and 
install a converter box to receive television programming beginning 
February 17, 2009 or purchase a new digital television. DIRECTV will 
support efforts to educate these households about the digital 
television transition.
    As a part of this outreach, DIRECTV is a member of the Digital 
Television Transition Coalition (DTTC). DTTC members are working to 
make the digital transition as smooth as possible for consumers. DTTC 
will support coordinated efforts to inform viewers of their options in 
advance of the transition.
    DIRECTV is also planning its own independent public relations, 
advertising, and promotional campaigns that will begin early next year 
and run through early 2009. These campaigns will discuss the benefits 
of DIRECTV, offer special subscription opportunities for those who 
currently do not subscribe to DIRECTV, and help those who wish to 
continue to receive OTA broadcasts to take only those steps necessary 
to stay tuned to their local broadcasters.
    DIRECTV plans to begin its outreach efforts early next year with 
two public service announcements (PSAs) geared toward our existing 
customer base. The first PSA will inform DIRECTV customers about the 
seamless digital transition they will undergo as a DIRECTV subscriber. 
The second PSA will encourage our customers to check on their elderly 
parents, grandparents, neighbors and friends, including those that are 
not DIRECTV subscribers. This effort will help educate this group about 
the upcoming digital transition and the steps they need to take to stay 
tuned in to their favorite television programming.
    DIRECTV will also incorporate the ideas from both of these PSAs 
into a 30-minute long-form program that we will produce and air 
continuously on DIRECTV's ``Customer Support Channel'' beginning in 
April 2008. The program will celebrate DIRECTV's 13 years of digital 
service, highlight our commitment to HD service, and let our 
subscribers know that they are set for the digital transition. We will 
help our customers guide their family and friends through the digital 
television transition with information about the NTIA digital-to-analog 
converter box program and information about DIRECTV's low-price offer 
for households who may use the transition to consider a pay television 
provider.
    We are also creating an interesting and entertaining educational 
tool to inform DIRECTV customers about the digital television 
transition. Since DIRECTV customers are already treated to cutting edge 
and high-quality programming, we've taken that idea to a whole new 
level--and created a new addition to the DIRECTV family.
    Our DIRECTV website now features a virtual customer service 
representative named Diane, and she will guide our subscribers and 
anyone who visits our website, DIRECTV.com, through the digital 
television conversion. Diane currently gives DIRECTV customers 
information about DIRECTV's services and packages. We will create a 
whole new Diane, complete with a wealth of knowledge and information 
about digital television, HD programming and the 2009 digital 
television transition. Diane will become DIRECTV's virtual online 
educational platform for the digital transition. We plan to drive 
consumers to the DIRECTV website using PSAs and our Customer Support 
Channel so they may view Diane and hear what she has to say about the 
upcoming transition. We will also promote Diane through a substantial 
e-mail campaign to our customers and through social networking sites.
    DIRECTV is very supportive of your efforts to ensure that consumers 
have all the information they need regarding the digital transition. 
DIRECTV has every incentive to not only assuage any anxiety that our 
current customers may feel when they hear or read about the coming 
switchover, but to also help viewers currently receiving only over-the-
air broadcasts.
          * * * * * * *
    DIRECTV is set to not only begin an aggressive education and 
outreach campaign toward our current customer base, but we hope to 
engage other consumers as the digital transition draws nearer. As I've 
stated throughout this testimony, DIRECTV customers will not be 
affected by the digital transition. This is the most important message 
we can continue to deliver. But there is much work to be done and we 
welcome the opportunity to be part of the process. This is an exciting 
time for our industry and we want consumers to embrace the 
possibilities--not shy away from them. Mr. Chairman, Co-Chairman 
Stevens and members of the Committee, thank you for allowing me to 
speak on this important issue today and to talk about DIRECTV's 
contribution to the educational and outreach efforts tied to the 
forthcoming digital transition. I am happy to take your questions.
                               Attachment
Contact:
Robert Mercer, DIRECTV, Inc.

Darris Gringeri, DIRECTV, Inc.
               DIRECTV HDTM Revolution Begins
DIRECTV Customers Now Have Access to Over 70 National HD Channels--
        Significantly More Than Any Other Television Provider In The 
        Nation

    EL SEGUNDO, Calif., Oct. 15, 2007--DIRECTV, the Nation's leading 
satellite television service provider, is now offering 72 national HD 
channels--significantly more than any other television provider in the 
Nation. This is the first wave in DIRECTV's unprecedented expansion of 
HD services that is building toward up to 100 HD channels by year-end.*
    ``If you own a high-definition television, or are thinking about 
buying one, you can now watch your favorite channels in crystal-clear 
DIRECTV HDTM,'' said Derek Chang, Executive Vice President, 
Content Strategy and Development, DIRECTV, Inc. ``The DIRECTV HD 
programming expansion that consumers have been waiting for has become a 
reality. We overwhelmingly lead the industry in terms of both quantity 
and quality of HD programming. There simply isn't a better television 
experience on the planet.''
    The full DIRECTV HD programming lineup, including the new channels, 
and details on receiving equipment needed for the new DIRECTV HD 
services, are available by calling 1-800-DIRECTV or visiting 
directv.com.




DIRECTV's current HD lineup includes:

   A&E HD                       The History Channel HD
   Animal Planet HD             HGTV-HD
   ABC HD NY**                  MGM HD
   ABC HD LA**                  MHD
   Big Ten Network HD           National Geographic
                                      Channel HD
   Bravo HD                     NBC HD NY**
   Cartoon Network HD           NBC HD LA**
   CBS HD NY**                  NESN HD
   CBS HD LA**                  NFL Network HD
   Cinemax HD East              Sci-Fi Channel HD
   Cinemax HD West              SHO Too HD
   CSN Chicago HD               Showtime HD
   CSN Mid-Atlantic HD          Showtime HD West
   CNBC HD+                     Smithsonian Channel HD
   CNN HD                       Speed Channel HD
   Discovery Channel HD         SportsNet New York HD
   ESPN HD                      Starz Comedy HD
   ESPN2 HD                     Starz Edge HD
   Food Network HD              Starz HD East
   Fox HD NY**                  Starz HD West
   Fox HD LA**                  Starz Kids & Family HD
   Fox Business Network HD      TBS in HD
   FSN Detroit HD               The Movie Channel East
                                      HD
   FSN Prime Ticket HD          The Science Channel HD
   FSN Southwest HD             The Weather Channel HD
   FSN West HD                  TLC HD
   Fuel TV HD                   TNT HD
   FX HD                        Universal HD
   HBO HD East                  USA Network HD
   HBO HD West                  Versus HD/Golf Channel
                                      HD
   HD Theater                   YES HD
   HDNet                        HD PPV (8)
   HDNet Movies


    DIRECTV HD customers will continue to pay only a $9.99 access fee, 
allowing them to receive DIRECTV's premier HD technology and all 
channels broadcast in HD that are tied to their particular base 
programming package.
    Customers who want the ultimate HD experience can subscribe to the 
DIRECTV' HD EXTRA PACK for an additional $4.99 per month. 
This new addition of HD-only channels is for the true HD fan and 
includes: HDNet, HDNet Movies, Universal HD, MHD, Smithsonian HD and 
MGM HD.
    In addition to the national HD channels listed above, DIRECTV also 
offers 245 local HD channels across 61 cities, representing more than 
70 percent of U.S. TV Households.
    The DIRECTV 11 satellite will be launched early next year to 
support further HD expansion. With the two satellites, DIRECTV will 
have the ability to deliver 150 national HD channels and 1,500 local HD 
and digital channels in addition to new advanced programming services 
for customers.
    *Number of HD channels subject to available HD programming and 
varies by base package selection.
    **Eligibility required.
    ***2007 American Customer Satisfaction Index, University of 
Michigan Business School.
About DIRECTV
    DIRECTV, Inc., the Nation's leading satellite television service 
provider, presents the finest television experience available to more 
than 16.3 million customers in the United States, through exclusive 
content, industry-leading customer satisfaction (which has surpassed 
cable for 7 years running) and superior technologies.*** Each day, 
DIRECTV subscribers enjoy access to over 250 channels of 100 percent 
digital picture and sound, exclusive programming and the most 
comprehensive collection of sports programming available anywhere, 
including NFL SUNDAY TICKETTM and MLB EXTRA 
INNINGS'. DIRECTV (NYSE:DTV) also leads the digital 
television technology revolution with exclusives such as NFL SUNDAY 
TICKET SuperFanTM, U.S. Open Interactive and YES Network 
Interactive and will soon have the capacity to offer over 150 national 
HD channels.* For the most up-to-date information on DIRECTV, please 
visit directv.com.

    The Chairman. I thank you very much, Mr. Gieselman.
    Mr. Pearl?

   STATEMENT OF MARC A. PEARL, EXECUTIVE DIRECTOR, CONSUMER 
                ELECTRONICS RETAILERS COALITION

    Mr. Pearl. Chairman Inouye, Vice Chairman Stevens, Senator 
McCaskill, I'm honored to be here today on behalf of the 
Consumer Electronics Retailers Coalition.
    CERC applauds the Committee's efforts to help identify the 
steps that the public and the private sectors both must take to 
make this transition as successful as possible.
    CERC's members include the largest and most well-known 
consumer electronic retailers, general retailers who sell CE 
products, and our country's three major retail associations. We 
are also one of the four founding members of the DTV Transition 
Coalition, which now has more than 170 members. Our 
organization is dedicated to helping all retailers, whether or 
not they are CERC members, better understand their role and 
responsibilities in assisting their customers through the 
transitions--two transitions--from analog to digital 
broadcasts, and, in parallel, from standard-definition to high-
definition programming, as you just saw demonstrated.
    This process, as you can well imagine, can be highly 
confusing to consumers. So, in response, among other 
educational tools, CERC developed, more than 2 years ago, one 
of the first consumer guides, and recently, in cooperation with 
the National Hispanic Media Coalition, published a Spanish 
version of that guide.
    But a successful transition cannot be the responsibility of 
retailers or the private sector alone. An effective public-
private partnership is necessary that must include coordination 
of message and outreach, as well as cooperation and 
communication. That was emphasized during your questions and 
the testimony in the first panel.
    As part of this partnership, CERC, several years ago, 
recognized--and, indeed, solicited--the leadership of the FCC, 
based on its vast experience and expertise. We have worked 
closely with the Commission on DTV messaging and public 
education, and continue to look to it for leadership and 
guidance. It should be pointed out, however, that the 
Commission has no experience, expertise, or delegated authority 
as to the regulation of retailer practices. Congress has 
delegated that authority elsewhere. CERC and its members have, 
nevertheless, specifically pledged to work with the FCC to 
achieve and apply a unified message.
    CERC and its members have also worked informally and 
formally, since the passage of the law, to help the NTIA craft 
a program that would attract the broadest possible 
participation of qualified retailers of every appropriate size, 
specialty, geographic location, and means of sales in the 
challenging and unprecedented endeavor that Congress has 
entrusted to the NTIA.
    It must be pointed out, however, that no one--no one in the 
public or the private sector has experience with this 
unprecedented program, particularly dealing with a government-
subsidized product, the demand for which is likely to rise 
sharply and unpredictably from zero, and then fall off even 
more sharply when the last coupon expires, on July 10, 2009.
    This is not to say that substantial progress has not been 
made in the 2 months since NTIA chose its contractor. Two 
manufacturers have recently been certified, and retailers have 
begun to receive substantial, but not yet complete, information 
on the technological options involved in accepting these 
coupons at the point of sale. There are still, however, 
outstanding key pieces that have not yet been made available to 
retailers; most critically, in terms of the agreement that a 
retailer will need to sign in order to participate and the 
metrics for a retailer to be considered qualified to 
participate, in the first place.
    But I will say that we are more confident than ever that 
CERC's members and many, many other qualified retailers 
throughout the country, of all sizes and capacities, will 
choose to participate in the program if its voluntary, 
marketplace-oriented nature is preserved and if it seamlessly 
interfaces with the retailers' current systems. I am less 
confident, however, if any agreement to participate will be 
accompanied by new FCC regulations or other threats of legal 
sanction. This is a voluntary program.
    The DTV Transition Coalition has brought together the key 
private-sector stakeholders in an atmosphere of cooperation and 
coordination. The FCC, the NTIA, and the CECB program 
contractor, along with key staffers from the Hill, have also 
been invited to work with and within the Coalition as partners.
    We and the DTV Transition Coalition are very focused on 
ensuring public credibility and stability of the transition and 
the hard date itself. Accordingly, while everyone would agree 
that the legislation was imperfect, it would be a mistake for 
Congress to fiddle with or try to fine tune the law. Doing so 
would undermine the credibility of our collective public 
education efforts at a vital time when a coordinated, 
sustained, and comprehensive campaign is needed. We are exactly 
16 months--from today--from takeoff. The transition will not be 
real to consumers so long as there is any doubt whatsoever that 
it will occur at the time and on the terms already enacted by 
Congress.
    In conclusion, Mr. Chairman, on September 17, CERC filed 
comments with the FCC that set forth the public education 
undertaking that retailers are pursuing or are prepared to 
pursue. Yesterday, several of our members filed specific 
endorsements of those comments--Target, Circuit City, and Best 
Buy--outlining their own individual intention. I would be more 
than happy to submit those as a part of the hearing record.
    Retailers want to work with this committee, the FCC, and 
the NTIA. And I just learned, this morning, today, that both 
Best Buy and Circuit City have publicly announced, together 
with previously announced RadioShack and Wal-Mart, that they 
will intend to participate in the CECB program.
    It is all of us, in the government and my colleagues here 
on the panel today as part of the DTV Transition Coalition, to 
make this transition work for all American households. I am 
gratefully appreciative of the opportunity to testify before 
you today, and I'm prepared to answer any of your questions.
    Thank you.
    The Chairman. Mr. Pearl, we'd be very happy to receive your 
documents, to be made part of the record.
    Mr. Pearl. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Pearl follows:]

       Prepared Statement of Marc A. Pearl, Executive Director, 
                Consumer Electronics Retailers Coalition
    Chairman Inouye, Co-Chairman Stevens, and members of this 
distinguished Committee, I am pleased to be here today on behalf of the 
Consumer Electronics Retailers Coalition (``CERC''). We applaud your 
focus, and your leadership, in assessing what government and industry 
are doing, and what they ought to be doing. What we need to achieve is 
a unified message, supported by government and industry alike, that 
will make each household fully aware of its choices and opportunities 
as the clock ticks down to February 17, 2009.
    CERC's members include consumer electronics specialists Best Buy, 
Circuit City and RadioShack; general retailers Sears and K-Mart, Target 
and Wal-Mart; online retailer Amazon.com; and our country's three major 
retail associations--the North American Retail Dealers Association 
(NARDA), the National Retail Federation (NRF), and the Retail Industry 
Leaders Association (RILA). CERC is a founding member, along with the 
Association for Public Television Stations (APTS), the National 
Association of Broadcasters (NAB), and the Consumer Electronics 
Association (CEA), of the DTV Transition Coalition.\1\ The Coalition's 
membership has grown from eight to over 160--including all segments of 
our society--broadcasters, retailers, manufacturers, as well as public 
interest community groups.
---------------------------------------------------------------------------
    \1\ www.DTVtransition.org.
---------------------------------------------------------------------------
    The DTV Transition Coalition and its private sector members have 
worked hard, in consultation with the FCC and the NTIA, to develop a 
common message to help educate consumers, through brochures, 
communications at retail, the Internet, and public service 
announcements. CERC itself, as I will detail later in my testimony, has 
led the way in developing one of the first Consumer Guides on the DTV 
Transition, and this summer had its latest version translated into 
Spanish in cooperation with the National Hispanic Media Coalition.
    But in order to make the Transition successful a strong and 
effective public-private sector partnership is needed. This includes 
coordination of message, outreach and a recognition that cooperation 
and communication between the sectors is an essential component. 
Without these elements, everyone will suffer the wrath of an unhappy 
American public.
    You invited us to testify today in order to provide a frank 
assessment of how the public and private sectors are administering the 
DTV Transition thus far. So I will consign our recitation of CERC's own 
efforts, as an organization and through is members, to an Appendix, and 
will get right into the discussion that your committee seeks:
    Legislation. Everyone in the public and private sectors is likely 
to tell you that the Transition legislation,\2\ while vitally 
necessary, was ``imperfect'' in some respect. From our own perspective, 
key provisions that were sought by retailers and other stakeholders and 
supported by a broad consensus were deleted in the final measure as a 
result of Senate rules. And, unfortunately, some provisions that should 
have been deleted remained in the final text. At this late date, 
however, exactly 16 months today, it would be a mistake for the 
Congress to even seriously raise the prospect of fiddling with or 
trying to `fine tune' this law. Doing so could open the whole measure 
up like a Pandora's Box, and would simply ruin the credibility of our 
collective public education efforts at a vital time when a coordinated, 
sustained and comprehensive campaign is needed. CERC and its members 
have always supported the goal of a ``hard date'' precisely because the 
Transition will not be credible to consumers so long as there is any 
doubt whatsoever that it will occur at the time, and on the terms, 
already enacted by the Congress.
---------------------------------------------------------------------------
    \2\ Deficit Reduction Act of 2005, Pub. L. 109-171, Title III,  
3001-3013, 120 Stat. 21-27, codified at 47 U.S.C.  337(e) and 47 
U.S.C.  309(j).
---------------------------------------------------------------------------
    The Federal Communications Commission. Under the previous ``soft 
date'' regime the FCC was given vast power that it could not sensibly 
exercise. Under the current regime, the law provides a clear objective 
but gives the Commission no additional regulatory authority. Hence, the 
FCC's appropriate role is to exercise leadership, based on its vast 
experience and expertise. For several years CERC has worked closely 
with the Commission on DTV messaging and public education, and we 
continue to look to the Commission for leadership and guidance. It 
should be recognized, however, that the Commission has no experience, 
expertise, or delegated authority as to the regulation of retailer 
practices. The Congress has delegated this authority elsewhere. 
Attempting to exercise such powers, in the absence of either expertise 
or clear authority, in our view is not the best application of the 
Commission's resources. CERC and its members, however, have pledged to 
the Commission their desire to work as partners to achieve and apply a 
unified message and program.
    The NTIA ``CECB'' Program. CERC and its members have worked 
informally and formally, since the passage of the law, to help the NTIA 
devise a program that would attract the broadest possible participation 
of qualified retailers of every appropriate size, specialty, geographic 
location, and means of sales. While the IBM Team was appointed as 
Program Contractor 2 months ago, we understand that the deadline for 
receipt by NTIA of the Team's final and specific program for retailers 
was just this past Monday. Substantial progress has been made. The 
``Coupon Eligible Converter Boxes'' (``CECBs'') of two manufacturers 
have been certified. Our members have received very substantial, but 
not complete, information on the Team's Point Of Sale (``POS'') 
technological options. There are still key pieces that have not been 
made available to retailers--such as the terms of the agreement that a 
retailer would need to sign in order to participate, and the metrics 
for a retailer to be considered ``qualified'' to participate. But I am 
more confident than ever that CERC's members and many, many other 
qualified retailers throughout the country of all sizes and capacities, 
will participate in the program if its voluntary, marketplace-oriented 
nature is preserved and if it seamlessly interfaces with retailers' 
current systems. I am less confident if the agreement to participate is 
to be accompanied by new FCC regulations or other threats of legal 
sanction.
    The Private Sector. Before the ``hard date'' of February 17, 2009 
was set, private sector discussions regarding the DTV Transition were 
largely exercises in finger-pointing and buck-passing. I am pleased to 
say that we are well beyond that. The DTV Transition Coalition has 
pulled together the key private sector industries in an atmosphere of 
focused cooperation. The FCC, the NTIA and the CECB Program contractor, 
along with key staffers from the Hill, have been invited to work with 
and within the Coalition as partners.
    CERC and its members have pledged to Congress, the NTIA and the FCC 
that we are committed to working with this Committee and with all of 
our partners in the DTV Transition Coalition to ensure that no consumer 
is unaware of his or her options, choices, and opportunities. But we 
also remain committed to serving our customers' needs in the context of 
a dynamic and competitive market in which they will have options in 
addition to the one that is a government-sponsored program. As was the 
case during ``Y2K'' (when incidentally I was serving as General Counsel 
of the Information Technology Association of America, and helped create 
and coordinate the cross-sector Y2K Coalition where we saw the bulls 
eye aimed at the technology industry), retailers are being blamed in 
advance for things that have not yet occurred; for not offering 
converter boxes that they don't have; and for not making potentially 
complex consumer options simple. I want now to review what we have 
done, and what we and others need to do, in more detail.
    Legislative Tinkering Would Be Counter-productive. CERC worked 
closely with the drafters of the Transition legislation, but 
ultimately, from our own viewpoint as well as that of others, the 
outcome was far from perfect:

   Device Labeling. Working with committee staff and the 
        Consumer Electronics Association, CERC helped draft a consensus 
        ``analog only'' television labeling provision that would have 
        required manufacturers of TVs with only analog tuners to attach 
        labels, which the retailer could have left on the TV or moved 
        to an adjacent shelf position. This important provision was in 
        the House bill, but was stricken in the Senate on grounds of 
        germaneness.

