[Senate Hearing 110-1220]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 110-1220
 
      OVERSIGHT OF THE DTV TRANSITION: COUNTDOWN TO FEBRUARY 2009
=======================================================================



                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,

                      SCIENCE, AND TRANSPORTATION

                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 23, 2008

                               __________

    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

                             SECOND SESSION

                   DANIEL K. INOUYE, Hawaii, Chairman
JOHN D. ROCKEFELLER IV, West         KAY BAILEY HUTCHISON, Texas, 
    Virginia                             Ranking
JOHN F. KERRY, Massachusetts         TED STEVENS, Alaska
BYRON L. DORGAN, North Dakota        JOHN McCAIN, Arizona
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             ROGER F. WICKER, Mississippi
   Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
Lila Harper Helms, Democratic Deputy Staff Director and Policy Director
   Christine D. Kurth, Republican Staff Director and General Counsel
                  Paul Nagle, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on September 23, 2008...............................     1
Statement of Senator Dorgan......................................    48
Statement of Senator Inouye......................................     1
Statement of Senator Klobuchar...................................    53
Statement of Senator Wicker......................................    52

                               Witnesses

Baker, Meredith Attwell, Acting Assistant Secretary for 
  Communications and Information, NTIA, U.S. Department of 
  Commerce.......................................................    20
    Prepared statement...........................................    22
Carbonell, Hon. Josefina G., Assistant Secretary for Aging, U.S. 
  Department of Health and Human Services........................    31
    Prepared statement...........................................    33
Goldstein, Mark L., Director, Physical Infrastructure, U.S. 
  Government Accountability Office (GAO).........................    36
    Prepared statement...........................................    38
Martin, Hon. Kevin J., Chairman, Federal Communications 
  Commission.....................................................     2
    Prepared statement...........................................     4
Saffo, Hon. Bill, Mayor, City of Wilmington, North Carolina......    43
    Prepared statement...........................................    46

                                Appendix

Response to written questions submitted to Meredith Attwell Baker 
  by:
    Hon. Maria Cantwell..........................................    68
    Hon. Daniel K. Inouye........................................    67
Response to written questions submitted to Hon. Josefina G. 
  Carbonell by:
    Hon. Maria Cantwell..........................................    66
    Hon. Daniel K. Inouye........................................    65
Response to written questions submitted to Mark L. Goldstein by:
    Hon. Maria Cantwell..........................................    72
    Hon. Daniel K. Inouye........................................    72
Response to written questions submitted to Hon. Kevin J. Martin 
  by:
    Hon. Maria Cantwell..........................................    64
    Hon. Daniel K. Inouye........................................    63
    Hon. John D. Rockefeller IV..................................    63
Response to written question submitted to Hon. Bill Saffo by:
    Hon. Maria Cantwell..........................................    74
    Hon. Daniel K. Inouye........................................    73


      OVERSIGHT OF THE DTV TRANSITION: COUNTDOWN TO FEBRUARY 2009

                              ----------                              


                      TUESDAY, SEPTEMBER 23, 2008

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:36 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. I realize that I am the only one here, but as 
you know, our Nation is faced with a very, very serious 
financial crisis, and both parties have their Senators in 
conferences at this moment. I excused myself from one of those 
because I do not want to have you waiting too long. But we may 
not have a full Committee here.
    But this DTV transition, which is scheduled for February 17 
next year, is less than 5 months away. And for the past 18 
months, Members of this Committee have been consistent in 
expressing their concern that the transition to digital 
television has not received enough attention or resources to 
ensure its success. And while Federal agencies and the industry 
have stepped up their efforts, I continue to be concerned that 
we are not fully prepared for the flood of coupon requests and 
calls that we can expect just before the transition or after 
the transition.
    The transition is taking place for the best of public 
policy reasons. Once the transition is complete, we will free 
up needed spectrum for emergency first responders to use to 
better serve and protect the American people. In addition, 
consumers will have higher quality pictures and sound and 
hopefully more channels to chose from.
    And February 17 will be the 29th day of the next 
Administration. The transition has the potential to cause 
serious disruption, not just to consumers, but to a new 
President who is just getting acquainted to the Oval Office. 
Neither President Obama nor President McCain should have to 
deal with a failed transition soon after coming into office.
    I am deeply concerned that the benefits of the transition 
may be overshadowed by poor implementation. As the recent tests 
in Wilmington, North Carolina demonstrated, even with a 
Herculean investment of time and resources that will be 
impossible to replicate throughout the rest of the country, 
consumers made thousands of phone calls seeking help with 
various aspects of the transition. On a national level, this 
may translate to millions of calls. Unless more is done, 
February 17, 18, and 19 will be very, very long days, indeed.
    We have limited resources, limited time, but I hope to hear 
from our witnesses today the creative ideas they have to 
overcome these limitations and their plans to address the 
potential flood of calls, questions, and coupon requests around 
the date of the transition. And I can tell you that Members of 
the Congress are beginning to receive calls now.
    These are immediate and significant challenges and we must 
find a way to overcome them. I urge the Federal Communications 
Commission and the National Telecommunications Information 
Administration to make this transition a high priority and not 
let attention be diverted by pursuing contentious proceedings. 
As the current Administration winds down, both agencies must 
remain vigilant so that the next Administration does not 
inherit a communications crisis. We have too many crises facing 
us at this moment.
    So with that, I would like to thank all the witnesses for 
joining us today, and may I call upon our first witness, the 
Chairman of the Federal Communications Commission, the 
Honorable Kevin Martin?

         STATEMENT OF HON. KEVIN J. MARTIN, CHAIRMAN, 
               FEDERAL COMMUNICATIONS COMMISSION

    Mr. Martin. Good afternoon and thank you, Chairman Inouye, 
for inviting me to be here and for continuing to update you on 
the status of the digital transition.
    With the national transition about five months away, much 
remains to be done. At the same time, since I last appeared 
before you, we have continued to make progress educating 
viewers and helping them prepare for the upcoming transition. 
In particular, in addition to our ongoing consumer and 
education efforts, we have recently gained real-world 
experience with the challenges facing viewers and broadcasters 
as we approach next February.
    On September 8, Wilmington, North Carolina, became the 
first market in the country to transition from analog to 
digital television.
    Before I go into the details of the Wilmington transition, 
I would like to start by thanking Commissioner Copps for 
challenging me and the industry to find a community that would 
be willing to help the rest of the country lead this 
transition. Commissioner Copps deserves credit for urging the 
Commission to engage in a real-world test that would help the 
broadcasters, viewers, and us prepare for the upcoming 
transition.
    May I also take a moment to thank Mayor Saffo and the 
entire Wilmington community. I know you will be hearing from 
him directly in a few moments, but it was the community's 
efforts that really made this transition possible in 
Wilmington.
    The Wilmington switch-over was critically important because 
it enabled us to learn what was effective in informing and 
preparing viewers and broadcasters for the transition. And, 
equally important, it helped us identify what outreach and 
technical challenges still need to be addressed in the months 
ahead.
    While we hope that the transition in Wilmington went 
relatively smoothly, the measure of success in Wilmington is 
not what occurred earlier this month. The measure of success in 
Wilmington is what happens next February and whether we are 
able to learn from the experience and apply those lessons as we 
move this effort across the country.
    Now, importantly, the consumer education campaign that was 
conducted appears to have been effective. Consumer calls 
received by the Commission at its call center indicated that a 
vast majority of the 400,000 television viewers in the 
Wilmington area were aware of the transition and prepared for 
it. As of last Friday, we had received 2,272 calls regarding 
the Wilmington test, representing only about 1.2 percent of the 
Wilmington households. During that same timeframe, following 
the switch-over, only 100 callers said they were unaware of the 
transition, and 186 callers said they were aware but did not 
take any action to prepare for it.
    So, though our consumer education effort appears to have 
been effective, our focus now needs to turn to resolving 
several of the technical challenges. Some of these challenges 
are easily resolved and others are not.
    With respect to the callers who were experiencing 
difficulty following the switch, I have directed our engineers 
and our outreach staff to work directly with these viewers and 
assist them in resolving their individual questions and needs.
    For example, as of last Friday, there were 341 calls to our 
help line about converter box problems. Thanks to the 
Commission staff, almost 90 percent of these, almost 300 of the 
341 calls that came in, have been resolved. Many of these 
solutions were very simple. Consumers needed to rescan for 
channels on their television set or on their converter box or 
properly hook up their converter box to the television. On a 
going-forward basis, our consumer education efforts are going 
to need to better instruct consumers about how to effectively 
hook up their box and how to rescan.
    Unfortunately, some viewers are experiencing problems that 
will not be as easy for us to resolve. For example, there are a 
number of consumers in the Wilmington area that have lost 
access to the Wilmington NBC affiliate. Prior to the digital 
switch, the Wilmington NBC affiliate was available to viewers 
outside the television market as far south as Myrtle Beach and 
as far north as Raleigh, North Carolina. The Wilmington NBC 
affiliate's coverage area after the switch no longer includes 
viewers outside its main market. Some of these viewers will be 
able to watch their local NBC affiliate in Myrtle Beach and 
Raleigh. There are some, however, that will not have access to 
any NBC affiliate.
    Our goal is to ensure that all viewers in the Wilmington 
area and ultimately across the country have access to the same 
television signals they did prior to the transition. The 
Commission is currently exploring what steps can be taken to 
address this problem in Wilmington and to help minimize the 
burden on viewers throughout the country.
    Finally, relatively few consumers lost their broadcast 
channels as a result of the cliff effect. Only about 15 percent 
of viewers receive their signals over the air. In the past, I 
have estimated that less than 1 percent of all viewers would 
need a new antenna due to the digital cliff effect. The data 
from Wilmington suggests a similar outcome. We received 
approximately 549 calls from viewers experiencing antenna or 
reception issues and were able to resolve approximately 139 of 
them by asking them to rescan or to adjust their antenna's 
direction. Only 410 calls, or about .22 percent of the 
Wilmington households, were potentially experiencing this 
digital cliff effect. In short, for stations whose DTV coverage 
signal was designed to replicate their analog coverage signal, 
complaints about the potential cliff effect were well below our 
estimate of one percent.
    The early switch to digital in Wilmington has been 
instrumental in helping the Commission to identify, understand, 
and hopefully prevent some of these future problems when the 
rest of the Nation transitions in February.
    And, finally, one of the fundamental lessons learned in 
Wilmington is the importance of educating consumers at a 
grassroots level. To this end, last month I announced a 
nationwide initiative to increase awareness about the upcoming 
transition to digital television. As part of our efforts to 
prepare consumers for the transition, the Commission identified 
those markets in which the largest number of viewers will need 
to take action to be prepared for the transition five months 
from now. My fellow Commissioners and I will fan out to these 
markets to raise awareness and educate consumers in the days 
leading up to the transition. At each stop, we will do public 
events such as town hall meetings, workshops, and round tables 
with an FCC Commissioner to highlight the transition, be 
available to local press, and in coordination with these 
visits, the Commission will work with local broadcasters and 
radio stations to increase the broadcast of radio and TV DTV 
PSAs.
    As part of the tour, the Commission is also coordinating 
with the broadcasters to explore whether at the same time these 
stations may participate in a temporary turn-off of their 
analog signals. During these so-called soft tests, analog 
consumers would see a message on their screens informing them 
of the transition and how to become prepared.
    The next five months will undoubtedly be challenging. 
Nevertheless, it is my hope that through the combined efforts 
of government, industry, advocacy, and grassroots groups, 
American consumers will reap the rewards that the digital 
transition has to offer and we can continue to try to minimize 
the burdens that we placed on them.
    Thank you, and I look forward to answering your questions.
    [The prepared statement of Mr. Martin follows:]

         Prepared Statement of Hon. Kevin J. Martin, Chairman, 
                   Federal Communications Commission
    Good afternoon, Chairman Inouye, Ranking Member Hutchison, and 
Members of the Committee. Thank you for inviting me here today to 
continue updating you on the status of the digital transition.
    The Commission has been hard at work on a number of fronts to 
minimize the potential burden for consumers and to maximize their 
ability to benefit from the upcoming digital transition. The conversion 
to digital television promises movie quality picture and sound as well 
as potentially new programming choices. It also will allow us to 
significantly improve public safety communications and usher in a new 
era of advanced wireless services.
    With the national transition about 5 months away, much remains to 
be done. At the same time, since I last appeared before you, we have 
continued to make progress educating viewers and helping them prepare 
for the upcoming transition. In particular, in addition to our ongoing 
consumer education and outreach efforts, we have recently gained real-
world experience with the challenges facing viewers and broadcasters as 
we approach February 2009.
    Earlier this month, on September 8, Wilmington, North Carolina 
became the first market in the country to transition from analog to 
digital television. At noon on that day, five local Wilmington stations 
turned off their analog signals and began broadcasting only digital to 
the viewers in the five counties that comprise the Wilmington 
television market. This was a historic day and I am pleased that the 
local broadcasters and the entire community embraced the challenge of 
helping the country prepare for the switch to digital.
    Before I go into the details of the Wilmington transition, I would 
like to start by thanking Commissioner Copps for challenging me and the 
industry to find a community that would be willing to help the rest of 
the country lead this transition. Commissioner Copps deserves credit 
for urging the Commission to engage in a real-world test that would 
help ready the broadcasters, viewers and us for the upcoming 
transition.
    For its part, the Commission worked to educate, inform, and prepare 
viewers for the transition. We had staff on the ground in every county, 
we attended over 400 outreach events, including Town Hall meetings, and 
distributed over 85,000 publications. But it was our partnerships, 
particularly those at the grassroots level, that were critical in 
enabling us to contact the ``at risk'' groups that we are focused on 
reaching--senior citizens, non-English speakers and minorities, people 
with disabilities, low-income consumers, and those living in rural or 
tribal areas. One of the invaluable lessons we have learned from 
Wilmington is that DTV outreach success depends on the commitment of 
the local community, including local industry, governmental and 
nongovernmental organizations. Community stakeholders must take a 
leadership role for such large-scale messaging to take effect, and 
tapping into existing grassroots networks is critical.
The Wilmington Test
    The Wilmington switchover was critically important because it 
enabled us to learn what was effective in informing and preparing 
viewers and broadcasters for the transition. Equally important, it 
helped us identify what outreach and technical challenges still need to 
be addressed in the months ahead. While we hope that the transition in 
Wilmington went relatively smoothly, the measure of success in 
Wilmington is not what occurred earlier this month. The measure of 
success in Wilmington is what happens next February and whether we are 
able to learn from this experience and apply those lessons as we move 
this effort across the country.
Majority of Wilmington Viewers Aware and Prepared for Transition
    Based on our current information, it appears that the majority of 
Wilmington viewers were aware of and prepared for the transition. 
Importantly, the consumer education campaign that was conducted appears 
to have been effective. Prior to the transition on September 8, NAB 
released a survey indicating that 97 percent of Wilmington residents 
were aware of the switch to digital. Consumer calls received by the 
Commission at its call center also indicated that the vast majority of 
the 400,000 television viewers in the Wilmington-area were aware of the 
transition and prepared for it.
    In total we received 2,272 calls regarding the Wilmington test, 
representing about 1.2 percent of Wilmington households. See Appendix 
D. During the first week of the transition we received 1,828 calls. 
That number dropped to 444 calls to the FCC call center during the 
second week. During the first day of the transition, the Commission's 
toll-free helpline received 797 calls representing less than one-half 
of 1 percent of area homes. Last Friday, 72 calls were placed to the 
call center by Wilmington residents.
    It appears that the residents of Wilmington were generally aware of 
the early transition and generally prepared for it. For the 2 weeks 
following the switchover only 100 callers said they were unaware of the 
transition and 186 callers were aware but did not act to prepare for 
it. See Appendix D.
Challenges that Remain
    While we continue to enhance our consumer education efforts which 
appear to have been effective, we must also be focused on resolving 
technical challenges. Some of these challenges are easily resolved and 
others are not. With respect to the callers who are experiencing 
difficulty following the switch to digital in Wilmington, I have 
directed our engineers and outreach staff to work directly with these 
viewers and assist them in resolving their individual questions and 
needs.
    For example, as of last Friday, 341 of the calls to our helpline 
were about converter box problems. We received 301 calls about the 
converter box program during the first week and 40 of those calls in 
the second week after the transition. Thanks to dedicated Commission 
staff, many of these difficulties have been resolved. Specifically, 
Commission staff was able to resolve almost 90 percent (299 of the 341) 
of the calls that came in about converter box issues. See Appendix D. 
The solutions were often relatively simple--consumers needed to re-scan 
the channels on their television set or properly hook up their 
converter box. Broadly speaking, gaining a better understanding of the 
challenges being faced by consumers after the real switchover in 
Wilmington, is enabling us to better focus our messaging and consumer 
education tools. Specifically, as we go forward, our consumer education 
efforts will need to better instruct consumers about how to effectively 
hookup their box and the need to re-scan.
    Unfortunately, some viewers are experiencing problems that will not 
be as easy for us to resolve. For example, there are a number of 
consumers in the Wilmington-area that have lost access to the 
Wilmington NBC affiliate, WECT. During the first week we received 581 
calls from viewers experiencing problems receiving channels or calls 
signs. In week two, 154 such calls were made to the Commission's 
helpline. (For the 2-weeks, the total number of calls in this category 
was 735.) Prior to the digital switch, the Wilmington NBC affiliate 
signal was available to viewers outside the television market as far 
south as Myrtle Beach, South Carolina and as far north as Raleigh, 
North Carolina. See Appendix B. The Wilmington NBC affiliate's new 
coverage area, however, no longer includes these out of market 
communities. Some of these viewers will be able to watch their local 
NBC affiliate in Myrtle Beach and Raleigh. There may be some, however, 
that will not have access to any NBC affiliate. See Appendix C. 
Reception problems for channel 6 were caused by a significant reduction 
in the service contour for WECT channel 6, not the digital cliff 
effect.
    Our goal is to ensure that all viewers in the Wilmington-area and 
the country have access to the same television signals that they did 
prior to the transition. The Commission is currently exploring what 
steps can be taken to address this problem in Wilmington and minimize 
the burden on viewers throughout the country.
    Finally, relatively few consumers lost their broadcast channels as 
a result of the ``cliff effect.'' Digital TV experiences what is often 
referred to as the ``digital cliff effect.'' Analog TV pictures degrade 
gradually. As the signals get weaker the picture becomes progressively 
poorer or becomes ``snowy.'' Yet, viewers may still find these pictures 
watchable. In contrast, digital TV pictures remain crystal clear even 
with relatively weak signal levels. However, once the signal falls 
below a certain level, the picture breaks up or disappears. In such 
situations, viewers may lose their picture altogether.
    I had previously testified that our engineers estimated that about 
5 percent of over-the-air viewers may need a new antenna to receive 
digital television due to the digital cliff effect. Only about 15 
percent of viewers receive their signals over the air, so we estimated 
that less than 1 percent (5 percent of 15 percent) of all viewers would 
need a new antenna. The data from Wilmington suggests a similar 
estimate.
    We received 549 calls from viewers experiencing antenna or 
receptions issues and were able to resolve 139 of them. Only 410 calls, 
then, or .22 percent of Wilmington households were potentially 
experiencing the ``cliff effect.'' In short, for stations whose DTV 
coverage was designed to replicate their analog coverage, complaints 
about the potential cliff effect were well below our estimate of 1 
percent.
    The early switch to digital in Wilmington has been instrumental in 
helping the Commission to identify, understand, and hopefully prevent 
some future problems when the rest of the Nation transitions in 
February 2009. The measure of success in Wilmington is not what 
happened on September 8. Rather, it is how we are going to take what we 
learned in Wilmington and apply that knowledge to the rest of the 
country.
    We have already learned some very important lessons. For example, 
the Commission learned from the Wilmington test the importance of 
emergency preparedness. At the time we began outreach in Wilmington 4 
months ago there were no battery operated converter boxes available. So 
the broadcasters and some folks down in Wilmington were able to work 
with one converter box manufacturer, Winegard, who recently introduced 
a DTV converter box battery pack specifically designed to allow its 
converter boxes to work in power outages.
    We will continue to study the Wilmington experience so that we can 
best minimize the burdens placed on consumers as the national 
transition approaches.
Ongoing DTV Efforts
    In addition to our efforts in the Wilmington test market, the 
Commission has been busy in other areas. Our activities are described 
in great detail in the monthly digital television status reports that 
we send to Congress. I have attached the most recent of these 
comprehensive reports to my testimony. See Appendix A. I would like to 
highlight a few things we have been working on.
Broadcasters' Transition to Digital
    Progress on converting broadcast facilities to all digital is 
continuing. Based on the status reports that we have required 
broadcasters to make, over 90 percent of active full power television 
stations are either fully operational with digital service or are on 
track to have their full digital service operational by February 17, 
2009. Slightly over 5 percent of the stations indicate that they will 
take advantage of the flexibility offered by the Commission and serve 
at least 85 percent of their service population on February 17, 2009, 
with final digital operations beginning sometime thereafter. The 
Commission gave such flexibility if a broadcaster faced unique 
technical challenges such as weather-related issues, or coordination 
with other stations.
Enforcement Activities
    The Commission's DTV-related enforcement efforts have focused on 
protecting consumers by enforcing our rules as this transition takes 
place. As of September 18, 2008, Commission personnel have inspected 
4,161 stores and 72 websites to assess their compliance with the 
Commission's rules requiring labels on analog-only television 
receivers. We have issued 369 citations for failing to comply with our 
labeling rules. Since October 2007, we have released NALs or consent 
decrees against 22 retailers, totaling more than $4.74 million.
    We also have been visiting retailers to assess their employee 
training in the DTV transition and the NTIA converter box coupon 
program. As of September 18, 2008, Commission field agents have visited 
1,489 stores and conducted 1,438 interviews of store managers in 47 
states and in Puerto Rico.
    In addition, we are actively enforcing the DTV consumer education 
requirements that the Commission adopted last spring. To this end, we 
have recently issued a Bureau-level NAL in the amount of $51,000 
against one company for failing to notify its customers of the 
transition as required under our rules. We have also circulated a 
Commission-level order proposing $12.3 million of fines collectively 
against eight companies for notification failures. We are in the midst 
of reviewing additional information submitted by broadcasters, cable 
operators, and telecommunications carriers, and expect to take 
additional enforcement actions in the near future.
Consumer Education and Outreach
    Word of the digital transition is spreading quickly throughout the 
country. I would like to highlight a few of our education and outreach 
activities.
    Nationwide 81-City Tour. Last month, I announced a nationwide 
initiative to increase awareness about the upcoming transition to 
digital television. As part of our efforts to prepare consumers for the 
transition, the Commission identified television markets in which the 
largest number of viewers will have to take action to be prepared for 
the transition 5 months from now. Specifically, we identified 81 target 
television markets for specific DTV outreach, including all those 
markets in which more than 100,000 households or at least 15 percent of 
the households rely solely on over-the-air signals for television. 
Within these markets, we are aiming to educate those groups most 
vulnerable to the transition such as senior citizens and non-English 
speakers. My fellow Commissioners and I, as well as other Commission 
staff, will fan out to these markets to raise awareness and educate 
consumers in the days leading up to the digital television transition 
on February 17, 2009.
    At each stop, there will be a public event, such as a town hall 
meeting, workshop, or roundtable with an FCC Commissioner to highlight 
the digital transition, and be available to local press. In 
coordination with these visits, the Commission will work with local 
broadcasters and radio stations to increase the broadcasts of Radio and 
TV DTV PSAs. The Commission has visited several cities so far 
including, Anchorage, Fairbanks, Tulsa and San Francisco and plans many 
more trips in the upcoming weeks.
    As part of this nationwide tour, the Commission is also 
coordinating with the broadcasters to explore whether at the same time 
these stations may participate in a temporary turn off of their analog 
signals. During these so-called ``soft tests'' analog customers would 
see a message on their screens informing them of the transition and how 
to become prepared.
    DTV Awareness Sessions. The Commission has conducted over 1,882 DTV 
Awareness sessions, attended more than 509 conferences and events, 
established 514 partnerships, and made over 7,985 visits to various 
organizations around the country to disseminate DTV information.
    Speakers Bureau. Last month, I announced that the Commission has 
launched a Speakers Bureau for groups throughout the country to request 
speakers to discuss the upcoming digital transition. The Speakers 
Bureau is the latest addition to the Commission's DTV outreach effort. 
The Commission will provide speakers, without cost, to any group 
requesting one. To date, we have received 61 requests for speakers. The 
requests are being handled by staff traveling for conferences and 
events, as part of the outreach for our town hall meetings, and by our 
field agents.
    Grassroots Bid. The Commission just announced that it is seeking 
contracts from grass roots organizations and community-based 
organizations to assist consumers, particularly those consumers that 
are home-bound or that have limited mobility, with the procurement and 
installation of digital TV converter boxes and related equipment. This 
builds upon the Commission's work with fire departments in Wilmington 
where firefighters entered residents' homes to help with installing 
converter boxes. These efforts will complement our ongoing work of 
educating consumers about the migration from analog to digital 
broadcasting.
    U.S. Postal Service Partnership. We have distributed more than 
9,300 posters nationwide. We are displaying DTV education posters in 
all 34,000 post offices across the country. These posters include a 
dinosaur saying ``Don't Let Your TV Become Extinct.'' We are working 
with the U.S. Postal Service to install updated posters beginning 
November 1, 2008 running through the end of the transition period. The 
new posters are targeted to instill a greater sense of urgency to 
consumers and will use the slogan ``On February 17, 2009 your TV is 
changing. Are you ready?''
Conclusion
    In conclusion, the Commission is devoting significant resources to 
facilitating a smooth transition. Nearly every Bureau and Office at the 
Commission has been involved in this effort including our field offices 
throughout the country.
    We intend to take whatever actions are necessary to minimize the 
potential burden the digital transition could impose on consumers and 
maximize their ability to benefit from it.
    The next 5 months will undoubtedly be challenging. Nevertheless, it 
is my hope that through the combined efforts of government, industry, 
advocacy, and grassroots groups, American consumers will reap the 
rewards that the digital transition has to offer.
                               Appendix A
                Digital Television Status Update of the 
           Federal Communications Commission--September 2008
Introduction
    This fifth DTV monthly report highlights the Federal Communication 
Commission's activities as of August 31, 2008. The full reports and 
lists of stations are available upon request.
    The Commission has three primary areas of focus: (1) developing 
policies and technical rules to ensure a smooth transition for 
broadcast stations and minimize the burden placed on consumers; (2) 
enforcement of DTV-related Commission rules to protect consumers; and 
(3) coordinating and conducting consumer education outreach on the DTV 
transition. The Commission is devoting significant resources in each of 
these areas to facilitate a smooth transition. Those efforts are 
summarized below and included in the various attachments.
Update on Full-Power Broadcasters' Transition to Digital
    With regard to our efforts to prepare full-power broadcasters for 
the end of the transition, the Commission has in place the necessary 
rules to allow broadcasters to construct digital facilities. 
Additionally, each station is required to file Form 387 indicating the 
current status of construction of its post-transition facility and to 
update its Form 387 filing to convey changes in status as warranted. It 
is important to note that application and build out status for stations 
changes daily. The following chart provides a summary of the current 
status of full-power television broadcast stations at the final 5 
months of the DTV transition. A full list of stations is available upon 
request.
    In the month of August, 10 stations completed construction of their 
post-transition digital facilities. Thus, as noted in line 2 of the 
chart below, 1,012 stations indicated that they were completely 
finished with their DTV transition. In other words, those stations are 
on their final post-transition channel, have completed construction, 
and are operating their authorized post-transition digital facility.
    On August 18, 2008, the Media Bureau released a report based on 
Form 387 filings. In response to the release of the report, the Bureau 
received updated information from 75 stations regarding their status. 
The updated filings are reflected in the chart below. We note that, 
based on recently filed Form 387s, approximately 5 percent (97 
stations) will take advantage of the flexibility offered by the 
Commission in the Third DTV Periodic Review Report and Order and will 
be serving at least 85 percent of their service population on February 
17, 2009, with final operations beginning sometime thereafter (See line 
4 below). Accordingly, line 3 below was adjusted to account for these 
stations. One station, a satellite of another station, forecasts that 
it will not be able to complete construction of its digital facility 
until a few days after February 17, 2009 and will be dark for this 
brief time (See line 5 below). Finally, 3 stations have not submitted 
their Form 387s and have not officially reported when they will be 
ready for the DTV transition, but each station has represented to video 
division staff orally that it is on track to complete digital 
construction by February 17, 2009 (See line 6 below). In addition, we 
note that 10 stations were identified as new permittees without current 
analog facilities and are not required to construct before 2/17/2009 
(See line 7 below). Finally, the total number of full power stations 
has been adjusted upward to 1,813 (See line 1), as there were two 
additional stations that have recently been granted applications for 
new digital facilities, but do not have post-transition construction 
permits (See line 8).

