[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
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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.
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\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.
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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.
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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.
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\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'').
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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\
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\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'').
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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\
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\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.
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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