    Instead, after the manufacture and importation of these 
            products had ceased, the FCC adopted a last-minute 
            regulation that applied on very short notice to retailers 
            only, and to recorder products as well as TVs. In the 
            absence of a prior labeling requirement on manufacturers, 
            in many cases neither retailers nor FCC enforcement 
            engineers had a clear understanding of which products--
            already on shelves and in warehouses--actually required 
            labels.

   90 Day Coupon Expiration. CERC strongly opposed the mandate 
        that CECB ``coupons'' \3\ expire in 90 days. We said this could 
        cause consumers to refrain from requesting them early enough, 
        or cause them to seek converters before they had adequate 
        information as to needs or alternatives. We were assured that 
        this provision would come out before final passage, but it did 
        not. Now the NTIA is under pressure to find ways around this 
        provision.
---------------------------------------------------------------------------
    \3\ Actually, these instruments are not ``coupons'' at all, but 
forms of tender.

    Nevertheless, CERC strongly opposes any legislative changes to the 
CECB Program, or to other aspects of the Transition, at this late date. 
Like others in the private and public sector, we have worked long and 
hard to overcome skepticism that this transition would actually occur, 
and that the hard date would ``stick.'' Now that public education 
campaigns are about to go into gear, and the NTIA program is about to 
move forward, the last thing we need is a new wave of uncertainty and 
speculation caused by Congressional consideration of new legislation.
    While legislative proposals might initially be targeted and 
limited, people expect, fairly or not, that congressional initiatives 
have a way of becoming Christmas trees, open to a multitude of new 
ornaments. We have seen enough last-minute changes, in regulation as 
well as in legislation, to be jaded ourselves as to how reliable our 
guidance to consumers can be while the possibility of key provisions 
and assumptions being changed remains open. We have a statute; we have 
regulations; let's stay with what we've got and keep on working with 
them.
    The FCC's Role Is One of Leadership. CERC and its members began 
working actively with the FCC well before the passage of the Transition 
legislation, and continue to do so--in spite of the fact that many of 
our members have also been under threat of an enforcement action with 
respect to the hastily conceived and executed product labeling 
regulations. CERC has undertaken several joint public education efforts 
with the Commission, including:

   Co-branding with the FCC and the Consumer Electronics 
        Association (CEA) of a ``DTV Tip Sheet,'' distribution of 
        copies to Best Buy and Circuit City stores, printing twice in 
        the NARDA magazine. A new version for distribution at the 
        retail level is now being developed.

   Co-production and branding with the FCC of an advisory to 
        all retailers with respect to the end of manufacturers' 
        distribution of ``analog only'' television receivers, and the 
        Commission's labeling regulation with respect to analog 
        television receivers.\4\
---------------------------------------------------------------------------
    \4\ 47 C.F.R.  15.117(k).

   CERC maintains a fact sheet on our website on the FCC's 
        ``analog only'' labeling regulation, for the benefit of all 
---------------------------------------------------------------------------
        retailers.

    CERC urged and facilitated compliance by all retailers with the 
FCC's labeling regulations despite the fact that we are on record that 
the agency lacks any delegated or ancillary authority, and frankly 
lacks the expertise, to regulate retailer practices.\5\ At this stage 
in the DTV Transition, it is important for those who have committed to 
act as partners, in a unified Coalition, to maintain this partnership 
in the most constructive mode possible. We are committed to working 
with the Commission on Consumer Education and to following its lead in 
this respect. We have done so and will continue to do so. Rather than 
wrangling about formal jurisdiction or execution of programs, such as 
analog-only labeling, that have largely been successfully implemented, 
everyone needs to be focused on the job at hand.
---------------------------------------------------------------------------
    \5\ In the Matter of DTV Consumer Education Initiative, MB Docket 
No. 07-148, Comments of the Consumer Electronics Retailers Coalition at 
3-7 (Sept. 19, 2007) (``CERC Comments'').
---------------------------------------------------------------------------
    CERC Is Committed to Aiding in NTIA CECB Implementation. The public 
dialog over NTIA's progress has been frustrating for CERC and its 
members--as stated previously, we have worked with the NTIA early and 
often in helping devise a program and regulations that would help get 
information on the program out to the greatest numbers of consumers and 
attract participation by the greatest number and variety of qualified 
retailers. We have committed to developing our own material and posting 
NTIA information, about the CECB program, for the benefit of all 
retailers, whether or not they are CERC members.
    We started meeting with potential CECB Program Contractor teams, 
including the IBM team, almost a year ago. Yet when our members are 
pressed to make commitments about their own commercial intentions, they 
have been obliged to point to a list of essential items as to which 
they as yet have inadequate information. Fortunately, this list has 
been steadily shrinking since the middle of August when NTIA chose IBM:

   The NTIA (with the FCC as its contractor) began certifying 
        CECB products a couple of weeks ago--an essential step for 
        retailers to know their supply options.

   The IBM Team has begun meeting with retailers and explaining 
        the technological options for conformance of retailers' POS 
        systems to the requirements for accepting coupons, providing 
        the necessary data to the government, and being reimbursed from 
        them by the government.

   However, CERC was told that retailers will be expected to 
        sign some sort of contractual agreement with the NTIA and/or 
        the IBM Team in addition to registering with the Central 
        Contract Registration program and separately with the NTIA, and 
        it remains unclear what the terms of this additional contract 
        will be. Until there is a ``dotted line'' to sign on, and terms 
        to consider, a business that is accountable to its shareholders 
        cannot make a contractual commitment.

    Even given all of these hurdles, most of CERC's members have 
indicated publicly their intention to participate in the CECB program. 
For example, Wal-Mart has informed the Senate Aging Committee of its 
intention to participate; and RadioShack announced its intention to 
participate at the NTIA DTV Forum on September 25. The FCC has received 
similar advice from other CERC members.
    CERC has worked with the NTIA to achieve an environment that relies 
on marketplace decisions and consumer choice to the extent possible.\6\ 
For example, whereas the NTIA initially proposed not allowing consumers 
to return or exchange CECBs for different models, CERC said that retail 
customers expect such freedom and suggested various means by which 
returns and exchanges could and should be accommodated. NTIA did agree 
to support exchanges, but CERC members remain concerned that NTIA could 
find no viable way to allow a customer to return a converter box and 
receive a new coupon.
---------------------------------------------------------------------------
    \6\ We are very concerned at press reports that the FCC might move 
to impose regulations over day to day retail practices where the NTIA, 
which has the delegated congressional authority, has not done so. This 
could be highly corrosive as to attracting retailers to, and 
maintaining retailers in, the CECB program.

   Indeed, it is important to note that the entire issue of 
        product returns remains daunting--for example, a cable customer 
        who has no intention of relying on an antenna would likely find 
        his or her CECB to have been improvidently purchased, and 
        expect to return it for a refund, to a retailer who has already 
        processed this customer's coupon and been reimbursed for it. 
        How this transaction is ``reversed,'' and how the retailer can 
        re-sell the CECB, still must be worked out with the NTIA and 
---------------------------------------------------------------------------
        the IBM Team.

   This example argues for caution in public education. Herding 
        millions of consumers--who will not in fact need CECBs--to rush 
        out and obtain them can only damage the CECB program and drain 
        the fund that supports it.

    Fortunately, the NTIA and our fellow members in the DTV Transition 
Coalition have recognized that while the CECB solution is a vital 
option--even a lifeline--for some consumers, it is only one of a number 
of marketplace options for most consumers. As experienced retailers, 
CERC believes this point of view is essential to a successful 
transition and applauds Secretary Kneuer and his staff for having 
adhered to it.
    CERC Has Been a Leader in Public Education Efforts. As I noted at 
the outset, public education is only as good as the quality and 
credibility of the information that is being conveyed. CERC has now 
published three editions of the CERC Guide, ``What You Need To Know 
About The February 17, 2009 `DTV Transition' and the NTIA Coupon-
Eligible Converter Box Program'' and just this summer published a 
Spanish version. The length of the title alone conveys the difficulty 
of providing a message that is both reliable and complete.
    To continue with the example discussed above, of the cable 
subscriber. . . . Most households in the U.S. are cable or satellite 
subscribers (estimates range from 83-87 percent). Their immediate 
reaction when they hear about the Digital Transition is: ``How will 
this affect my cable TV?'' We will need a clear and consistent answer 
to this question.
    Until the FCC's public meeting on September 11, the FCC itself was 
not sure whether cable operators would carry analog versions of even to 
the so-called ``Must Carry'' channels to their customers. At that 
meeting the Commission decided to require such carriage at least for 3 
years, but the carriage of broadcasters' secondary digital channels 
will not be mandatory. Here is how, in the CERC Guide, we have, to 
date, explained this situation to our customers:

        Question #4: I now subscribe to cable or satellite. Do I need 
        to be concerned about losing a TV signal to my TVs that are 
        hooked up to these services? Our answer: No. Cable operators 
        pick up most local broadcasts at a central location and send 
        them to homes over cable; satellite services increasingly are 
        able to do this as well. It is likely that they will continue 
        to provide whatever free local broadcast programming they 
        currently provide to you, even after there is this change in 
        broadcasters' means of transmission.

     However, local broadcasters will be able to offer 
            additional digital channels, some or all of which might not 
            be carried, or carried in HDTV, by your service. If you 
            want to see such channels, you would need an antenna, and 
            your set would need an HDTV or DTV tuner built-in or added 
            on via a converter. For local information, see 
            www.antennaweb.org.

     In the future, cable operators might also move to ``all 
            digital'' means of delivery, which could mean that even for 
            your TVs that are hooked up, you would need to lease a 
            ``set top box'' or have a TV with a digital cable tuner 
            (such as one with a ``CableCARD'' slot)--but this is likely 
            a future, not a present, consideration.''

        Question #10: I subscribe to cable or satellite service, but 
        not all my TVs are hooked up. What does the February 17, 2009 
        shutoff of the analog channels mean to me?

     If some of your TVs rely on an antenna, you will need a 
            converter box if they are not DTV television sets. (As 
            noted above, you might still want an antenna and a DTV or 
            HDTV tuner in order to receive all local channels.)

     If a TV is not currently hooked up to an antenna (for 
            example, it is being used to play video games, or to watch 
            DVDs or camcorder movies, etc.), nothing will change, 
            because only free over-the-air broadcasts will be affected 
            by this DTV broadcast transition.

    CERC believes --subject to advice from the FCC, the NTIA, 
congressional leaders, and other members of the DTV Transition 
Coalition--that this advice remains accurate after the September 11 FCC 
meeting. The challenge, of course, is how to convey such detailed 
considerations to busy customers, and indeed how to include such 
complexities in the training of sales associates. Each time CERC has 
revised its Guide it has solicited ways of making its advice more 
succinct without leaving out any detail of importance. Thus far our 
Guide remains at 2.5 typeset pages, and as further details of the NTIA 
Coupon-Eligible Converter Box Program are released, it is unlikely to 
shrink.
    Additional confusion, and concern, has been generated by the fact 
that the DTV Transition is moving in parallel with another transition--
the one from broadcasting entirely in ``standard definition'' 
programming to broadcasts in ``high definition,'' as well as in 
standard definition. While consumers have found HDTV to be compelling, 
the explanation of how HDTV fits in to the DTV Transition is not a 
simple one, either. The current version of the CERC Guide tackles this 
subject as follows:

        Question #5: What is ``DTV'' anyway? ``Digital television or 
        ``DTV'' as used in this program means the broadcasting of 
        digital television by local TV (not cable or satellite) 
        broadcasters, as received directly by consumers using ``rabbit 
        ears'' or roof-top antennas. The signals are sent from local 
        transmitters, over the air, to homes, by modern digital 
        techniques rather than the older analog methods that are not as 
        efficient and are of lower quality.''

        Question #6: What is ``HDTV''? ``High Definition Television 
        (``HDTV'') is the highest quality version of DTV. (There is 
        ``standard,'' ``enhanced,'' and ``HDTV".) Not all DTV 
        broadcasts are in HDTV and not all DTV receivers can display 
        HDTV. Analog HDTV broadcasts in the U.S. are not possible. If 
        you have seen an HDTV broadcast, it has been over satellite, 
        cable, another such service, or over a digital TV broadcast 
        channel--these are already on the air.''

        Question #7: Does my present TV have a DTV tuner? What about my 
        VCR, DVD recorder, PVR, DVR, etc.? ``The only televisions that 
        have DTV tuners are those that have been sold--since about 
        1998--as having an integrated or ``built-in'' DTV or HDTV 
        broadcast tuner. (An HD set sold as a ``monitor'' or ``HD-
        ready'' is capable of displaying HDTV but does not have a 
        built-in HDTV tuner.) The FCC now requires that most TVs with 
        analog tuners also be marketed with built-in or separate DTV or 
        HDTV tuners, and this will soon be a requirement for all TVs--
        so most of the TVs you see nowadays in stores will be DTV or 
        HDTV ``built-in'' products. Be sure to check, however, just in 
        case one is not.''

    Again, if someone has the time and attention span to absorb this 
information, they should find it accurate, useful, and as succinct as 
is possible. The challenge is, how much time can a busy shopper, with a 
long list, kids in tow and a life to live, devote to in-store study?
    ``Upselling.'' Congressional leaders and others have expressed 
concern that, once coupon-eligible converter boxes are available 
sometime next year--or even now, before they are available--retail 
sales associates will try to ``upsell'' consumers who would be best 
served by a Coupon-Eligible Converter Box. We don't think this will be 
a problem once the ``CECBs'' are on the shelves and we, and our 
partners in the DTV Transition Coalition have fully explained their 
purpose and function to consumers.
    We have to bear in mind that we have two transitions, in parallel, 
in which our customers are interested. One is from analog to digital 
broadcasting. The other, which is of more interest to the majority of 
our customers, is from Standard Definition to High Definition 
programming. Our challenge and goal is to fully explain, to all 
customers, their options with respect to each of these transitions, 
which overlap but are of different natures. Already, most of the TV 
products on display in stores today are HDTV receivers. Retailers would 
not be serving their guests if they failed to explain how these 
products, and the programming they can support, differ from older, 
conventional displays and programming.
    We need to explain about the DTV Transition as well, but this is of 
concern primarily to those customers who rely on antennas. We have 
published much material on this subject and will address it on the 
sales floor as well. At present, with no CECBs on the shelves and some 
details still to be learned, we can only give these assurances, which 
are based on consultation with our members:

   Legitimate retailers are dedicated to learning and meeting a 
        customer's needs and wants. These will largely be determined by 
        the sources of programming in which the customer is most 
        interested, and the available viewing space and budget.

   If a customer is interested in obtaining a CECB to service 
        an existing TV, VCR, etc., this will be the focus on the sales 
        discussion and transaction. If the customer is interested in 
        upgrading to a new digital TV or an HDTV display, to better 
        experience and enjoy watching DVDs or high definition DVDs, or 
        in receiving digital broadcasts in a new TV or recording 
        product, this will be the focus of the transaction.

   It would be foolhardy to try to divert a customer from his 
        or her needs or wants. Most customers do substantial research 
        before visiting a store to make a purchase, and improvident 
        purchases lead to product returns, which are costly for 
        retailers.

    CERC Is Committed To Achieving a Successful DTV Transition. In 
CERC's September 17 Comments in the FCC's DTV Public Education docket, 
CERC made these commitments:

        ``Over the last month most CERC members have consulted with the 
        Commission, via the Chairman, the Chairman's office, bureau 
        staff, and/or Commissioners' legal advisors, and in this 
        process have advised of their specific plans to inform and 
        assist their customers as key Transition dates approach. 
        Undertakings discussed with the Commission, some of which are 
        already in process, cumulatively \7\ are expected to include:
---------------------------------------------------------------------------
    \7\ As CERC includes specialist as well as general retailers, and 
store-front as well as web-based retailers, not every undertaking may 
be feasible for execution by every CERC member.

     Additional and more specific training for sales 
---------------------------------------------------------------------------
            associates.

     Retail floor signage about the Transition and the end of 
            analog broadcasts.

     Pamphlets with retailers' own advisories, distribution of 
            FCC, NTIA, CERC, and DTV Transition Coalition printed 
            material; links/frames to CERC and official sites.

     Inclusion of DTV Transition advisory information in 
            advertising supplements.

     Participation in the NTIA CECB program.

     Specialized website about Transition as part of web store.

     Inclusion of Transition/end of analog information in in-
            store ``video loops'' (specialist retailers).

     Continued implementation of Commission-required labels 
            until stocks of covered products are exhausted.

        ``Given the variety in the sources and, potentially, the 
        content of published material and Internet advisories 
        pertaining to the Transition, CERC, as a member and founder of 
        the Steering Committee of the DTV Transition Coalition, has 
        urged that early attention be paid to coordination in and 
        rationalization of messaging and consumer contact points. For 
        example, the public and private sectors need to pay careful 
        attention to the number of `1-800' numbers that are offered to 
        the public. They need carefully to coordinate the subject 
        matter of each, the message communicated, and the resources 
        available for answering questions. In this respect, the 
        leadership role to be played by the Commission is as obvious as 
        it is necessary. CERC and its members specifically commit to 
        working with the Commission, via the DTV Transition Coalition 
        and otherwise, to assist the Commission, pursuant to the 
        requests of Members of Congress and the Commission's own 
        responsibilities, in achieving a unified message that is 
        strongly in the public interest at this critical time.''

    CERC's commitment includes working with the Commerce Committee 
throughout the Transition and afterwards if necessary, to assure that 
the public is well informed and well served.
    Thank you again for inviting me to testify and I will be pleased to 
answer any questions.
                                Appendix
    On behalf of its members and the retail community at large, CERC 
has long advocated voluntary public education measures to promote the 
DTV Transition, and has been a leader among industry groups in taking 
affirmative steps to bring accurate information to the consuming 
public:

   CERC was the first to publish a comprehensive Consumer Guide 
        To The DTV Transition and the CECB Converter Box Program, 
        initially issued well before passage of the Transition 
        legislation, and twice updated since and now available in 
        Spanish. The Guide appears on the CERC website, 
        www.ceretailers.org, and has been widely linked to by others, 
        including CERC members and the Commission. CERC also posts 
        shorter-form consumer advisories which are also linked to by 
        members.

   CERC maintains information on the DTV Transition on its 
        website, available to all retailers and members of the public.

   CERC was a founding member of the DTV Transition Coalition 
        and is active in the Coalition's public outreach efforts.

   CERC has undertaken several joint public education efforts 
        with the Commission--

    Co-branding with the FCC and the Consumer Electronics 
            Association (CEA) of a ``DTV Tip Sheet,'' distribution of 
            copies to Best Buy and Circuit City stores, printing twice 
            in the NARDA magazine.

    Co-production and branding with the Commission of an 
            advisory to all retailers with respect to the end of 
            manufacturers' distribution of ``analog only'' television 
            receivers, and the Commission's labeling regulation with 
            respect to analog television receivers (47 C.F.R.  
            15.117(k)).

    CERC maintains a fact sheet on the Commission's 
            ``analog only'' labeling regulation, for the benefit of all 
            retailers.

   CERC has worked with the NTIA to facilitate its CECB program 
        and has posted NTIA information and application forms on the 
        CERC website.

   CERC will provide information and guidance with respect to 
        the CECB Program to all retailers, irrespective of CERC 
        membership.

   CERC representatives have convened forums and traveled to 
        meetings to advise non-member companies about the DTV 
        Transition generally and FCC and NTIA initiatives specifically.

   CERC member companies have instituted consumer educational 
        and associate training measures, including linking or copying 
        CERC and FCC material via their web stores, and are in 
        consultation with the Commission as to specific enhancements as 
        the DTV Transition approaches.