                       Full Power Station Summary
------------------------------------------------------------------------
                                                        July     August
------------------------------------------------------------------------
1.                  Total # of full power stations     1,811      1,813
                     with DTV channels:
------------------------------------------------------------------------
2.                  Total # of stations with           1,002      1,012
                     completed post-transition
                     digital facilities:
------------------------------------------------------------------------
3.                  Total # of stations on-track to      736        685
                     complete construction by 2/17/
                     09:
------------------------------------------------------------------------
4.                  Total # of stations expecting to      56         97
                     serve at least 85 percent of
                     their digital population by 2/
                     17/09 (with full construction
                     completed after 2/17/09):
------------------------------------------------------------------------
5.                  Total # of stations expecting to       1          1
                     complete construction by
                     approximately 2/21/09:
------------------------------------------------------------------------
6.                  Total # of stations not filing         3          3
                     Form 387:
------------------------------------------------------------------------
7.                  Total # of new DTV stations with      10         10
                     construction deadlines after 2/
                     17/09 (4/3/2009, 4/10/2009, 6/
                     28/2009, 8/11/2009, 8/24/2009,
                     9/20/2009, 12/6/2009, 1/10/
                     2010, and 7/20/2010):
------------------------------------------------------------------------
8.                  Total # of recently granted            3          5
                     applications for new digital
                     stations:
------------------------------------------------------------------------

Update on Technical and Policy Actions
    The Media Bureau continues to process maximization applications and 
requests for new channels. As of August 31, 2008, 253 maximization 
applications have been granted, and 34 Notices of Proposed Rulemaking 
for new channels have been released, with 4 dismissed. Additionally, as 
reported by the Media Bureau in August, 106 stations indicate they plan 
to reduce analog service and 88 stations plan to terminate analog 
transmissions prior to 2/17/2009. As of August 31, 2008, 49 stations 
have been granted permission to reduce analog service with 28 having 
already reduced analog service. Additionally, as of August 31, 2008, 18 
stations have been granted permission to turn off their analog stations 
with 8 stations already shutting down their analog operations.
    Below is a summary of the other technical and policy actions taken 
with regard to the DTV transition in August 2008. A complete Policy and 
Technical Actions document is available upon request.
                     Policy and Technical Actions 
                          August 2008 Updates

   Applications for DTV Facilities--In August 2008, the Video 
        Division of the Media Bureau processed 141 modification and 
        license applications for DTV facilities. As of August 31, 2008, 
        the total number of modification and license applications 
        processed by the Video Division since 1997 is 5471.

   Applications for Construction Permits--In August 2008, the 
        Commission received approximately 6 construction permit 
        applications from stations implementing their post-transition 
        facilities. As of August 31 2008, the total number of 
        applications to implement post-transition facilities received 
        is 706.

   DTV Build Out--In August 2008, the Media Bureau released a 
        report on the status of the digital build out by full power 
        television stations. The report showed that over 96 percent of 
        active full power television stations are either fully 
        operational with digital service or are on track to have their 
        full digital service operational by February 17, 2009.

   NTIA Certified Converter Boxes--In August 2008, NTIA 
        announced certification of 20 converter boxes including 20 that 
        are capable of analog pass though. In total, as of August 31, 
        2008, NTIA has certified 149 converter boxes including 75 that 
        are capable of analog pass through.
Update on Low-power Broadcasters' Transition to Digital
    The Commission continues to process digital companion channel and 
digital flash cut applications for low power stations. As of August 31, 
2008, 236 low power stations are operating in digital, with 5 new 
stations licensed in July. The chart below summarizes the current 
information related to Class A, low power, and TV translator stations. 
Additional information by station type and a full list of low power 
stations is available upon request.

                        Low Power Station Summary
                            [As of 8.31.2008]
------------------------------------------------------------------------
                                                          July    August
------------------------------------------------------------------------
Total # of Class A, LPTV & TV Translator Stations:        7,088    7,088
------------------------------------------------------------------------
Total # of licensed digital Low Power stations (both        231      236
 ``Digital Companion Channel'' and ``Digital Flash
 Cut'' stations):
------------------------------------------------------------------------
Total # of stations with granted digital applications:    1,860    1,900
------------------------------------------------------------------------
Total # of stations with accepted/pending digital           186      199
 applications:
------------------------------------------------------------------------
Total # of stations with no digital application filed     4,811    4,753
 or application dismissed:
------------------------------------------------------------------------

Industry Outreach Efforts
    Broadcast stations must electronically report their consumer 
education efforts to the Commission on a quarterly basis by filing Form 
388 electronically in a database that is publicly available. These 
reports must also be placed in the broadcaster's public file and on 
their website. Broadcasters will file the next Form 388 on October 10, 
2008, reporting data for the previous quarter. A summary of that data 
will be provided in November, when we report data from October 2008.
Enforcement
    The Commission's DTV-related enforcement efforts have focused on 
protecting consumers from unknowingly buying televisions that will not 
receive full-power broadcast stations following the transition. There 
are three specific areas of enforcement: (1) the labeling of analog-
only televisions; (2) the prohibition on importing and shipment of 
analog-only televisions; (3) the V-Chip requirement for digital 
televisions. In addition, we have begun conducting informational 
interviews of store managers to assess the employee training and 
consumer education efforts of retailers participating in the NTIA 
converter box coupon program.
A. Labeling Enforcement

                          Labeling Inspections
------------------------------------------------------------------------
                                               August    Total to Date
------------------------------------------------------------------------
Retail Stores                                     129              3,978
------------------------------------------------------------------------
Websites                                           33                 72
------------------------------------------------------------------------
Citations                                           3                369
------------------------------------------------------------------------
Note: Due to the fact that generally retailers are not FCC licensees,
  citations must be issued prior to proposing monetary penalty via a
  Notice of Apparent Liability (NAL).

B. DTV Tuner Mandate
    The Enforcement Bureau continues to ensure that no manufacturers 
import and ship analog-only television receivers and equipment. In 
August, two new NALs for apparent violation were issued to Hannspree 
North America, Inc., and Invision Industries, Inc., for a total of 
$336,450. These NALs bring the total to date to five. Previous NALs 
were issued to Precor, Syntax Brillian Corp., and Regent USA, Inc. 
Precor and Regent have paid $421,550 combined, but Syntax Brillian has 
declared Chapter 11 bankruptcy. The Department of Justice must now file 
a proof of claim at the appropriate time in the company's bankruptcy 
proceeding to establish a claim for collection purposes.
C. V-Chip Requirements
    The Commission's rules require digital television manufacturers to 
include the V-Chip in their equipment and to ensure that their devices 
can adjust to changes in the content advisory system. We began 
investigating allegations that some manufacturers were not complying 
with our rules. We have released three NALs and eight consent decrees 
with manufacturers to resolve our investigations. The voluntary 
contributions from these orders totaled over $3.7 million and payment 
has already been made to the U.S. Treasury. In addition, the 
manufacturers agreeing to consent decrees have undertaken significant 
compliance measures to remedy their past violations and prevent future 
ones.
D. Retail Interviews
    As part of our follow-up on the requirements of the recent DTV 
Consumer Education Order, field agents across the country have been 
interviewing store managers at retail establishments offering digital-
toanalog converter boxes. Below is a summary of those efforts.

                            Retail Interviews
------------------------------------------------------------------------
                                               August    Total to Date
------------------------------------------------------------------------
Visits                                            111              1,446
------------------------------------------------------------------------
Interviews                                        106              1,397
------------------------------------------------------------------------

    To date, as reflected graphically below, the Bureau has found that 
the majority of store managers interviewed are well-informed of the 
digital transition and the NTIA converter box coupon program. Some 
managers, however, appear to need additional training in certain areas, 
e.g., the need of some customers for new antenna equipment, the fact 
that many low-power television stations will not convert to digital 
broadcasting on February 17, 2009. Where such training issues arise, 
field agents are providing information tip sheets and conducting 
supplemental training sessions.


    The Commission also has reviewed 35 retailer websites and contacted 
ten retailers selling converter boxes by telephone to assess whether 
they are providing accurate information to the public. We also are 
conducting compliance reviews of telecommunications carriers, 
manufacturers, and cable and satellite companies to verify that they 
have met our consumer education requirements. In addition, we are 
reviewing hundreds of broadcaster filings to determine whether they 
have complied with the DTV outreach requirements in the DTV Consumer 
Education Order.
    Swift enforcement of all our DTV-related rules is critical to 
protecting consumers and reducing potential confusion. Our activities 
in this area will continue to be a priority. Please see Attachment A 
for a list of enforcement actions and a summary of our retailer 
interview responses through August 2008.
National Consumer Education and Outreach
    The Commission is actively and directly promoting consumer 
awareness through our own education and outreach efforts. Our efforts 
emphasize outreach to over-the-air consumers and other ``hard to 
reach'' populations, including senior citizens; non-English speaking 
and minority communities; people with disabilities; low-income 
individuals; and people living in rural and tribal areas. Commission 
staff has been working to form partnerships and commitments from a wide 
variety of sources--including other Federal Agencies, as well as 
Tribal, State and Local governments. Below is a summary of outreach 
efforts of the Commission on a national level for the month of August. 
A complete report of national outreach efforts is available upon 
request.
A. Information Distribution
    A key part of the Commission's education and outreach efforts has 
been the development and distribution of consumer literature. These 
tools are a cost-effective means to provide information about the 
transition. In August, over 94,500 pages of DTV-related publications 
and posters were distributed. Additionally, as part of an agreement 
with the U.S. Postal Service, thousands of DTV transition posters were 
distributed to the U.S. Postal Service and are being displayed for the 
public at Post Offices nationwide. The chart below summarizes the 
Commission's distribution efforts.

                Distribution of Materials and Information
------------------------------------------------------------------------
                                             August      Total to Date
------------------------------------------------------------------------
Publications Distributed (Pages)               94,552   Over 5.6 million
------------------------------------------------------------------------
Posters Distributed                                25             41,251
------------------------------------------------------------------------
Website Hits                                6,397,784         35,298,312
------------------------------------------------------------------------
Call Center Calls                             146,107          1,188,873
------------------------------------------------------------------------

    Further, the number of website rose again in August, reflecting an 
increasing demand for Internet access to information on the DTV 
transition. Total call volume to the FCC in August 2008 was 146,107, 
which is a 336 percent increase since December 2007. The graphs below 
illustrate the call center calls and website hits since October 2007.


    In addition, our most widely distributed DTV one-pager is available 
in 20 languages in addition to English, including: Spanish, Chinese, 
French, Korean, Russian, Tagalog, Vietnamese, Hmong, Japanese, Arabic, 
Cambodian, Navajo, Somali, Amharic, Yupik, Portuguese, Laotian, Creole, 
Kurdish, and Polish, as well as Braille and audio formats. The public 
can obtain copies of our various DTV publications, as well as access 
other information resources, by visiting our www.DTV.gov web page or by 
calling our Consumer Center toll-free at 1-888-CALL FCC.
B. Media Outreach
    Billboards: Ketchum rolled out highway billboards on outdoor 
advertising space in five additional markets in August, and has now 
made agreements for donated space in a total of 55 markets. The new 
billboards went up in Duluth, MN; Springfield, MO; Yuma (El Centro), 
AZ; Kansas City, MO; and Dayton, OH.
    Public Service Announcements: Ketchum has produced 18 English and 
Spanish radio public service announcements, of varying lengths, 
featuring FCC Commissioners. Ketchum distributed the PSAs to all full-
power radio stations nationwide and the PSAs are available on DTV.gov 
as broadcast-quality downloads. Based on preliminary data, Ketchum 
indicates that, as of August 31, 2008, a total of 180 radio stations 
aired the PSA, resulting in over 36,000,000 audience impressions. This 
preliminary data translates into an estimated greater than 6 percent 
airing rate nationwide--or over 155,000,000 audience impressions 
nationwide. Ketchum has produced 12 English and Spanish television 
PSAs, of varying lengths, also featuring FCC Commissioners. They are 
being distributed to broadcasters and public access cable programmers 
nationwide. Ketchum has also produced a longer-form educational video. 
The television PSAs and educational video are viewable on www.DTV.gov 
and broadcast-quality versions are available, upon request, from the 
Commission.
C. Participation in Events and Conferences and Utilization of FCC Field 
        Offices

                  Cumulative National Outreach Summary
------------------------------------------------------------------------
                                               August    Total to Date
------------------------------------------------------------------------
Visits                                            632              7,732
------------------------------------------------------------------------
Awareness Sessions                                163              1,765
------------------------------------------------------------------------
Conferences, Events, & Meetings                   113                482
------------------------------------------------------------------------
Media Interviews                                   15                101
------------------------------------------------------------------------
Partnerships                                       82                516
------------------------------------------------------------------------

    As a subset of the numbers above of, in August, FCC field agents 
have visited 274 senior centers and 327 community centers, which 
frequently include large numbers of seniors, and gave 95 presentations. 
Thus far, Field Agents have visited 5,082 senior centers and 2,704 
community centers and have given 1,221 presentations.
D. Coordination with Federal, State, Tribal and Local entities and 
        Community Stakeholders
    The Commission's ongoing collaboration with public and private 
sector agencies and organizations continues to produce positive 
results. Eighty-two DTV outreach commitments were obtained as a result 
of partnership activities in August 2008. A list of these commitments 
is available upon request.
State-by-State Consumer Education and Outreach
    The Commission continues its active outreach on the DTV Transition 
with a focus on over-the-air households with a particular emphasis on 
the hard to reach constituencies, including senior citizens, non-
English speaking and minority communities; people with disabilities; 
low-income individuals; and people living in rural and tribal areas.
    On August 18, 2008, Chairman Kevin Martin announced a new 
initiative to increase awareness about the upcoming transition to 
digital television in target television markets, including all those 
markets in which more than 100,000 households (or at least 15 percent 
of the households) rely solely on over-the-air signals for television. 
The five FCC Commissioners and other Commission staff will fan out to 
these and other markets to raise awareness and educate consumers in the 
days leading up to the digital television transition on February 17, 
2009. At each stop, there will be a public event, such as a town hall 
meeting, workshop, or roundtable with an FCC Commissioner, to highlight 
the digital transition. In coordination with these visits, the FCC will 
work with local broadcasters and radio stations to increase the 
broadcasts of Radio and TV DTV Public Service Announcements. Particular 
emphasis is being placed on those groups that are most vulnerable in 
the transition: Seniors, People Living in Tribal and Rural Areas, 
People with Disabilities, Individuals with Low-Incomes, Minorities and 
Non-English Speakers.
    Additionally, the FCC launched a ``Speakers Bureau'' to provide 
groups and organizations throughout the country a convenient way to 
request speakers to discuss the upcoming transition to Digital 
Television (DTV) at their meetings and events. The Speakers Bureau is 
the latest addition to the FCC's DTV outreach effort. The Commission 
will provide speakers, without cost, to any group requesting one. To 
date, we have received over 40 requests for speakers. The requests are 
being handled by staff traveling for conferences and events, as part of 
the outreach for our town hall meetings, and by our field agents.
    Taking all of these new initiatives and the existing outreach 
effort into account, for September and October, there are 90 Awareness 
Sessions planned, with FCC staff attending 30 Conferences, Events or 
Meetings. Additionally, FCC Field Offices have 145 presentations 
scheduled in the days ahead. Please see Attachment B for detailed 
information on the public education efforts of the Commission on a 
state-by-state basis.
The Early Transition in Wilmington, North Carolina
    The stations in Wilmington, North Carolina transitioned to digital 
on September 8, 2008. Over the last month, Commission staff continued 
to focus on at risk constituencies and key messaging in Wilmington. 
Additional events during this time period included presentations at 
rotary clubs, pantries, meals on wheels facilities, fire departments 
and an exhibit at a Wilmington Sharks game. The Commission's outreach 
efforts also focused on continuing efforts to help at risk 
constituencies order and install the digital to analog converter box. 
Outreach highlights include numerous converter box coupon sign up 
events at libraries, churches and social services agencies. The FCC 
sponsored a town hall event focused on educating consumers about closed 
captioning in the digital television era. Also during August, 
broadcasters conducted two ``soft tests'' to assess consumer awareness.
    Attachment C provides an overview and analysis of the consumer 
calls received through the first 5 days of the transition. Additional 
information on the Wilmington transition will be provided in next 
month's report.
    Below is a summary of activities taken in Wilmington during the 
early transition period. Additional detail regarding the outreach is 
listed in Attachment D.