                              Attachment 1

        Consumer Electronic Retailers Coalition Guide (English)

 What You Need to Know About the February 17, 2009 DTV Transition and 
             the NTIA Coupon-Eligible Converter Box Program

    1. When will the transition from analog to DTV broadcasting occur?
    The last day that local broadcasters can send out conventional 
``analog'' television signals will be February 17, 2009. After that 
date, your local television broadcasters will broadcast exclusively 
digital television (``DTV'') signals that can be received only by 
digital TVs or converters. If you use a TV antenna with one or more 
TVs, you should consider what this means to you.
    2. Why will over-the-air broadcasting stop on the analog channels?
    After decades of study, Congress passed a law in late 2005 
requiring this change. For more than half a century, TV broadcasts have 
used and improved on basic analog technology that was invented in the 
1920s and 1930s.
    These signals take up a lot of radio ``spectrum'' that is now 
urgently needed for emergency communications and new broadband 
services. (Finding new frequencies for emergency communications became 
a high priority after September 11, 2001.)
    Congress found that we can support these essential communications, 
and new digital services, by moving TV to much more efficient digital 
transmission, while offering more locally broadcast channels, plus HDTV 
programming, in less overall spectrum space.
    3. What is the NTIA ``Coupon-Eligible Converter Box'' (CECB) 
program?
    Because millions of households rely on antennas for all or some of 
their TV viewing, the Congress, when it enacted the DTV Transition law, 
set aside up to $1.5 billion to fund a program of ``Coupon-Eligible 
Converter Boxes,'' to be administered by an agency of the Department of 
Commerce, the NTIA.
    The law requires the NTIA to make available, to each household, up 
to two $40 electronic coupons that can be used at participating 
retailers for ``converter boxes'' that will convert digital TV 
broadcasts to analog signals that can be received by the older 
conventional TVs.
    These coupons will be available only from the NTIA, but 
applications to obtain them will be widely available.
    The coupons cannot be combined to buy a single product. Coupons may 
be requested starting January 1, 2008, and will expire 90 days from 
issuance. The last coupons will be sent out by March 31, 2009.
    4. I now subscribe to cable or satellite. Do I need to be concerned 
about losing a TV signal to my TVs that are hooked up to these 
services?
    No. Cable operators pick up most local broadcasts at a central 
location and send them to homes over cable; satellite services 
increasingly are able to do this as well. It is likely that they will 
continue to provide whatever free local broadcast programming they 
currently provide to you, even after there is this change in 
broadcasters' means of transmission.

   However, local broadcasters will be able to offer additional 
        digital channels, some or all of which might not be carried, or 
        carried in HDTV, by your service. If you want to see such 
        channels, you would need an antenna, and your set would need an 
        HDTV or DTV tuner built-in or added on via a converter. For 
        local information, see www.antennaweb.org.

   In the future, cable operators might also move to ``all 
        digital'' means of delivery, which could mean that even for 
        your TVs that are hooked up, you would need to lease a ``set 
        top box'' or have a TV with a digital cable tuner (such as one 
        with a ``CableCARD'' slot)--but this is likely a future, not a 
        present, consideration.

    5. What is ``DTV?''
    Digital television or ``DTV'' as used in this program means the 
broadcasting of digital television by local TV (not cable or satellite) 
broadcasters, as received directly by consumers using ``rabbit ears'' 
or roof-top antennas. The signals are sent from local transmitters, 
over the air, to homes, by modern digital techniques rather than the 
older analog methods that are not as efficient and are of lower 
quality.
    6. What is ``HDTV"?
    High Definition Television (``HDTV'') is the highest quality 
version of DTV. (There is ``standard,'' ``enhanced,'' and ``HDTV''.) 
Not all DTV broadcasts are in HDTV and not all DTV receivers can 
display HDTV. Analog HDTV broadcasts in the U.S. are not possible. If 
you have seen an HDTV broadcast, it has been over satellite, cable, 
another such service, or over a digital TV broadcast channel--these are 
already on the air.
    7. Does my present TV have a DTV tuner? What about my VCR, DVD 
recorder, PVR, DVR, etc.?
    The only televisions that have DTV tuners are those that have been 
sold--since about 1998--as having an integrated or ``built-in'' DTV or 
HDTV broadcast tuner. (An HD set sold as a ``monitor'' or ``HD-ready'' 
is capable of displaying HDTV but does not have a built-in HDTV tuner.)
    The FCC now requires that TVs with analog tuners be manufactured 
with built-in DTV or HDTV tuners as well--so most of the TVs you see 
nowadays in stores will be DTV or HDTV ``built-in'' products. The FCC 
is now requiring retailers to post a ``Consumer Alert'' next to any 
remaining TV receiver that has only an analog tuner.
    8. I now rely on an antenna for at least one TV that does not have 
a DTV tuner. What are my other options?
    You could subscribe to a cable, satellite, or other program 
delivery service that carries the broadcast programming in which you 
are interested. If you are already a cable, satellite, or other 
programming service subscriber, you might extend your hookup to reach 
this TV.
    To continue to rely on an antenna, you will need an external DTV 
Broadcast Converter product such as a Coupon-Eligible Converter Box.

   If your set is an HD Monitor (sometimes called ``HD-ready'') 
        you are likely to want a tuner that can display HDTV broadcasts 
        in full HDTV resolution (rather than ``downconverting'' them to 
        a lesser format). Coupon-Eligible Converter Boxes will not have 
        HDTV outputs, so you may want a non-subsidized product.

   If your set is a ``standard'' television, you will likely 
        want to obtain a Coupon-Eligible Converter Box through the NTIA 
        program. The NTIA, broadcasters, retailers, and others will 
        soon be publishing information about how to obtain coupons, 
        when the program starts in 2008, to use toward the purchase of 
        such products at retail and on-line stores. For up-to-date 
        information, check at www.dtvtransition.org or 
        www.ceretailers.org or www.dtv.gov.

    9. If I am shopping for a new TV, what does the February 17, 2009 
shutoff of the analog channels mean to me?
    If you plan to purchase a new TV that will rely on a roof-top or 
indoor antenna, you will want to make sure that it has a built-in 
(integrated) HDTV or DTV tuner. Even after DTV tuners are required in 
all new TVs, there will still be some products sold as ``monitors'' 
that do not have any tuner at all.
    10. I subscribe to cable or satellite service, but not all my TVs 
are hooked up. What does the February 17, 2009 shutoff of the analog 
channels mean to me?

   If some of your TVs rely on an antenna, you will need a 
        converter box if they are not DTV television sets. (As noted 
        above, you might still want an antenna and a DTV or HDTV tuner 
        in order to receive all local channels.)

   If a TV is not currently hooked up to an antenna (for 
        example, it is being used to play video games, or to watch DVDs 
        or camcorder movies, etc.), nothing will change, because only 
        free over-the-air broadcasts will be affected by this DTV 
        broadcast transition.
    11. What else do I need to know about HDTV?
    High Definition Television, or ``HDTV,'' is the more general name 
for showing video in a new and better format--a wider screen with about 
5 times the picture information. All types of video displays--
conventional picture tubes, the various sorts of projection TVs, and 
Plasma or LCD ``flat panels''--can show HDTV if they are designed to 
handle all of this video information in this format. You can expect a 
product to tune or display HDTV only if it was sold or advertised as 
such.

   If your existing set is not HD-capable (an ``HD Monitor'' or 
        ``HD built-in'') it will not display an HDTV signal in full 
        quality, even if an ``HDTV broadcast converter'' is attached to 
        it.

   If your existing set is HD-capable it should display an HDTV 
        quality picture when an HDTV broadcast converter is attached 
        (but will display only a standard quality picture from a ``DTV 
        Broadcast Converter'' that is not advertised as HDTV).

   For your existing TV that cannot handle HDTV, a converter 
        should tune the HDTV broadcast channels, but provide them to 
        your set in the standard quality format that your set can 
        display. (Some, but not all, of these might also provide HDTV-
        quality signals to ``HD-ready'' sets.)

   For further information on display formats, see the Consumer 
        Electronics Association's Guide to Digital Television at 
        www.myceknowhow.com/digitalTelevision.cfm.
                              Attachment 2

        Consumer Electronic Retailers Coalition Guide (Spanish)

Lo que debe saber de la transicion DTV del 17 de Febrero del 2009 y del 
      programa NTIA (CECB) cupon de descuento de caja convertidora

    1. :Cuando se llevara acabo el cambio de difusion de senal analoga 
a senal DTV?
    El ultimo dia en el cual las emisoras locales, puedan transmitir la 
senal convencional analoga de television sera el 17 de febrero del 
2009, despues de esta fecha las emisoras locales de television 
transmitiran exclusivamente, usando la senal digital de television la 
cual puede ser recibida unicamente por televisores digitales o cajas 
convertidoras. Si usted utiliza unicamente antena de television con uno 
o varios televisores, debe considerar como le puede afectar.

    2. :Por que se va dejar de transmitir en canales analogos?
    Despues de decadas de investigacion, el Congreso aprobo una ley a 
finales del ano 2005 requiriendo este cambio. Por mas de medio siglo, 
las emisoras de television han utilizado y mejorado la tecnologia 
basica analoga, la cual fue inventada en los 1920s y 1930s.
    Las senales analogas ocupan mucho espacio de la gama de radio, la 
cual se necesita urgentemente para el uso de los medios de comunicacion 
de emergencias y los nuevos servicios de banda ancha (broadband). (El 
encontrar nuevas frecuencias para uso de comunicaciones de los 
servicios de emergencias, se convirtio en un tema de alta prioridad 
despues del 11 de septiembre del 2001.)
    El Congreso descubrio que se pueden sostener este tipo de 
comunicaciones esenciales al igual que nuevos servicios digitales, 
cambiando los televisores al sistema digital el cual es mas eficiente, 
ofreciendo la transmision de mas canales locales y ademas programacion 
HDTV, usando menos espacio en la gama actual.

    3. :Que es el Programa (CECB) de cupones de descuento para cajas 
convertidoras elegibles del NTIA?
    Como muchas personas dependen de las antenas para recibir toda o 
parte de la programacion de television que ven, el congreso, cuando 
aprobo la ley de transicion DTV, reservo $1,500 millones de dolares 
para costear un programa de cajas convertidoras elegibles a cupon, el 
cual sera administrado por una agencia del departamento de Comercio el 
NTIA.
    La ley requiere que el NTIA le haga disponible a cada vivienda, 
hasta dos cupones electronicos de $40 que se pueden usar en negocios 
participantes, para obtener cajas que convertiran transmisiones 
digitales a senal analoga, que puedan recibir los televisores viejos 
normales.
    Los cupones seran disponibles unicamente del NTIA pero las 
solicitudes para obtenerlos estaran disponibles en muchos sitios. Para 
obtener mas informacion del NTIA vaya a http://www.ntia.doc.gov/
dtvcoupon/PreparingForDTVSpanish.pdf, http://www.ntia.doc.gov/
dtvcoupon/faq_spanish.html.
    Los cupones no se pueden combinar para comprar una sola unidad. Los 
cupones se pueden pedir a partir del 1 de enero del 2008, y se venceran 
90 dias despues de que se otorguen. Los ultimos cupones se enviaran el 
31 de marzo del 2009.

    4. Actualmente soy usuario de Cable o satelite--:Necesito 
preocuparme de perder la senal de television del televisor que este 
conectado a estos servicios?
    No, los operadores de cable reciben la mayoria de las transmisiones 
locales en una matriz central y despues las envian a los hogares por 
medio de cable. Los servicios de satelite tambien pueden hacer esto, 
cada vez mas. Es muy probable que continuen ofreciendo las 
transmisiones de programacion local gratuita que actualmente le dan, 
aun despues de que se cambie la forma de transmision de la emisora.

   Sin embargo, las emisoras locales podran ofrecer canales 
        digitales adicionales, algunos o quizas todos no sean 
        incluidos, o incluidos en HDTV por su proveedor de servicios. 
        Si desea ver esos canales necesitara una antena y su televisor 
        necesitara un sintonizador de HDTV o DTV interno o agregado por 
        medio de una caja convertidora. Para obtener informacion, vea 
        www.antennaweb.org.

   En el futuro, los operadores de servicios de cable podrian 
        cambiarse a un medio de entrega completamente digital, lo cual 
        podria resultar en que tenga que arrendar una caja de cable, 
        aun para los televisores que estan conectados o tendra que 
        tener un televisor con un sintonizador de cable digital (como 
        los que tiene espacio para un cartucho de cable), esto 
        probablemente sera algo que debe ser considerado en el futuro y 
        no actualmente.

    5. :Que es la TV digital (DTV)?
    La television digital o DTV como lo usamos en este programa 
significa, que las transmisiones digitales se haran por las emisoras de 
television local (no por cable ni satelite), asi como los recibe usando 
las antenas de conejo o las antenas que estan sobre los techos. Las 
senales se transmiten por aire a los hogares, usando metodos modernos 
digitales en lugar de los metodos viejos analogos, los cuales no son 
tan eficientes y de mas baja calidad.

    6. :Que es la HDTV?
    HDTV (television de alta definicion) es la version de television 
digital de mas alta calidad. (Existe normal, mejorada y HDTV) No todas 
las transmisiones de television digital son en HDTV y no todos los 
recibidores de television digital pueden verse en HDTV. En los Estados 
Unidos no son posibles las transmisiones analogas de HDTV. Si usted ha 
visto una transmision de HDTV fue por medio de satelite, cable, o algun 
otro servicio parecido o por medio de una transmision de un canal 
digital, estos ya estan al aire.

    7. :Tiene mi televisor un sintonizador de television digital? :Y mi 
video grabadora, grabadora de Vd., PVR, DVR, ect.?
    Los unicos televisores que tienen sintonizadores de television 
digital, son aquellos que fuero vendidos desde aproximadamente 1998--
teniendo un sintonizador interno u integrado de television digital o de 
HDTV. (Una unidad HD vendido como monitor o que este listo para HD, es 
capaz de mostrar HDTV, pero no contiene un sintonizador interno o 
integrado.)

    8. Actualmente dependo de una antena para por to menos un televisor 
que no tiene sintonizador de television digital. :Cuales son mis 
opciones?
    Puede contratar servicios de cable, satelite, u otro servicio de 
entrega de programacion que ofrezca la transmision de programacion que 
le interese. Si usted ya es cliente de un servicio de cable, satelite, 
u otro proveedor de servicios de programacion, puede extender la 
conexion para que llegue a ese televisor.
    Para continuar usando una antena, necesitara un producto 
convertidor de transmision de television digital, como las cajas 
convertidoras que son elegibles a los cupones.

   Si su aparato es un monitor HD (a veces llamado HD-Ready) 
        probablemente quiera un sintonizador que pueda reproducir en la 
        pantalla transmisiones HDTV con resolucion completa HDTV (en 
        lugar de convertirlo a un formato de menos resolucion) Las 
        cajas convertidoras elegibles para un cupon, no tendran 
        capacidad de HDTV, por lo que quizas prefiera un producto sin 
        subsidio.

   Si su aparato es un televisor normal, quizas quiera obtener 
        una caja convertidora elegible a cupon de descuento por medio 
        del programa de NTIA. El NTIA, las emisoras, vendedores de 
        menudeo y otros pronto publicaron informacion, de como poder 
        obtener los cupones cuando inicie el programa en el 2008, para 
        utilizar los cupones en la compra de los productos en comercios 
        de menudeo o tiendas de la red de Internet. Para obtener 
        informacion actualizada vea www.dtvtransition.org o 
        www.ceretailers.org o www.dtv.gov o www.ntia.doc.gov/dtvcoupon/
        index.html.

    9. :Si estoy buscando comprar un televisor nuevo, que importancia 
tiene la fecha de cierre de los canales analogos 17 de febrero del 
2009?
    Si usted tiene planeado el comprar un televisor nuevo, que 
dependera de una antena montada sobre el techo o una antena para el 
interior, debe asegurarse de que tenga un sintonizador integrado o 
interno de HDTV o television digital. Aun despues de que requieran 
sintonizadores de television digital en todos los modelos nuevos de 
televisores, continuaran vendiendo productos clasificados como 
``monitores'', los cuales no tendran sintonizadores.

    10. Actualmente soy subscriptor de un servicio de cable o satelite, 
pero no todos mis televisores estan conectados. :Como me va impactar el 
cierre del 17 de febrero del 2009 de los canales de senal analoga?

   Si algunos de sus televisores dependen de una antena, 
        necesitara una caja convertidora si no son televisores DTV. 
        (Como se menciono anteriormente, quizas quiera una antena y un 
        sintonizador DTV o HDTV para poder recibir todos los canales 
        locales.)

   Si un televisor no esta conectado a una antena, pero por 
        ejemplo, se esta usando unicamente para jugar juegos de video o 
        para ver DVDS o peliculas grabadas etc., nada cambiara, por que 
        unicamente las transmisiones gratuitas por aire seran afectadas 
        por este cambio de transmision DTV.

    11. :Que mas necesito saber de HDTV?
    La television de alta definicion o HDTV, es un titulo generalmente 
usado para mostrar videos en un mejor y nuevo formato, la pantalla es 
mas ancha con aproximadamente 5 veces mas informacion de imagen. Todos 
los tipos de presentaciones de video como pantallas convencionales, las 
diferentes variedades de televisores de proyeccion, plasma o LCD de 
pantalla plana pueden mostrar HDTV, si fueron disenadas para poder 
manejar toda esta informacion de imagen en este formato. Puede esperar 
que el producto pueda sintonizar o manejar HDTV unicamente si fue 
vendido o se anuncio indicando terser dicha capacidad.

   Si su televisor actual no tiene capacidad HD (como monitor 
        HD o HD integrado) no podra exhibir una senal HD con calidad 
        completa, aun cuando este conectado a una caja convertidora de 
        HDTV.

   Si su televisor actual tiene capacidad de HD, podra exhibir 
        una imagen de calidad de HDTV cuando este conectado a una caja 
        convertidora de senal HDTV, (pero solo podra exhibir una imagen 
        de calidad regular, si usa una caja convertidor de senal DTV si 
        no se anuncio como HDTV.)

   Para su televisor que no puede manejar HDTV, una caja 
        convertidora debe sintonizar la transmision de los canales 
        HDTV, pero en su televisor se debe ver en el formato de calidad 
        regular. (Algunos, pero no todos podran ofrecer senal de 
        calidad HDTV a los televisores que tengan capacidad HD.)

    Para obtener mas information de los formatos, vea la Guia HDTV de 
la Asociacion de Electronicos de Consumidores al www.myceknowhow.com/
digitalTelevision.cfm.

    The Chairman. I'd like to first commend all your 
organizations for the work you're doing to get the word across 
on February 17, 2009. However, I note that there are reasonable 
problems. In some areas, you have retailers with shelves filled 
with converters. I've been told, in some, they haven't received 
any. And then, you have some with translators, some without 
translators. Then, we just heard testimony that NTIA-approved 
converter boxes will be available for sale on January 1, 2008. 
Is that true, Mr. Pearl?
    Mr. Pearl. On January 1, 2008, the applications are going 
to be made available to consumers. We hope that those will be 
widespread, not only in the retailers, but in community 
centers, in churches, in synagogues, in mosques, at--across the 
board, at banks, at grocery stories, online, et cetera.
    The Chairman. So----
    Mr. Pearl. And so, that that is what will be available on 
January 1st, the application.
    The Chairman. Coupons, not the box.
    Mr. Pearl. The application, not the coupon. At--when the 
application is submitted, whether it be phone, by Internet, or 
by mail, it is our hope that the NTIA will then look at those 
applications, verify those applications, and then give, in 
essence, retailers an opportunity--who are participating in the 
program----
    The Chairman. When----
    Mr. Pearl.--an opportunity to stock their shelves.
    The Chairman. When will the coupons come out?
    Mr. Pearl. We--when--we haven't been told when those 
coupons would come out.
    The Chairman. NTIA said, ``We'll begin mailing coupons 
after that date,'' whatever that is.
    Mr. Pearl. All that we--we have been in contact--in 
communication, Mr. Chairman, with the NTIA, simply asking them 
that, when qualified retailers who are participating in the 
program can be informed well enough in advance so that they 
can, in essence, supply, through their own distribution 
channels, the boxes, based on the ZIP Codes and the 
geographical areas where the applications are coming in, so 
that if there is a--applications coming in from Missouri or 
from Hawaii or from Alaska or from any of those individual 
states, that the retailers would be, then, given sufficient 
information--that might be a couple of weeks--in order to, in 
essence, pre-position those boxes so that the consumers in 
those areas will be able to, when the coupons are sent to them 
by the NTIA or by the--a contractor--to be able to then go to 
the stores--make a phone call and know where they can get them.
    The Chairman. These coupons have expiration dates----
    Mr. Pearl. Ninety days.
    The Chairman. Ninety days. And you think they'll be 
receiving the boxes in time, before they expire?
    Mr. Pearl. Yes. It's the intention that--we have been told 
by the NTIA--and I think that Secretary Kneuer mentioned that 
today--that, before a coupon is sent to a household, that, in 
point of fact, that the retailers that are participating in 
that geographical region will be informed well enough in 
advance to be able to pre-position them so that, in that 90-day 
period of time, the consumer will get it. It is our 
understanding that retailers will also be participating, 
through Internet and through 1-800 toll-free numbers, so that, 
if you are, in fact, in a rural area or not close to a--an 
individual geographical store, that you would still be able to 
make the phone call or go onto the Internet, either at home or 
at the public library or at work, and be able to order a box 
that would then be sent to you.
    The Chairman. All of you were here when FCC and NTIA 
testified. What are your thoughts on their remarks on who's in 
charge? Any of you?
    Yes, sir, Mr. Lawson?
    Mr. Lawson. Mr. Chairman, we share the concern that no one 
is in charge. We've been talking about the need for national-
level coordination for some time. We were impressed with the 
effort in the U.K., where they created a public-private 
partnership, which was originally called SwitchCo, and then it 
became Digital UK. And they also made a major commitment to 
consumer education there, and have actually brought back over-
the-air television. It's been a remarkable story. They call it 
Freeview. We think the same thing could happen here. But we 
have just about given up hope, frankly, that we're going to 
have that kind of national-level coordination, and that's why I 
think we and the other industry groups are doing what we can, 
on our own and through the DTV Transition Coalition, to move 
this forward. But there is a lot more that needs to be done.
    The Chairman. Mr. McSlarrow?
    Mr. McSlarrow. I think Senator McCaskill, in ``the buck 
stops here'' category, talked about ``someone has got to be 
accountable.'' And I say this with all due respect, as a former 
Deputy Secretary of a Cabinet agency. I think we have to 
understand the limitations of the Executive Branch. There is an 
enormous amount of coordination within the government, and 
obviously there is an enormous amount of work that has to be 
done to make sure the coupon program is done correctly.
    And, I think, somehow somebody has to be in charge of 
coordinating all that. And I think, just speaking for my 
industry, but, I suspect, for all of us, I think we would 
welcome someone's leadership, in terms of trying to help make 
sure that everything that we're doing is coordinated. We've got 
to communicate that there is a transition coming, number one. 
Number two, we have to identify who the at-risk populations 
are, and those owners of analog TVs. And, number three, we have 
to communicate what tools are available, including the coupon 
program, to those consumers.
    I think the limitations, though--and the one caution I 
would present is since we've already seen how the messaging can 
get messed up with the government, that I don't think we want 
to put somebody in charge of actually reading the scripts. We 
did it on our own, just because it was common sense to try to 
vet this with the government agencies, and we'll continue to do 
that. But I don't think we want to slow this down. So, there is 
a balance here of some accountability, making sure someone's in 
charge, and, at the same time, being nimble enough--because we 
don't actually have a lot of time left--to make sure the 
education campaigns roll out and the right information is given 
but, really, when you get right down to it, it's going to be 
this coupon program and its success that drives the success of 
the digital transition.
    The Chairman. It would appear that most people suggest that 
we need a leader, but, more specifically, who would you 
recommend? What agency or what person? Any thoughts?
    Mr. McSlarrow. I always hesitate to volunteer my chief 
regulator for anything.
    [Laughter.]
    Mr. McSlarrow. I'll defer to the wisdom of the Committee.
    [Laughter.]
    Mr. Pearl. Mr. Chairman, I don't know if it's--I was 
General Counsel of the Information Technology Association of 
America in the late 1990s, and we helped coordinate the 
technology industry, the Y2K millennium bug, and how to deal 
with that. But it wasn't just the technology community. And we 
helped form the Y2K private-sector coalition, which was across 
the board, both users and providers of technology. It included 
the National Association of Manufacturers and the Chamber of 
Commerce and insurance companies, across the board.
    There was, in essence, an interagency task force that was 
set up as a result of the Administration, President Clinton, 
who, in essence, put together an interagency coordination.
    I don't think it necessarily means that someone has to be 
in charge, but the private sector, without anyone in charge--
we're all doing this together--is coordinating its message and 
coordinating cooperation across the board. We want to see just 
the same thing happen, interagency. We want to see the Post 
Office involved--and we don't think that they are, 
necessarily--in applications. We want to see the HHS, we want 
to see Veterans, we want to see--wherever there are points of 
contact for constituents, that they're all part of the same 
message. And if that's coordinated by the FCC and the NTIA 
working together, we applaud that. But we want to make sure 
that the same kind of thing that's happening in private sector 
is going on within the government.
    I talked to the incoming President of the National 
Governors Association, the Legislative Director, just on 
Monday, Governor Rendell's staff. The NGA is not aware of 
what's going on. So, public sector across the board, where this 
involves people, needs to be done, and whether it's done by one 
person or by a coordination, we just want to see it done.
    The Chairman. I'm glad you got the churches and synagogues 
and temples involved----
    Mr. Pearl. We have reached out to them.
    The Chairman.--because they're going to be a lot of old 
folks who may have the box, but won't know how to put them 
together. It's going to be a little messy, and they'll need 
your help.
    Senator Stevens?
    Senator Stevens. Well, thank you.
    Let me ask, just generally, how are you going to reach out 
to people in isolated areas, such as ours, and to the elderly 
in very small communities?
    Mr. Lawson. Senator, public television will do what we can 
through our allies. We have strong ties to the Leadership 
Conference on Civil Rights, some of the aging groups, the 
Alliance for Rural Television.
    However, we feel like we need some boots on the ground. 
We--there is a limit to what we can do with volunteers. Our 
stations are pretty strained, as it is, as you know. That's why 
we believe that a classic outreach model would really be 
effective in this, in this case. We've done it through public 
television and our alliances many times, including through our 
Ready to Learn Program, funded by the Department of Education. 
We have high-quality children's programming, and then we do 
mini grants to stations. We and others go into the community 
and really bring free books and the message to parents and 
their children about our programming. And we take the 
excitement generated by the programming to get children 
interested in reading. It's a great way to reach out. This is 
geared toward Title I populations. We've done the same thing 
for family members who have a family member with Alzheimer's. 
We have a long history of that. But it does take some cash, 
some resources, to hire the people to make sure it gets done. 
We can't do it with volunteers alone.
    Senator Stevens. Up in our areas, we have various 
organizations, Alaska Native--Alaska Federation of Natives, 
various organizations, and have some rural distributions. And 
I'm not advertising it for them, but I think that every house 
in every small village has got a Sears catalog. Are you going 
to go to people who are sending advertising, in a traditional 
means of advertising in the rural areas, and see if you can put 
instruction of how to get these certificates and how to get 
them--get these boxes to--in that manner?
    Mr. Rehr. I, Senator, think that's a great idea, and I 
think we should do that. And we will do that. Let me just give, 
kind of, a listing of the things that we, at the NAB, envision 
doing in those areas that are a little harder to reach.
    To John's point, working with Coalition partners, nonprofit 
organizations; if we have to do mailings, we'll do mailings; of 
course, through our local radio and television broadcasters. 
And if we can't get to them through television, we, hopefully, 
will get to them through local radio. Flyovers, in the case of 
some of the more rural parts, we're more than willing to put up 
planes with messages, on a nice, sunny day, where people could 
see what the message is. Churches, synagogues, we're----
    Senator Stevens. You'd have to fly 400 miles to do that, 
per village, so I'm not sure that's too cost-effective.
    Mr. Rehr. Yes.
    Senator Stevens. But, let me interrupt you just by saying 
this. Those--we've got a certificate, and that certificate is 
worth $40, right?
    Mr. Pearl. You can get up to two.
    Senator Stevens. What do you do about the people who have 
to pay to have them shipped out to their areas? There's not 
going to be any retail distribution in, what, 90 percent of 
rural Alaska. How do they get their boxes? And what do they 
cost out there?
    Mr. Pearl. It's our understanding--again, there have been 
only two box manufacturers that have been certified, up to this 
point, but it is our understanding, I think, through public 
announcements, that the box will cost somewhere in the area of 
about $60 to $70--that's what we've been told--as a retail 
price, minus the $40 that the coupon will take off against it. 
There will be, for people that are in rural areas who now--
what--how they buy their consumer electronics now, they will 
more than likely be able to find one or more retailers who, 
either through a 1-800 number, as I said, or an Internet, or, 
possibly, independent retailers----
    We were just in, for example, at a convention of 
independent retailers, about 5,000 of them, who are not part of 
the big boxes and are not part of the big stores that you 
normally hear about, who are in rural areas, Senator, who, in 
essence, expressed interest to us to participate in the 
program. And so, we are working with them to try to encourage 
them--in western Kansas, in western Alaska, in--wherever 
they're located--to take part in this program and provide for 
their customers this box if, in fact, they're not getting cable 
or satellite right now, if they're getting over-the-air, to be 
able to at least know that they can have this box available to 
them at that price, minus the $40.
    Senator Stevens. Can we arrange a wholesale price to groups 
like the Alaska Federation of Natives, and let them distribute 
them? I assume that they'd get them for less cost if you had a 
wholesale price for, say, 1,000 of these?
    Mr. Pearl. There--it is our understanding that the price of 
the box is not a very profitable price right now, but there is 
no question that if nonprofit groups or others want to 
participate in a collective buy of these kinds of programs, and 
be able to work out, with their households, the use of the 
coupon, as I think David talked about, I think that those are 
the kind of things that we, at the DTV Transition Coalition, 
working with our partners and community groups, would 
absolutely encourage. That's why we've gone before the 
Congressional Black Caucus and the Congressional Hispanic 
Caucus to, in essence, suggest there are ways in which we can 
reach your constituent groups more effectively.
    Senator Stevens. You've been telling us that--the retail 
price, right?
    Mr. Pearl. The retail price--that we've been told is the 
manufacturer's suggested retail price. But, again, there have 
only been two boxes that have been certified.
    Senator Stevens. I understand. But do we know what the 
wholesale price is going to be?
    Mr. Pearl. I have no idea. I have no idea what the 
wholesale price is going to be.
    Senator Stevens. Well, a whole lot of people out there in 
our villages in Alaska, in the islands in Hawaii, that, you 
know, probably can't afford to get another television. They're 
probably using one that they bought secondhand somewhere in 
town 20 years ago. Now----
    Mr. Pearl. Television.
    Senator Stevens. Right. I've got a few in my house that I 
bought 20 years ago. But, as a matter of fact, what is going to 
happen, in terms of--is there going to be any national program 
for those who can't pay the price?
    Mr. Pearl. NTIA is responsible for the program, and we have 
had discussions with NTIA about the possibility of how they 
might coordinate for those who can't even afford the $20 or $25 
that it will cost. That will be a--that will be a determination 
by the contractor, you know, and NTIA. I will say that we have 
been in discussions with John's group--with John Lawson's 
group, with the public television stations, to try to work out 
coordination on getting messages to, in essence, public 
television viewers, to, in essence, maybe, coordinate both with 
manufacturers and retailers and public television stations.
    We are trying, in the public--in the private sector, 
Senator, to come up with creative, inventive ways to, in 
essence, bring this message that--it may not be a box, it may 
be that a person--a household decides that they don't want 
their 20-year-old television anymore, and it's time to move up 
to a digital television. We want, in essence, the consumers to 
know what their choices are so that no screen, for any 
consumer, any household, is blank on February 18, 2009.
    Senator Stevens. Well, I hope you can work it. I've got 
some villages where the unemployment is over 70 percent, thanks 
to our friends who won't let us dig for coal or produce oil or 
gas, or cut the timber. There's an extreme high unemployment in 
my state right now. And I'm not--I'm just stating a fact. Now, 
when those people--their only contact is through the Internet 
that's provided with Universal Service payments right now, and 
the television, which, as a matter of fact, my state subsidizes 
getting television to them right now. So, I think we're going 
to have to find out some way to get these boxes to people who 
can't afford them. And I don't see any--I haven't heard 
anything here today that convinces me there is any program to 
deal with those people who can't--really can't afford to have 
the extra $25 for this.
    What are you going to do, on the broadcaster's side, to 
deal with the basic problems of commercials that identify to 
the customers where the markets are if they don't have 
retailers in their own vicinities? Again, I'm getting back to 
rural America. There are many places that don't have a Home 
Depot or a Wal-Mart or--et cetera. Are you going to have any 
centers that rural people can put in a mail order and get 
delivery, as they would through the Sears concept?
    Mr. Rehr. Yes. Actually, Senator, we're looking at, in all 
210 television markets, how best to approach getting the boxes 
to people. Many of our broadcasters have even suggested that 
they might make the boxes available in their own broadcast 
facilities, or at annex facilities or working with local 
independent retailers to promote the availability of the boxes 
in the market.
    Senator Stevens. I'd better invite all of you to come up to 
Alaska. You know, the----
    Mr. Rehr. Yes, I've been there a couple of times, Senator.
    Senator Stevens.--the supply for people at Hooper Bay is in 
Anchorage, 700 miles away.
    Mr. Rehr. Yes.
    Senator Stevens. Now, you know, the--and these people in 
rural areas have got to have some access.
    You've got some similar situations, don't you?
    The Chairman. Oh, yes.
    Senator Stevens. We'd like to talk to you sometime about 
connecting the dots for those people who live where there 
aren't retail distributions and those people who can't afford 
to pay the full cost.
    Thank you, Mr. Chairman.
    The Chairman. Senator McCaskill?
    Senator McCaskill. Thank you, Mr. Chairman.
    I want to compliment the cable industries on your latest 
ads. I think they're good. I've seen both of them. I think 
they're both pretty powerful spokespeople. I don't know where 
you found them, but they're good. I'm not running for a while, 
but I may call you when I get ready to run again. I thought 
they were informative. I thought they were fair. I just want to 
start out with good news.
    Now, I do think you're going to have to change one of the 
graphics, because the graphic in your ad says, ``Government 
coupons available to help consumers, beginning January 2008.'' 
It's pretty obvious to me, in listening to the retailers' 
testimony and reading the contract with IBM, that coupons are 
not going to be available until April. You're going to be able 
to apply for a coupon, I think, beginning in January, but it 
appears to me, in reading this contract, that there is--the 
operational phase--in fact, they even call it the operational 
phase in the contract--does not really begin until the 1st of 
April. But, until then, it's really kind of a test time and a 
time for them to figure out where these requests are coming 
from, to try to figure out how they can get these products on 
the shelves in places that the coupons can be used within the 
90 days.
    Now, I don't think there is anything inherently evil about 
that. I just think it's too bad they're not being forthcoming 
about that right now.
    Mr. Pearl, is it your understanding that what I just 
summarized is, in fact, what's going to occur?
    Mr. Pearl. I don't know if it's, in fact, what's going to 
occur, Senator. We were under the understanding, and had read 
the contract, and had been told the same thing that you had 
been told. We just----
    Senator McCaskill. I haven't been told--no one told us.
    Mr. Pearl. That you've read. That you've read.
    Senator McCaskill. I've just read the contract and figured 
it out.
    Mr. Pearl. We were in the same situation. And, in many 
respects, if the program can get, in essence, to a pilot phase, 
where we know how to get product onto shelves, and that we know 
that the point-of-sale system works, and that the retailers 
are, in fact, getting their $40 from the government, that there 
are----
    Senator McCaskill. Right.
    Mr. Pearl.--participation--the--in fact, the contract calls 
for, and the program calls for, that the retailers don't have 
to, in essence, officially announce their participation or sign 
a contract until March 31----
    Senator McCaskill. Right.
    Mr. Pearl.--of 2009. So, in essence, retailers----
    Senator McCaskill. March 31, 2008.
    Mr. Pearl.--of 2008. So that it may be that some retailers, 
particularly small ones, may hold back and see, do they have 
customers that need the box----
    Senator McCaskill. Right.
    Mr. Pearl.--et cetera? So, in essence, what we're hopeful--
is, is that--whether the program starts the middle of January 
or not until the middle of March, that the--whenever it starts, 
all of the people on this panel, as well as, obviously, the 
government officials, want to make sure that, when it rolls 
out, it's successful and that there are 11 months, even if it 
was--even if the first coupon went out on April 1, it's 11 
months until the transition, and it's not until July 10, 2009 
that the last coupon would be--would expire. So that, in point 
of fact, there is--there would be time, if it meant that it was 
done successfully.
    But RadioShack did announce, a couple of weeks ago, that it 
is going to do everything that it can, once it goes through the 
certification process, to, in essence, have the boxes ready in 
early January. All of our retailers who have been interested in 
the program want this program to start and have boxes be on the 
shelves and be able to accept the coupons as soon as they can. 
And if it takes until April 1, you know, that might be one 
downside, but if it means--April 1 means it's rolled out 
successfully, then Congress is happy, the government is happy, 
and certainly the members of this panel are happy.
    Senator McCaskill. Well, I guess, you know, what I'm most 
worried about is that consumers get correct information from 
the get-go, and that's why I'm a little worried that you all 
are beginning to prepare advertising and information that says 
you can get a coupon beginning in January. And, I think, 
responsibly, IBM is not going to send these coupons out until 
they're sure that whoever is getting it can get a box. So, we 
have a real chicken-and-egg problem here. And the people are 
going to be very confused, and they're going to panic. If 
they're told they can get a coupon, and they call and ask for a 
coupon in January--January goes by, February goes by--you know 
what they're going to start doing then? They're going to start 
calling, or they're going to start trying to figure out what 
happened, and they're going to be, you know, insecure about 
whether or not this--was my request lost? Is it still coming? 
When is it coming? And we'll probably start getting calls then.
    So, I just--I hope that there is a much better 
communication between NTIA and you all about what these ads 
need to say, so the expectation of the consumer is realistic as 
to how this is actually going to work, in terms of the boxes 
being available.
    Let me ask you this, for the retail community. Are you all 
making any money off this?
    Mr. Pearl. I don't know. I'm a policy association 
executive, and I'm not made privy of what the--you know, the 
profit margin----
    Senator McCaskill. Does anybody know if----
    Mr. Pearl. The margins are----
    Senator McCaskill.--the retailers are making any----
    Mr. Pearl.--very, very thin.
    Senator McCaskill. Well--but I'm trying to figure out why 
they're doing it.
    Mr. Pearl. They're doing it because it's in the public 
interest to do it.
    Senator McCaskill. OK, great. So, if they're doing it 
because it's in the public interest, are they willing to 
accept, you know, inspections from the FCC? Are they willing 
expect that they have to include notice with every device? I 
mean, your presentation was a little bit of sweet and sour. It 
was ``Hey, we want to do this in the public interest, but don't 
tell us what to do.''
    Mr. Pearl. We want to do this in the public interest, but 
if sanctions are applied to a voluntary program, if an agency 
which has no jurisdiction over a particular industry is 
asserting jurisdiction and applying sanctions or certain 
liabilities, and they're--and the--and the cost, which is not 
being recouped through any aspect of this program, is going to 
be overwhelming in order to make the point-of-sale system work, 
if all of those hoops are humongous, Senator--if that's a 
word----
    Senator McCaskill. I think it is.
    Mr. Pearl. OK. If all of those hoops are overbearing, then, 
in point of fact, this voluntary program is going to be--have a 
less incentive for retailers to want to participate----
    Senator McCaskill. Right.
    Mr. Pearl.--so that what we say is, is that, in the public 
interest, it is--we want customers through our stores, we want 
foot traffic, we want them to know what their choices are. It 
may be a box, it may be to tell them, ``You are already a cable 
or satellite subscriber, you don't need a box.'' We want to be 
able to, in essence--if people panic, we want them to do, as 
Mr. Gieselman said--not feel that they don't have to buy one. 
So, we want to provide that information, and we want----
    Senator McCaskill. I guess I'm just--I'm just a little 
worried, because, if it is just a not-for-profit activity that 
you're embracing because it's a good thing to do, and if it 
becomes cumbersome, in terms of how it works, seems like, to 
me, if you guys just, you know, say, ``Well, we're not making 
any money off this. We're done. We're not doing it anymore,'' 
if it's not seamless, if the process is not easy, if it turns 
out it's costing you money. Is there a sense that maybe it's 
going to create the foot traffic and you guys are going to sell 
a lot of TVs?
    Mr. Pearl. Some independent retailers and some other 
retailers have commented that, in point of fact, anything that 
brings customers in so that they are knowledgeable of what 
their choices are, both, as I said, whether it be a digital 
television, an HD television, the programming, the technology, 
any of those things are good things for the consumers at large. 
If, however, there are consumers who have no desire at all to 
go into a subscriber-based service, who do not want to buy a 
new digital television, who simply want to keep their old 
analog television, it is in the interests of the retail 
community to be able to provide for them the coupon-eligible 
converter box, which is why, publicly, companies like Wal-Mart, 
RadioShack, Circuit City, and Best Buy, among others, have, in 
essence, indicated an--a willingness to want to participate in 
the program.
    Senator McCaskill. Well, finally, I guess I'm a little 
worried, the fact that there is no contract. Have you seen 
anything in writing?
    Mr. Pearl. We have not seen a--what would be the contract 
between the retailer and the--whether it's IBM or the--their 
subcontractor. We have been told that there will be a contract 
that will have to be sold--signed by both parties, even after 
certification. And, as late as this morning, I was just told, 
there were some meetings between the contractor and one of our 
members, and the contract was still not presented.
    Senator McCaskill. If we could make a request, Mr. 
Chairman, for the record, that, since this contract was signed 
in August, and has a lot of information in it that I think 
Senators would want to know about what really is going to 
happen, in terms of how this is going to work, and we had to 
affirmatively request this contract, I would request that the 
contract that NTIA enters into with the retailers, that we're 
given copies of that contract as soon as they're available, so 
we have some sense of what's going to be required of the 
retailers and what they're actually being told as to when 
they're going to be expected to have these boxes available for 
people who don't want to buy a new TV or go with the satellite 
or go with cable.
    The Chairman. You're right on target, because, as of this 
moment, we have no idea as to exactly when the applications 
will be mailed out----
    Senator McCaskill. Right.
    The Chairman.--when the coupons will be issued----
    Senator McCaskill. Right, we don't know.
    The Chairman.--when the boxes will be available.
    Senator McCaskill. Right.
    The Chairman. And I'd like to put it on my website, so my 
constituents can look at it and say, ``Oh, that's when.''
    Senator McCaskill. Right. That's great.
    The Chairman. But right now I'm afraid to put anything on.
    Senator McCaskill. So, if you all would give us a copy of 
the contract when you get it, and we'll ask NTIA to do the 
same, and then maybe we'll get it as soon as you all have 
drafted it, and we can take a look at what is actually 
happening.
    And then let me just say that I was a big fan of public 
television, and it was my comfort zone when I had small 
children. I didn't feel quite as guilty sitting them in front 
of Big Bird as I did some of the other shows that were on, 
Teenage Mutant Ninja Turtles and so forth. That shows you how 
old I am. We watched--I guess they're still watching Teenage 
Mutant Ninja Turtles.
    But I do want to say to the satellite folks, I hope you 
reconsider giving public television the ability to have more 
than one of their channels on satellite. I participate in 
several different systems, and so, I know that we can only get 
one of your--I guess you have three or four now, that you just 
demonstrated, Mr. Lawson----
    Mr. Lawson. It varies by station but typically, it's four; 
one HD and three standard definition.
    Senator McCaskill. Right. I would certainly hope that--I 
get more than one on cable, but on my satellite I can only get 
one public television station, and public television belongs to 
the public, and I would hope that satellite would think about 
giving them a chance to put more than one up.
    Thank you, Mr. Chairman.
    The Chairman. It would be well to listen to Mother 
McCaskill.
    [Laughter.]
    Senator McCaskill. My children don't, so----
    [Laughter.]
    Senator McCaskill. That's why I'm always so cranky in here, 
because my kids never listen.
    [Laughter.]
    The Chairman. Thank you.
    Senator Thune?