               Wilmington, North Carolina Outreach Summary
------------------------------------------------------------------------
                                                         August   Total
------------------------------------------------------------------------
Visits                                                       88      427
------------------------------------------------------------------------
Awareness Sessions                                           90      343
------------------------------------------------------------------------
Conferences, Events, & Meetings                               1       75
------------------------------------------------------------------------
Media Interviews                                             12       24
------------------------------------------------------------------------
Partnerships                                                  0      102
------------------------------------------------------------------------

FCC Consumer Advisories
    Commission staff are continually updating and creating new Consumer 
Advisories as we become aware of new issues and questions from the 
public. Recently, based on questions and comments from consumers, the 
Commission prepared a Consumer Advisory on select features in 41 
digital-to-analog converter boxes purchased by the Commission. The 
features described in the advisory include features of particular 
interest to the disabilities community, as recommended by the 
Commission's Consumer Advisory Committee. All of the boxes listed in 
the advisory are certified under NTIA's converter box coupon program 
and, therefore, are eligible for purchase using a free converter box 
coupon issued by NTIA. The advisory will be updated as more NTIA-
approved converter boxes become available at retail stores and online. 
A copy of the Converter Box Features Consumer Advisory is included in 
Attachment E.
                               Appendix B


                               Appendix C


                               Appendix D












                     Wilmington, NC DTV Transition 
                         Overview of DTV Calls

                 Wilmington, NC Transition Calls by Week
  Overview/Analysis of Wilmington Transition Test DTV Calls (adjusted)
------------------------------------------------------------------------
                   Category                     Week 1   Week 2   Total
------------------------------------------------------------------------
             CONSUMERS WHO WERE NOT AWARE OF THE TRANSITION
------------------------------------------------------------------------
They were not aware of the switch to DTV            23        4       27
They were unaware of the correct transition         26        1       27
 date
They did not think the stations they watch          42        4       46
 would switch to digital
------------------------------------------------------------------------
Subtotal:                                           91        9      100
------------------------------------------------------------------------
                CONSUMERS WHO WERE AWARE BUT DID NOT ACT
------------------------------------------------------------------------
They forgot to upgrade                              56        5       61
They were unable to attain assistance to            11        0       11
 upgrade
They relied on another member of their               7        4       11
 household to upgrade
They waited too long to buy or set up a             70        9       79
 digital set or a converter box
They were out of town or too busy or knew           19        5       24
 they could do it later
------------------------------------------------------------------------
Subtotal:                                          163       23      186
------------------------------------------------------------------------
    CONSUMERS WHO HAD PROBLEMS WITH THE CONVERTER BOX COUPON PROGRAM
------------------------------------------------------------------------
A coupon did not arrive in time                     64       10       74
Wanted coupon or had not received coupon from      119       44      163
 NTIA
The retail store was out of boxes                    2        0        2
------------------------------------------------------------------------
Subtotal:                                          185       54      239
------------------------------------------------------------------------
     CONSUMERS WHO HAD INITIAL DIFFICULTY WITH THEIR CONVERTER BOXES
------------------------------------------------------------------------
Setting up converter boxes was too hard             57       14       71
They didn't understand the instructions for         66        5       71
 the digital set or the converter box
Their converter box ``didn't work''                178       21      199
------------------------------------------------------------------------
Subtotal:                                         301*       40      341
------------------------------------------------------------------------
           CONSUMERS WHO HAD RECEPTION AND TECHNICAL PROBLEMS
------------------------------------------------------------------------
Their antenna didn't work or they have no          114       39      153
 antenna or their antenna wasn't connected
Problem with channel or call sign                  157       62      219
Weak or spotty signal                              136       41      177
------------------------------------------------------------------------
Subtotal:                                          407      142      549
------------------------------------------------------------------------
      CONSUMERS COMPLAINING ABOUT NOT RECEIVING WILMINGTON SIGNALS
------------------------------------------------------------------------
Problem with channel 6/44                          581      154      735
------------------------------------------------------------------------
Subtotal:                                        581**      154      735
------------------------------------------------------------------------
                             OTHER PROBLEMS
------------------------------------------------------------------------
Satellite subscribers to Dish Network or            53       18       71
 Direct TV--did not subscribe to local
 package
They thought all their sets were hooked up to       22        3       25
 cable or satellite
They were waiting for cable or satellite            13        0       13
 installation
Wanted DTV consumer information sent to them        12        1       13
------------------------------------------------------------------------
Subtotal:                                          100       22      122
------------------------------------------------------------------------
Total                                            1,828      444    2,272
------------------------------------------------------------------------
* This number reflects the reduction of 28 calls previously reported as
  converter box problems that were subsequently determined to be channel
  6/44 reception issues.
** This number reflects an increase of 28 calls previously reported as
  converter box problems that were subsequently determined to be channel
  6/44 reception issues.


    The Chairman. Thank you very much, Mr. Chairman.
    Our next witness is the Acting Assistant Secretary of 
Commerce for Communications and Information, National 
Telecommunications Information Administration, Meredith Attwell 
Baker. Secretary Baker?

          STATEMENT OF MEREDITH ATTWELL BAKER, ACTING 
          ASSISTANT SECRETARY FOR COMMUNICATIONS AND 
         INFORMATION, NTIA, U.S. DEPARTMENT OF COMMERCE

    Ms. Baker. Thank you, Mr. Chairman. Good afternoon. And 
thank you for the opportunity to testify today.
    For more than 2 years, NTIA's top priority has been to 
educate Americans about their options for the DTV transition 
and to administer an efficient and consumer-friendly coupon 
program. With 147 days to go, we remain committed to doing all 
that we can to assist Americans to prepare for this historic 
evolution in television broadcasting technology.
    From January 1, when we first launched the coupon program, 
through September 17, the volume of coupon applications has 
been strong: more than 27 million coupons requested from over 
14.5 million households. This is equivalent to 105,000 average 
household requests each day of the 260 days of the program. In 
the last 30 days, the average household requests were up to 
112,000 per day.
    The rate of coupon redemptions has likewise been strong. 
Over 10 million coupons have been redeemed through September 
17, a rate of 49.3 percent for all coupons and 55.5 percent for 
coupons used by over-the-air-only households.
    The cooperation of the converter box manufacturers and the 
retailers has greatly contributed to the consumer-friendly 
objective of the program and we really appreciate their 
partnership. As of September 17, we have certified 158 
converter boxes, including 83 boxes with an analog pass-through 
feature, and at least one, Winegard, that works with a battery 
pack. The program also now includes more than 2,300 
participating retailers with over 29,400 outlets in all 50 
states and territories. There are now 35 online retailers, 
which includes the recently added Amazon.com, and 13 telephone 
retailers.
    As for NTIA's progress, GAO's report and testimony of 
September 16, concluded that NTIA is effectively implementing 
the coupon program. GAO acknowledges that this encompasses our 
comprehensive systems to process application requests, produce 
and distribute coupons, and process coupons for retailer 
reimbursement.
    Complementing the GAO finding, consumer satisfaction with 
the program is high. A recent survey by the Consumer 
Electronics Association found that 90 percent of consumers who 
used the coupon website to request coupons rates the experience 
as good or excellent.
    With the goal of increasing coupon participation by over-
the-air households and to better target our consumer education 
efforts, NTIA correlated coupon redemption information with 
industry data to analyze each U.S. television market. Based on 
our analysis, we estimate that 79 percent of over-the-air 
households that are potential purchasers of converter boxes 
have requested coupons as of September 1st. In other words, 
coupon program participation by over-the-air households is on 
track in 187 out of the Nation's 210 television markets. NTIA 
is working very hard to implement outreach in the 23 markets 
where participation rates are lower than expected.
    We believe that our consumer education efforts are working. 
Based on the Wilmington test pilot of September 8, we learned 
that strong and steady demand for coupons and boxes can stem a 
rush at the end of the program in the final days. We also 
learned that it is important for consumers to act early so that 
they have ample time to address any technical issues that arise 
from installing a converter box.
    NTIA has, thus, tailored its consumer education messaging 
to ``apply, buy, and try.'' Consumers should apply for a box, 
buy a box, and try the box to ensure that it works and can 
troubleshoot for any issues that they may experience. We are 
also urging consumers to apply, buy, and try by the end of this 
year, well in advance of the transition date.
    The success of the Wilmington test pilot shows that when 
government, industry and nonprofit groups coordinate closely, 
the whole truly does become greater than the sum of its parts.
    To enhance the Government component, 24 Federal agencies 
convened at the White House on September 12. It was encouraging 
to hear how USDA, the VA, HHS, and the IRS, among others are 
helping millions of vulnerable Americans prepare for the 
digital transition. We continue to explore adopting the 
practices that other Federal agencies are using to expand the 
reach to a broader cross section of over-the-air households.
    I want to thank the Committee for the enactment of the DTV 
Transition Assistance Act, which will enhance our consumer 
education efforts. This legislation provided NTIA with the 
flexibility to use surplus funds from the conversion program 
for lower-power television and translator stations for DTV-
related public education and technical assistance.
    I would like to turn now briefly to how NTIA is responding 
to a couple of key challenges we have faced in administering 
the coupon program. This past Friday, on September 19, the 
Federal Register published NTIA's final rule to enable coupon 
program participation by residents of licensed nursing homes, 
intermediate care facilities, and assisted living facilities, 
as well as households that use a post office box for 
residential mail delivery. This rule will take effect on 
Monday, October 20. We are pleased to be taking the steps to 
make this coupon program more inclusive.
    In the same vein, the Department of Commerce recently 
submitted draft legislation to Congress to be able to maximize 
the number of coupons NTIA can distribute, while not exceeding 
the $1.5 billion in total funds authorized for the coupon 
program. The proposed legislation provides NTIA with needed 
flexibility to cover any incremental increases in 
administrative costs associated with distributing coupons 
through the end of the program, including expected increased 
demand as the transition date approaches.
    Assuming that consumer requests for coupons will increase 
as the February 17 transition date nears--and we do--NTIA wants 
to be as prepared as it possibly can to maximize consumer 
participation in the coupon program. Without the flexibility to 
increase administrative spending, if needed, NTIA will be able 
to distribute 44.5 million coupons. With the flexibility, NTIA 
will be able to distribute about 50.5 million coupons.
    We believe that the draft legislation is a responsible and 
prudent approach to address potential additional demand for 
coupons, and I urge its immediate consideration.
    Thank you again for the opportunity to testify, and I will 
be happy to answer any questions.
    [The prepared statement of Ms. Baker follows:]

    Prepared Statement of Meredith Attwell Baker, Acting Assistant 
Secretary for Communications and Information, NTIA, U.S. Department of 
                                Commerce
    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to testify before you today on behalf of the National 
Telecommunications and Information Administration (NTIA) regarding the 
transition to digital television (DTV) and NTIA's implementation of the 
TV Converter Box Coupon Program (Coupon Program). Educating Americans 
about their options when full-power television stations cease analog 
broadcasting on February 17, 2009, and administering an efficient and 
consumer friendly Coupon Program have been top priorities for NTIA over 
the past 2 years. NTIA has already served millions of Americans who 
have requested, received, and redeemed coupons with the purchase of a 
coupon-eligible converter box (CECB) from among the Program's 
participating retailers, and we are well poised to assist millions 
more. With 147 days to go until the DTV switch occurs, the significant 
progress NTIA has made in meeting the Coupon Program's objectives is 
matched only by our determination to ensure that as many consumers as 
possible are aware and prepared for the DTV transition, and that NTIA 
is able to maximize opportunities for households to participate in the 
Coupon Program.
    My testimony today will focus chiefly on the status of activities 
and consumer education efforts of NTIA's Coupon Program; the experience 
gained by the September 8, 2008, DTV switch in Wilmington, North 
Carolina; and the actions taken by, and in process, at NTIA to maximize 
opportunities for over-the-air households to participate in the Coupon 
Program.
Current Coupon Activities
    As you know, Title III of the Deficit Reduction Act of 2005, known 
as the ``Digital Television Transition and Public Safety Act of 2005'' 
(the Act), directs the Federal Communications Commission (FCC) to 
require full-power television stations to cease analog broadcasting on 
February 17, 2009. The Act directs NTIA to implement and administer the 
Digital-to-Analog Converter Box Coupon for the purpose of assisting 
consumers who opt to keep their existing analog TV's working to view 
over-the-air broadcasts using a converter box.
    As required by the Act, the Assistant Secretary of Commerce for 
Communications and Information must ensure that requesting households 
receive a maximum of two $40 coupons, via U.S. mail, each to be applied 
toward the purchase of a digital-to-analog converter box. The Act 
authorizes NTIA to use up to $990 million to carry out the program, 
including up to $100 million for expenses incurred for program 
administration, of which $5 million may be used for consumer education. 
It also authorizes an additional $510 million in funding to be 
available upon 60 days advance notice to Congress, $60 million of which 
may be used for program administration expenses.
    Leading up to the launch of the TV Converter Box Coupon Program on 
January 1, 2008, NTIA undertook extensive preparations beginning with a 
comprehensive rulemaking proceeding and Request for Proposal (RFP). 
Through a competitive procurement process, NTIA selected IBM to develop 
fully operational systems for the application, processing, 
distribution, and redemption of coupons; and to certify retailers for 
participation in the program. Working with the FCC, NTIA established a 
procedure to test and certify coupon-eligible convert boxes (CECBs). 
The Contract with IBM has all of the elements necessary for a fully 
operational and well-functioning program through its conclusion, 
including the ability to scale the Program as needed to maximize 
customer participation. Simply stated, the implementation of this 
Program is without precedent and has presented unique opportunities and 
challenges along with way. The effectiveness of our efforts in this 
planning phase, I submit, can be measured best by the results of the 
Program's implementation.
Coupons Requests, Issuance, and Redemptions
    Since January 1, 2008, the Coupon Program has received requests 
from 14,630,166 households for 27,457,404 coupons through September 17, 
2008. This is equivalent to 105,601 average household requests for each 
of the 267 days the Coupon Program has been operational. Over the past 
30 days, the average daily household request rate was slightly higher, 
at 112,360 average requests, consistent with a trend of slight 
increases in requests rates experienced by the Program over the course 
of the past few months.
    NTIA began processing requests for coupons from OTA households 
using contingent funds on August 1, 2008, while continuing to process 
coupon requests from other eligible households from recycled base funds 
that become available when unredeemed coupons expire. NTIA received the 
$510 million in contingent funds on June 25, 2008, subsequent to our 
April 25, 2008, notification to the House Energy and Commerce Committee 
and the Senate Commerce, Science and Transportation Committee. Based on 
the number of redeemed coupons and coupons that are still active and 
have not reached the end of their 90-day expiration, 74 percent of the 
$890 million in initial funding has been committed, and 25 percent of 
the $450 million in contingent funding has been committed as of 
September 17, 2008.
    Applications for coupons have been received primarily through the 
Coupon Program website at www.DTV2009.gov (56.9 percent), and our toll-
free telephone number, 1-888-DTV-2009 (40.6 percent); a much smaller 
percentage of coupon applications (2.5 percent) has been received by 
fax and by mail. Consumers can expect that coupons will be issued and 
mailed within 10 to 15 business days from the date in which a coupon 
application is received. Consumers are able to check on the status of 
their coupon applications on the Program's web page (https://
www.dtv2009.gov/CheckStatus.aspx). NTIA continues to work closely with 
our contractor, IBM, to ensure that coupon requests are processed in a 
timely fashion. We were pleased to learn that in a recent survey 
conducted by the Consumer Electronics Association, 90 percent of 
consumers who used the website to request coupons rated the experience 
as ``good'' or ``excellent.'' NTIA is in the process of streamlining 
its phone system to facilitate consumer coupon requests through its 
Interactive Voice Response (IVR) and to refer consumer questions to 
appropriate third parties, such as the FCC and local television 
stations.
    In addition to the high volume of applications, the appeal of the 
Coupon Program to consumers is demonstrated by the rate of coupon 
redemptions. Through September 17, 2008, more than 10 million coupons 
have been redeemed, an overall redemption rate of 49.3 percent for 
coupons that have reached the end of the 90-day expiration period. For 
OTA households, the redemption rate is even higher; 55.5 percent of the 
coupons that have reached the end of the 90-day expiration period have 
been redeemed. Since June 2008, NTIA has posted online a Weekly 
Redemption Report for easy access by retailers, converter box 
manufacturers, and the public that presents data on overall weekly 
coupon redemption rates and a breakdown of coupon redemption rates by 
OTA households. (https://www.ntiadtv.gov/docs/
WeeklyRedemptionsReport.pdf)
    Using the estimate of the Consumer Electronics Association that 60 
percent of OTA households are potential purchasers of converter boxes, 
and of the Nielsen Company that there were 14 million OTA households on 
January 1, 2008, NTIA has estimated that 79 percent of this target 
audience--TV households who rely on television with an antenna and 
expected to purchase a converter box--have already requested coupons as 
of September 1, 2008. Further, our analysis confirms that Coupon 
Program participation by OTA households is on track in 187 of the 
country's 210 Designated Market Areas (DMAs). Based on our analysis, 
NTIA is developing and will implement specific outreach plans in the 23 
DMAs where participation rates seem to be lower than average 
participation rates seem to be lower than average. Appendix A of this 
testimony provides a listing of Coupon Program participation rates of 
OTA households in each of the Nation's 210 television markets.
Coupon-Eligible Converter Boxes and Participating Retailers
    A critical factor in the Coupon Program's progress has been the 
voluntary participation of converter box manufacturers and retailers. 
NTIA is extremely gratified that we have been able to certify 158 CECBs 
submitted for testing and certification by manufacturers through 
September 17, 2008. Each of these converter boxes was designed for the 
statutory purpose of enabling a consumer to view digital signals on 
analog television sets.
    NTIA continues to certify boxes and is expediting those that have 
the capability to pass-through analog signals that will continue to be 
transmitted by many low power television and translator stations after 
February 17, 2009. As of September 17, 2008, NTIA has certified 83 
CECBs with an analog pass-through capability. We appreciate the 
responsiveness of manufacturers--such as RCA, Craig, Philco, Magnavox, 
Memorex, and Zenith, among others--to serve consumers' needs for this 
simple solution to view both digital and analog signals on analog 
television sets.
    From the Nation's largest consumer electronics retailers--Best Buy, 
Circuit City, Radio Shack, Sears, Target, and Walmart--to the hundreds 
of regional chains and smaller firms, we are likewise pleased that 
retailers have made converter boxes widely available. Through September 
17, 2008, 2,362 retailers are participating in the Coupon Program, with 
over 29,400 retail outlets nationwide, including locations in all 50 
states, all DMAs, as well as Guam, Puerto Rico, and the U.S. Virgin 
Islands. Among these are 35 retailers redeeming coupons online, and 13 
retailers that will redeem coupons by phone. We are pleased that 
Amazon.com and Office Depot are the latest to join the ranks of the 
Coupon Program's participating retailers.
    To achieve the status as a ``participating retailer'' in the Coupon 
Program, retailers must certify that their employees are trained, that 
stores have an inventory of converter boxes, and that their systems are 
prepared to redeem coupons. Working with IBM, NTIA has made employee 
training materials available to participating retailers so that they 
are able to answer consumers' questions about converter boxes and 
coupon use. To better support the management of CECB inventory, NTIA 
makes available coupon request data to retailers on a per state basis, 
as well as by 3-digit and 5-digit zip code. The cooperation of 
retailers and box manufacturers alike have greatly contributed to 
consumers' satisfaction with the Coupon Program, and NTIA is truly 
grateful for their partnership.
Consumer Education
    Educating consumers about the DTV transition and the converter box 
coupon option has been an integral part of NTIA's Coupon Program. Our 
efforts have focused on raising awareness among households 
disproportionately reliant on OTA broadcasting for their television 
services, namely seniors, minorities, the disabled, low-income, and 
rural households. NTIA's messaging encourages these and other OTA 
households to know their options and, if the converter box is their 
preferred option for making the transition, to request a coupon and 
purchase a converter box now rather than delay and contend with a 
possible rush for boxes closer to the transition date. Consumers should 
plan at least 6 weeks in advance to ``apply, buy and try''--that is, 
``apply'' for their coupons, ``buy'' their preferred converter box and 
``try'' it to make sure they can receive their favorite channels--to be 
ready well in advance of February 17, 2009. As a practical matter, 
consumers should request coupons now to ensure a smooth transition and 
begin enjoying digital television service.
    A recent national survey sponsored by the National Association of 
Broadcasters (NAB) shows that knowledge about the DTV transition is 
nearly universal. In a telephone survey of 21,436 households, conducted 
between the end of March and mid-May, 2008, 90 percent of respondents 
said they were aware of the February 17, 2009, DTV transition, up from 
83 percent in a January 2008 NAB survey. These results reflect the 
success of the nationwide public education campaigns undertaken by the 
broadcasting and cable industries, as well as our own public education 
efforts and those of the 300 Federal, national, regional, and local 
organizations that have partnered with NTIA to arm consumers with the 
information they need to be prepared on February 17, 2009.
NTIA's Outreach and Partnerships
    For its part, NTIA participates in meetings, conferences, and other 
fora on an ongoing basis, often with one or more of our partners to 
educate audiences about the DTV transition and the Coupon Program. For 
example, in recent months, NTIA attended events held by the American 
Council on the Blind, the Community Action Partnership of Chicago, 
Self-Help for the Elderly of San Francisco, and the General Federation 
of Women's Clubs. We have jointly hosted and participated in coupon 
application completion events with organizations such as SeniorSource 
in Dallas/Ft. Worth, Texas; the Maryland Department of General Services 
in Baltimore, Maryland; JobStarts in Englewood, California; and KNME-
PBS in Albuquerque, New Mexico.
    NTIA's consumer education efforts do not begin and end with Coupon 
Program staff. Rather, my staff and I, along with others in the 
Department of Commerce have participated in numerous events, including 
town hall meetings convened in the districts of Members of Congress, 
such as Senator Ted Stevens of Alaska, Senator Gordon Smith of Oregon, 
Senator Mike Crapo of Idaho, Representative John Dingell of Michigan, 
and Rep. John Shimkus of Illinois. As you know, Commerce Secretary 
Carlos Gutierrez has likewise been extremely active in helping educate 
Americans about the DTV transition and the Coupon Program. He continues 
to conduct media interviews in both Spanish and English, and speaks to 
audiences throughout the country to help raise public awareness. Most 
recently, Secretary Gutierrez participated in a public education event 
held at a Circuit City retail store in Atlanta, accompanied by Georgia 
Governor Sonny Perdue.
    As I noted earlier, NTIA analyzed Coupon Program participation by 
DMA, enabling us to better target consumer education efforts and reach 
out to media in markets with high rates of OTA households and/or key 
demographic populations. For example, in July and August 2008, NTIA 
staff conducted 117 media interviews, including outlets such as The 
Maui News (Honolulu, HI), Eureka Reporter (Eureka, CA), KBBIAM/KDLL-FM 
(Anchorage, AK), Star News (Wilmington, NC), AARP Bulletin (seniors), 
Sister 2 Sister (African American magazine), KOVR-TV (Sacramento, CA), 
KBOW-AM (Butte-Bozeman, MT), and Alaska Public Radio.
    Working with the communications firm, Ketchum, NTIA continues to 
track media impressions regarding the DTV transition and the Coupon 
Program. The following chart shows the cumulative number of print 
circulation, online unique visits, and broadcast impressions from 
September 10, 2007, through August 31, 2008.