                 STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    Senator Thune. Thank you, Mr. Chairman.
    And I want to thank you for holding a hearing on this 
quickly approaching transition, and I also want to express my 
appreciation to our panelists today for providing valuable 
input about your consumer education efforts and the challenges 
that are ahead for this transition.
    We--estimates range, there are 13.5 million households that 
rely exclusively on analog signals, somewhere up to 19.6 
million households. Within these households, it's assumed that 
we have 36 million to 69 million television sets that may need 
a digital converter box in order to continue receiving 
broadcast signals past February of 2009. And it is a 
significant date, because I think a lot of Americans are, at 
this point, unaware that that deadline is looming out there.
    And, in my State of South Dakota, I think we have--about 17 
percent of our people who have televisions receiving analog 
signals, and we are not as rural as is Alaska, which presents 
some very unique obstacles, I would think, to educating people 
in that State, but we have a lot of rural households; and, for 
many seniors, in particular, this is their lifeline, their 
television really is, to the world. And so, this is a 
critically important thing, and it's important that we get it 
right.
    I do want to commend and compliment NAB for their 
commitment, just recently here, to put $700 million to consumer 
education. I think that's something that ought to be applauded. 
And NCTA has also, I understand, made some significant 
financial contributions to educating consumers. So, I'm pleased 
to see some of the efforts that are being made, and I--as a 
committee, I think, it's important for us to continue to 
monitor the progress of both the public- and private-sector 
consumer education programs, as we get closer to February of 
2009, to ensure that the transition is as seamless as is 
humanly possible.
    I have a question, I guess, for Mr. Rehr, of NAB, that if--
there are 750 of the 1,812 broadcast stations that have 
completed their construction of digital facilities. Do you 
anticipate that the remaining stations are going to complete 
their construction on time? And if there are--if there are 
those that you don't think are going to make it, what are the 
circumstances that are delaying the transition?
    Mr. Rehr. We anticipate that the stations will complete the 
construction on time.
    Senator Thune. You think all of them will be there in 
February of 2009----
    Mr. Rehr. [Nodding in the affirmative.]
    Senator Thune. OK. Is--are you getting good--listening to 
some of the discussion today--good cooperation from all the 
government agencies? I mean, the--working with the industry 
and--is that--has that relationship been good? They're----
    Mr. Rehr. Yes, I think it has. I think there----
    Senator Thune. It's a loaded question.
    Mr. Rehr.--always can be more to do--quicker, sooner, 
faster. I mean, this is a herculean effort, and we need to do 
as much as we can every day. I think we're waiting for the 
third order to come out from the FCC to finalize the--I guess, 
the Table of Allotments of channels. I think people are doing 
their best, but, you know, we've not experienced something like 
this before, and it's a herculean effort. I mean, I think about 
it every day--every minute of every day, and what else should 
we be doing, just so we're not here in February 2009, going, 
``Well, why didn't we think about that? Why didn't we do that? 
Why didn't we contact Sears to see if they're willing to put 
flyers in their catalogs, et cetera?''
    Senator Thune. Mr. Lawson?
    Mr. Lawson. Senator, we think there could be more 
leadership at the Federal level. We, as industries, have come 
together. We're proud of that effort. But, as Mr. Pearl 
alluded, and as Commissioner Copps said the other day, the real 
model for this should be the Y2K--the Y2K commitment. That was 
a national priority. There was a task force within the White 
House, as I understand it. There are many Federal agencies that 
could play a constructive role in reaching people, whether 
they're rural service delivery agencies or agencies for the 
elderly or the veterans or whoever. We really think there is an 
opportunity for more Federal Government-wide cooperation and 
leadership.
    Having said that, we are going to do what we can with the 
resources we have, including the commitment we made of air 
time, with--along with the NAB--to get that message out. But we 
really feel like need some help, particularly at the grassroots 
level, to reach the hard-to-reach populations.
    Mr. Rehr. And let me just go ahead and add, Senator, that--
reading through the list of--going beyond Washington, all 
Members of Congress, every State agency director, Governors, 
chiefs of staff, Lieutenant Governors, State legislative 
leadership, African-American Caucus leaders, Hispanic Latino 
State legislators, State municipal league executive directors, 
State county association executive directors, and all 7,200 
State legislators.
    So, what we're trying to do is--and they all get toolkits, 
and they get materials to make it easy for them to understand 
what they need to do to talk to their respective 
constituencies. And I think, you know, part of our job is just 
to have as many touchpoints as possible all across the country, 
in as many avenues, to make sure people get the message, so 
then they, in turn, can use their own resources to continue the 
education process.
    Senator Thune. In addition to communicating with our 
constituents about this, are there things that we can be doing 
to be helpful to help light the fire under the government 
agencies that you reference in order to get them to assume and 
take more leadership and feel more of a sense of urgency about 
this? I mean, is there----
    Mr. Rehr. I don't know if anyone else wants to jump in. I 
mean, I think we could ask the Administration to require 
notices in all Federal buildings and post offices. We routinely 
send checks and/or receipts for Social Security to senior 
citizens; I don't think it would cost very much to print up 
notices about the DTV transition, the same thing for veterans. 
You know, we have great county extension agents in South Dakota 
and all across the country; perhaps, provide them with 
additional information, because people in rural areas rely on 
their expertise on many, many issues, and they're the leaders 
in the community. I mean, there is a whole list of things that 
we could do, and which the Senate could help provide leadership 
on, to ensure that we're leaving no stone unturned.
    Senator Thune. OK.
    Mr. McSlarrow?
    Mr. McSlarrow. Senator, I think, before you walked in I had 
mentioned that one of the things the cable industry had adopted 
and crafted, working with this committee--2 years ago, really--
to ensure that our analog customers and our digital customers 
both got signals--was the dual-carriage plan. The FCC recently 
adopted the dual-carriage plan.
    But, in answer to your question, ``What can you do to 
help?'' I think the FCC the order is deficient in one major 
respect. This committee actually recognized, although it didn't 
ultimately pass into law, the circumstances of very small cable 
operators, or those operators with very-low-capacity systems, 
which are primarily rural in nature, if forced into a one-size-
fits-all dual-carriage regime, would actually put at risk the 
rollout of broadband in rural America that everybody on this 
committee expects and wants.
    So, I think the FCC has basically punted this to a further 
notice of proposed rulemaking, and I think a message to them 
that the exemption has bipartisan support and that they ought 
to adopt a small system exemption as quickly as possible--would 
be very useful to reduce the uncertainty around the process.
    Mr. Rehr. I have to--excuse me, Senator, I've got to jump 
in, because I think my good friend and I might disagree on 
that. You know, the FCC order, as we understand it, will allow 
waivers on a case-by-case basis. You've had small television 
broadcasting companies invest millions of dollars in the 
digital transition, and if we start making blanket exemptions 
for all sorts of groups, I think the whole thing starts to 
unwind. So, I think we need to be really careful, let the FCC 
do its job.
    Senator Thune. On that--since I had raised that issue and 
created that conflict, I do want to ask, just in terms of your 
various organizations, because you all have different, sort of, 
objectives in all of this, and goals, in terms of what your--at 
least, economically--and serve, say, different constituencies. 
You're all, sort of, I guess, the same constituency, but you do 
it in different ways. And is there a--how would you rate the 
ability to work together between the various organizations?
    I mean, you've got public, you've got cable, broadcaster, 
satellite--I mean, everybody's represented in this--retailers--
and how would you rate the--just on the private-sector side, 
the partnership and the sense of unity of direction, or at 
least that we're all headed toward the same goal?
    And, yes, we have different--we're kind of headed in 
different general directions, in terms of our business models 
and plans, but this clearly is something everybody ought to, I 
would think, be working together on.
    Mr. McSlarrow. Well, it might surprise you, Senator, but 
actually we'll compliment NAB, because, I think, on the 
education side, I think the cooperation has been extraordinary, 
in terms of working on the messaging and building a Coalition. 
And NAB has really led the effort with the DTV Transition 
Coalition, which includes hundreds of groups, everybody here, 
plus the FCC and NTIA. You know, when you get into the public 
policy space with some of the disputes, like we just had, 
obviously there is a divergence. But on education the 
cooperation and the willingness to work together, I think, is 
topnotch.
    Senator Thune. Is there--the question was asked earlier, 
and maybe if you--if you covered this, I apologize--but about 
somebody, whoever that is, taking the lead, the leadership, 
appointing somebody that would coordinate all this, from your 
perspective. I mean, has there been any discussion given to 
assembling some sort of a private-sector task force that is 
composed of all your organizations, that would do that? I mean, 
is that already----
    Mr. Rehr. Yes, we actually already have that, Senator. We 
have a DTV Transition Steering Committee----
    Senator Thune. OK.
    Mr. Rehr.--which consists, I think, of eight or nine 
organizations, many of whom are on the panel. And then, they 
work with the 171 other nationwide organizations that are 
phenomenally diverse in--to different constituencies.
    Mr. Pearl. It is a model, Senator, in terms of what the 
private sector--even though there are disagreements, you know, 
at ground level, the ability to come up with a common message, 
coordination, to be in--more than, I think, important than 
anything else, there is communication, that, in fact, the 
service-providing industry--the cable and the satellite 
industry--are, in fact, communicating continually with over-
the-air broadcasters of public television, NAB, with retailers, 
with manufacturers. And, as I think John Lawson pointed out, 
we're also reaching out to AARP and the Leadership Conference 
on Civil Rights and a lot of other community groups. And so, 
from eight--in essence, there were about four founding members, 
but, from eight original members in February of this year, we 
now have, as David said, more than 170 across the Nation, 
community-interest, private-sector folks. That kind of model is 
needed at the government level. I mean, it shouldn't be just 
the responsibility of the private sector to reach out to State 
and local and government--Federal Government officials. 
They're--that's coming. And, in point of fact, what we've 
heard, from Secretary Kneuer, both this morning in the House 
and this afternoon in--before this committee--is that, in point 
of fact, NTIA is doing that kind of outreach to a wide variety 
of governmental agencies in the kind of way that we've been 
trying to do it in the private sector. And hopefully there will 
be this bridge of communication, interagency and private 
sector, to continue the message in coordination.
    Mr. Rehr. And----
    Senator Thune. Go ahead.
    Mr. Rehr. I'm sorry. Let me also add, publicly--I've done 
this before--but much of our Coalition work and all of our 
efforts are a result of John Lawson and Mark Erstling at the 
public television stations who were the--kind of the 
intellectual driving force behind this. And, you know, we owe 
them a great deal for moving this forward.
    Senator Thune. Are you saying all the intelligence is at 
PBS? Is that what you're----
    [Laughter.]
    Senator Thune. Well, I--that's not--this is not very far 
away. We all know that. And I know you're very focused on it. 
But I would add, again, just in summing up, that anything that 
we can do to be helpful at--in spurring this along, we 
certainly want to be doing that. We just don't want any of 
these TV sets in homes and communities across the country and 
in--like I said, in rural areas, we've got people who are very 
dependent upon that as their source of information and news. We 
don't want any of them to go dark. So, thank you for your 
testimony.
    Thank you, Mr. Chairman.
    The Chairman. I thank you very much.
    I arrived here this afternoon a bit concerned and 
uncertain, but I tell you that I leave, this afternoon, after 
hearing your testimony, feeling better. I'm glad to known all 
that you're doing, and I commend you for it, and I thank you 
for it. But, obviously, there is much more to be done. And time 
is ticking, not too far away from now. But I think we can face 
it. But if we fail in this, we'll fail in providing information 
to our people, even if it's Britney Spears, but----
    [Laughter.]
    The Chairman. That's information, I suppose.
    [Laughter.]
    The Chairman. So, we'll do our best on our side. You tell 
us what we should do.
    With that, thank you.
    [Whereupon, at 4:50 p.m., the hearing was adjourned.]
                            A P P E N D I X

  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                         Hon. John M.R. Kneuer
    Question 1. Do you know how many viewers are served by translators?
    Answer. Information provided by the National Translator Association 
indicates that between 4 million and 6 million households view each of 
the five major television networks (ABC, CBS, FOX, NBC, and PBS) via 
translators. The total number of households that receive television via 
translators is probably somewhat higher.

    Question 2. Do you know how many translators intend to continue to 
broadcast in analog after the transition date?
    Answer. Low-power television operators including translators appear 
eager to convert to digital broadcasting. Almost 40 percent of the low-
power stations (2,786 of the 6,951 licensed facilities) have already 
applied to the FCC to broadcast in digital. While NTIA anticipates that 
more stations will request digital authorizations, a significant number 
of stations are expected to remain in analog after the February 17, 
2009 deadline for full-power stations.

    Question 3. What happens to viewers who receive signals over analog 
translators?
    Answer. Viewers who receive signals of analog translators over-the-
air will have several options. If all the translators in their area 
remain in analog, viewers can continue to use their existing analog 
televisions to receive all the local translators.
    If some of the translators in their area convert to digital and 
others remain in analog, viewers must be able to view both analog and 
digital broadcasts. Among the options viewers will have to receive the 
analog stations are:

   Purchase a digital-to-analog converter box which has an 
        analog pass-through capability. This feature is permitted for 
        the converter boxes eligible for the NTIA coupon program and 
        allows the viewer to turn off the converter box when the viewer 
        wants to watch an analog station.

   Purchase a digital-to-analog converter box which does not 
        have an analog pass-through capability, then add a splitter or 
        A/B switch to receive both analog and digital signals.

   Purchase a digital television set. All new television sets 
        currently on the market can receive both analog and digital 
        stations.

   Leave an analog television set connected to an antenna for 
        reception of analog stations. Most homes have several 
        television sets, and the others could use a digital television 
        or an analog television with a converter box to receive a 
        signal from the digital stations.

   Subscribe to a local cable television service which carries 
        the analog station.

    Analog translator stakeholders should work with converter box 
manufacturers and retailers to impress on them the market potential for 
producing and selling converter boxes with analog pass-through 
capability.

    Question 4. How do we craft regionally-accurate messages about the 
transition for viewers served by analog translators?
    Answer. NTIA will develop messages and work with appropriate 
private-sector, government and not-for-profit partners to inform 
viewers in translator communities about the TV Converter Box Coupon 
Program. NTIA continues to work closely with the Community Broadcasters 
Association and the National Translator Association to assist these 
groups and the audiences they serve. The 2,412 low-power stations that 
are licensed as Class A or Low-Power TV stations have the ability to 
originate local programming. These stations will be able to provide 
their viewers with specific information about their continuation of 
analog broadcasts and methods of receiving analog broadcasts, as 
appropriate.
    The 4,527 low-power stations that are licensed as translators 
rebroadcast the signal of full-power television stations. Since full-
power television stations will be providing messages about the digital 
transition and promoting the digital telecasts of their signals, those 
viewing these stations on analog translators will be receiving an 
incorrect message.
    These translator operators are in the best position to let their 
viewers know whether they will be converting to digital or not, the 
date of the translator's conversion, and how to continue to receive an 
analog signal, if appropriate. Many translators are operated by 
voluntary clubs or taxing districts that have a direct association with 
their viewers. These translator operators have the opportunity to use 
direct mailings to keep their viewers informed about actions the 
viewers may take to continue to receive analog translator broadcasts.
    Translator operators may have to work with their local newspapers, 
civic organizations, community groups, schools, churches, etc. to 
contact the viewers in their service area regarding the digital 
transition in their area. If there are multiple translator operators in 
an area, they should cooperate to present a unified message that serves 
the viewers in their community.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                         Hon. John M.R. Kneuer
    Question 1. My understanding is that as consumers fill out 
applications for set-top box coupons, IBM will tally the number of set-
top boxes needed for a given area. Does IBM make this demand 
information available to retailers in a local area that are voluntarily 
participating in the set-top box program? As we discussed at the first 
DTV hearing, there are no inventory requirements for participating 
retailers. How will retailers in a given area know how much inventory 
of set-top boxes it should carry? Will participating retailers in an 
area have to coordinate their actions?
    Answer. Our program rules require retailers to ``use commercially 
reasonable methods to order and manage inventory to meet customer 
demand for CECBs.'' NTIA believes that consumer electronics retailers 
are well suited to forecast demand for television related products such 
as converter boxes. The highly competitive nature of the consumer 
electronics industry also will cause various retailers to adopt 
different marketing strategies with regard to converters. NTIA does not 
have statutory or inherent authority to regulate the commercial 
relationships that exist between manufacturers and consumer electronics 
retailers. We have required IBM to develop program tracking metrics 
such as data on consumer application requests that are to be provided 
to NTIA in order to enable us to administer the program efficiently. 
These program metrics are especially important to us in enhancing our 
ability to minimize waste, fraud, and abuse.

    Question 2. To date, how many retailers has NTIA certified to 
participate in the program?
    Answer. As of November 9, 2007, NTIA has certified thirty-five 
retailers to participate in the program. The certified retailers 
include one of the top 30 consumer electronics retailers, ABC Warehouse 
headquartered in Pontiac, Michigan, as well as two other regional 
retailers, one online and catalog retailer, and 31 small retailers. 
Another 20 major consumer electronics retailers are working with NTIA 
to gain certification to participate in the program.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                       Hon. Jonathan S. Adelstein
    Question 1. Translators are an important part of making 
broadcasting work. By repeating broadcast signals, they can extend the 
reach of local stations. Because translators are low-power facilities, 
they are not required to make the switch to digital with full-power 
stations. Yet there are approximately 4,700 translator stations in this 
country. In light of this, I have a few questions: Do you know how many 
viewers are served by translators?
    Answer. The Media Bureau is in the process of determining the 
number of viewers who are served by translators.

    Question 2. Do you know how many translators intend to continue to 
broadcast in analog after the transition date?
    Answer. We do not know how many translators specifically intend to 
continue to broadcast in analog after the transition. However, to date, 
the Media Bureau is aware of more than 3,000 TV translators, LPTV and 
Class A stations that have either applied to flash cut to digital or 
requested companion channels to broadcast digitally. There are over 
7,300 stations, so as of now 40 percent of them plan to switch. This 
number will most likely grow as we get closer to the transition date.