      TV Converter Box Coupon Program: Cumulative Media Impressions
                   September 10, 2007-August 31, 2008
------------------------------------------------------------------------
                            Print        Online  Unique     Broadcast
        Period           Circulation         Visits        Impressions
------------------------------------------------------------------------
As of January 31,          55,287,903      790,968,896       61,930,084
 2008
As of February 29,         86,704,470    1,461,800,861       77,976,320
 2008
As of March 31, 2008      101,948,865    1,831,462,304       97,279,716
As of April 30, 2008      133,133,069    2,475,646,251      133,325,921
As of May 31, 2008        149,212,817    2,738,704,788      176,597,506
As of June 30, 2008       162,552,550    2,951,814,191      242,916,367
As of July 31, 2008       183,117,820    3,097,501,422      292,567,681
As of August 31, 2008     197,260,220    3,285,822,971      332,884,358
------------------------------------------------------------------------

    NTIA is now working with over 24 Federal departments and agencies 
with direct communications to vulnerable populations to expand the 
reach of our consumer education efforts. On September 12, 2008, the 
Office of Management and Budget, the Office of Science and Technology 
Policy, NTIA, and the FCC, spearheaded an interagency Federal DTV 
Awareness meeting to discuss strategies to better coordinate activities 
across Executive branch agencies to enhance consumer education and 
assistance to our target populations. It was very encouraging to hear 
how the Department of Agriculture, the Department of Veterans Affairs, 
the Department of Health and Human Services, and the Internal Revenue 
Service, among others, are helping millions of vulnerable Americans 
prepare for the digital transition. We continue to explore how these 
good practices can be applied to other Federal agencies to reach a 
broader cross-section of Americans who rely on over-the-air television.
Statutory Flexibility to Expand Consumer Education
    NTIA appreciates the flexibility provided by the ``DTV Transition 
Assistance Act'' (Pub. L. 110-295) (Assistance Act), signed into law by 
President Bush on July 30, 2008, which will provide an additional 
mechanism to expand our public education efforts. As you know, there 
are two key provisions of the Assistance Act: (1) enabling NTIA to more 
immediately begin providing grant support for the digital upgrade of 
low power television and translator stations; and (2) authorizing NTIA 
to utilize surplus funds in the Low Power Television and Translator 
Station Conversion Program (providing grant support to low power 
television and translator stations for the purchase a digital-toanalog 
conversion device) for purposes of consumer education and technical 
assistance related to the DTV transition and the Coupon Program.
    Pursuant to the Assistance Act, NTIA issued a notice on August 28, 
2008, confirming a determination that only $3.5 million of the full 
funding amount for the Conversion Program ($8 million) would be 
necessary. This allows for $4.5 million of these funds to become 
available for consumer education and technical assistance related to 
the DTV transition and the Coupon Program. This determination was based 
on the number of potential eligible Conversion Program applicants, the 
number of grant applications received through July 31, 2008, and the 
number of facilities receiving authorization from the FCC to upgrade to 
digital transmission via flash-cut.
    We have already received expressions of interest, and encourage the 
submission of other proposals, to provide consumer education and 
technical assistance as provided for in the Assistance Act. NTIA will 
act as expeditiously as possible to formalize agreements for these 
purposes.
Wilmington DTV Transition Test Pilot
    Leveraging the awareness-building activities of the variety of 
partners that participated in the Wilmington DTV transition test pilot 
on September 8, 2008, not only contributed to Wilmington's success, but 
it also demonstrates early preparation and mobilizing of existing 
assets by communities can help ensure that their citizens experience a 
smooth transition to digital television. I commend the people of 
Wilmington and the many Wilmington area volunteers and community 
leaders, television broadcasters, and participating retailers, as well 
as the FCC, and all other involved stakeholders for their efforts to 
ensure that Wilmington households were prepared and that the test pilot 
was a success.
    Among the steps taken in Wilmington contributing to this success, 
broadcasters were nimble in modifying their messaging to increase 
awareness of the early transition date and reduce confusion among 
Wilmington consumers about their need to act early. The minute-long 
test run by Wilmington broadcasters in advance of the September 8 
switch also proved to be a useful way to help consumers pinpoint 
whether they really needed a converter box. The consumer electronics 
industry and box manufacturers also stepped up to support this effort 
to make converter boxes widely available in stores to meet high demand. 
I especially appreciate their willingness to donate boxes to nursing 
homes and troubleshooting advice for consumers. Local firefighters and 
community groups provided helpful technical assistance to households, 
including converter box installation for the more vulnerable among 
Wilmington's citizens.
    The Wilmington test pilot was an important opportunity for NTIA to 
gauge consumer awareness and participation in the Coupon Program. 
Through September 7, NTIA received requests for more than 69,000 
coupons from 37,500 households in the Wilmington DMA, 47 percent of 
which were from OTA households. Of the coupons issued and mailed, over 
28,000 were redeemed as of September 7. We were pleased with the strong 
response for coupons from Wilmington households; requests for coupons 
increased 300 percent since the May 8, 2008, FCC announcement of the 
test pilot. Strong and steady demand for coupons and boxes over the 
past 4 months stemmed a rush in the final days leading up to the 
September 8 switch.
    The primary lesson NTIA gained from Wilmington is that we must 
emphasize to an even greater extent the need for consumers that rely on 
OTA broadcasts for viewing on analog television sets to apply for a 
coupon and purchase a converter box well in advance of the transition 
date. It is essential that consumers are aware that it will take 
several weeks to make adequate preparations--to apply for and receive a 
coupon, and to purchase and install a converter box--to ensure that all 
of the analog televisions in their household are prepared when the 
transition occurs.
Responding to Coupon Program Challenges
Rulemaking on Nursing Home and Post Office Box Program Eligibility
    The final rule on participation of Coupon Program applicants living 
in licensed nursing homes, intermediate care facilities, and assisted 
living facilities, and households that use a post office box for 
residential mail delivery was published in the Federal Register on 
September 19, 2008. The final rule will take effect on October 20, 
2008.
    Under the waiver provisions of the new regulations, residents of 
licensed nursing homes, intermediate care facilities, and assisted 
living facilities are required to provide their name and the address of 
the facility, and whether they receive television exclusively with an 
antenna, or through cable, satellite or other pay television service. 
The nursing home resident, a family member, or a representative from 
the licensed facility may apply for one coupon for the resident, and 
the coupon will be mailed directly to the nursing home resident. A 
special application will be made available for nursing home residents 
to complete once the rule becomes effective.
    Also, applicants who utilize a post office box for residential mail 
delivery will be able to request two coupons through the normal 
application process after the rule change goes into effect. Applicants 
will be required to provide the address of their physical residence in 
addition to their post office box address. NTIA is pleased to take this 
step in making the Coupon Program more inclusive.
Coupon Reissuance
    NTIA has been extremely sensitive to concerns, questions, and 
requests made for the reissuance of coupons to households that did not, 
or were unable to, redeem previously requested coupons prior to their 
expiration date. However, we do not believe the Act sets out clear 
authority for NTIA to issue any additional coupons to households that 
have already requested and received coupons, even if the coupons were 
not redeemed in advance of their expiration.
    We also do not believe that making such a change to the Program at 
this time is advisable. The reissuance of coupons would necessitate, we 
believe, the undertaking and completion of numerous additional actions. 
The added--and potentially substantial--costs and delays that would 
accompany each of these actions could jeopardize the Program's ability 
to achieve its core mission of facilitating a smooth DTV transition.
    For example, such a change would require a rulemaking proceeding, 
similar to NTIA's pending proposed rule amending the eligibility of 
individuals residing in nursing homes as discussed above. Such a 
rulemaking, even if conducted on an expedited basis, would not likely 
be completed before early 2009. A change would also impact NTIA's 
current contract with IBM to administer the Coupon Program, requiring 
revision in the operational systems and procedures of the Program. 
Likewise changes would be needed to materials currently utilized in 
Program administration (e.g., online, phone and paper application forms 
and processes) and consumer education.
    Moreover, such a change could seriously compromise NTIA's emphasis 
on the need for prompt action by consumers to apply for and redeem 
their coupons, and could cause a last-minute rush on--and potential 
product shortages of--converter boxes in the latest stages of the DTV 
transition. Finally, it would be unfair to consumers who redeemed 
coupons in a timely manner, consistent with the statutory 90-day 
expiration deadline requirement and existing Coupon Program 
regulations.
Maximizing Coupon Distribution
    As you know, the Act authorizes a total of $1.34 billion for the 
Coupon Program from both the base ($890 million) and contingent ($450 
million) funding levels, an amount sufficient to cover the value of up 
to 33.5 million redeemed coupons. The remaining $160 million from both 
base and contingent funding is authorized for administrative expenses 
which includes, but is not limited to, those costs associated with the 
distribution and processing (i.e., not the underlying value) of each 
coupon.
    As noted earlier, the Coupon Program received over 105,000 average 
daily requests from households for coupons, and the overall coupon 
redemption rate currently stands at just under 50 percent. Assuming 
that consumer requests for coupons will increase as the February 17, 
2009, transition date nears, and that the redemption rate remains 
constant, NTIA could distribute more than 50 million coupons in total 
over the life of the Program. Without legislation providing NTIA with 
greater flexibility, NTIA will be unable to fully meet this consumer 
demand and costs associated with expected changes to the Program.
    On September 11, 2008, the Department of Commerce submitted to 
Congress draft legislation that would provide NTIA with the statutory 
flexibility, if needed, to use available balances in certain Digital 
Television and Public Safety programs to cover administrative expenses 
of the Coupon Program above the authorized $160 million. The proposal 
would enable NTIA to continue coupon distribution to requesting 
eligible American households in the event that coupon demand exceeds 
the level of administrative resources presently authorized for the 
Coupon Program while still ensuring that overall program costs do not 
exceed $1.5 billion as established in the Act. Under the draft 
legislation, $7 million would be available upon enactment and 
additional funds as needed would be available upon approval of the 
Office of Management and Budget (OMB) Director and upon 15-day notice 
to the House Committee on Energy and Commerce and the Senate Committee 
on Commerce, Science, and Transportation.
Waste, Fraud, and Abuse
    NTIA remains vigilant in monitoring operations for waste, fraud, 
and abuse across all components of the Coupon Program. The agency meets 
regularly with the Department of Commerce Inspector General, the 
Government Accountability Office, and Department of Commerce auditors 
to monitor all aspects of the Coupon Program, from household requests 
for coupons to retailer payment for coupon redemptions.
    Working with IBM, NTIA has developed a comprehensive and rigorous 
approach to deterring and detecting waste, fraud and abuse in the 
Program. In terms of retailer certification, participation and payment, 
NTIA has protections in place to minimize opportunities for 
inappropriate retailer behavior.
    To date, no egregious instances of waste, fraud, and abuse have 
been discovered in the Coupon Program. However, several retailers have 
been decertified for a variety of violations of program rules. In these 
cases, NTIA has also taken swift action to the extent possible to 
ensure that retailers remedy any adverse effects suffered by consumers. 
While the number of decertified retailers is a very small percentage of 
the total number of certified retailers, NTIA remains committed to 
taking swift action to avoid any and all waste, fraud, and abuse in the 
Program.
    We are also ensuring that no more than two coupons are sent to each 
U.S. household, as specified in the Act, and that consumers are unable 
to use the $40 coupon to purchase ineligible products. To protect 
consumers we have just issued a ``consumer checklist,'' helping them 
navigate the Coupon Program. We have also worked with the Federal Trade 
Commission and the FCC on a tip-sheet to arm consumers with the 
information they need to make decisions right for their household.
Preparedness for a Surge
    NTIA is aware of the potential for a surge in coupon applications 
as the February 17, 2009, transition date draws closer. Although the 
coupon application rate has spiked only rarely over the past eight and 
one-half months, we recognize that consumer education will intensify in 
the coming months and that coupon applications could reach more 
consistently high levels than has been our experience to date. NTIA has 
designed and administered the Coupon Program in a manner that strives 
to assure that no Americans lose their television service as a result 
of the DTV transition. This commitment underlies the Program 
regulations, as well as NTIA's proposal to expand coupon eligibility to 
residents of nursing homes and citizens that utilize a post office box, 
and the draft legislation to maximize household participation in the 
Coupon Program.
    Again, this underscores the emphasis of the Coupon Program's key 
consumer education messaging that consumers should act now to apply for 
coupons and to redeem them at a participating retailer as soon as 
possible after their receipt. As noted above, our experience in 
Wilmington confirms that encouraging people to act now will help avoid 
lengthy periods of extremely high volumes of coupon requests as the 
Program draws to an end.
    In conclusion, I want to thank the Committee for the opportunity to 
testify before you today. I will be happy to answer your questions.
   Appendix A: Over-the-Air Household Participation Rates in Coupon 
      Program by Designated Market Area (DMA) as of Sept. 1, 2008

    Over-the-Air Household Participation Rates in Coupon Program  by
            Designated Market Area (DMA) as of Sept. 1, 2008
------------------------------------------------------------------------
                                     Number of  Over-
                                         the-Air          Over-the-Air
                                     Households with       Household
                                         Approved        Participation
                                         Requests            Rate *
------------------------------------------------------------------------
JUNEAU, AK                                        218                13%
GLENDIVE, MT                                       61                30%
ANCHORAGE, AK                                   6,441                38%
EUREKA, CA                                      2,023                38%
HONOLULU, HI                                    5,381                39%
FAIRBANKS, AK                                   2,903                40%
SEATTLE TACOMA, WA                             53,923                43%
BUTTE BOZEMAN, MT                               3,123                44%
HELENA, MT                                      1,466                45%
MISSOULA, MT                                    5,631                46%
BILLINGS, MT                                    4,913                48%
GRAND JUNCTION MONTROSE, CO                     3,183                51%
GREAT FALLS, MT                                 2,888                51%
ODESSA MIDLAND, TX                              3,783                52%
SAN DIEGO, CA                                  28,207                52%
BURLINGTON PLATTSBURGH, VT--NY                 13,102                53%
MANKATO, MN                                     2,108                54%
MONROE ELDORADO, LA--AR                         7,625                54%
SPOKANE, WA                                    21,362                55%
SANTA BARBARA SANTA MARIA SAN LUIS              5,424                56%
 OBISPO, CA
SALT LAKE CITY, UT                             68,522                56%
LAS VEGAS, NV                                  25,382                56%
IDAHO FALLS POCATELLO, ID                       7,931                57%
LAFAYETTE, IN                                   2,455                58%
SACRAMENTO STOCKTON MODESTO, CA                64,735                58%
CASPER RIVERTON, WY                             2,064                58%
MONTEREY SALINAS, CA                            9,541                58%
CHARLOTTESVILLE, VA                             4,085                58%
YAKIMA PASCO RICHLAND KENNEWICK,               13,657                59%
 WA
TWIN FALLS, ID                                  3,642                59%
HARTFORD NEW HAVEN, CT                         21,384                60%
COLORADO SPRINGS PUEBLO, CO                    21,197                60%
SAN ANGELO, TX                                  1,144                60%
AMARILLO, TX                                    8,551                61%
BATON ROUGE, LA                                 9,145                61%
SPRINGFIELD HOLYOKE, MA                         8,085                61%
CHICO REDDING, CA                              12,646                62%
TOPEKA, KS                                      8,164                62%
YUMA EL CENTRO, CA                              9,668                62%
DENVER, CO                                     75,299                63%
BOISE, ID                                      27,165                63%
JOPLIN PITTSBURGH, MO--KS                      13,192                63%
MEDFORD KLAMATH FALLS, OR                       7,018                63%
ALBUQUERQUE SANTA FE, NM                       45,363                63%
TUCSON SIERRA VISTA, AZ                        27,342                64%
MINOT BISMARCK DICKINSON, ND                    6,465                64%
ELMIRA, NY                                      2,779                65%
BALTIMORE, MD                                  58,822                65%
SHREVEPORT, LA                                 17,782                65%
PHOENIX, AZ                                    96,688                65%
ABILENE SWEETWATER, TX                          5,081                65%
CHAMPAIGN SPRINGFIELD DECATUR, IL              16,681                65%
INDIANAPOLIS, IN                               68,555                66%
FARGO VALLEY CITY, ND                          12,488                66%
TALLAHASSEE THOMASVILLE, FL                     9,747                67%
ST. JOSEPH, MO                                  2,619                68%
DALLAS FT. WORTH, TX                          210,358                68%
BAKERSFIELD, CA                                14,345                68%
WICHITA FALLS LAWTON, TX--OK                    7,278                68%
SYRACUSE, NY                                   18,063                68%
NASHVILLE, TN                                  46,413                68%
MINNEAPOLIS ST. PAUL, MN                      159,383                69%
PORTLAND AUBURN, ME                            21,994                69%
WICHITA HUTCHINSON, KS                         24,347                69%
WASHINGTON, DC                                 82,489                70%
ROCHESTER, NY                                  27,466                70%
PROVIDENCE NEW BEDFORD, RI--MA                 25,012                70%
LOS ANGELES, CA                               412,401                70%
RAPID CITY, SD                                  4,222                70%
MEMPHIS, TN                                    39,403                71%
HARRISONBURG, VA                                3,667                71%
ROCKFORD, IL                                   10,524                71%
CHEYENNE SCOTTSBLUFF, WY--NE                    2,211                72%
CLEVELAND AKRON CANTON, OH                     87,590                72%
PEORIA BLOOMINGTON, IL                         13,955                72%
BEND, OR                                        4,275                73%
TYLER LONGVIEW LUFKIN NACOGDOCHES,             13,631                73%
 TX
JOHNSTOWN ALTOONA, PA                           7,971                73%
CORPUS CHRISTI, TX                              9,594                73%
BLUEFIELD BECKLEY OAK HILL, WV                  3,997                74%
HOUSTON, TX                                   200,611                74%
LUBBOCK, TX                                    14,143                74%
LITTLE ROCK PINE BLUFF, AR                     29,502                74%
CINCINNATI, OH                                 73,066                74%
PADUCAH CAPE GIRARDEAU MARION                  24,139                75%
 CARBONDALE MCLEANSBORO POPULAR
 BLUFF MT. VERNON, KY--MO--IL
ALPENA, MI                                        939                75%
HARLINGEN MCALLEN BROWNSVILLE, TX              55,083                76%
SIOUX FALLS MITCHELL, SD                       13,406                77%
TOLEDO, OH                                     34,668                77%
PORTLAND, OR                                   97,950                77%
SAVANNAH, GA                                   10,489                77%
YOUNGSTOWN, OH                                 17,297                78%
LINCOLN HASTINGS KEARNY, NE                    16,233                78%
EUGENE, OR                                     17,439                78%
MARQUETTE, MI                                   3,659                78%
NORTH PLATTE, NE                                  780                79%
ATLANTA, GA                                    80,154                79%
WACO TEMPLE BRYAN, TX                          18,389                79%
MADISON, WI                                    34,371                79%
AUSTIN, TX                                     38,632                79%
RENO, NV                                       13,292                79%
ALBANY SCHENECTADY TROY, NY                    24,020                79%
LA CROSSE EAU CLAIRE, WI                       17,091                79%
SAN FRANCISCO OAKLAND SAN JOSE, CA            121,651                79%
BIRMINGHAM ANNISTON TUSCALOOSA, AL             30,040                80%
COLUMBUS, OH                                   54,278                80%
GREENVILLE NEW BERN WASHINGTON, NC             17,718                80%
FRESNO VISALIA, CA                             60,300                80%
JACKSONVILLE BRUNSWICK, FL--GA                 30,881                81%
EVANSVILLE, IN                                 16,695                81%
COLUMBIA JEFFERSON CITY, MO                    14,196                81%
KANSAS CITY, KS--MO                            61,754                81%
ROANOKE LYNCHBURG, VA                          26,907                81%
NORFOLK PORTSMOUTH NEWPORT NEWS,               31,324                81%
 VA
JACKSON, MS                                    17,325                82%
LEXINGTON, KY                                  21,316                82%
ALBANY, GA                                      5,630                82%
ST. LOUIS, MO                                 114,595                82%
SIOUX CITY, IA                                 11,985                82%
BEAUMONT PORT ARTHUR, TX                        8,861                82%
HUNTSVILLE DECATUR FLORENCE, AL                17,338                82%
TULSA, OK                                      42,588                82%
GRAND RAPIDS KALAMAZOO BATTLE                  63,294                83%
 CREEK, MI
OTTUMWA KIRKSVILLE, IA--MO                      3,615                83%
TAMPA ST. PETERSBURG SARASOTA, FL              76,147                83%
MILWAUKEE, WI                                  93,592                83%
COLUMBUS TUPELO WEST POINT, MS                 11,222                84%
DAYTON, OH                                     43,697                84%
CHARLESTON, SC                                 17,521                85%
ERIE, PA                                       13,140                85%
DAVENPORT ROCK ISLAND MOLINE, IA--             23,055                85%
 IL
KNOXVILLE, TN                                  29,600                85%
LANSING, MI                                    22,141                85%
DES MOINES AMES, IA                            45,064                86%
BANGOR, ME                                     13,739                87%
LOUISVILLE, KY                                 45,425                87%
CLARKSBURG WESTON, WV                           3,365                87%
MIAMI FT. LAUDERDALE, FL                       66,009                87%
COLUMBUS, GA                                    8,574                87%
WEST PALM BEACH FT. PIERCE, FL                 16,230                88%
TERRE HAUTE, IN                                10,605                88%
BOSTON MANCHESTER, MA--NH                      65,215                88%
ROCHSTER MASON CITY AUSTIN, IA                 11,255                89%
SPRINGFIELD, MO                                47,016                89%
RALEIGH DURHAM FAYETTEVILLE, NC                67,682                89%
CHARLOTTE, NC                                  58,139                89%
DULUTH SUPERIOR, MN                            20,784                89%
CHICAGO, IL                                   282,376                90%
PALM SPRINGS, CA                                4,275                90%
JACKSON, TN                                     4,881                90%
BUFFALO, NY                                    33,625                90%
LAKE CHARLES, LA                                4,791                91%
GREENSBORO HIGH POINT WINSTON                  40,230                91%
 SALEM, NC
MACON, GA                                      11,698                91%
WILKES BARRE SCRANTON, PA                      23,047                92%
TRAVERSE CITY CADILLAC, MI                     22,321                92%
DETROIT, MI                                   121,971                93%
CEDAR RAPIDS WATERLOO DUBUQUE, IA              28,865                94%
MERIDIAN, MS                                    5,035                94%
EL PASO, TX                                    49,724                94%
BOWLING GREEN, KY                               5,078                94%
PANAMA CITY, FL                                 8,203                94%
GREENVILLE SPARTANBURG ASHVILLE                55,624                94%
 ANDERSON, NC--SC
HARRISBURG LANCASTER LEBANON YORK,             35,543                94%
 PA
FT. SMITH FAYETTEVILLE SPRINGDALE,             16,074                95%
 AR+A197
PITTSBURGH, PA                                 54,574                95%
FT. WAYNE, IN                                  36,578                96%
AUGUSTA, GA                                    15,859                96%
DOTHAN, AL                                      4,327                97%
CHATTANOOGA, TN                                20,182                97%
SAN ANTONIO, TX                                67,784                99%
FLINT SAGINAW BAY CITY, MI                     40,319                99%
OKLAHOMA CITY, OK                              62,116               100%
GREENWOOD GREENVILLE, MS                        2,986               100%
RICHMOND PETERSBURG, VA                        31,768               100%
GREEN BAY APPLETON, WI                         58,686               100%
PARKERSBURG, WV                                 2,618               100%
LAFAYETTE, LA                                  11,598               101%
SHERMAN ADA, TX--OK                            10,460               101%
PHILADELPHIA, PA                              134,008               101%
NEW YORK, NY                                  228,786               101%
ALEXANDRIA, LA                                  3,829               102%
LAREDO, TX                                      9,358               103%
WHEELING STEUBENVILLE, WV                       6,701               103%
MOBILE PENSACOLA, AL--FL                       30,484               103%
JONESBORO, AR                                   5,266               103%
FT. MYERS NAPLES, FL                           18,194               107%
UTICA, NY                                       5,207               108%
ORLANDO DAYTONA BEACH MELBOURNE,               63,115               108%
 FL
NEW ORLEANS, LA                                26,098               108%
BINGHAMTON, NY                                  6,929               109%
TRI CITIES, VA--TN                             15,642               109%
GAINESVILLE, FL                                 6,828               109%
LIMA, OH                                        3,600               110%
WATERTOWN, NY                                   5,506               110%
HATTIESBURG LAUREL, MS                          8,169               110%
ZANESVILLE, OH                                  1,619               110%
OMAHA, NE                                      30,484               110%
VICTORIA, TX                                    2,073               111%
SOUTH BEND ELKHART BENTON HARBOR,              50,712               112%
 IN
MONTGOMERY SELMA, AL                           13,770               119%
WAUSAU RHINELANDER, WI                         25,094               121%
COLUMBIA, SC                                   36,979               123%
BILOXI GULFPORT, MS                             7,026               123%
MYRTLE BEACH FLORENCE, SC                      23,155               132%
CHARLESTON HUNTINGTON, WV                      24,384               133%
PRESQUE ISLE, ME                                2,860               138%
QUINCY HANNIBAL KEOKUK--MO--IA                 13,360               148%
SALISBURY, MD                                   8,276               158%
WILMINGTON, NC                                 16,726               203%
------------------------------------------------------------------------
* According to the Consumer Electronics Association, about 60% of over-
  the-air (OTA) consumers are potential purchasers of converter boxes.
  The participation rate is the number of OTA requests divided by CEA's
  estimated market.