    Question 3. What happens to viewers who receive signals over analog 
translators?
    Answer. I am concerned about what will happen to viewers who 
receive their over-the-air broadcast signals over analog translators 
post-transition. It is important that we do not leave any viewers or 
television households out after the transition. Analog viewers who have 
not purchased digital-to-analog converter boxes with analog pass-
through capability will not be able to receive an analog translator's 
signal. These are among the most vulnerable consumers.
    The failure to have a plan to address this issue is just one 
example of the Commission's lack of planning and coordination. While 
the Commission has publicized that all analog broadcast transmission 
actually ceases on February 17, 2009, for millions of Americans, 
particularly over-the-air Spanish-speaking viewers and many rural 
residents, who rely on the over 4,700 low-power, Class A and translator 
television stations in the U.S., analog broadcasting will continue. In 
many urban and rural cities, popular Spanish language networks like 
Telemundo and Azteca, and quality stations that are often the main 
source for critical local news and information, are not required to 
convert their facilities to digital by the deadline.
    Recently, the Community Broadcasters Association (CBA) brought this 
issue to the attention of FCC's outreach and consumer education 
specialists. CBA expressed concern that ``publicity about the digital 
television transition will be misleading if it suggests that no over-
the-air analog television service will be available'' after the 
deadline for full-power stations. In response to this concern, the FCC 
hastily issued a consumer advisory on its website to inform the public 
about this forgotten, but important, aspect of the DTV transition.

    Question 4. How do we craft regionally-accurate messages about the 
transition for viewers served by analog translators?
    Answer. In order to craft regionally-accurate message about the 
transition for viewers served by analog translators, the Commission 
needs to first engage in meaningful dialogue with the broadcasters, 
particularly the National Association of Broadcasters and the Community 
Broadcasters Association. Broadcasters have a vested interest in 
ensuring that all viewers are capable of receiving their programming 
streams after the transition. We first need to know which facilities 
intend to continue to broadcast in analog after the transition date. 
This will help us know and prioritize which regions are in need of 
targeted consumer education and technical assistance.
    Next, we need to coordinate with NTIA, state and local/tribal 
governments, and organizations that provide direct assistance to the 
identified regions. NTIA regulations do not require consumer 
electronics manufacturers to produce converter boxes that pass through 
analog signals, but it is my understanding that several manufacturers 
have decided voluntarily to include this important capability. Viewers 
need to know which converters have analog pass through capability, and 
that information needs to be integrated with the consumer education 
information that is disseminated by the Commission, other government 
entities and community-based organizations.
    This is a task I believe we can accomplish, but it will require 
more planning, coordination and leadership than we have thus far shown.
                                 ______
                                 
   Response to Written Question Submitted by Hon. Maria Cantwell to 
                       Hon. Jonathan S. Adelstein
    Question. In your testimony, you suggested that the U.S. Postal 
Service could play a role in helping the Nation prepare for the digital 
television transition. Can you elaborate?
    Answer. As an independent establishment of the Executive Branch of 
the U.S. Government, the U.S. Postal Service would have to make the 
decision to support the national effort to educate consumers about the 
DTV Transition. Perhaps unlike any other public or private entity, USPS 
reaches nearly every household in America several times a week. After 
all, the USPS is the third-largest employer in the United States and 
operates the largest civilian vehicle fleet in the world, with an 
estimated 260,000 vehicles and over 35,000 post offices in the U.S. 
Simply put, the network of the USPS is unmatched and, accordingly, 
could play a valuable role in the DTV consumer education process.
    To date, the Commission has met and conferred with USPS to make DTV 
education a real national priority. USPS has agreed to display posters 
and placards in every post office location and clerk station across the 
country. The Commission and NTIA, however, have not discussed the 
possibility of participating in the national DTV effort by delivering a 
brochure or leaflet to every household in America. We should either ask 
USPS if we could get some space on one of the mailings they do on their 
own behalf, or Congress could consider a modest and targeted 
appropriation for a specific mailing. The cost of doing a mailing could 
be held to a minimum by getting special dispensation to permit the 
mailing to go at the reduced rate afforded nonprofits and political 
mailings by state and national party organizations. A very rough 
estimate is that by using the reduced rate on a letter-sized piece 
would cost about 8.5 cents if done correctly (presorted and drop-
shipped, etc.), or about $10 million for 125 million households.
    I will continue to encourage further discussion between the FCC and 
USPS, but time is running out.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                             David K. Rehr
    Question 1. National messages that broadly proclaim that analog 
broadcasting is coming to an end on February 17, 2009, can obfuscate 
important regional differences.
    For instance, in some areas of the country there are many 
translator stations. Some have low-power stations that may remain in 
analog. In others, full-power broadcasters may need to do tower work 
and make the transition before February 17, 2009. On top of this, in 
some areas of the country, retailers may have many converter boxes on 
their shelves, and in other areas retailers with boxes available may be 
few and far between. In light of this, I would like your thoughts on 
the following:

   How do we match national messages with region-specific 
        transition realities?

   How can we have the equivalent of a DTV ``block captain'' in 
        every designated market area in the country?

    Answer. The DTV Education Campaign that we have developed is 
designed to provide the kind of tailored information that your question 
contemplates. As I explained in my testimony at the hearing, our DTV 
action spots will have both national and local elements. In addition, 
we plan to target every local community with pertinent information for 
specific obstacles that may be relevant to that television market. For 
example, with help from our partners in the DTV Transition Coalition, 
which now has 180 members, we will use our members' grassroots to 
target specific communities in unique or vulnerable situations.
    NAB is also spearheading a national DTV speaker's bureau, which is 
booking over 8,000 speaking engagements nationwide and has already 
produced dozens of speaking events in vulnerable communities. 
Furthermore, the DTV road show ``trekkers'' will be crisscrossing the 
United States with specific information targeted to that area. In terms 
of having a ``block captain'' located in every designated market, we 
have not yet explored that option. As we proceed with our polling and 
if certain areas are falling behind in consumer awareness, the ``block 
captain'' approach may be one of the many ways we can adjust a given 
market's consumer education campaign.

    Question 2. Broadcasters have made many technical adjustments in 
order to prepare for the return of their analog spectrum by February 
17, 2009. Not all broadcasters, however, plan to ``flash-cut'' on this 
date. Some may need to coordinate tower work or take into consideration 
weather conditions. This could mean they need to transition earlier. 
Does this mean that the DTV transition will happen in advance of 
February 17, 2009, in some areas of the country? Does this mean some 
over-the-air viewers will need converter boxes earlier than February 
17, 2009?
    Answer. Yes, due to channel allocations and the need to coordinate 
many stations in each designated market area, some stations will need 
to transition to digital technology in advance of February 17, 2009. In 
these situations where certain stations move to a digital-only format 
prior to February 17, viewers will need to purchase a converter box, 
buy a digital television, or subscribe to a pay service to receive 
those stations. To ensure continuity of service, however, broadcasters 
will be reducing or terminating analog service only where necessary. No 
broadcaster will willingly give up any viewers.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                            to David K. Rehr
    Question 1. As a result of the 1992 Cable Act, television 
broadcasters generally elect either must-carry or retransmission-
consent status every 3 years. The next election cycle concludes on 
December 31, 2008, approximately 6 weeks before the DTV transition 
deadline of February 17, 2009.
    In recent years, there have been a number of cases where 
retransmission consent (RTC) negotiations have grown extremely 
contentious, resulting in broadcasters removing or threatening to 
remove their signals from cable operators. If the RTC negotiations of 
late 2008 are similarly contentious, American consumers could be 
subjected to simultaneous, overlapping, conflicting, and confusing 
messages about the digital transition and the potential loss of 
stations due to RTC negotiations that have reached an impasse.
    Accordingly, one could argue that the public interest would be well 
served by a further separation of the December 31, 2008 RTC deadline 
and the February 17, 2009 DTV deadline. One possible way to achieve 
that goal would be the creation of a ``quiet period,'' to wit: If a 
broadcaster and cable operator failed to reach an RTC agreement by 
December 31, 2008, neither party would be allowed to remove or threaten 
to remove a broadcast signal from a cable system for a reasonable 
period of time before and after December 31, 2008. During this ``quiet 
period,'' the parties could continue to negotiate a mutually acceptable 
agreement. Failing said agreement, the option to remove or threaten to 
remove broadcast signals from cable systems would be reinstated at the 
end of the quiet period. Do you agree it would be in the public 
interest to further separate the retransmission consent cycle ending 
December 31, 2008, from the digital cutover date of February 17, 2009?
    Answer. It should be noted that for most TV stations the 3-year 
election cycles are irrelevant because broadcasters and MSOs enter into 
carriage contracts longer than 3 years and are not linked to the 
election cycle. Therefore, I see the retransmission consent issue as 
quite separate from the digital cutover date. The duration of these 
contracts varies according to the negotiations. While some 
retransmission consent deals may expire toward the end of 2008 it is 
purely coincidental and in no way because of a three-year election 
cycle. A retransmission consent contract, like any contract negotiated 
in the marketplace, can be of any duration and therefore retransmission 
consent deals do not necessarily expire at the same time. To be clear, 
however, no broadcaster wants to be removed from a cable outlet so long 
as the terms of the carriage are fair to both parties. Indeed, it would 
be most unfortunate if a cable operator tried to use the fact of the 
digital transition to avoid fair negotiation over the terms for 
carriage of the most popular programming on their system. Moreover, 
viewers of free over-the-air television will continue to receive their 
local programming no matter what happens as a result of the December 
31st election date, so therefore no separation is required. 
Broadcasters take their public interest obligations very seriously and 
will therefore always endeavor to make sure that no viewer loses 
service.

    Question 2. If so, how do you believe this separation might be best 
achieved? Is there a better way to achieve the stated goal than the 
``quiet period'' described above?
    Answer. Retransmission negotiations have worked as Congress 
intended them to work for the last 17 years. There is no justification 
to change this process now.

    Question 3. If we agree that a further separation of these 
deadlines is in the public interest, can the FCC create said separation 
by rulemaking or is legislation required?
    Answer. See responses above, I do not believe that a separation is 
necessary.

    Question 4. If the separation was achieved by the creation of a 
quiet period, how long should the quiet period extend, before and after 
the DTV transition?
    Answer. See responses above, I do not believe that a separation is 
necessary.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                             David K. Rehr
    Question 1. The Government Accountability Office recently testified 
that no entity or individual in the Federal Government appears to be in 
charge of the digital television transition. The responsibility appears 
to lie somewhere between NTIA and the FCC. And unlike the Clinton 
Administration that housed its overall Y2K coordination function within 
the White House and made an individual accountable for its success, as 
far as I can tell, the current Administration is not engaged at senior 
levels. Are you concerned at all that this lack of specific 
accountability and lack of coordination at senior levels in the current 
Administration may prove to be an Achilles heel for ensuring that 
consumers that receive over-the-air television broadcasts are not 
disenfranchised on the day of the DTV transition?
    Answer. At the end of the day, local broadcasters will be held 
accountable if viewers are lost. To prevent this from happening, I can 
assure you we are working night and day to accomplish all the goals we 
have laid out. This includes our work with the DTV Coalition of some 
180 diverse groups which will provide a good basis for coordination. 
And, we are working with both FCC and NTIA to stay coordinated with 
those agencies.

    Question 2. Also, are you concerned that as a new Administration 
comes into office only a month before the transition, that there may be 
some hand-off problems such as vacancies in key decisionmaking 
functions? As you know, the law does not provide for any waivers or 
extensions to the DTV hard date.
    Answer. We would expect that all of our plans will be actively in 
place at that time and thus the impact of any governmental changes in 
January 2009 will be minimal.

    Question 3. In Washington State, over 300,000 households, or 13.4 
percent of households, rely exclusively on over-the-air television. 
This represents 12 percent of households in the Seattle market and 18 
percent in the Yakima market. The more rural areas of my state rely on 
translator stations to rebroadcast the over-the-air signals from the 
major markets. Because translators are not full-power facilities, they 
are not required to switch to digital service on February 17, 2009. As 
you know, the DTV hard date is only for full power stations. This could 
lead to problems for viewers receiving over-the-air broadcast service 
over translators. There are over 4700 translator stations, mostly in 
the western part of the country. My state has over 200 translator 
stations. How many viewers are served by translator stations 
nationally? How many viewers in Washington State?
    Answer. I am not aware of any quantitative analysis that has been 
performed on the total viewership of translator stations--the National 
Translator Association, which represents this stakeholder, may have 
some estimates.

    Question 3a. How many translator stations intend to continue to 
broadcast in analog after the transition date?
    Answer. Unknown. The FCC has not completed its proceeding on the 
DTV transition deadline for translators.

    Question 3b. What happens to viewers who receive signals over 
analog translators?
    Answer. Viewers will need to access analog translators through the 
tuner in their analog television set or the analog tuner in a new DTV 
set (all DTV sets on the market have both digital and analog tuners).

    Question 3c. Given your outreach campaign, what is your strategy 
for crafting regionally-accurate messages about the transition for 
viewers served by analog translators?
    Answer. We are aware of this issue and are considering how to 
address it.
                                 ______
                                 
  Response to Written Question Submitted by Hon. Daniel K. Inouye to 
                           Kyle E. McSlarrow
    Question. National messages that broadly proclaim that analog 
broadcasting is coming to an end on February 17, 2009, can obfuscate 
important regional differences.
    For instance, in some areas of the country there are many 
translator stations. Some have low-power stations that may remain in 
analog. In others, full-power broadcasters may need to do tower work 
and make the transition before February 17, 2009. On top of this, in 
some areas of the country, retailers may have many converter boxes on 
their shelves, and in other areas retailers with boxes available may be 
few and far between. In light of this, I would like your thoughts on 
the following:

   How do we match national messages with region-specific 
        transition realities?

   How can we have the equivalent of a DTV ``block captain'' in 
        every designated market area in the country?

    Answer. As a member of the DTV Transition Coalition, NCTA is 
committed to working with our partners, including the broadcasters and 
consumer electronic manufacturers, to ensure that our messaging is as 
useful and targeted as possible. We agree that there are important 
regional differences that will impact the decisions consumers make, and 
to the extent cable is able to tailor our messaging in a region-
specific manner, we will do so.
    While cable operators' franchise areas do not conform to the 
broadcasters' DMAs, we stand ready to work with any entity, such as a 
DTV ``block captain,'' to coordinate our education efforts.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                          to Kyle E. McSlarrow
    Question 1. As a result of the 1992 Cable Act, television 
broadcasters generally elect either must-carry or retransmission-
consent status every 3 years. The next election cycle concludes on 
December 31, 2008, approximately 6 weeks before the DTV transition 
deadline of February 17, 2009.
    In recent years, there have been a number of cases where 
retransmission consent (RTC) negotiations have grown extremely 
contentious, resulting in broadcasters removing or threatening to 
remove their signals from cable operators. If the RTC negotiations of 
late 2008 are similarly contentious, American consumers could be 
subjected to simultaneous, overlapping, conflicting, and confusing 
messages about the digital transition and the potential loss of 
stations due to RTC negotiations that have reached an impasse.
    Accordingly, one could argue that the public interest would be well 
served by a further separation of the December 31, 2008 RTC deadline 
and the February 17, 2009 DTV deadline. One possible way to achieve 
that goal would be the creation of a ``quiet period,'' to wit: If a 
broadcaster and cable operator failed to reach an RTC agreement by 
December 31, 2008, neither party would be allowed to remove or threaten 
to remove a broadcast signal from a cable system for a reasonable 
period of time before and after December 31, 2008. During this ``quiet 
period,'' the parties could continue to negotiate a mutually acceptable 
agreement. Failing said agreement, the option to remove or threaten to 
remove broadcast signals from cable systems would be re-instated at the 
end of the quiet period. Do you agree it would be in the public 
interest to further separate the retransmission consent cycle ending 
December 31, 2008, from the digital cutover date of February 17, 2009?
    Answer. Yes. Cable operators have gone beyond what we believe we 
are required to do by accepting the obligation to carry must carry 
broadcast stations in analog and digital format. That dual carriage 
obligation is not required by statute and raises significant 
Constitutional issues; but the cable industry made that commitment 
precisely and solely because of the unique nature of the broadcasters' 
digital transition.
    Some broadcast stations have threatened to withdraw consent to 
retransmit their signals at particularly vulnerable times, such as the 
day of a major sports event. It would not serve the public interest if 
consumers and cable operators were forced to contend with the potential 
or actual loss of broadcast stations at the same time as they were 
preparing for the digital transition. And it would be a particularly 
odd result when cable operators are doing more to ensure carriage of 
broadcasters' signals.
    We believe that all of the industries with a stake in a successful 
transition should go the extra mile to make sure it is successful. 
Temporarily foregoing the right to withdraw retransmission consent in 
order to preserve stability and certainty for consumers would be a 
small burden for broadcasters to undertake.

    Question 2. If so, how do you believe this separation might be best 
achieved? Is there a better way to achieve the stated goal than the 
``quiet period'' described above?
    Answer. We believe a ``quiet period'' would be an appropriate way 
to achieve the goal of separation, which in turn will help ease the 
digital transition for the reasons discussed above. A successful 
digital transition will also require the concerted efforts of all 
affecting industries and the government to educate consumers about the 
transition and their options for dealing with it. In my testimony I 
described the efforts that the cable industry has and will undertake, 
on its own and as part of the DTV Coalition, to meet those objectives.

    Question 3. If we agree that a further separation of these 
deadlines is in the public interest, can the FCC create said separation 
by rulemaking or is legislation required?
    Answer. It is unclear what authority the FCC would have to mandate 
a ``quiet period'' by modifying its retransmission consent rules. It is 
possible that the FCC could modify the timetables for which 
retransmission consent elections are made, or it could make such a 
``quiet period'' a requirement of its good faith negotiation rules in 
light of the unique additional demands placed on cable operators, 
broadcasters, and the public by the DTV transition. But the best answer 
is for the FCC and legislative leaders to work with broadcasters to 
achieve a voluntary ``quiet period'' in the same way the cable industry 
agreed voluntarily to dual carriage except in those markets with small 
systems and low capacity networks.

    Question 4. If the separation was achieved by the creation of a 
quiet period, how long should the quiet period extend, before and after 
the DTV transition?
    Answer. We believe that a quiet period for any retransmission 
consent agreement that expires some number of months before and after 
the hard date (February 17, 2009) is the best way to achieve the stated 
goal. It is difficult to pinpoint precisely how many months this should 
be both before and after the transition, but it should be tied to 
ensuring the avoidance of significant public confusion about how the 
transition will affect the viewing public. It would also ensure that 
broadcast carriage remains stable in the time period immediately after 
the transition when cable operators must devote their full attention 
and energy to ensuring a smooth and seamless transition for all of 
their consumers.
    While retransmission consent negotiations proceeded, the 
broadcaster would continue to be carried on the cable system under the 
terms and conditions of the existing retransmission consent agreement. 
Any adjustment to compensation needed to reflect market changes during 
this time period could be determined during the ongoing negotiations.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                           Kyle E. McSlarrow
    Question 1. The Government Accountability Office recently testified 
that no entity or individual in the Federal Government appears to be in 
charge of the digital television transition. The responsibility appears 
to lie somewhere between NTIA and the FCC. And unlike the Clinton 
Administration that housed its overall Y2K coordination function within 
the White House and made an individual accountable for its success, as 
far as I can tell, the current Administration is not engaged at senior 
levels. Are you concerned at all that this lack of specific 
accountability and lack of coordination at senior levels in the current 
Administration may prove to be an Achilles heel for ensuring that 
consumers that receive over-the-air television broadcasts are not 
disenfranchised on the day of the DTV transition?
    Answer. As noted in my testimony before this committee on October 
19, I think it is important to recognize the limitations of the 
Executive Branch. An enormous amount of coordination is required to 
make things happen within the Federal Government. And so, ultimately, 
the success of NTIA's coupon program will be determined by how well 
NTIA coordinates with other Federal agencies, both executive and 
independent. To that end, we would welcome leadership within the 
government to help direct that effort.
    However, we recommend that the government not micromanage industry 
messaging, to the point of reading and approving scripts for television 
advertisements. NCTA recognized the need to have input from Congress, 
the FCC and public interest groups, and on its own, sought advice on 
how best to craft its ads. Our latest set of ads which are currently 
running, reflect the input we received, and we plan to continue that 
collaboration. My concern is that injecting a government approval 
requirement into this process will only slow down our, and other 
affected industries, education campaigns.

    Question 2. Also, are you concerned that as a new Administration 
comes into office only a month before the transition, that there may be 
some hand-off problems such as vacancies in key decisionmaking 
functions? As you know, the law does not provide for any waivers or 
extensions to the DTV hard date.
    Answer. The way to avoid hand-off problems is to ensure that all of 
the key elements necessary to ensure a seamless transition, such as 
coordination of industry and government messaging and securing NTIA's 
coupon program, are put into place next year. The cable industry 
remains committed to ensuring a smooth transition and will continue to 
work with Congress, the FCC, NTIA and other affected industries 
throughout 2008 to reach this goal.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                             John M. Lawson
    Question 1. National messages that broadly proclaim that analog 
broadcasting is coming to an end on February 17, 2009, can obfuscate 
important regional differences.
    For instance, in some areas of the country there are many 
translator stations. Some have low-power stations that may remain in 
analog. In others, full-power broadcasters may need to do tower work 
and make the transition before February 17, 2009. On top of this, in 
some areas of the country, retailers may have many converter boxes on 
their shelves, and in other areas retailers with boxes available may be 
few and far between. In light of this, I would like your thoughts on 
the following:

   How do we match national messages with region-specific 
        transition realities?

    Answer. Mr. Chairman, you highlight a very significant issue we are 
facing to prepare consumers for a national transition that has local 
variances. The problem also raises the importance of a consumer 
education campaign that is focused beyond traditional broadcasting as a 
means of disseminating this vital information. As public service media, 
we will certainly do our part to disseminate as much information as 
possible. To this end, Public Television recently announced a 
commitment of $50 million in airtime devoted to consumer education, 
which will result in 3 billion impressions on the American public.
    There are 364 locally-owned and operated Public Television stations 
nationwide that will take into account their unique local circumstances 
when devising and executing their consumer education plans. However, 
relying on PSAs alone will never fully educate the American public 
about this major transition and all the steps viewers need to take to 
successfully make the switch.
    As I stated in my testimony, we need to think of the consumer 
awareness campaign in the same way Members of Congress think of a re-
election campaign. It will take on-thground, face-to-face contact to 
reach the most vulnerable constituents. People need to see the box, see 
the picture quality and see how it is all connected to understand what 
this transition is all about. To your point, people will need to know 
if their community is served by translators, and if it is, whether 
those translators are operating in digital or plan to continue 
operating in analog, as the FCC will likely finalize the digital 
translator rules after the February 17, 2009 analog shut-off.
    The type of community-specific information required to ensure a 
successful transition makes it imperative that Congress funds a hands-
on grassroots outreach campaign. We are requesting a minimum of $20 
million that would be applied to direct, local outreach activities to 
explain the intricacies of the transition in a locally relevant manner 
that focuses on reaching the most vulnerable populations--especially 
the elderly, lower-income households, people with disabilities, those 
living in rural areas and non-English speakers. Public Television has a 
proven history of reaching these constituencies through direct 
outreach. Over the years, Public Television has built an extensive 
network of trusted partnerships with local service groups. Nationally 
we have worked closely with AARP, the Leadership Conference on Civil 
Rights and the Alliance for Rural Television to coordinate the digital 
transition consumer education of their local chapter members. A 
federally-funded, Public Television-led community grassroots outreach 
campaign would leverage these partnerships to ensure that regionally--
and locally--tailored information is delivered directly to your 
constituents and others nationwide.
    Simply put, a national broadcast-only consumer education campaign 
poses an unacceptable risk of failing to accomplish the task at hand 
and has the potential to leave many vulnerable groups behind in this 
transition. Without people on the ground, in the schools, libraries, 
senior citizen centers, churches and other places people go to receive 
trusted information, we may have a nightmare on our hands. This 
nightmare however, is preventable. Public Television has the knowledge 
and the expertise to make this work for all Americans. What we lack is 
significant funds to make it happen. We call on Congress to make this 
investment in the future of digital television for all Americans to 
ensure that no viewer is left behind by this transition.

    Question 1a. How can we have the equivalent of a DTV ``block 
captain'' in every designated market area in the country?
    Answer. The idea of a ``DMA block captain'' is precisely the kind 
of community-specific consumer education and outreach that needs to be 
implemented. With sufficient Federal resources, Local Public Television 
stations are ideally suited to be the ``block captain'' for the local 
communities they serve, and to coordinate with partner service 
organizations to ensure that accurate, locally-tailored information 
reaches everyone in those communities, especially at-risk populations. 
As discussed in my testimony, Public Television believes a minimum 
additional investment of $20 million is needed to implement such a 
campaign.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                             John M. Lawson
    Question 1. The Government Accountability Office recently testified 
that no entity or individual in the Federal Government appears to be in 
charge of the digital television transition. The responsibility appears 
to lie somewhere between NTIA and the FCC. And unlike the Clinton 
Administration that housed its overall Y2K coordination function within 
the White House and made an individual accountable for its success, as 
far as I can tell, the current Administration is not engaged at senior 
levels. Are you concerned at all that this lack of specific 
accountability and lack of coordination at senior levels in the current 
Administration may prove to be an Achilles heel for ensuring that 
consumers that receive over-the-air television broadcasts are not 
disenfranchised on the day of the DTV transition?
    Answer. Senator Cantwell, I am very glad that you mention the 
differences between the priority the Federal Government made out of the 
Y2K effort and the hands-off nature Federal agencies have thus far 
demonstrated with regards to consumer education around the digital 
transition. For years now, Public Television has been calling for a 
``Y2K level effort'' around the transition, advocating for a national, 
public-private partnership to coordinate all aspects of the transition. 
In the past, I have pointed to the successful SwitchCo model 
implemented in the U.K., which leveraged public and private resources 
to ensure that a single entity was responsible for the successful 
transition to digital and as such, that adequate resources were 
dedicated to ensure that no viewer was left behind by the transition.
    It is important to note, however, that Public Television is not 
sitting idly on the sidelines waiting for the Federal Government to 
undertake the steps necessary to ensure the public is ready. Instead, 
we have been maximizing our resources, leveraging our partnership and 
utilizing every tool and resource in our arsenal to educate our viewers 
about the transition and steps they need to take to continue to receive 
over-the-air television service.
    However, as I said in my testimony, just as broadcasters have a 
major stake in the success of the DTV transition, so too does the 
Federal Government, especially given the fact that it will receive an 
estimated $12.5 billion in revenue from the auction of analog spectrum. 
If only as a matter of practical risk-management, the Federal 
Government must do everything it can to ensure that nothing--especially 
consumer confusion--keeps the transition from being completed 
successfully.
    The success of this transition cannot be placed solely in the hands 
of industry. Public Television will do our part, as will other industry 
partners, but it is time for the Federal Government to recognize the 
success of this transition as a Federal priority on par with Y2K 
mitigation efforts.

    Question 2. Also, are you concerned that as a new Administration 
comes into office only a month before the transition, that there may be 
some hand-off problems such as vacancies in key decisionmaking 
functions? As you know, the law does not provide for any waivers or 
extensions to the DTV hard date.
    Answer. This could be a very big problem if extensive resources and 
funding are not dedicated to consumer education today. If public and 
private stakeholders do their jobs correctly, then February 17, 2009 
will be just another Tuesday and the American public will be adequately 
prepared for the transition long before this Administration leaves 
office.
    Direct, on-the-ground, consumer education efforts need to begin 
today to ensure that the most vulnerable constituencies are prepared 
for this transition. The Federal Government needs to make this a 
priority today and invest immediately in the resources necessary to 
make this happen. As I have said before, Public Television will do its 
share of the heavy lifting with the limited resources we have, but with 
additional funds, we would be well positioned to conduct extensive, 
hands-on, local outreach explaining to the public what the transition 
is, why they might need a converter box, how they can go about 
purchasing and installing the boxes, what their options regarding 
antennas are and other relevant questions. With all the different 
variables at play in the transition, we cannot afford to wait one 
moment longer to begin extensive outreach to the American public.
                                 ______
                                 
  Response to Written Question Submitted by Hon. Daniel K. Inouye to 
                             Jon Gieselman
    Question. National messages that broadly proclaim that analog 
broadcasting is coming to an end on February 17, 2009, can obfuscate 
important regional differences.
    For instance, in some areas of the country there are many 
translator stations. Some have low-power stations that may remain in 
analog. In others, full-power broadcasters may need to do tower work 
and make the transition before February 17, 2009. On top of this, in 
some areas of the country, retailers may have many converter boxes on 
their shelves, and in other areas retailers with boxes available may be 
few and far between. In light of this, I would like your thoughts on 
the following:

   How do we match national messages with region-specific 
        transition realities?

   How can we have the equivalent of a DTV ``block captain'' in 
        every designated market area in the country?

    Answer. DIRECTV's two-way relationship with our customers allows us 
to communicate on both a national and local or one-to-one level with 
subscribers. To the extent that anomalies exist in DMAs with local 
broadcasters, we will fully educate our customers about them. As we 
testified, we do not think our subscribers will need to rely on 
converter boxes to continue enjoying our 100 percent all digital 
products. Therefore, converter box shortages should not be an issue for 
DIRECTV subscribers. For over-the-air households local broadcasters, 
including public television stations, are perhaps best situated to play 
the role of DTV ``block captain.'' DIRECTV will continue to educate our 
subscribers about the important role they can play in helping friends 
and family members manage through the transition.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                             Jon Gieselman
    Question 1. The Government Accountability Office recently testified 
that no entity or individual in the Federal Government appears to be in 
charge of the digital television transition. The responsibility appears 
to lie somewhere between NTIA and the FCC. And unlike the Clinton 
Administration that housed its overall Y2K coordination function within 
the White House and made an individual accountable for its success, as 
far as I can tell, the current Administration is not engaged at senior 
levels. Are you concerned at all that this lack of specific 
accountability and lack of coordination at senior levels in the current 
Administration may prove to be an Achilles heel for ensuring that 
consumers that receive over-the-air television broadcasts are not 
disenfranchised on the day of the DTV transition?
    Answer. DIRECTV believes that a collaborative industry-government 
effort underway will be successful. We have already been working with 
Department of Commerce, having most recently participated in their 
``DTV Expo'' here in Washington, D.C. We look forward to continue to 
work with all the Federal agencies involved in the transition. 
Furthermore, we will actively participate in government-industry 
coordination through the ``DTV Transition Coalition.'' Finally, we will 
make certain that our 16.5 million subscribers have all the information 
they need for the digital transition as well as information that will 
help them assist friends and family members through the transition.

    Question 2. Also, are you concerned that as a new Administration 
comes into office only a month before the transition, that there may be 
some hand-off problems such as vacancies in key decisionmaking 
functions? As you know, the law does not provide for any waivers or 
extensions to the DTV hard date.
    Answer. Again, DIRECTV believes that a collaborative industry-
government effort underway will be successful. There may indeed be some 
hand-off issues when the new administration takes office. DIRECTV 
believes that these issues can be minimized through effective industry-
government collaboration throughout the period leading up to the 
transition. For example, the NTIA Digital-to-Analog Converter Box 
Program is scheduled to launch in January 2008. Successful 
implementation of the program coupled with industry and government 
consumer education program can inform and educate over-the-air 
households about the digital transition and steps they need to take to 
avoid a disruption of their television service.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                             Marc A. Pearl
    Question 1. On January 1, 2008, the law permits consumers to 
request up to two $40 coupons per household for the purchase of 
approved digital-to-analog converter boxes. However, many have 
expressed concerns that when consumers require these coupons, there 
will be very few converter boxes available for sale. I would like to 
know approximately how many of those converter boxes will be on shelves 
available for purchase as of January 1, 2008. Would your member 
companies be willing to provide the Committee with information as to 
how many converter boxes in the aggregate will be available for sale on 
January 1, 2008, in each television market?
    Answer. Chairman Inouye, matching the available production 
capacity, to retail inventory, to the time and geographic demand for 
``CECBs'' is a vital question. CERC submitted comments to NTIA early in 
their process to request that retailers be given sufficient notice upon 
receipt of coupon applications to match Zip Code requests with 
participating retailers' locations; and thereby be able to move 
sufficient/anticipated quantities of CECBs from distribution centers to 
the area stores. Additionally, this issue was addressed by Best Buy's 
Sr. Vice President Michael Vitelli on behalf of CERC during the October 
31 House Energy & Commerce hearing. CERC, as an association of 
competitors, does not and will not collect information on manufacturing 
or retail inventory.
    However, Mr. Vitelli proposed that the NTIA should establish a 
confidential mechanism for polling and compiling aggregate data on at 
least a monthly basis of (1) manufacturing capacity, (2) retail 
inventory, and (3) requests for coupons, by date and geographic area. 
NTIA should then use this data to advise retailers as to apparent 
aggregate demand for Coupons, and its geographic concentration 
(possibly by Zip Code). This information would be of vital use to 
retailers in planning their ordering from vendors and in directing 
their inventory to match geographic consumer demand as nearly as is 
possible.
    CERC also recommended on October 31 that January 2008 is likely not 
the best time period to advise consumers to expect to receive coupons, 
as it is likely that the necessary changes to many or most retail 
systems in order to accept those coupons could not be performed by that 
time, nor can retailers be assured that sufficient quantities of CECBs 
will be available and distributed to the right geographical areas. CERC 
said that it would be more prudent to advise consumers--at least at the 
beginning stages of this unique and unprecedented program--to expect 
that they might not receive their coupons before April 1, 2008, 
although the government and private sector would attempt to exceed 
consumer expectations. (E.g., earlier coupon delivery by some or all 
participating and registered retailers may be feasible in some, but not 
all geographic areas based on applications received, store capability 
and inventory distribution.)

    Question 1a. Should Congress make it illegal for a retailer to sell 
analog televisions after January 1, 2008, unless such retailer also 
makes digital-to-analog converters available for sale?
    Answer. No, Mr. Chairman, this would be inadvisable for a number of 
reasons: (1) ``analog-only'' TVs will continue to remain useful and 
excellent values for consumers who (as, e.g., cable or satellite 
subscribers) do not rely on an over-the-air antenna at any viewing 
location; (2) many consumers may want to use such sets for watching 
DVDs or playing video games and not for viewing over-the-air 
broadcasts; (3) such sets already carry ``Consumer Alert'' labels, (4) 
retailers already stock a range of non-subsidized recording products 
with digital TV tuners that consumers may already own or could buy, 
that will also maintain full utility for these TVs, (5) most major 
retailers are either out of analog-only TVs or they represent 1 percent 
of inventory at best and will likely be exhausted before the law could 
take effect, so any enforcement efforts would be highly inefficient and 
a waste of resources, (6) these products were lawful when bought by 
retailers and remain lawful to sell to consumers, and participation in 
the NTIA program is, by law, voluntary, hence (7) such a mandate may be 
constitutionally suspect.

    Question 2. In July, we heard testimony before this Committee from 
the FCC. An FCC official noted that the agency has issued over 262 
citations to retailers for failing to place warning labels on analog 
sets indicating that they will not work without converter boxes. We 
were told that these fines, in aggregate, total over $3 million 
dollars. Are retailers still selling analog sets to consumers?
    Answer. The references in question were to matters in preliminary 
or interim stages; no ``forfeiture'' orders have been assessed against 
retailers, who are engaged in discussions with the FCC. The initial 
``citations'' had no direct punitive consequence, although fine 
proposals can result from later inspections. Overwhelmingly, retailers 
have complied with labeling obligations and began compliance even 
before the regulations were final. However, retailers were given short 
and in some respects vague notice as to the content of the regulations, 
and execution in thousands of stores can fall short of perfection.
    Some retailers are now ``out'' of analog-only TVs, e.g., Best Buy 
has not sold any analog televisions since October 1, 2007. For other 
major retailers, as is indicated above, such products are subject to 
labeling, represent a miniscule part of retailer inventory, and are on 
the way to being exhausted.

    Question 2a. If so, can you confirm that your members are placing 
warning labels on them so consumers are not stuck with televisions that 
no longer work after the transition?
    Answer. Yes. (But as noted above, cable and satellite subscribers 
who do not rely on antennas would not be ``stuck'' with such a product. 
Indeed, the remaining ones may prove exceptional values as retailer 
inventory is exhausted. These products will also continue to work with 
DVD and VHS players, video games, etc.)

    Question 3. National messages that broadly proclaim that analog 
broadcasting is coming to an end on February 17, 2009, can obfuscate 
important regional differences. For instance, in some areas of the 
country there are many translator stations. Some have low-power 
stations that may remain in analog. In others, full-power broadcasters 
may need to do tower work and make the transition before February 17, 
2009. On top of this, in some areas of the country, retailers may have 
many converter boxes on their shelves, and in other areas retailers 
with boxes available may be few and far between. In light of this, I 
would like your thoughts on the following:

   How do we match national messages with region-specific 
        transition realities?

    Answer. Mr. Chairman, matching inventory and messaging, and 
calibrating approach by region (as well as by age, income, and 
language) are a major CERC priority and one on which we are eager to 
work with the NTIA, the FCC, and the Congress. These are also 
priorities of the DTV Transition Coalition--the major cross-industry 
group of which CERC was a founding member and that now numbers more 
than 175 members--as well as, specifically, every national and local 
commercial and public broadcaster. As I noted in my testimony before 
your Committee, we believe the DTV Transition Coalition has been 
effective in pulling together private sector industries and public 
interest groups to identify challenges in such areas and to work with 
the government sector to seek solutions. For example, only through 
cooperation with government and with the IBM Team will retailers be 
able to plan their inventory on a geographic basis so that no consumer 
will be disappointed by having a coupon expire.
    Our understanding from their congressional testimony is that the 
objective of low power TV stations is to achieve cable carriage. It 
will be an ongoing challenge to avoid over-complicating an already 
difficult public message, but to address problems and exceptions 
nevertheless.

    Question 3a. How can we have the equivalent of a DTV ``block 
captain'' in every designated market area in the country?
    Answer. This should be an agenda item for the DTV Transition 
Coalition; we need to arrive at a single answer to this issue. We 
anticipate that this question will be discussed soon. To a certain 
extent, every local broadcaster--who cannot afford to lose a single 
pair of `eyeballs' (viewers) in its market--is the equivalent of a DTV 
``block captain.'' Retailers have worked and will continue to work on 
the local level in support of these and other creative efforts to help 
consumers better understand their options and choices as the Transition 
approaches.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                             Marc A. Pearl
    Question 1. The Government Accountability Office recently testified 
that no entity or individual in the Federal Government appears to be in 
charge of the digital television transition. The responsibility appears 
to lie somewhere between NTIA and the FCC. And unlike the Clinton 
Administration that housed its overall Y2K coordination function within 
the White House and made an individual accountable for its success, as 
far as I can tell, the current Administration is not engaged at senior 
levels. Are you concerned at all that this lack of specific 
accountability and lack of coordination at senior levels in the current 
Administration may prove to be an Achilles heel for ensuring that 
consumers that receive over-the-air television broadcasts are not 
disenfranchised on the day of the DTV transition?
    Answer. Senator Cantwell, at this point retailers see their role, 
through the DTV Transition Coalition, as identifying areas in which 
public-private cooperation seems essential (e.g., inventory 
anticipation and geographic distribution, messaging to groups according 
to age, language and dispersion, unification of ``1-800'' numbers, 
Federal-state agreement re taxation of Converter Box sales), and 
achieving a unified Federal response--which encompasses strategic 
plans, messaging and outreach. My personal experience with respect to 
Y2K that I outlined during my testimony, indicated the advisability of 
close public-private sector coordination, clear decision-making, and 
unified messaging. CERC remains hopeful that such results will be 
achieved in the DTV Transition but has not been specifically 
prescriptive as to how the government sector should achieve this. We 
are more than willing to lend retail expertise and perspectives to such 
an effort.

    Question 2. Also, are you concerned that as a new Administration 
comes into office only a month before the transition, that there may be 
some hand-off problems such as vacancies in key decisionmaking 
functions? As you know, the law does not provide for any waivers or 
extensions to the DTV hard date.
    Answer. CERC has faith in the dedication and professionalism of the 
FCC and the NTIA leadership and staffing. This past week's announced 
resignation of the NTIA Administrator is an example of the need to 
ensure that the CECB Program moves forward toward a successful 
conclusion no matter what `transitions' may be taking place within the 
government agencies themselves during the DTV Transition. We are 
confident that this will be the case.
    While any hand-off timing from now on will appear awkward, we hope 
and believe that there will be sufficient continuity at the 
professional staffing level to overcome problems (anticipated and 
unanticipated) as they may arise. Fortunately, we do not anticipate 
severe changes in the makeup of the ever-expanding private sector 
coalition, which we expect to continue to be an engine in a public-
private partnership. CERC and most other industry representatives have 
also worked with the Congress on a bipartisan basis; CERC was not among 
those concerned about a possible drop in support for the ``hard date'' 
when leadership of the Congress and of its oversight committees changes 
hands. Indeed, the leadership of this Committee provides an excellent 
model in this respect.
    Discussion by Members of this Committee at the October 17 hearing 
emphasized that the DTV Transition is sufficiently a national priority 
that it should be approached on a bipartisan basis and should involve 
sectors going well beyond the industries most directly affected. CERC 
and consumer electronics retailers want to work with this Committee's 
members and leadership to help achieve this.