    The Chairman. Thank you very much. I now call upon the 
Assistant Secretary for Aging, Department of Health and Human 
Services, the Honorable Josefina Carbonell.

 STATEMENT OF HON. JOSEFINA G. CARBONELL, ASSISTANT SECRETARY 
    FOR AGING, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

    Ms. Carbonell. Good afternoon, Mr. Chairman, Members of the 
Committee. Thank you for the opportunity to testify today.
    I am pleased to report that the U.S. Department of Health 
and Human Services has been working in partnership with the FCC 
and NTIA to ensure that the people that we serve receive the 
information and assistance they need to make the transition 
from analog to digital broadcast on February 17, 2009.
    Earlier this year, Secretary Leavitt established a work 
group to ensure that HHS is doing everything it can to get that 
message out. Many of the people that we serve at the 
Department, the elderly, people with disabilities, low-income, 
minorities, geographically isolated, homebound, and limited 
English-speaking, are the primary audiences for whom the impact 
will be most challenging.
    HHS has participated in events throughout the country to 
make our respective networks aware of the DTV transition and 
what we can do to make it successful. My written testimony has 
several examples and details of these efforts, but I would like 
to highlight those of my agency, the Administration on Aging.
    I am proud to report that we were one of the first agencies 
that FCC and NTIA approached to ensure that as the transition 
progressed, the unique needs of older Americans were being 
addressed. AoA has communicated information about the DTV 
transition to our national aging services network, which is 
comprised of 56 State Units on Aging; 655 local planning and 
service entities called Area Agencies on Aging; 239 tribal and 
native organizations, representing more than 300 tribes; 29,000 
local community service provider organizations; and more than 
half a million volunteers. These organizations are 
disseminating the information further down to their respective 
partners, staff, and volunteer networks at the community level 
where it counts.
    We accomplish our mission through the provision of critical 
services to more than 10.7 million older individuals and family 
caregivers, and we are in contact with older adults every day.
    Our community service provider organizations are visible 
and trusted sources of information and are most often the place 
where older adults turn for help. Data indicates that seniors 
are more likely to have older analog television sets and are 
less likely to have cable television service. Some may face 
physical, financial, or transportation issues that limit their 
ability to successfully make the transition to digital TV. 
Additionally, many may not be familiar or, frankly, comfortable 
with the technology involved with this conversion.
    Building on the success of the network in the 
implementation of the Medicare Part D prescription drug 
program, we recognized early on that the network, the aging 
network, represented a perfect access point for reaching older 
and disabled adults. We have developed a very important 
coalition of national aging services organizations that 
represent a cross section of our local network. We have 
developed unique coordination efforts and meetings between NTIA 
and FCC and this coalition to really maximize their hands-on 
experience with the hard-to-reach. The coalition continues to 
fine-tune strategies and local plans for more targeted efforts 
in line with what the Assistant Secretary and the Chairman have 
mentioned, in providing direct education, one-on-one 
information, assistance in purchasing and acquiring converter 
boxes, as well help with installation of the boxes so that 
vulnerable older adults can successfully manage the DTV 
transition.
    AoA has also participated in several FCC and NTIA forums on 
DTV, and we applaud them for being responsive to the issues 
that we have raised. We were pleased that Secretary Gutierrez 
has announced that residents of nursing homes, assisted living 
facilities, and households that use a post office box will be 
able to request coupons.
    We will continue to work in partnership with FCC and NTIA 
to distribute materials and information to our stakeholders and 
partners, as well as through our grantee and communication 
networks. This includes disseminating information through our 
electronic newsletter which reaches over 22,000 subscribers 
from national, State and local programs.
    While we have done op-ed articles in English and Spanish, 
we stand ready to do more articles, PSAs, television shows, to 
use all means that the Department has available to get the word 
out.
    We have had NTIA and FCC participate in many important and 
big national and State aging conferences and events, which 
reach thousands of providers, seniors, and family caregivers.
    At the community level, local senior centers, nutrition 
sites, adult day care programs, and Meals on Wheels programs 
are holding DTV information sessions. Many are working with the 
National Association of Broadcasters that has local TV 
broadcasters available to speak and participate in these 
events. At these events, seniors are provided not only with the 
critical information, but a hands-on demonstration in how to 
hook up the converter box.
    Our aging network in North Carolina was very involved in 
the Wilmington pilot test and has indicated that they have been 
working very closely with FCC representatives to help ensure a 
smooth transition, particularly for vulnerable individuals.
    Finally, HHS will continue to explore ways to reach out to 
our constituents to help ensure that no one is left out in the 
dark, and we are working together to help make this transition 
as successful as possible.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Ms. Carbonell follows:]

Prepared Statement of Hon. Josefina Carbonell, Assistant Secretary for 
          Aging, U.S. Department of Health and Human Services
    Chairman Inouye, Ranking Member Hutchison, and Members of the 
Committee, thank you for the opportunity to testify before you today. I 
am pleased to report that the U.S. Department of Health and Human 
Services (HHS) has been working in partnership with the Federal 
Communications Commission (FCC) and the National Telecommunications and 
Information Administration (NTIA) to ensure that the people we serve 
receive the information and assistance they need to make the transition 
from analog to digital TV broadcasts on February 17, 2009. Earlier this 
year in response to a request from FCC, Secretary Michael O. Leavitt 
established a work group of his operating divisions to encourage them 
to make special efforts to ensure that HHS was doing everything it 
could to get the message out. Many of the people we serve--the elderly, 
people who have disabilities, or are low-income, minorities, 
geographically isolated, homebound, or limited English speaking--are 
the primary audiences for whom the impact will be most challenging.
    HHS staff have participated in forums and meetings throughout the 
country in order to make our respective networks aware of the DTV 
transition and what our agencies can do to help make it successful. I 
would like to share with you just a few examples of what we are doing.
    The Health Resources and Services Administration (HRSA) is the 
primary Federal agency for improving access to health care services for 
people who are uninsured, isolated or medically vulnerable. HRSA has 
forwarded FCC DTV information to approximately 4,000 grantee 
organizations who serve approximately 16 million low-income people. 
They have also worked with organizations such as the State Primary Care 
Offices, the Primary Care Associations and the National Association for 
Community Health Centers. These organizations which represent many more 
non-federally funded health centers and clinics nationwide were asked 
to post and distribute DTV flyers in their clinics and to distribute 
information to patients.
    The Administration for Children and Families (ACF) is responsible 
for Federal programs that promote the economic and social well-being of 
families, children, individuals, and communities. Information has been 
distributed to their 1,600 Head Start grantees and Community Action 
Agencies, covering more than 18,000 centers around the country as well 
as through their Temporary Assistance for Needy Families program. The 
Office of Community Services (OCS) within ACF promotes the TV Converter 
Box Coupon Program during public engagements and conferences and 
encourages grantees and partner associations to invite FCC 
representatives to their activities to help educate the public about 
the DTV transition. More specifically, OCS has distributed English and 
Spanish DTV Transition: February 17, 2009, ``Are You Ready?'' flyers to 
over 100 State Community Service Block Grant, 600 Community Action 
Agency and 500 Weatherization and Low-Income Energy Assistance Program 
staff; posted information on the websites of partner associations that 
represent over 1,000 Community Action Agencies; and facilitated coupon 
sign-up events with over 100 Social Services Block Grant and Community 
Services Block Grant grantees. The Child Care Bureau conducted several 
outreach activities to inform the child care community serving low-
income children and families. Activities include disseminating the 
flyers at the 14th National American Indian/Alaska Native Child Care 
Conference which was attended by over 500 tribal organizations; and e-
mailing the flyer to the 50 State and 5 territory Child Care and 
Development Fund (CCDF) administrators with the request that the flyer 
be disseminated to the families served by the program. Approximately 1 
million families are served in an average month with CCDF funds. The 
Office of Child Support Enforcement (OCSE) informed all State child 
support enforcement programs of the DTV initiative, prominently 
displayed the DTV transition logo and link on the OCSE website, and 
invited child support agencies to either download or order hard copies 
through OCSE of the material to share with their clientele. OCSE filled 
many requests for the material from various agencies.
    The Substance Abuse and Mental Health Services Administration 
(SAMHSA) has focused its mission on building resilience and 
facilitating recovery for people with or at risk for mental or 
substance use disorders. They are using their call center that responds 
to requests for information from approximately 50,000 individuals each 
month as a means of informing people about the DTV transition.
    The Indian Health Service (IHS) has distributed information to 
their 120 health facilities and worked with Tribes to distribute 
consumer information to an additional 300 tribally managed health 
facilities.
    Finally, the Centers for Medicare and Medicaid Services (CMS) will 
embark on its fall Open Enrollment period from November 15 to December 
31, 2008 where they will be reaching out to 44 million people with 
Medicare through approximately 10,000 events to enroll in a drug plan, 
review their health care and drug coverage, and make changes. CMS has 
agreed to share information with partner organizations about the DTV 
transition as a part of their outreach efforts using information 
provided by the NTIA.
    I am proud to report that my agency, the Administration on Aging 
(AoA), was one of the first agencies in the Federal Government that FCC 
and NTIA approached to work in partnership with them because they 
wanted to ensure that as the transition progressed the special and 
unique needs of older Americans were being addressed. As you know, AoA 
oversees the national aging services network (the network) which is 
comprised of 56 State Units on Aging designated by each Governor; 655 
local planning and service entities in geographic regions in the states 
known as Area Agencies on Aging; 239 tribal and native organizations, 
representing more than 300 Tribes; 29,000 local community service 
provider organizations; and more than 500,000 volunteers. We accomplish 
our mission through the provision of critical services to more than 
10.7 million older individuals and family caregivers; 3 million of whom 
require intensive home care services; the provision of an array of 
health and social supports through 13 million information and referral 
contacts and by providing over 20 million people with outreach and 
information about services; by providing over 28 million rides to meal 
sites, doctor's offices and other critical activities; and by serving 
237 million meals to prevent and manage chronic diseases. So you can 
see that we are in contact with older adults everyday. The community 
service provider organizations in our network consist of local 
community-based and faith-based organizations who are the visible and 
trusted source of information in the community and most often the place 
were older adults will turn for help.
    Data indicate that seniors are more likely to have older analog 
television sets and are less likely to have cable television service. 
Many face physical, financial or transportation limitations that will 
impact their ability to successfully make the transition to digital 
television. Additionally, many may not be familiar or comfortable with 
the technology involved with the conversion. Although consumer 
education efforts are important, we also recognize the need to 
safeguard against up selling as well as fraud and abuse and the need to 
address the impact of requiring physical assistance related to 
installation, repairs and service of converter boxes. Providing 
consumer education and information does not produce access to converter 
boxes nor does it produce appropriate installation of them for a frail, 
mobility challenged population who rely on television as a primary 
source of critical information such as weather and emergency 
announcements; for a sense of connectedness and for entertainment. 
Building on the successful outreach, education and individual 
assistance provided by the network in the implementation of Medicare 
Part D Prescription Drug Coverage and Preventive Benefits, we 
recognized early on that the network represented a perfect access point 
for reaching the older adults who would be most affected by the digital 
television conversion.
    When NTIA reached out to us in the summer of 2007, we immediately 
agreed to help them with this effort. One of the first things that we 
did was to reach out to a coalition of national aging services 
organizations and advocacy groups representing the network. AoA granted 
access to and facilitated meetings and discussions with NTIA and FCC. 
Each of the 11 organizations in the coalition have a focus on the needs 
of older adults, particularly those most in need of services and 
supports as they age and/or those in diverse communities. They have 
experience in developing approaches to reach out and assist the most 
at-risk older adults and their caregivers. They have experience in 
reaching the hard-to-reach; such as rural, isolated and limited 
English-speaking older individuals. And they have well-established 
aging-related communications channels and networks.
    Currently, the coalition is working toward providing direct 
education; one-on-one information; assistance in purchasing and 
acquiring converter boxes; as well as installation of the boxes so that 
vulnerable older adults can successfully manage the DTV transition. The 
members of the coalition communicate on a regular basis and we are 
working with them to identify ways in which they could use the 
strengths of each group to maximize and leverage their resources at the 
local level.
    AoA has participated in several FCC and NTIA forums on DTV and we 
applaud them for listening to our recommendations and being responsive 
to the issues we raised. We will continue to work in partnership with 
FCC and NTIA to provide information at aging conferences and exhibits 
occurring through the balance of the year. We will continue to 
distribute materials and information through our grantee and 
communications networks, such as our electronic newsletter that has 
22,000 subscribers, as well as to our stakeholders and partners. 
Finally, we will refresh or update our website to ensure that links 
remain in a prominent location.
    Currently at the community level, local senior centers, nutrition 
sites and other agencies are holding DTV information sessions. Many are 
working in partnership with the National Association of Broadcasters 
that has a DTV Speakers Bureau made up of local TV station broadcasters 
and others who are available to speak at local events. At these events, 
seniors are provided not only with information, but a hands-on 
demonstration on how to hook-up the converter box.
    Additionally, Wilmington, North Carolina was the first market to 
test the transition to digital television (DTV) in advance of the 
nationwide transition to DTV on February 17, 2009. The commercial 
broadcasters serving the Wilmington television market voluntarily 
agreed to turn off their analog signals at noon on September 8, 2008. 
Our State and local aging agencies in North Carolina were very involved 
in the Wilmington test and have indicated that they have been working 
very closely with FCC representatives to help ensure a smooth 
transition.
    We were pleased to learn that U.S. Secretary of Commerce Carlos 
Gutierrez announced last Tuesday that residents of licensed nursing 
homes, intermediate care facilities, assisted living facilities and 
households that use a post office box for mail delivery will be 
eligible to request coupons from the DTV Converter Box Coupon Program. 
This was an issue raised early on by aging advocates and this ruling 
demonstrates we are all working together to help make this transition 
as successful as possible.
    Finally, the Department of Health and Human Services will continue 
to explore ways that we can reach out to our constituents to help 
ensure that no one is left in the dark on February 18, 2009.
    Thank you for the opportunity to testify today. I would be pleased 
to answer any questions you may have.

    The Chairman. I thank you very much, Madam Secretary.
    And may I now call upon the Director of the Physical 
Infrastructure Issues, U.S. Government Accountability Office, 
Mr. Mark Goldstein?

      STATEMENT OF MARK L. GOLDSTEIN, DIRECTOR, PHYSICAL 
        INFRASTRUCTURE, U.S. GOVERNMENT ACCOUNTABILITY 
                          OFFICE (GAO)

    Mr. Goldstein. Well, thank you, Mr. Chairman, Mr. Dorgan. 
Good afternoon. I am pleased to be here today to discuss the 
GAO's recent issuance of a report last week on NTIA's 
implementation of the mandated converter box subsidy program.
    The Federal Government and the private sector have taken 
many steps to prepare for the DTV transition. NTIA created and 
implemented a digital-to-analog converter box subsidy program. 
Additionally, the Government, the television broadcast 
industry, cable, and satellite providers and other carriers 
with broadcast signals have established several educational 
efforts informing consumers about the transition and the 
subsidy program.
    However, the success of the DTV transition and the subsidy 
program requires consumers understanding about the transition 
and the steps needed to continue receiving a television signal. 
In addition, consumers will rely on retailers to provide 
information, as well as to supply eligible converter boxes for 
the program.
    In my testimony today, I discuss, number one, what consumer 
education efforts have been undertaken by private and Federal 
stakeholders and, number two, how effective NTIA has been in 
implementing the converter box subsidy program and to what 
extent consumers are participating in the program.
    First, private sector and Federal stakeholders have 
undertaken various consumer education efforts to raise 
awareness about the transition. For example, the National 
Association of Broadcasters and the National Cable and 
Telecommunications Association have committed over $1.4 billion 
to educate consumers about the transition. This funding has 
supported the development of public service announcements, 
education programs for broadcast, websites and other 
activities.
    In addition, most national retailers participating in the 
converter box subsidy program have developed consumer education 
campaigns to raise awareness of the transition and the subsidy 
program.
    Federal stakeholders, FCC and NTIA, have developed consumer 
education plans that target those populations most likely to be 
affected by the transition, and particularly they have focused 
their outreach efforts on certain demographic groups, including 
seniors, low-income, minority, and non-English-speaking, rural 
households, and persons with disabilities.
    Second, NTIA is effectively implementing the converter box 
subsidy program, but plans to address the likely increase in 
coupon demand as the transition nears remain unclear. As of 
August 31, 2008, NTIA had issued approximately 24 million 
coupons, and as of that date, approximately 13 percent of U.S. 
households had requested coupons. As found in our recent 
consumer survey, however, up to 35 percent of U.S. households 
could be affected by the transition because they have at least 
one television not connected to a subscription service, such as 
cable or satellite. In U.S. households relying solely on over-
the-air broadcasts, approximately 15 percent, of those who 
intend to purchase a converter box, 100 percent of our survey 
respondents said they were likely to request a coupon. 
Therefore, a spike in demand for converter box coupons is 
likely as the transition date nears.
    According to NTIA, an increase in requests around the 
transition date may cause a delay in issuing coupons. However, 
we found that NTIA had no specific plans to address an increase 
in demand and that it has encountered challenges in issuing 
coupons within its requirement of 10 to 15 days from the date 
the coupon application was approved.
    Given the challenges to meet this requirement and its lack 
of a clear plan to address a potential spike in demand, 
consumers might incur significant wait times to receive their 
coupons and might lose television service if their wait time 
lasts beyond February 17, 2009.
    In terms of participation in the converter box subsidy 
program, we analyzed coupon data in the areas of the country 
comprised of predominantly minority and senior populations and 
found that participation varies. For example, we found that ZIP 
codes with a high concentration of Latino or Hispanic 
households had noticeably higher coupon request rates, 28 
percent, when compared to areas with predominantly non-Latino 
or non-Hispanic households, about 12 percent. We also found 
households in both predominantly black and Hispanic or Latino 
areas were less likely, compared to households outside those 
areas, to redeem their coupons once they receive them.
    Additionally, we analyzed participation in the converter 
box subsidy program in the 45 areas of the country on which 
NTIA and FCC focus their consumer education efforts and found 
coupon requests to be roughly the same for ZIP codes within the 
45 targeted areas compared with areas that were not targeted.
    NTIA estimates that it will see a large increase in the 
number of coupon requests in the first quarter of 2009, and our 
analysis confirms that. As the transition nears, a spike in 
coupon requests is likely. However, NTIA has not developed a 
plan for managing that potential spike or the sustained 
increase. The time required for processing coupons has improved 
since consumers incurred significant wait times to receive 
their coupons at the beginning of the program, but until 
recently, NTIA fell short of this requirement for processing 
coupons within the allotted time. Consequently, consumers may 
still face potential risks.
    To help NTIA prepare for potential increase in demand for 
converter box coupons and so that consumers are not left 
waiting a lengthy period of time for requested coupons, the 
report we released last week recommended that the Secretary of 
Commerce direct NTIA to develop a plan to manage volatility in 
coupon requests so that coupons will be processed within the 
allotted time period.
    Mr. Chairman, this concludes my prepared statement. I would 
be happy to respond to any questions you or the Committee may 
have.
    [The prepared statement of Mr. Goldstein follows:]

      Prepared Statement of Mark L. Goldstein, Director, Physical 
      Infrastructure, U.S. Government Accountability Office (GAO)
    Mr. Chairman and Members of the Committee:

    I am pleased to be here today to discuss our recently issued report 
on the National Telecommunications and Information Administration's 
(NTIA) implementation of the mandated converter box subsidy program.\1\
---------------------------------------------------------------------------
    \1\ GAO, Digital Television Transition: Implementation of the 
Converter Box Subsidy Program Is Under Way, but Preparedness to Manage 
an Increase in Subsidy Demand Is Unclear, GAO-08-1040 (Washington, 
D.C.: September 16, 2008).
---------------------------------------------------------------------------
    Federal law requires all full power television stations in the 
United States to cease analog broadcasting and broadcast digital-only 
transmissions after February 17, 2009--often referred to as the digital 
television (DTV) transition. Currently, most television broadcasters 
transmit over-the-air signals in both an analog and digital format to 
television households. After the transition, consumers who rely 
exclusively on over-the-air television signals viewed on analog sets 
will not be able to view broadcast programming, which could include 
important news information or emergency alerts, unless they take 
action. In particular, these consumers could: (1) purchase a television 
capable of processing digital signals, (2) purchase a digital-to-analog 
converter box that converts the digital signals to analog signals and 
enables their display on an analog set, or (3) subscribe to cable, 
satellite, or other service.
    The Federal Government and the private sector have taken several 
steps to prepare for the DTV transition. NTIA, a bureau within the U.S. 
Department of Commerce, created and implemented a digital-to-analog 
converter box subsidy program to provide households with up to two $40 
coupons toward the purchase of converter boxes that allow consumers to 
continue viewing over-the-air signals on analog television sets.\2\ 
Additionally, the government, television broadcast industry, cable and 
satellite providers, and other carriers of broadcast signals have 
established several educational efforts informing consumers about the 
DTV transition and the subsidy program. However, the success of the DTV 
transition and the subsidy program requires consumers' understanding 
about the transition and the steps needed to continue receiving a 
television signal. In addition, consumers will rely on retailers to 
provide information, as well as supply eligible converter boxes, for 
the subsidy program.
---------------------------------------------------------------------------
    \2\ Eligible converter boxes range in price from $40 to over $90.
---------------------------------------------------------------------------
    In my testimony today, I will discuss: (1) what consumer education 
efforts have been undertaken by private and Federal stakeholders and 
(2) how effective NTIA has been in implementing the converter box 
subsidy program and to what extent consumers are participating in the 
program.
    To meet these objectives, we interviewed agency officials from the 
Federal Communications Commission (FCC) and NTIA and reviewed their 
consumer education documents, orders, rules and proposed rules. We also 
interviewed private sector stakeholders representing the broadcasting, 
retailer, manufacturing, and cable industries and reviewed publicly 
available information on their consumer education planning. Further, we 
discussed the effectiveness of consumer education efforts with various 
advocacy groups identified as NTIA partners that represent hard-to-
reach populations. We also analyzed date-specific data from NTIA on 
coupon requests, issuance, redemptions, and expirations, and examined 
NTIA timeliness in issuing coupons from the beginning of the converter 
box subsidy program in January through August 2008. Due to report 
processing constraints the report this testimony is primarily based on 
only analyzed data from January through June 2008. We conducted data 
reliability testing and determined that the data used in this report 
were sufficiently reliable for our purposes. We conducted a ``mystery 
shopper'' study--i.e., discussing the transition with randomly selected 
retailers without identifying ourselves as government employees--to 
determine retailer preparedness for the converter box subsidy program 
including the level of retailer knowledge about the program and 
availability of converter boxes. The study, in which we visited 132 
store locations in 12 cities, was conducted from April to early May 
2008. We performed our review from February to September 2008 in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our review objectives. We believe 
that the evidence obtained provides a reasonable basis for our findings 
and conclusions based on our audit objectives.
Summary
   Private sector and Federal stakeholders have undertaken 
        various consumer education efforts to raise awareness about the 
        DTV transition. For example, the National Association of 
        Broadcasters (NAB) and the National Cable and 
        Telecommunications Association have committed over $1.4 billion 
        to educate consumers about the transition. This funding has 
        supported the development of public service announcements, 
        education programs for broadcast, websites, and other 
        activities. In addition, most national retailers participating 
        in the converter box subsidy program have developed consumer 
        education campaigns to raise awareness of the DTV transition 
        and the subsidy program. Federal stakeholders (FCC and NTIA) 
        have developed consumer education plans that target those 
        populations most likely to be affected by the DTV transition. 
        In particular, they focused their outreach efforts on certain 
        demographic groups, including seniors, low-income, minority and 
        non-English speaking, rural households, and persons with 
        disabilities.

   NTIA is effectively implementing the converter box subsidy 
        program, but plans to address the likely increase in coupon 
        demand as the transition nears remain unclear. As of August 31, 
        2008, NTIA had issued approximately 24 million coupons and as 
        of that date approximately 13 percent of U.S. households had 
        requested coupons. As found in our consumer survey, up to 35 
        percent of U.S. households could be affected by the transition 
        because they have at least one television not connected to a 
        subscription service, such as cable or satellite.\3\ In U.S. 
        households relying solely on over-the-air broadcasts 
        (approximately 15 percent), of those who intend to purchase a 
        converter box, 100 percent of survey respondents said they were 
        likely to request a coupon. Therefore, a spike in demand for 
        converter box coupons is likely as the transition date nears. 
        According to NTIA, an increase in requests around the 
        transition date may cause a delay in issuing coupons. However, 
        we found NTIA has no specific plans to address an increase in 
        demand and that it has encountered challenges in issuing 
        coupons within its requirement of 10 to 15 days from the date 
        the coupon application was approved. Given the challenges to 
        meet this requirement and its lack of a clear plan to address a 
        potential spike in demand, consumers might incur significant 
        wait time to receive their coupons and might lose television 
        service if their wait time lasts beyond February 17, 2009. In 
        terms of participation in the converter box subsidy program, we 
        analyzed coupon data in areas of the country comprised of 
        predominantly minority and senior populations and found that 
        participation varies. For example, we found that ZIP codes with 
        a high concentration of Latino or Hispanic households had 
        noticeably higher coupon request rates (28 percent) when 
        compared to areas with predominantly non-Latino or non-Hispanic 
        households (12 percent). We also found households in both 
        predominantly black and Hispanic or Latino areas were less 
        likely, compared to households outside these areas, to redeem 
        their coupons once they received them. Additionally, we 
        analyzed participation in the converter box subsidy program in 
        the 45 areas of the country on which NTIA and FCC focused their 
        consumer education efforts and found coupon requests to be 
        roughly the same for zip codes within the 45 targeted areas 
        compared with areas that were not targeted.
---------------------------------------------------------------------------
    \3\ GAO, Digital Television Transition: Broadcasters' Transition 
Status, Low-Power Station Issues, and Information on Consumer Awareness 
of the DTV Transition, GAO-08-881T (Washington, D.C.: June 10, 2008).
---------------------------------------------------------------------------
Background
    The DTV transition will require citizens to understand the 
transition and the actions that some might have to take to maintain 
television service. For those households with subscription video 
service on all televisions or with all televisions capable of 
processing a digital signal, no action is required. However, households 
with analog televisions that rely solely on over-the-air television 
signals received through rooftop or indoor antennas must take action to 
be able to view digital broadcast signals after analog broadcasting 
ceases. The Digital Television Transition and Public Safety Act of 2005 
addresses the responsibilities of two Federal agencies--FCC and NTIA--
related to the DTV transition. The act directs FCC to require full-
power television stations to cease analog broadcasting after February 
17, 2009. The act also directed NTIA to establish a $1.5 billion 
subsidy program through which households can obtain coupons toward the 
purchase of digital-to-analog converter boxes. In August 2007, NTIA 
selected International Business Machines Corporation (IBM) as the 
contractor to provide certain services for the program. On January 1, 
2008, NTIA, in conjunction with IBM and in accordance with the act, 
began accepting applications for up to two $40 coupons per household 
that can apply toward the purchase of eligible digital-to-analog 
converter boxes and, in mid-February 2008, began mailing the coupons. 
Initially, during the first phase of the program any household is 
eligible to request and receive the coupons, but once $890 million 
worth of coupons has been redeemed, and issued but not expired, NTIA 
must certify to Congress that the program's initial allocation of funds 
is insufficient to fulfill coupon requests. NTIA will then receive $510 
million in additional program funds, but households requesting coupons 
during this second phase must certify that they do not receive cable, 
satellite, or any other pay television service. As of June 24, 2008, in 
response to NTIA's statement certifying that the initial allocation of 
funds would be insufficient, all appropriated coupon funds were made 
available to the program.\4\ Consumers can request coupons up to March 
31, 2009, and coupons can be redeemed through July 9, 2009. As required 
by law, all coupons expire 90 days after issuance. As unredeemed 
coupons expire, the funds obligated for those coupons are returned to 
the converter box subsidy program.
---------------------------------------------------------------------------
    \4\ With the additional $510 million, total program funding is $1.5 
billion, which includes up to $1.34 billion in coupon funds and up to 
$160 million in administrative funds.
---------------------------------------------------------------------------
    Retailer participation in the converter box subsidy program is 
voluntary, but participating retailers are required to follow specific 
program rules to ensure the proper use and processing of converter box 
coupons. Retailers are obligated to, among other things, establish 
systems capable of electronically processing coupons for redemption and 
payment and tracking transactions. Retailers must also train their 
employees on the purpose and operation of the subsidy program. 
According to NTIA officials, NTIA initially explored the idea of 
setting requirements for training content, but decided to allow 
retailers the flexibility of developing their own training programs and 
provided retailers with sample training materials. Certification 
requires retailers to have completed an application form by March 31, 
2008, and to attest that they have been engaged in the consumer 
electronics retail business for at least one year. Retailers must also 
register in the government's Central Contractor Registration data base, 
have systems or procedures that can be easily audited and that can 
provide adequate data to minimize fraud and abuse, agree to be audited 
at any time, and provide data tracking each coupon with a corresponding 
converter box purchase. NTIA may revoke retailers' certification if 
they fail to comply with these regulations or if any of their actions 
are deemed inconsistent with the subsidy program. Converter boxes can 
also be purchased by telephone or online and be shipped directly to a 
customer's home from participating retailers. At the time of our 
review, 29 online retailers were participating in the converter box 
subsidy program. Additionally, 13 telephone retailers were listed as 
participating in the program, 2 of which are associated with national 
retailers.
Private and Federal Stakeholders Have Undertaken a Myriad of Activities 
        Aimed at Increasing the Public's Awareness of the Transition
    Private sector stakeholders, such as broadcasters and cable 
providers, have undertaken various education efforts to increase public 
awareness about the DTV transition. The NAB and the National Cable and 
Telecommunications Association initiated DTV transition consumer 
education campaigns in late 2007 at an estimated value of $1.4 billion 
combined. NAB has produced six versions of a public service 
announcement, including 15-second and 30-second versions in both 
English and Spanish and close-captioned versions. Private sector 
stakeholders have also produced DTV transition educational programs for 
broadcast and distribution, developed websites that provide information 
on the transition, and engaged in various other forms of outreach to 
raise awareness. Additionally, most of the national retailers 
participating in the NTIA converter box subsidy program are providing 
materials to help inform their customers of the DTV transition and the 
subsidy program. Examples of these materials include informational 
brochures in English and Spanish, educational videos and in-store 
displays in English and Spanish, informational content on retailer 
websites, and information provided in retailer advertising in Sunday 
circulars.
    FCC and NTIA also have ongoing DTV consumer education efforts, 
which target populations most likely to be affected by the DTV 
transition. Specifically, they focused their efforts on 45 areas of the 
country that have at least 1 of the following population groups: (1) 
more than 150,000 over the-air households, (2) more than 20 percent of 
all households relying on over-the-air broadcasts, or (3) a top 10 City 
of residence for the largest target demographic groups. The target 
demographic groups include seniors, low-income, minority and non-
English speaking, rural households, and persons with disabilities. 
According to NTIA, its consumer education efforts will specifically 
target these 45 areas by leveraging partnerships and earned media spots 
(such as news stories or opinion editorials) to better reach the 
targeted populations. FCC indicated that while its outreach efforts 
focus on the targeted hard-to-reach populations, the only effort 
specifically targeting the 45 locations has been to place billboards in 
these communities. According to FCC, contracts exist for billboards in 
26 of the 45 markets, and it is working to place billboards in the 
other 19 markets. Furthermore, FCC and NTIA have developed partnerships 
with some Federal, state, and local organizations that serve the 
targeted hard-toreach populations.
NTIA is Effectively Implementing the Converter Box Subsidy Program, But 
        Concerns Exist about NTIA's Ability to Manage a Potential Spike 
        in 
        Demand
    NTIA has processed and issued coupons to millions of consumers, but 
a sharp increase in demand might affect NTIA's ability to respond to 
coupon requests in a timely manner. NTIA and its contractors have 
implemented systems: (1) to process coupon applications, (2) to produce 
and distribute coupons to consumers, and (3) for retailers to process 
coupons and receive reimbursement for the coupons from the government. 
Millions of consumers have requested converter box coupons and most of 
the requested coupons have been issued. Through August 2008, households 
had requested approximately 26 million coupons. NTIA had issued over 94 
percent of all coupon requests, for more than 24 million coupons. Of 
those coupons issued, about 9.5 million (39 percent) had been redeemed 
and 31 percent had expired.\5\ After an initial spike at the beginning 
of the program, coupon requests have remained steady and have averaged 
over 105,000 requests per day. Coupon redemptions, since coupons were 
first issued in February 2008, have averaged over 48,000 per day.
---------------------------------------------------------------------------
    \5\ Our redemption rate was calculated by dividing the number of 
redeemed coupons by the total number of issued coupons as of August 31, 
2008. The total number of issued coupons includes coupons which had 
been redeemed, had expired, and had not yet expired as of that date.
---------------------------------------------------------------------------
    In our consumer survey, we found that 35 percent of U.S. households 
are at risk of losing some television service because they have at 
least one television not connected to a subscription service, such as 
cable or satellite. However, through August 2008, only 13 percent of 
U.S. households had requested converter box coupons, and less than 5 
percent had redeemed these coupons. As the transition date nears, there 
is the potential that many affected households that have not taken 
action might begin requesting coupons. Our consumer survey found that 
of those at risk of losing some television service and intending to 
purchase a converter box, most will likely request a coupon. In fact, 
in households relying solely on over-the-air broadcasts (approximately 
15 percent), of those who intend to purchase a converter box, 100 
percent of survey respondents said they were likely to request a 
coupon.
    Consumers have incurred significant wait times in the processing of 
their coupon requests, but the processing time from receiving requests 
to issuing coupons is improving. NTIA requires that 98 percent of all 
coupon requests be issued within 10 days, and the remainder be issued 
within 15 days. From February 17 through August 31, 2008, our analysis 
shows that the average duration between coupon request and issuance was 
over 16 days.\6\ In aggregate, 53 percent of all coupon requests had 
been issued within 10 days, and 39 percent of all coupon requests had 
been issued more than 15 days after being requested. From May 1 through 
August 31, 2008, the average processing time from coupon request to 
issuance was 9 days.
---------------------------------------------------------------------------
    \6\ For the purposes of our analysis, we assumed that all coupons 
were issued in the order they were received. According to NTIA, coupon 
issuance was to begin 1 year from the transition. Therefore the 
processing time between coupon requests and issuance was calculated 
beginning on February 17, 2008.
---------------------------------------------------------------------------
    Given the processing time required in issuing coupons, NTIA's 
preparedness to handle volatility in coupon demand is unclear. 
Fluctuation in coupon requests, including the potential for a spike in 
requests as the transition date approaches, could adversely affect 
consumers. When NTIA faced a deluge of coupon requests in the early 
days of the converter box subsidy program, it took weeks to bring down 
the deficit of coupons issued to coupons requested. According to NTIA, 
it expects a similar increase in requests around the transition date, 
and such an increase may cause a delay in issuing coupons. As a result, 
consumers might incur significant wait time before they receive their 
coupons and might lose television service during the time they are 
waiting for the coupons. While NTIA and its contractors have 
demonstrated the capacity to process and issue large numbers of coupon 
requests over short periods, they have yet to establish specific plans 
to manage a potential spike or a sustained increase in demand leading 
up to the transition.
    We analyzed data to compare areas of the country that comprise 
predominantly minority and elderly populations with the rest of the 
U.S. population and found some differences in the coupon request, 
redemption, and expiration rates for Hispanic, black, and senior 
households compared with the rest of the U.S. population. For example, 
ZIP codes with a high concentration of Latino or Hispanic households 
had noticeably higher request rates (28 percent) when compared with 
non-Latino or non-Hispanic zip codes (12 percent). However, households 
in predominantly black and Latino or Hispanic zip codes were less 
likely, compared with households outside these areas, to redeem their 
coupons once they received them. As shown in table 1, the overall rate 
of redemption for the converter box subsidy program is 39 percent. 
Approximately 37 percent of coupons have been redeemed in predominantly 
Latino or Hispanic areas. In predominantly black areas, 32 percent of 
coupons have been redeemed. We found that in areas of the country with 
a high concentration of seniors, fewer coupons were requested (9 
percent) compared with areas of the country that did not have a high 
concentration of seniors (13 percent). Redemption rates for the senior 
population were lower than the redemption rates in the rest of the 
country. Regarding coupon expirations, we found that the areas 
comprising Latino or Hispanic households allowed 27 percent of their 
coupons to expire, while areas with predominantly senior populations 
allowed 43 percent of their coupons to expire.




----------------------------------------------------------------------------------------------------------------



        Table 1.--Request, Redemption, and Expiration Rates of Converter Box Coupons through August 2008
----------------------------------------------------------------------------------------------------------------
                                                       Request rate       Redemption rate       Expiration rate
----------------------------------------------------------------------------------------------------------------
U.S. population                                                 12.5                     39.0               30.5
Latino or Hispanic                                              27.5                     36.6               26.8
Black                                                           13.4                     31.5               30.3
Seniors                                                          8.7                     34.0               43.2
----------------------------------------------------------------------------------------------------------------
Source: GAO analysis of NTIA data.

    To determine participation in the converter box subsidy program in 
the 45 areas of the country receiving targeted outreach by NTIA and 
FCC, we analyzed NTIA coupon data (including requests, redemptions, and 
expirations) in the 45 areas compared to the rest of the country not 
targeted by NTIA and FCC. We found participation levels were about the 
same in the targeted areas when compared to the rest of the country. 
For example, we found in the 45 targeted areas, 12.2 percent of 
households have requested coupons compared with 12.8 percent for the 
rest of the country not targeted by NTIA and FCC. According to NTIA, 
similarities in request, redemption, and expiration rates between the 
45 targeted areas and the rest of the country is viewed as a success.
    As the sellers of the converter boxes, retailers play a crucial 
role in the converter box subsidy program and are counted on to inform 
consumers about it. At the time of our review, seven national retailers 
were certified to participate in the subsidy program. Participating 
retailers are obligated to, among other things, train employees on the 
purpose and operation of the subsidy program. All of the retailers with 
whom we spoke told us they were training employees on the DTV 
transition and the subsidy program, although the retailers varied in 
which staff must complete training.
    As part of our work, we conducted a ``mystery shopper'' study by 
visiting 132 randomly selected retail locations in 12 cities across the 
United States that were listed as participating in the converter box 
subsidy program. We did not alert retailers that we were visiting their 
stores or identify ourselves as government employees. During our 
visits, we engaged the retailers in conversation about the DTV 
transition and the subsidy program to determine whether the information 
they were providing to customers was accurate and whether individual 
stores had coupon-eligible converter boxes available. While not 
required to do so, some stores we visited had informational material 
available and others had signs describing the DTV transition and the 
subsidy program. We also determined whether the information that 
retailers were providing to customers was accurate and whether 
individual stores had coupon-eligible converter boxes available. At 
most retailers (118) we visited, a representative was able to correctly 
identify that the DTV transition would occur in February 2009. 
Additionally, nearly all (126) retailers identified a coupon-eligible 
converter box as an option available to consumers to continue watching 
television after the transition. Besides coupon eligible converter 
boxes, representatives identified other options to continue viewing 
television after the transition, including purchasing a digital 
television (67) or subscribing to cable or satellite service (77). 
However, in rare instances, we heard erroneous information from the 
retailers, including one representative who told us that an option for 
continuing to watch television after the transition was to obtain a 
``cable converter box'' from a cable company and another representative 
who recommended buying an ``HD tuner.'' Since participating retailers 
are obligated to train their employees on the purpose and operation of 
the subsidy program, we observed whether the representative was able to 
explain various aspects about the subsidy program. A vast majority of 
the representatives were able to explain how to receive or apply for a 
coupon and the value of the coupon.
    Although we could obtain information from the majority of the 
stores that we visited and that were listed as participating in the 
subsidy program, in a few instances, we were not able to ask questions 
and observe whether the information provided was accurate. In two 
instances, there was no retailer at the store location listed as a 
participating retailer on NTIA's website (https://www.dtv2009.gov/
VendorSearch.aspx). In another instance, the location listed was under 
construction and had not yet opened. In two additional instances, the 
locations listed were private residences--one was an in-home 
electronics store, and the other was a satellite television installer 
working from a house. We asked NTIA how it ensured the accuracy of the 
list of participating retailers on its website, and according to NTIA, 
ensuring the accuracy of the list is the responsibility of the 
retailers. NTIA said it provides a list of locations to each retailer 
prior to placing the list on the website, and retailers can update 
addresses or add new listings as warranted.
Conclusions and Recommendation
    NTIA estimates that it will see a large increase in the number of 
coupon requests in the first quarter of 2009 and our analysis confirms 
that, as the transition nears, a spike in coupon requests is likely. 
However, NTIA has not developed a plan for managing that potential 
spike or sustained increase in coupon demand. The time required for 
processing coupons has improved since consumers incurred significant 
wait times to receive their coupons at the beginning of the program, 
but until recently NTIA fell short of its requirement for processing 
coupons within 10 to 15 days. Given the relatively low participation 
rates to date and the amount of time it took to process the spike in 
coupon requests in the early days of the program, NTIA's ability to 
handle volatility in coupon demand without a plan is uncertain. 
Consequently, consumers face potential risks that they might not 
receive their coupons before the transition and might lose their 
television service.
    To help NTIA prepare for a potential increase in demand for 
converter box coupons and so that consumers are not left waiting a 
lengthy amount of time for requested coupons, the report we issued 
September 16, 2008, recommended that the Secretary of Commerce direct 
the Administrator of the NTIA to develop a plan to manage volatility in 
coupon requests so that coupons will be processed and mailed within 10-
15 days from the day the coupon applications are approved, per NTIA's 
stated requirement.
    In reviewing a draft of the report, the Department of Commerce 
(which contains NTIA) did not state whether it agreed or disagreed with 
our recommendation, but did say the Department shares our concern about 
an increase in coupon demand as the transition nears. Further, its 
letter stated it is committed to doing all that it can within its 
statutory authority and existing resources to ensure that all Americans 
are ready for the DTV transition. In its letter, FCC noted consumer 
outreach efforts it has taken related to the DTV transition.
    Mr. Chairman, this concludes my prepared statement. I would be 
happy to respond to any questions you or other Members of the Committee 
may have at this time.