    Question 3. Much of the transition's success rests on your members 
voluntarily stocking the set-top converter box, having appropriately 
trained employees, and providing consumer education, among other 
things. This summer, after over a thousand field inspections, the FCC 
issued over 250 citations and a dozen notices of apparent liability to 
retailers across the country for labeling violations. The FCC is 
looking at additional retailer requirements and enforcement efforts. 
Under current law, do you believe the FCC has the authority to 
institute retailer requirements and undertake enforcement efforts, or 
would the Congress need to provide the Commission with that specific 
authority?
    Answer. Senator Cantwell, CERC is on record, in a related 
proceeding, that the FCC at present lacks the authority to regulate 
retailer stocking or sales practices. Nevertheless, CERC supported the 
FCC labeling regulation rather than direct time and resources to a 
court challenge that could have been perceived as detracting from the 
Transition, and has done all it can to aid and facilitate compliance by 
retailers whether or not they are CERC members. CERC, in the midst of 
enforcement activity, even launched a retailer advisory, co-branded 
with the FCC, promoting the labeling regulation. As indicated in my 
answer to Chairman Inouye, the overall compliance of CERC member 
retailers with this regulation has been exemplary. There will 
inevitably be instances of imperfect execution, especially where a 
retailer has hundreds or thousands of stores and carries tens of 
thousands of products. These were largely attributable to the fact that 
the regulation did not cover manufacturers, so both retailers and the 
FCC investigators began their approach to labeling with no reliable 
database or product indications as a guide, and with very little time 
to assess which products in fact required labels. As to future 
regulations or laws, CERC's view is:

   The issue of ``analog-only'' TVs is already statistically 
        miniscule, is effectively being addressed via labeling, and 
        will soon be resolved in the market by the exhaustion of the 
        remaining inventory; and

   There should not be any ``parallel'' regimes--the NTIA, 
        pursuant to the authority specifically delegated by the 
        Congress, has already received public comment and issued 
        regulations. Cooperation between the FCC and the NTIA with 
        respect to enforcement of existing regulations and sanctions 
        would be appropriate. A parallel regulatory and enforcement 
        regime would be the opposite of the unified Federal approach 
        discussed in your first question.

    Question 4. My understanding is that as consumers fill out 
applications for set-top box coupons, IBM will tally the number of set-
top boxes needed for a given area. Does IBM make this demand 
information available to retailers in a local area that are voluntarily 
participating in the program? As you know, there are no inventory 
requirements for participating retailers. How will retailers in a given 
area know how much inventory of set-top boxes it should carry? Will 
participating retailers in an area have to coordinate? Does that raise 
anti-trust concerns?
    Answer. This is an absolutely vital issue, Senator Cantwell. In 
House testimony on October 31 on behalf of CERC, Best Buy's Sr. Vice 
President Michael Vitelli said that a coordinated public-private 
approach here is essential. For details, please see my answer to 
Chairman Inouye's first question. CERC is more than happy to work with 
this Committee and its Members to help assure that you are continually 
informed and updated on this important topic. We think any antitrust 
concerns can and will be avoided by the collection and aggregation of 
data by responsible government agencies. With respect to any 
competitively sensitive issue, only aggregated data need be provided to 
the private sector. Such data could also lawfully be collected by a 
trade association, if published or shared only in the aggregate. CERC 
believes, however, that the collection and matching process is so 
integral to the NTIA task that it would best be performed by NTIA and 
its Contractor team.
    Thank you for the opportunity to answer your additional questions. 
CERC and its members hopes that you will continue to call upon us for 
additional information as this important DTV Transition moves forward 
over the next several months.
                                 ______
                                 
                                         Best Buy Co., Inc.
                                    Richfield, MN, October 16, 2007
Hon. Kevin J. Martin,
Chairman,
Federal Communications Commission,
Washington, DC.

Re: MB Docket No. 07-148; Best Buy Co., Inc. Commitment To DTV Consumer 
    Education

Dear Chairman Martin:

    Best Buy Co., Inc. respectfully submits this letter to endorse and 
specify the commitment to DTV Consumer Education as expressed in the 
Comments of the Consumer Electronics Retailers Coalition (``CERC'').\1\ 
Best Buy is the Nation's leading retailer of consumer electronics 
products and is currently the chair of CERC. Best Buy's Chairman also 
serves on the Board of the Consumer Electronics Association. In CERC's 
Comments, CERC and its members acknowledged the Commission's position 
of leadership in the public interest, and pledged their cooperation in 
helping the Commission to exercise its responsibilities so as to 
achieve a successful result in the DTV Transition. This commitment was 
recognized in CEA's Comments, as well.\2\ We want to advise the 
Commission specifically of our DTV Public Education undertakings. The 
undersigned has met with Chairman Martin on a related matter and 
described these in some detail, and we have consulted with commissioner 
and bureau staff.
---------------------------------------------------------------------------
    \1\ In the Matter of DTV Consumer Education Initiative, MB Docket 
No. 07-148, Comments of the Consumer Electronics Retailers Coalition 
(Sept. 19, 2007) (``CERC Comments'').
    \2\ In the Matter of DTV Consumer Education Initiative, MB Docket 
No. 07-148, Comments of the Consumer Electronics Association at 2, 6-7, 
9-10 (Sept. 19, 2007) (``CEA Comments'').
---------------------------------------------------------------------------
    CERC's Comments set forth the consumer electronics retail industry 
initiatives that have already been undertaken, and those that are 
planned. Best Buy has played a key role in these initiatives. Best Buy 
has distributed to its stores each printing of the ``DTV Tip Sheets'' 
that were co-branded by the Commission, CEA, and CERC. Best Buy offers 
an extensive discussion of the DTV Transition, and what consumers need 
to know, via the TV & Video pages of its web store. A Best Buy 
executive has spoken at National Telecommunications Information 
Administration (``NTIA'')-sponsored public meetings of the importance 
of the NTIA' s Coupon-Eligible Converter Box (CECB) program and of the 
necessity of a retail commitment to it.\3\ Best Buy has also been 
aggressive in engaging the NTIA Program Contractor with a view to the 
earliest and most efficient possible execution of the program at 
retail.
---------------------------------------------------------------------------
    \3\ Best Buy has advised the FCC of an intention to participate, 
pending receipt of additional information as to specific expectations 
of the NTIA CECB Program Contractor, certification of CECB products (at 
this writing two manufacturers' products have been certified), their 
availability from manufacturers, coupon availability, and 
implementation of technical system requirements for redeeming 
consumers' coupons. Best Buy is also aware of press reports that the 
Commission may consider in this Docket regulating retailer 
implementation of the NTIA program; this is of concern. Best Buy 
endorses CERC's observation that all parties, public and private, are 
working on these issues expeditiously and in good faith.
---------------------------------------------------------------------------
    In CERC's Comments, CERC recognized the FCC's overall 
responsibilities pertaining to the DTV Transition, and pledged to help 
and support the Commission in fulfilling them. CERC agreed with 
congressional leaders that the FCC has a vital leadership role to play 
in the Transition, and said its members will cooperate further, to 
assist the Commission in this role, particularly as to coordination and 
focus in the activities of the public and private sector members of the 
DTV Transition Coalition. Best Buy embraces this obligation as its own.
    More specifically, Best Buy has consulted with the Commission, via 
the Chairman, the Chairman's office, bureau staff, and/or 
Commissioners' legal advisors as to specific plans to inform and assist 
customers as key Transition dates approach. Best Buy hereby advises the 
Commission of the following public education and NTIA undertakings, 
some of which are already in process:

   As of October 1, 2007, Best Buy stopped selling analog-tuner 
        video equipment.

   Best Buy will participate in the NTIA CECB program.

   Best Buy will educate the public in many ways including as 
        follows:

    Best Buy will include educational items about the DTV 
            Transition and the end of analog broadcasting in its in-
            store ``video loops'' that are shown on the TVs displayed 
            for sale.

    Best Buy will deploy retail signs about the Transition 
            and the end of analog broadcasts.

   Best Buy will conduct additional and more specific training 
        for its sales associates about the DTV Transition and the NTIA 
        CECB program, including appropriately addressing the expressed 
        needs of customers for CECB products in aid of their existing 
        TVs, if this will suit their needs better than would the 
        purchase of a new TV.

   Best Buy will include DTV Transition information in a 
        variety of advertisements.

   Best Buy will make available to its customers its own 
        pamphlet material as to the DTV transition, plus that of the 
        FCC, NTIA, CERC, and DTV Transition Coalition as copies are 
        provided to Best Buy.

   Best Buy will continue to use its website to educate 
        consumers about the DTV Transition and the NTIA CECB program as 
        more specific information becomes available.

    As an active member of CERC and CEA, and separately, Best Buy has 
worked actively and specifically with the NTIA from almost the moment 
the agency established its team to fulfill the responsibilities 
delegated to it by the Congress. Best Buy will consult with the 
Commission, as well, to help the FCC and the public and private members 
of the DTV Transition Coalition achieve coordinated message and 
implementation, as discussed in the CERC Comments. As noted, Best Buy 
intends to participate actively in the CECB program and believes this 
participation will be most effective and most feasible for retailers--
if the messaging of the FCC, the NTIA, and others is closely 
coordinated and aligned. As do CERC and CEA, Best Buy acknowledges and 
endorses the appropriate role of the Commission as to such 
coordination.
            Respectfully submitted,
                                           Michael Vitelli,
                              Senior Vice President, Merchandising.

                                               Paula Prahl,
                                    Vice President, Public Affairs,
cc: Commissioner Jonathan Adelstein
Commissioner Michael J. Copps
Commissioner Robert M. McDowell
Commissioner Deborah Taylor Tate
                                 ______
                                 
                                   Target Corporation, Inc.
                                  Minneapolis, MN, October 16, 2007
Hon. Kevin J. Martin,
Chairman,
Federal Communications Commission,
Washington, DC.

Re: MB Docket No. 07-148; Target Corporation, Inc. Commitment To DTV 
    Consumer Education

Dear Chairman Martin:

    Target Corporation respectfully submits this specific endorsement 
of the DTV Consumer Education commitments made in the Comments of the 
Consumer Electronics Retailers Coalition (``CERC'').\1\ Target, a 
general merchandise and food retailer and a leading national seller of 
consumer electronics products, is a Board member of CERC. In the CERC 
Comments, CERC acknowledged on behalf of its members the Commission's 
position of leadership in the public interest, and pledged their 
cooperation in helping the Commission to exercise its responsibilities 
so as to achieve a successful result in the DTV Transition. Target 
endorses CERC's pledge, and specifically advises the Commission of the 
DTV Public Education undertakings that Target commits to pursue.
---------------------------------------------------------------------------
    \1\ In the Matter of DTV Consumer Education Initiative, MB Docket 
No. 07-148, Comments of the Consumer Electronics Retailers Coalition 
(Sept. 19, 2007) (``CERC Comments'').
---------------------------------------------------------------------------
    CERC has pledged to assist the Commission in fulfilling its overall 
responsibilities with respect to the DTV Transition.. CERC agreed with 
congressional leaders that the FCC has a vital leadership role to play 
in the Transition, and said its members will cooperate further, to 
assist the Commission in this role, particularly as to coordination and 
focus in the activities of the public and private sector members of the 
DTV Transition Coalition. Target specifically embraces this obligation 
as its own.
    More specifically, Target has engaged the National 
Telecommunications Information Administration (``NTIA'') Coupon-
Eligible Converter Box (``CECB'') Coupon Program Contractor, and its 
own product vendors, with a view to the earliest and most efficient 
possible execution of the NTIA CECB program at retail. Target, through 
its counsel, has also consulted extensively with Commission staff, the 
Chairman's office, and the offices of all Commissioners as to the 
undertakings that Target can and will, as discussed and guided by the 
FCC, pursue within its context as a general retailer of merchandise and 
food. Target hereby confirms having advised the Commission of the 
following public education and NTIA undertakings, some of which are 
already in process:

   Target, through published and distributed materials, will 
        inform both its sales associates and its consumer guests of the 
        DTV Transition and the NTIA CECB program, including needs of 
        some guests for CECB products in aid of their existing TVs 
        rather than for the purchase of new displays.

   Target will endeavor to include DTV Transition advisory 
        information in future advertising supplements.

   Target will make available to its customers pamphlet 
        material as to the DTV transition.

   Target intends to participate in the NTIA CECB program, 
        subject to conditions and information yet to be received.

   Target will include information on its retail web commerce 
        site on the DTV Transition and the NTIA CECB program as more 
        specific information becomes available.

   Target will of course continue to implement compliance with 
        Section 15.117(k) of Commission regulations until stocks of 
        covered products are exhausted. Target is analyzing its 
        inventory to assess the possibility of expeditiously offering 
        its remaining stock of ``analog only'' TVs to those customers 
        (such as cable subscribers) for whom they may be good values.

    Through CERC and through its own personnel, Target has focused 
actively and specifically on cooperation with the NTIA from the 
program's inception, to fulfill the responsibilities delegated to it by 
the Congress. Target will consult with the Commission, as well, to help 
the FCC and the public and private members of the DTV Transition 
Coalition achieve coordinated message and implementation, as discussed 
in the CERC Comments. As noted, Target intends to participate actively 
in the NTIA CECB program \2\ and believes this participation will be 
most effective--and most feasible for retailers--if the messaging of 
the FCC, the NTIA, and others is closely coordinated and aligned. 
Target joins CERC in acknowledging and endorsing the appropriate role 
of the Commission as to such coordination.
---------------------------------------------------------------------------
    \2\ Target has advised the FCC of an intention to participate, 
pending receipt of additional information as to specific expectations 
of the NTIA CECB Program Contractor and Target's legal status as a 
participant, certification of CECB products (at this writing two 
manufacturers' products have been certified), their availability from 
manufacturers, coupon availability, and implementation of technical 
system requirements for redeeming consumers' coupons. Target has not 
yet seen or received any form of agreement from the IBM Team so cannot 
yet commit to its terms, nor does it know whether the Commission will 
impose additional requirements via this Docket. Target endorses CERC's 
observation that all parties, public and private, are working on these 
issues expeditiously and in good faith.
---------------------------------------------------------------------------
            Respectully Submitted,
                                          Nathan K. Garvis,
                                Vice President, Government Affairs.
cc: Commissioner Jonathan Adelstein
Commissioner Michael J. Copps
Commissioner Robert M. McDowell
Commissioner Deborah Taylor Tate
                                 ______
                                 
                                  Circuit City Stores, Inc.
                                     Richmond, VA, October 16, 2007
Hon. Kevin J. Martin,
Chairman,
Federal Communications Commission,
Washington, DC.

Re: MB Docket No. 07-148; Circuit City Commitment To DTV Consumer 
    Education

Dear Chairman Martin:

    On behalf of Circuit City Stores, Inc., I am writing to assure you 
that Circuit City recognizes the importance of educating consumers as 
to the DTV Transition, and that Circuit City intends to do its part. We 
specifically endorse, in this respect, the Comments filed by the 
Consumer Electronics Retailers Coalition (CERC).\1\ As you know, 
Circuit City is a leading specialist retailer of consumer electronics 
products and a founding member of CERC. In CERC's Comments, CERC and 
its members acknowledged the Commission's position of leadership in the 
public interest, and pledged their cooperation in helping the 
Commission to exercise its responsibilities so as to achieve a 
successful result in the DTV Transition.
---------------------------------------------------------------------------
    \1\ In the Matter of DTV Consumer Education Initiative, MB Docket 
No. 07-148, Comments of the Consumer Electronics Retailers Coalition 
(Sept. 19, 2007) (``CERC Comments'').
---------------------------------------------------------------------------
    Prior to the filing of the CERC Comments, Phil Schoonover, Circuit 
City's CEO, and I expressed Circuit City's commitment to working with 
you and the Commission to further DTV Consumer Education. We reviewed 
and sought your input on the measures that Circuit City was intending 
to implement to assure that our associates and our customers had an 
appreciation of the imminence and significance of the DTV Transition, 
and the range of choices that will be offered to consumers. Phil 
Schoonover also serves on the Board of the Consumer Electronics 
Association (CEA), and such commitments were recognized in CEA's 
Comments, as well.\2\
---------------------------------------------------------------------------
    \2\ In the Matter of DTV Consumer Education Initiative, MB Docket 
No. 07-148, Comments of the Consumer Electronics Association at 2, 6-7, 
9-10 (Sept. 19, 2007) (``CEA Comments'').
---------------------------------------------------------------------------
    CERC's Comments set forth the consumer electronics retail industry 
initiatives that have already been undertaken, and those that are 
planned. Circuit City has played a key role in these initiatives. 
Circuit City has distributed to its stores the ``DTV Tip Sheets'' that 
were co-branded by the Commission, CEA, and CERC. Circuit City posted 
advisory signage in its stores, for antenna-reliant customers, within 
weeks of the signing of the legislation that set the February 17, 2009 
date for the DTV Transition, and has consistently advised consumers as 
to the Transition via its commercial website. Circuit City has engaged 
the NTIA Program Contractor and its own vendors with a view to the 
earliest and most efficient possible execution of the program at 
retail.
    In addition to consulting with you personally, through counsel we 
have consulted with your office, bureau staff, and other Commissioners' 
legal advisors as to specific plans to inform and assist customers as 
key Transition dates approach. We are committed to these public 
education and NTIA Program undertakings, some of which are already in 
process:

   Circuit City will conduct additional and more specific 
        training for sales associates as to the DTV Transition and the 
        NTIA Coupon Eligible Converter Box (``CECB'') program, 
        including appropriately addressing the expressed needs of 
        customers for CECB products in aid of their existing TVs.

   Circuit City will include DTV Transition advisory 
        information in its advertising supplements.

   Circuit City will include items on the DTV Transition and 
        the end of analog broadcasting in its in-store ``video loops'' 
        that are shown on the TVs displayed for sale.

   Circuit City will have store signage about the DTV 
        Transition and the end of analog broadcasts.

   Circuit City will make available to its customers pamphlet 
        material as to the DTV Transition reflecting a unified Federal 
        message. (Circuit City has previously distributed the ``DTV Tip 
        Sheet'' that has been jointly produced and branded by the FCC, 
        CERC, and CEA, as copies have been provided to Circuit City.)

   Circuit City intends to participate in the NTIA CECB program 
        and has begun commercial steps to do so. Any final business 
        decision and commitment, however, must await receipt of 
        necessary documents and information:

    Receipt of a form of agreement from the NTIA or its 
            Contractor, and knowledge of its terms;

    Certification by the NTIA of additional models of CECBs 
            (only two manufacturers have received certification as of 
            this writing); and

    Receipt of additional technical and regulatory 
            information that is still not available to Circuit City. We 
            are encouraged by technical information received from the 
            IBM Team but we still lack sufficient information to assure 
            that participation is feasible with respect to our point of 
            sale and other technological systems. Nor do we know 
            whether the Commission will impose regulations that could 
            penalize retail marketing practices with respect to a 
            program that the NTIA has assured us is voluntary.

   Circuit City will increasingly focus its retail web commerce 
        site on the DTV Transition and the NTIA CECB program, as more 
        specific information becomes available.

   Circuit City will of course continue to implement compliance 
        with Section 15.117(k) of Commission regulations until stocks 
        of covered products are exhausted.

    In this respect, we are aware of your interest in our 
            exhausting existing stocks of ``analog-only'' TVs. Circuit 
            City is willing to attempt to expedite its sales of these 
            products to consumers who do not rely on antennas.

    As an active member of CERC and CEA, and separately, Circuit City 
has worked actively and specifically with the NTIA from the program's 
inception to fulfill the responsibilities delegated to it by the 
Congress. Circuit City will consult with the Commission, as well, to 
help the FCC and the public and private members of the DTV Transition 
Coalition achieve coordinated messaging and implementation, including a 
coordinated Federal Government message and communication plan, as 
discussed in the CERC Comments. As we advised you on a personal basis, 
Circuit City intends to participate actively in the CECB program, 
subject to the considerations described above, and believes this 
participation will be most effective--and most feasible for retailers--
if the messaging of the FCC, the NTIA, and others is closely 
coordinated and aligned. As do CERC and CEA, Circuit City acknowledges 
and endorses the appropriate role of the Commission as to such 
coordination.\3\
---------------------------------------------------------------------------
    \3\ We do, however, also endorse CERC's opposition to the 
Commission regulating in areas in which it appears to lack jurisdiction 
and as to which the NTIA, which was specifically delegated the 
Congressional authority to regulate, has declined to do so.
---------------------------------------------------------------------------
    In CERC's Comments, CERC recognized the FCC's overall 
responsibilities pertaining to the DTV Transition, and pledged to help 
and support the Commission in fulfilling them. CERC agreed with 
congressional leaders that the FCC has a vital leadership role to play 
in the Transition, and said its members will cooperate further, to 
assist the Commission in this role, particularly as to coordination and 
focus in the activities of the public and private sector members of the 
DTV Transition Coalition. Circuit City embraces this obligation as its 
own.
            Respectfully,
                                     Reginald D. Hedgebeth,
                            Senior VP, General Counsel & Secretary.
cc: Commissioner Jonathan Adelstein
Commissioner Michael J. Copps
Commissioner Robert M. McDowell
Commissioner Deborah Taylor Tate

                                  