    The Chairman. I thank you very much, Mr. Director.
    And our final witness is the Mayor of Wilmington, the 
Honorable Bill Saffo. Mr. Mayor?

             STATEMENT OF HON. BILL SAFFO, MAYOR, 
               CITY OF WILMINGTON, NORTH CAROLINA

    Mr. Saffo. Thank you, Mr. Chairman. Thank you, members of 
the Committee. Thank you for the opportunity to share the City 
of Wilmington's perspective on being the first in the country 
to make the DTV switch. It is an honor to be invited here to 
speak. My name is Bill Saffo, and I am the Mayor of the City of 
Wilmington, North Carolina.
    My office was contacted on May 6, 2008, by Mr. Gary McNair, 
General Manager for WECT TV, the NBC affiliate in Wilmington, 
inviting me to attend the press conference here in Washington 
on May the 8th announcing that the City of Wilmington was 
chosen by the FCC to be the first in the country to switch from 
analog to digital television. While I was excited for this 
historical event to occur in our great city, I was also 
concerned and apprehensive about being the first. Would the FCC 
make available to us the necessary resources to inform, 
educate, and to provide converter boxes for our residents by 
the big switch date of September 8?
    I am proud to say that those concerns were quickly 
diminished as meetings and conversations began immediately 
between my office and members of the FCC, Chairman Martin, and 
the staff of Mr. Louis Sigalos, Chief of Consumer Affairs and 
Outreach Division. It was clear to me that the staff at the FCC 
had all intentions to be by our side through this transition, 
even setting up a local office in our Chamber of Commerce. They 
outlined their plan to have an FCC staff person assigned to 
each of the five counties involved in this digital transition. 
That representative then worked with local government 
officials, broadcasters, community and business leaders, and 
the public at large to saturate each county with information on 
this coming event. Through their resources, they set up 
informational events at our local festivals, farmers' markets, 
senior centers, churches, civic organizations, low-income 
apartments, and the Department of Social Services. They truly 
seemed to be everywhere educating our residents and answering 
their questions.
    I also want to thank the various retailers who planned 
accordingly to have plenty of converter boxes in stock and 
staff members who were knowledgeable and able to assist the 
public with answers to their questions. Our local broadcasters 
also played another key role as they frequently advertised 
informative commercials reminding the viewers of the big switch 
date happening in Wilmington on September 8. I feel that the 
collaborative effort of this private-public partnership was a 
key component to the success of this event.
    Another important segment in our community that they met 
with was the emergency management teams. Being in hurricane 
alley, it was vital that this group was informed and their 
concerns addressed. Many residents depend on the use of 
battery-powered analog TVs as their means of obtaining critical 
information after a hurricane event. Both residents and 
emergency management personnel expressed apprehension about 
turning off the analog signal while in the middle of our 
hurricane season. The FCC addressed those concerns by telling 
us that in the event of an approaching hurricane, first, they 
would not make the switch, and second, that they would give our 
local broadcasters the ability to switch over to an analog 
signal in the event of a hurricane. I must compliment the FCC 
and especially Chairman Kevin Martin for their foresight as 
these two things eased the concerns of our emergency management 
folks, as well as our citizens.
    The other main concern in our area was making contact with 
the elderly and those who depend solely on the over-the-air TV 
signals through the use of rabbit ears and/or roof-top 
antennas. The overall education and public awareness by our 
local broadcasters and the FCC was outstanding and yet, for all 
of the public outreach and education, we still had residents 
that went dark after 12 o'clock on September 8, at noon.
    It was reported to me that predominantly the vast majority 
of the calls first received right after the switch were seniors 
who either did not want to even try to install the converter 
box or they attempted to install the box but were not finding 
success. It also appears that many of these callers were not 
scanning the channels after they installed their box or they 
would need to perform an additional scan after the big switch 
at noon in order to receive all of the channels. Many sons, 
daughters, and neighbors have been calling to request 
assistance for an elderly community member.
    As of September 15, the City of Wilmington had over 300 
calls. 80 percent needed technical assistance with their boxes 
over the telephone, while the other 20 percent needed more in-
depth help of a home visit from the fire department. We have 
also been very successful using our fire personnel to help 
those needing technical assistance with their converter boxes 
and at the same time having our fire personnel check for 
working smoke alarms. We found most residents, who might be 
apprehensive with a stranger, were willing to let the firemen 
into their homes.
    Another surprise to us was that, in fact, after some time, 
many of our callers were not the elderly or the disabled 
looking for assistance, but were coming from the general public 
at large.
    A key component, I believe, to our success was conducting 
soft tests within our market. One was a 1-minute test, and the 
other was a 5-minute test, which alerted viewers if they were 
not equipped to view digital programming. Getting the 
information out to the public early on was very important. 
Having information available to the general public through many 
resources and at various locations throughout our community and 
throughout the five-county area was very important. 
Collaborative efforts from all areas of the marketplace, 
broadcasters, the FCC staff, retailers, government officials, 
were extremely important. And in conjunction with New Hanover 
County, a television and computer recycling day was held on 
August 30, which was also very beneficial.
    Problems experienced in Wilmington post switch were that we 
had too many callers for one staff person in the City of 
Wilmington. Most callers had properly installed the converter 
boxes, yet were unaware of the need to run the autoscan, which 
is a very important item. Callers were contacting the one 
designated help line to request assistance in setting up their 
secondary televisions within their residence, resulting in 
calls that were not an immediate priority, unlike the 
households who were not receiving any reception at all.
    And in a small sector of our population, there were still 
some that could not afford the converter box even with a 
coupon. The FCC grant money was designated for specific use and 
was not available to be used at the discretion of the local 
municipalities to assist this very small group of the 
population that could not even afford the converter box.
    Suggestions to other markets. My suggestion would be to 
inform the public to act early and not to wait as coupons take 
time to receive. Have a staff of individuals trained in both 
the technology and the installation of the converter boxes 
ready to handle the influx of calls. The general public wanted 
to speak directly to someone immediately, not a voice mail or 
busy signal resulting in frustration, as you can imagine.
    And encourage local government offices to apply for grant 
funding through the FCC to be used for fuel and other costs 
associated with resolving problems after the switch to digital 
signals. We have had tremendous success with our local fire 
departments in getting personnel out to those properties and to 
those people that needed to have that assistance, especially 
the elderly and low-income neighborhoods that really treasured 
that assistance from our local fire department. And it was a 
great initiative on our behalf to get those folks out there.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Saffo follows:]

             Prepared Statement of Hon. Bill Saffo, Mayor, 
                   City of Wilmington, North Carolina
    Good afternoon Mr. Chairman and Members of the Committee. Thank you 
for the opportunity to share the City of Wilmington's perspective on 
being the first in the country to make the DTV switch. It is an honor 
to be invited here to speak today. My name is Bill Saffo and I am the 
Mayor of the City of Wilmington, North Carolina.
    My office was contacted on May 6, 2008, by Mr. Gary McNair, General 
Manager for WECT TV in Wilmington, inviting me to attend the press 
conference here in Washington on May 8 announcing that the City of 
Wilmington was chosen by the FCC to be the first in the country to 
switch from analog to digital television. While I was excited for this 
historical event to occur in our great city, I was also concerned that 
being the first, would the FCC make available to us the necessary 
resources to inform, educate and to provide converter boxes to our 
residents by the Big Switch date of September 8?
    I am proud to say that those concerns were quickly diminished as 
meetings and conversations began immediately between my office and 
members of the FCC, Chairman Martin, and the staff of Mr. Louis 
Sigalos, Chief of Consumer Affairs & Outreach Division. It was clear to 
me that the staff of the FCC had all intentions to be by our side 
through this transition, even setting up a local office in our Chamber 
of Commerce. They outlined their plan to have a FCC staff person 
assigned to each of the five counties involved in this digital 
transition. That representative then worked with local government 
officials, broadcasters, community and business leaders, and the public 
at large to saturate each county with information on this coming event. 
Through their resources, they set up informational events at our local 
festivals, farmer's market, senior centers, churches, civic 
organizations, low-income apartments and the department of social 
services. They truly seemed to be everywhere educating our residents 
and answering their questions.
    I also want to thank the various retailers who planned accordingly 
to have plenty of converter boxes in stock and staff members who were 
knowledgeable and able to assist the public with answers to their 
questions. Our local broadcasters also played another key role as they 
frequently advertised informative commercials reminding their viewers 
of the Big Switch date happening in Wilmington on September 8. I feel 
that the collaborative effort of this private--public partnership was a 
key component to the success of this event.
    Another important segment in our community that they met with was 
our emergency management teams. Being in hurricane alley, it was vital 
that this group was also informed and their concerns addressed. Many 
residents depend on the use of battery powered analog TV's as their 
means of obtaining critical information after a hurricane event. Both 
residents and emergency management personnel expressed apprehension 
about turning off the analog signal while in the middle of our 
hurricane season. The FCC addressed those concerns by telling us that 
in the event of an approaching hurricane----
    First they would not make the switch and second that they would 
give our local broadcasters the ability to switch over to analog 
signal. I must compliment the FCC and Chairman Martin for their 
foresight as these two things eased the concerns of our emergency 
management folks as well as our citizens.
    The other main concern in our area was making contact with the 
elderly and those who depend solely on over-the-air TV signals through 
the use of rabbit ears and roof-top antennas. The overall education and 
public awareness by our local broadcasters and the FCC was outstanding 
and yet, for all of the public outreach and education, we still had 
residents that went dark on September 8 at noon. It was reported to me 
that predominately the vast majority of the calls first received right 
after the switch were seniors who either did not want to even try to 
install the converter box or they attempted to install the box but were 
not finding success. It also appears that many of these callers were 
not scanning the channels after they installed their box or, that they 
would need to perform an additional scan after the Big Switch at noon 
in order to receive all the channels. Many sons, daughters, and 
neighbors have been calling to request assistance for an elderly 
community member.
    As of September 15, the City of Wilmington had over 300 calls, 80 
percent needed technical assistance with their boxes over the phone, 
while the other 20 percent needed more in-depth help of a home visit 
from the fire department. We have also been very successful using our 
fire personnel to help those needing technical assistance with their 
converter boxes and at the same time, having our fire personnel check 
for working smoke alarms. We found most residents, who might be 
apprehensive with a stranger, were willing to let firemen into their 
homes. Another surprise to us was that, in fact, after some time, many 
of our callers were not the elderly or disabled looking for assistance 
but were the general public at large.

    Key components to our success were:

   Conducting soft tests within our market--one was a 1 minute 
        test and the other was a 5 minute test--which alerted viewers 
        if they were not equipped to view digital programming.

   Getting the information out to the public early on.

   Having information available to the general public through 
        many resources and at various locations.

   Collaborative efforts from all areas of the marketplace--
        broadcasters, FCC staff, retailers, government officials.

   In conjunction with New Hanover County, a ``Television and 
        Computer Recycling Day'' was held on August 30.

    Problems Experienced in Wilmington:

   Post Switch--too many callers for one staff person.

   Most callers had properly installed the converter boxes yet 
        were unaware of the need to run autoscan.

   Callers were contacting the one designated helpline to 
        request assistance in setting up their ``secondary 
        televisions'' within their residence; resulting in calls that 
        were not an immediate priority unlike the households who were 
        not receiving any reception at all.

   In a small sector of our population, there were still some 
        that could not afford the converter box even with a coupon.

   The FCC grant money was designated for specific use and was 
        not available to be used at the discretion of the local 
        municipalities to assist this small group of the population.

    Suggestions to other markets:

   Inform the public to act early not to wait as coupons take 
        time to receive.

   Have a staff of individuals trained in both the technology 
        and the installation of the converter boxes ready to handle the 
        influx of calls.

   The general public wanted to speak directly to someone 
        immediately, not a voice mail or busy signal; resulting in 
        frustration.

   Encourage local governmental offices to apply for grant 
        funding through the FCC to be used for fuel and other costs 
        associated with resolving problems after the switch to digital 
        signals.

    The Chairman. Thank you very much, Mr. Mayor.
    I now recognize Senator Dorgan.

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

    Senator Dorgan. Mr. Chairman, thank you very much, and let 
me thank all five of you. I was not here for Chairman Martin's 
presentation, but thank you for the work you are all doing with 
respect to the transition.
    I confess I am pretty nervous about this transition. They 
did this in England, as you know, over a rather lengthy period 
of time, staged it over a long period of time.
    And I want to ask you a couple of questions about 
Wilmington, if I might, described I think, Mr. Mayor, as a 
success. But just on one day just with a snap of the fingers, 
we are converting in this country. And in Wilmington, which was 
a test area, 4 months prior to the test, the FCC, the NTIA, and 
the industry began preparing. Chairman Martin, you indicated 
you had staff on the ground in every county. They attended more 
than 400 outreach events, distributed 85,000 publications. I 
think you made five personal visits to the Wilmington area to 
raise public awareness.
    The fact is that will not happen anywhere else in the 
country, and I think while it appears that Wilmington succeeded 
with that major kind of effort, nowhere else in America will 
that effort exist. And still you had nearly 2,000 telephone 
calls in the several days afterwards, which I assume would 
overwhelm anything that we have established on a national 
scale.
    So, Chairman Martin, do you see the test area--and I think 
this is the only one you are going to do this way. I think 
maybe there should be more, but do you see this test area as a 
success that demonstrates the potential for success early next 
year when we convert?
    Mr. Martin. Well, first, I think it is important--and as I 
said in my testimony, I do not think you can judge the success 
of what occurred in Wilmington based on what happened last 
week. Ultimately, whether this is a success or not is whether 
we are going to learn lessons that we can put in place so that 
it is successful next February. So the success in Wilmington or 
not will be judged by what happens next February.
    So, on the one hand, I would say that we may not be able to 
completely replicate everything that occurred in Wilmington, 
but we are going to be able to do a significant amount. We have 
already visited thousands of senior centers around the country. 
We have made thousands of presentations around the country. In 
addition, I think you have to put in context that what we were 
doing to educate the people in Wilmington was unique because 
the folks in Wilmington were not able to take advantage of any 
of the nationwide education efforts that are being put forth by 
the industry, the broadcasters, the cable industry, the 
consumer electronics industry. All of those educational efforts 
were geared toward next February. So those are efforts that the 
rest of the country is going to be able to take advantage of.
    Senator Dorgan. If you were to estimate today, when we do 
the transition at that moment, how many people in this country 
will essentially go dark and not have gotten a converter box or 
not be able to get a signal--as I understand it, we also have 
some digital cliff issues, which I will ask you about in a 
moment. But if you were to estimate the number of Americans 
that you think we will not reach or will not take appropriate 
action to get a converter box, do you have any notion of how 
many Americans that will be?
    Mr. Martin. I think it is very difficult to estimate. The 
awareness among consumers today has increased dramatically, 
from about 35 to 40 percent a year ago to over 80 percent 
today. Some estimate over 90. In Wilmington, as we were 
approaching the transition, the NAB had done a survey and they 
said that 97 percent of the people were aware of the 
transition. The number of people who were unaware was very low 
in Wilmington as a result of the education efforts, and I think 
that the education efforts hopefully will be as successful 
around the country. There will always be some few number of 
people who may not be aware.
    Senator Dorgan. I think the issue is to drill down on 
awareness. Being aware and understanding are two very different 
concepts. I mean, somebody might be aware of something 
happening, but understanding what is going to happen and what 
they might be required to do to respond to it is something 
different.
    Let me ask on the issue of the converter boxes. We have put 
out $40 certificates. My understanding is most converter boxes 
are costing $60, although there is a $40 converter box on the 
market I am told that is not widely available. Tell me if there 
is a $40 box on the market, why is it not widely available.
    Mr. Martin. It took a little while for the $40 box to 
become available. But I agree with you. I think the consumer 
electronics retailer outlets need to be carrying the lowest 
available box that is currently on the market, that is 
available in the marketplace. And I have written to the 
consumer electronics companies and their representatives and 
said that they need to be carrying the $40 boxes. I do not 
understand why they would not be carrying that as an option for 
consumers on the low end.
    Senator Dorgan. What percent of them are now carrying the 
boxes? I understand it is hard to find.
    Mr. Martin. None of them are carrying them.
    Senator Dorgan. None of them. So, again, I do not 
understand that. If we are giving out $40 coupons and most 
people are having to pay $60 for a converter box, and yet there 
is a $40 box available but not made available in the 
marketplace, why?
    Ms. Baker. I will speak to that. Actually the box is 
available in 169 stores, according to our contractor, as of 
this week. I think you are right. It is an important market 
pressure to bring the market prices of the other boxes down as 
well, and it is important to have it available in the 
marketplace. We are pleased to see it.
    The boxes have several different permissive features, and 
so I think this is an important one on the price feature. But 
there are 34 analog pass-through boxes that are available, 
widely available in the market, that many consumers will want 
to purchase. There are some that have a smart antenna, which I 
also think is an important interface. There are some that have 
enhanced closed captions for the hearing impaired and some that 
have a video description which are to assist visually impaired 
customers. There are 150 boxes out there. I think it is 
important for all of these boxes to be out there, and I am 
pleased to see the market working and the prices of these 
things coming down.
    Senator Dorgan. Well, but are they coming down? If most of 
them are being sold at $60, that is 50 percent more than the 
$40 box that most Americans do not have access to.
    Ms. Baker. There are some now that are available at $44. 
There are some at $59. There are some that are free shipping 
when you use the phone option. If you order them on the phone, 
they will ship them to you for free. There are various market 
aspects that are covering various parts of the constituencies.
    Senator Dorgan. Let me just give you a North Dakota 
example. In North Dakota, 52,900 coupons have been requested, 
21,000 have been used, and 13,000 have expired. Almost 14,000 
have expired. What is going to happen with the expired coupons, 
and why do you think so few of the many coupons, 52,000 
requested, 21,000 redeemed? Why so few redeemed and what is 
going to happen to the expired coupons?
    Ms. Baker. We are actually pleased with the redemption rate 
of coupons. Many coupon programs you see are in the single-
digit redemption rate. So we are pleased with the redemption 
rates and they do seem to be creeping up, which we also think 
is important.
    I have actually sat out at our call center, and when people 
call for coupons, they typically order two. We might have 
thought that they might have ordered one, but they typically 
order two. And it is more about ``how many can I have'', as 
opposed to ``how many do I need?'' So I think that may 
attribute to why we are seeing two being ordered instead of 
just one.
    Senator Dorgan. I would encourage you to do some review of 
that, perhaps some surveys and so on, to try to understand that 
number because my understanding is that the coupons that have 
expired will not be renewed. Is that correct?
    Ms. Baker. They will not be reissued, but importantly, the 
money for those coupons is put back into the pot of money that 
will be recycled and more coupons will be sent out from those 
coupons that are not redeemed.
    Senator Dorgan. Mr. Goldstein, if you are among those of us 
who are worried about coming up to a date and just turning the 
switch--they did not do that in England, as I said, and I have 
read some about what the experience was in England. If you are 
one of those that is worried about problems in the days 
following that, what do you estimate to be the problems that 
will be most confronted?
    Mr. Goldstein. Senator Dorgan, we have talked, in the last 
couple of months as we have issued reports, about a number of 
different problems. One, of course, is awareness and the number 
of OTA households.
    You asked a few minutes ago about the difference between 
Wilmington and the United States as a whole. Wilmington has an 
over-the-air population of only about 7 percent, where the 
Nation is at about 15 percent based on our consumer survey. So 
roughly double. So you have to extrapolate to some extent the 
amount of problems that were faced in Wilmington and imagine 
what that might mean to the United States overall.
    We have reported about consumer problems, even though there 
is a considerable range of consumer awareness efforts ongoing 
from the private and the public sector. We have also talked 
about some technical issues over time, including issues related 
to the same kinds of things that have occurred in Wilmington, 
coverage areas, inability to get the boxes up and running, need 
of assistance, inability to understand what is happening and 
when. We found a variety of problems of those kinds of nature. 
Antenna problems also we have raised.
    There is a lot of different problems that are going to 
affect both the consumer side and the broadcast side as we get 
closer to the date. Not all parts of the country, not all 
broadcasters at this point have their towers in the order that 
they need to be. There are still many issues that are 
unresolved.
    Senator Dorgan. I am just curious. Has anybody on the panel 
hooked up a converter box?
    Ms. Baker. I have. A lot of them.
    Senator Dorgan. You have?
    Ms. Baker. Yes, sir.
    Senator Dorgan. Successfully?
    Ms. Baker. They are actually very simple.
    Senator Dorgan. Are they simple?
    Ms. Baker. They are designed to be very simple. I 
understand that they can be technically challenging, but you 
know, putting batteries in a remote control can sometimes be 
technically challenging. So TV is personal and a lot of the 
communities, the vulnerable communities that we are reaching 
out to, the elderly, the rural, the disabled, the minorities, 
the low-incomes, these folks are not technically savvy and they 
do need assistance. It is a challenge. That is why we encourage 
people to really act early and try these boxes out, try to hook 
them up early.
    Senator Dorgan. One of the reasons I ask the question is I 
was asked to unplug a dishwasher at home last evening, and the 
instruction manual said that was easy as well. I am lucky I am 
still not working on it.
    Mr. Saffo. Senator?
    Senator Dorgan. Yes?
    Mr. Saffo. One thing we did experience when we did have the 
boxes that were connected successfully, sometimes the antennas, 
if they had antennas on the roof, had to be adjusted. Now, 
obviously, since Wilmington is a pretty flat area--it is in the 
coastal plain of southeastern North Carolina--if you get into a 
mountainous area, you get into an area which is a highly 
urbanized area with a lot of buildings or a hilly area, you 
might have some difficulty in the adjustment of those antennas.
    Senator Dorgan. Would the FCC provide for the Committee's 
benefit the digital cliff areas? Or do you know where the cliff 
areas are where there will be some areas where the antenna will 
simply fail to pick up a signal once the conversion happens?
    Mr. Martin. One of the benefits of doing the test in 
Wilmington was to identify exactly where that digital cliff is 
and the impact of where viewers used to be able to get a signal 
and then were no longer able to.
    I think that there are two different issues that occurred 
in Wilmington that people should be aware of.
    I should just say, Senator, for the record I am nervous 
about what is going to occur in February as well. We are doing 
all that we can to minimize that burden, but that does not mean 
I do not think everyone up here is nervous and concerned about 
it.
    But the bigger problem in Wilmington was not actually the 
result of the digital cliff. It was actually a result of one of 
the analog stations shrinking its coverage area and resulting 
in viewers who used to be able to have coverage no longer 
having it because of the shrinking of that coverage area. That 
was a much more significant problem in Wilmington than the 
digital cliff. It was only several hundred people in 
Wilmington, but the people that were impacted by the shrinking 
of the coverage was a much more significant problem.
    Senator Dorgan. The reason I ask that question is the 
topography of Wilmington is rather flat. In many parts of the 
country, you are going to have contoured land, and I am just 
curious whether that is going to affect what is called the 
digital cliff.
    But if you will submit whatever information the FCC can to 
us, that would be very helpful, with respect to this digital 
cliff.
    Mr. Martin. Of course.
    Senator Dorgan. Mr. Chairman, thank you.
    The Chairman. Thank you.
    Senator Wicker?

              STATEMENT OF HON. ROGER F. WICKER, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Wicker. Thank you, Mr. Chairman.
    Obviously, there has been quite a bit of testimony that I 
have missed.
    I appreciate the fact that we have concerns today about the 
elderly and their ability to participate in this transition. I 
am mindful of the fact that they rely, I think to a greater 
extent, on television for much of their information and much of 
it is over-the-air.
    I also appreciate the benefit of the experience that we 
received from Wilmington.
    Wilmington is a medium-sized city. What would the 
population of Wilmington be?
    Mr. Saffo. Mr. Wicker, it is 100,000 within the city limits 
and 187,000 total within the county of New Hanover, which is 
the second smallest county in North Carolina.
    Senator Wicker. Was the entire county part of this 
experiment?
    Mr. Saffo. Yes, sir. Not only including New Hanover County, 
but also Brunswick County, Pender County, Columbus, and Bladen 
County. There were five counties all together.
    Senator Wicker. Well, I am sure that experience will be 
instructive to us.
    I wonder, Secretary Carbonell, if you have any information 
specific to the elderly in rural communities and if there is 
anything you can share with the Committee about that.
    Ms. Carbonell. Well, particularly our experience on the 
ground--obviously, the aging services network which are the 
actual providers that are on the ground, over 29,000 
organizations, are very knowledgeable of the area that they 
serve, know the clients, serve them in the majority of 
instances every day.
    We went through a similar historic experience, just in 
numbers of people, with the Medicare Part D prescription drug 
roll-out. And it was a complicated matter in which people 
needed to look at the options available and choose the plans 
that best met their needs, which is similar to this situation 
because it is particular to the television set that they own 
right now, whether they have rabbit ears or they have a roof 
antenna.
    So the issues that we have been seeing across the country 
in those that have requested--we are prioritizing to make sure 
that our network prioritizes and serves and reaches out to 
those that are homebound, people that we are serving right now, 
providing home care, home-delivered meals. And that we are not 
only taking that information out, but that we are asking some 
of the actual home care workers to look at the kind of 
television set that these people have and assist them as they 
need to get the coupons, complete the application, and then 
make sure that when that box comes, if that person needs 
additional assistance, that there will be somebody, either a 
staff person that goes into the home to do the home care or a 
volunteer that delivers the meal or a volunteer from the 
community, just like you had in Wilmington where you had the 
fire department, the firemen actually helping, emergency 
rescue. These are folks that are working with our aging network 
day in and day out in our communities.
    But the most important thing is to make sure that we 
identify those pockets and target those people. So the work 
that we are fine tuning now, in coordination with the NTIA and 
FCC, really focuses on those target areas that are identified 
as either low enrollment or high concentrations of elderly 
people, similar to the mapping that we did for low-income 
subsidy under Medicare in areas where the enrollment efforts 
were much lower. So we are targeting, trying to sift that 
information together, and matching it with our community 
providers, and being able to get that assistance on the ground 
with the rest of the coalition members that are present in the 
community, which encompass the Rotary Club, other civic 
organizations. And actually, there has been a lot of 
participation with local television stations and broadcasters 
and also retailers in assisting with this.
    Senator Wicker. Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Senator Klobuchar?

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

    Senator Klobuchar. Thank you very much, Mr. Chairman. Thank 
you for holding this hearing.
    And thank you, Mr. Mayor, for having this experiment occur 
in your city. I am sure it was not easy. And I am glad you have 
some good things to report.
    I just wanted to follow up what Senator Wicker was saying. 
It is my understanding of the houses that just had the 
traditional rabbit ears, something like 14,000--is that right?
    Mr. Saffo. That is about right in the five-county area. 
Yes, ma'am.
    Senator Klobuchar. And there were about 700--and we can 
talk with Chairman Martin about this, but 700 concerns raised 
or complaints afterward. Is that right?
    Mr. Saffo. In the jurisdiction that I represent, the calls 
that we received there at the fire department--and that was the 
folks that we used to address the issues--was about 300.
    Senator Klobuchar. So 300.
    Mr. Saffo. Yes, ma'am.
    Senator Klobuchar. And do you know where that number 700 
came from?
    Mr. Martin. The 700 number was the first-day calls we 
received.
    Senator Klobuchar. The first day calls.
    Mr. Martin. We received about 2,000 in total, but 700 on 
the first day. That is probably where you got that number.
    Senator Klobuchar. Very good. Thank you. And while the 
number seems small, when you look at my State, there are 
430,000 households that rely exclusively on over-the-air 
television. That is more than 20 percent of the households in 
my State. So you can see if you add that up, it is more than 
just hundreds where there is going to be an issue.
    And I appreciate, Chairman Martin, you saying that you are 
concerned about the fact that it is going to be less than 150 
days from today we are going to be converting over.
    So I just want to follow up--I know you talked about this 
briefly, Chairman Martin--about some of the issues that went 
wrong that need to be fixed. And I remember at the earlier 
hearing we talked about this digital cliff, and I am just 
picturing in February in Minnesota--have you ever been on a 
roof with an antenna in February in Minnesota, Chairman Martin?
    Mr. Martin. Not in February.
    Senator Klobuchar. It is going to be just a little bit 
different than the mayor's jurisdiction. So it is not an 
optimal time to suddenly learn that you have to upgrade your 
antenna.
    So could you talk a little bit about the digital cliff? And 
then we will go to this other issue of the analog signal 
contours. But if you could talk first about that and what we 
need to do about that and what it means.
    Mr. Martin. What it means is that in general most people, 
when you switch from analog to digital, will receive a better 
picture, an improved quality picture. Digital pictures are 
either on or off, whereas analog signals fade gradually over 
distance. So if you get a digital signal, it is a clearer 
picture, but there are certain people who would have gotten a 
fuzzy analog picture before, but will be unable to get a 
digital signal as a result.
    Senator Klobuchar. And that is the digital cliff?
    Mr. Martin. That is right. And in general, when people talk 
about the differences in topography or whether it is an urban 
area with the urban canyons or mountains, if you are getting a 
clear signal today, a clear analog signal, you should be able 
to get a clear digital signal. Our engineers estimate that the 
digital cliff will impact about one percent of people, but that 
is still not an insignificant amount when you talk about a 
significant number of people throughout the country. When we 
talked about this the last time, that was my estimate. It is 
about one percent of households that we estimate, based upon 
what happened in the U.K. and our engineering estimates, that 
will suffer from this digital cliff.
    Senator Klobuchar. And how do they know they are going to 
be one of those people?
    Mr. Martin. Unfortunately, they are all going to be on the 
edges of the contours. So if you are receiving an analog signal 
that is fuzzy today on certain channels, then that would be a 
channel you might not be able to receive.
    But one of the difficult things about the digital cliff 
effect is that today--and it will be the same case after the 
switch--each broadcaster's footprint is different. So you may 
have the digital cliff effect for one channel but not for the 
other. So if you receive four broadcast channels over the air, 
you may be subject to a digital cliff for one but not the other 
three.
    Senator Klobuchar. And so then how do we fix it besides 
having you come to Minnesota and stand on the roofs?
    Mr. Martin. Unfortunately, I think that is where you get 
into both what Mayor Saffo testified to and Assistant Secretary 
Baker testified. It is important for people, particularly those 
in areas where it is going to be more difficult for them to 
switch antennas later, to try to make the transition early so 
they can see whether or not they are going to be required to 
get a new antenna.
    Senator Klobuchar. Oh, I see. So you are saying make that 
switch early so that you can see if it is a problem so you are 
not suddenly stuck with it.
    Mr. Martin. Unfortunately. We can identify where the edges 
of those contours are, but we are not going to be able to 
predict specifically. And even in those cases, it will vary 
channel by channel. But we will not be able to do it with as 
much specificity as any individual would need to say we can 
pinpoint it to this address will be subject to a digital cliff 
and this address will not. It will be on the edges of those 
contours.
    And it will also be outside technically of where they are 
required to be serving. The circle that they are required to 
serve they will still be serving. It will be the people that 
are just outside those edges who used to get the signal before 
but who are no longer able to.
    Senator Klobuchar. OK. Then to move on to the next topic. 
You said about 15 percent of the markets around the country 
will experience a significant shrinkage of analog signal 
contours post transition. Could you explain that to us?
    Mr. Martin. What we have found was a much more significant 
problem in Wilmington from a viewer perspective was that one of 
the channels had reached as far north from Wilmington, all the 
way to Raleigh, North Carolina, and as far south as Myrtle 
Beach. Just to give you a sense of distances, it would be the 
same as if the Richmond signals were reaching Baltimore. After 
the channels were converted from analog to digital, they were 
no longer going to reach as far as they had before. That was 
actually by design. That is what the broadcaster wanted. He no 
longer wanted to be serving all the way up that far.
    And as a result, the people that were in the Raleigh area 
and in the Myrtle Beach area were still going to be able to get 
an NBC affiliate from their Raleigh station or from their 
Myrtle Beach station, but there are people in between those 
areas, in between the two, that were then left out. And that is 
what is estimated will be the folks who are unserved. It will 
be about 15 percent of the markets in the country that will 
have a broadcaster who is having some kind of a significant 
change like this where they are diminishing----
    Senator Klobuchar. So they might again get some of the 
channels and then not certain ones where they had this larger 
contour----
    Mr. Martin. Exactly. Fortunately, on that, what we are 
trying to identify now is a way to be able to--and what I have 
asked our engineers to do, based upon what we did in 
Wilmington, is both in Wilmington and throughout the rest of 
the country, identify ways in which you can put either 
translator or repeater antennas to make sure that there is no 
one who used to get a signal from an NBC affiliate, for 
example, in Wilmington, who is no longer going to get any kind 
of a coverage. So it is not that we will be able to carry the 
signal all the way to Raleigh or all the way from Richmond to 
Baltimore in every instance, but we can make sure that there 
are not pockets of places, like there were in Wilmington that 
received no coverage afterwards. And that is why we need to 
identify where those pockets will be throughout the country and 
how we authorize those broadcasters to put in repeater antennas 
so they can make sure they are covered.
    Senator Klobuchar. So this is kind of like when my family 
used to drive out to Wyoming on vacation and we could still get 
WCCO radio and hear the Twins game. We would keep moving it and 
it would go longer and longer. And what would happen here is--
this was a radio station, but you are going to have it within 
the contours, but they could pick up like a sister affiliate 
that they did not have before. Is that what it will be?
    Mr. Martin. It could be. It is an interesting analogy. The 
switch from analog to digital in radio is going to also 
eliminate the ability to get those long distance AM signals as 
well. They can no longer bounce off the atmosphere and you 
cannot get those distance signals. That is one of the down 
sides of the switch from analog to digital radio that will 
occur. So in that sense, it is very similar.
    But as is in this case, the people in Raleigh and in Myrtle 
Beach will be able to get the NBC affiliate there. But the 
people that are in between those three markets will be left 
out. And we need to find a way to get a repeater for one of 
those other signals there so they still do not lose access to--
--
    Senator Klobuchar. So, would they have to pay extra for 
that, or is it just trying to change the technology so we can--
--
    Mr. Martin. Oh, the consumer would not have to. I am 
talking about getting the broadcasters to put a repeater 
antenna. The broadcaster would end up having to pay extra to 
put a repeater antenna there.
    Senator Klobuchar. OK. So, Assistant Secretary Baker--is 
that your correct title?
    Ms. Baker. Acting.
    Senator Klobuchar. Acting Assistant Secretary Baker, with 
what you have learned from Wilmington, can you target the 
advertising more or the information we give to people more as 
we know where this--you know, I use the number 700 because that 
is what came in the first day or 300 complaints. We know these 
two issues that are going on, the digital cliff and the contour 
issue. Is there a way to tailor some of the communications with 
consumers in addition to what we are doing today?
    Ms. Baker. I think the entire DTV coalition agrees that the 
problems that we see in this area need an awful lot more 
consumer education. So certainly we will be working with our 
partners.
    Again, I think the most important from our perspective is 
to get your box early and try it out to make sure that it 
works, and if you have any technical challenges, then you will 
have time to--I mean, it is important both from a technical 
standpoint as well as a programmatic standpoint. We want to see 
people getting their boxes now. For those that are not in this 
area, they will enjoy digital television sooner, but for those 
who are in these areas, then they will realize that they have a 
problem and they can act soon to try and fix it.
    Senator Klobuchar. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. I thank you very much.
    Before I begin my questioning, a few facts might help us. 
The United States has a population of about 300 million people. 
And about 3 years ago we made available $5 million for consumer 
education for this transition. We realized that maybe that is 
not enough, so we added $2.5 million last year, and if we are 
successful in this appropriation process that is going on now, 
you may get an additional $20 million. $27.5 million. And this 
program is supposed to last until February 19, 2009.
    On the other hand, on the British Isles, with a population 
of 60 million, they made available $400 million for consumer 
education. Their program of transition will last about 5 years 
because they felt it was so important that they had to 
communicate and make certain that every household, bar none, 
had information on this transition. It is a long process, 
expensive process, but this small country, less than us, 20 
percent, decided to spend that much money.
    That is why we are holding this hearing here because we are 
concerned that if the British felt that it took $400 million 
and 5 years to carry out their transition, we have to be super 
people to do it with less.
    Now, Mr. Goldstein, in your testimony you have indicated 
that there will be a dramatic increase or a spike just before 
the transition date.
    Mr. Goldstein. Yes, Mr. Chairman, that is likely. There is 
likely to be a significant spike. In our discussion with NTIA, 
they have agreed with that as a very significant possibility. 
But I need to say that to this point in time, only about 12.5 
percent of U.S. households have even requested a coupon and 
only 5 percent of households have used one. So we have a long 
way to go, and while a lot of money has been spent by the DTV 
coalition and by Federal agencies to this date, we are still 
concerned that a lot of people who need a coupon will not get 
one in time.
    We also believe that the expiration rates, particularly 
among some of the greatest at-risk populations, are fairly 
high. For instance, among seniors, the expiration rate is 43.2 
percent, when for the U.S. population as a whole, it is only 30 
percent, and only 8.7 percent of seniors have requested 
coupons, where in the population as a whole, it is 12.5 
percent. So that at-risk populations, while messages are being 
sent and hopefully received, there is still some evidence that 
they are not being received at a good enough pace yet.
    The Chairman. Are you satisfied that we have a plan to 
confront this spike or a sudden surge?
    Mr. Goldstein. Mr. Chairman, we indicated in our report 
last week--we made a recommendation to the Secretary of 
Commerce that NTIA needed to develop a plan that would be able 
to deal with the anticipated spike.
    The Chairman. Do you believe we do have one?
    Mr. Goldstein. We did not find such a plan. No, sir.
    The Chairman. Secretary Baker, do you believe that you can 
come up with a plan to meet this sudden spike?
    Ms. Baker. Yes, sir. There are several parts of the plan, 
and we are actually going to put it down in writing. We will be 
happy to submit it to you. We are currently processing about 
3.2 million coupons a month. We have spoken with our 
contractor. They can bring it up to 4.5 million coupons a 
month. I do think that the backlog that is often referred to 
from the start of the program was because we did not send out 
coupons until February 17. So we had a month and a half where 
we were not sending out coupons. So we hope to avoid a backlog 
toward the end of this program.
    What we really want to do is to encourage people to act now 
so that we will see a strong and high demand for an extended 
period of time like we did in Wilmington. The results in 
Wilmington were terrific. It was a nice bell curve where as 
soon as it was announced, the coupon requests went up and then 
they came down now that the switch has happened.
    So we anticipate spikes, particularly as media increases. A 
hundred days out we know is going to be a great big spike. We 
will continue to watch consumer demand and redemption and visit 
with the Committee on all of our available data. But we think 
it is important that people apply, buy, and try now. And as you 
know, we have also submitted a request for $7 million to have 
additional flexibility in our ability to fund additional 
coupons for this increased demand.
    The Chairman. A survey was made and it found that 97 
percent of the population in Wilmington knew about the early 
transition, and yet the FCC received 797 calls on the first day 
and 1,800-plus calls during the first 5 days. On a national 
level, this could mean that you could be fielding millions of 
calls from confused consumers on or about this date, February 
17, 2009. Are we prepared for that?
    Mr. Martin. Well, I think that what we hope to be able to 
do is learn some lessons from Wilmington so we can continue to 
minimize that. Many of the calls that we received were not that 
they were not aware of it. As I indicated, we have received 
actually only about 100 calls during the whole time since 
September 8 from consumers who said they were unaware of the 
early transition.
    But there were problems and challenges for viewers both in 
terms of some of the antenna issues that I was talking about 
with Senator Klobuchar and also the fact that there were over 
300 calls from viewers who had problems with their initial 
converter box, turning it on, scanning for channels, making 
sure it was hooked up properly to their television.
    Fortunately, we were able to resolve many of those over the 
phone by just walking them through, hooking up their converter 
boxes. But that is something that we now need to integrate into 
our messaging more appropriately to make sure that people 
understand how the converter boxes work to try to take away 
that segment of the calls that we were receiving from 
Wilmington by the time we get to next February.
    But I think that we have got to continue also to find ways 
to minimize the problems from a technical standpoint on the 
antenna issue so we can make sure and try to address that and 
to minimize the burden that is going to be placed on viewers, 
at least to the maximum extent we can.
    The Chairman. Believe me, I am not trying to place blame 
anywhere----
    Mr. Martin. No, no.
    The Chairman.--because we in the Congress were the ones who 
appropriated $5 million, and we are still holding back. 
Compared to the British, our appropriation is almost nothing. I 
am certain we all agree that communication is absolutely 
essential in a democracy such as ours. And I am concerned that 
segments of our population may be denied or deprived of this 
important element in our democracy.
    Over a period of 4 months, the FCC and the industry really 
saturated the Wilmington market, and I applaud this. According 
to the numbers I have here, there were more than 400 events, 
distributed more than 85,000 publications, and Chairman Martin, 
you made five visits to the city. This outreach program is 
laudable, but do we have a nationwide program to ensure that 
they will get the same Wilmington treatment?
    Mr. Martin. Well, I think it is important to try to put 
into context that this was also a substitute for some of the 
industry efforts that were going on throughout the rest of the 
country. As you know, the broadcasters, the cable operators, 
and the consumer electronics industries have all indicated they 
are going to be spending hundreds of millions of dollars 
educating consumers for the DTV transition. None of those 
educational efforts were going to be going on in Wilmington, 
and they will be ramping up as we approach it.
    But I agree that we need to take what we put in place in 
Wilmington and try to build a similar kind of grassroots effort 
in those markets where we have identified they have a 
significant number of at-risk viewers. So for all the markets 
in which there are more than 100,000 over-the-air households or 
15 percent of the viewing population, we have actually tried to 
identify those as our target markets where we are going to be 
doing the same kinds of Commissioner visits and town hall 
meetings.
    We have actually put out a request for proposal with some 
of the resources, if we are able to get some additional 
resources from Congress. But anticipating that we might, we 
have already put out a request for proposal for grassroots 
organizations to conduct both the same kind of grassroots 
educational efforts and also potentially helping hook up at-
risk households, as we did with the fire department down in 
Wilmington.
    So we are trying to take the blueprint from what we did 
down in Wilmington and at least replicate it in those 81 at-
risk markets throughout the country. It is not completely 
everywhere in the country, but we are doing our best with the 
limited resources that we have.
    The Chairman. From the standpoint of the three officials 
there, did we appropriate enough money?
    Mr. Martin. From the Commission's standpoint, there were 
several years even leading up to this transition where we had 
asked for money and actually received zero money for consumer 
education. The initial $5 million that you had indicated 
actually went to NTIA, and we had asked for money in the first 
years of our budget and Congress actually provided us none for 
consumer education prior to this past January.
    The Chairman. Do you need some more?
    Mr. Martin. Yes, at least the $20 million that we have 
asked for, for this year. A significant component of that is 
for upgrading our call center. We increased our call center in 
anticipation of Wilmington. Several million dollars, we have 
already estimated, will be needed just for the call center, and 
that is even if we can bring down the calls. So absolutely we 
are hopeful that Congress will be able to provide us some 
additional resources.
    Ms. Baker. It appears that the statutory cap on 
administrative funds is a little short. So we do need more 
administrative funds due to the popularity of the program and 
the amount of coupons that are being requested. So certainly 
for administrative funds, the statutory cap of $160 million is 
short, is shy of what we need, which is why we submitted our 
request.
    I think that Congress could have appropriated an awful lot 
more money in consumer education, but you probably then would 
also have seen less participation by the broadcasters and the 
cable industry. I think they have stepped in. I think public-
private partnerships have stepped in to fill the gaps on the 
consumer education. We have been grateful for the creativity of 
this committee in coming up with more money for us through the 
low power conversion fund that you gave us, $4.5 million in 
education. We will certainly use that. So certainly the money 
that you are giving us we will use, but we are very pleased 
with the participation from the industry on consumer education.
    The Chairman. Assistant Secretary Carbonell, do you have 
anything?
    Ms. Carbonell. Well, I think, one of the areas, 
particularly the vulnerable homebound people will need help in, 
is in the technology piece, the actual installation and 
connection. Under the Older Americans Act, which is the program 
that we run throughout the country, home repairs is one of the 
allowable services, but the coverage for home repairs is not 
across the country.
    So one of the areas that we have been working, with NTIA 
and FCC not only is to target those specific messages to those 
areas of need or areas where there is under-enrollment like the 
GAO has mentioned, but also looking at abilities to really walk 
people through the entire process. The grassroots--as much as 
we can invest, hands-on, to give support to some of the local 
aging networks that are working with these people day in and 
day out to try to assist actually those people that are most 
fragile. We know that 24 percent of our elderly population live 
in rural areas. The Older Americans Act is serving about 27 
percent of our clients out of the 11 million that we serve on a 
yearly basis who reside in rural areas. So again, those would 
be the areas where we would definitely benefit from additional 
resources and support. We are fine tuning efforts to really 
target those populations, those at greatest need in that area.
    The Chairman. I believe every government entity, county, 
State, city, township, village, has some agencies handling 
aging problems. Do you have any program to provide instruction 
or education to those officials on what they can do to help in 
this? Because they are in daily contact with the elderly 
population.
    Mr. Martin. Through our work with the Assistant Secretary 
and HHS, we have been working with--as you said, each State, 
many counties and cities have their own organizations that deal 
with the aging community, and we have been working with them. 
We did so in Wilmington and that was critical. We also worked 
with other private sector groups and nonprofits that were 
targeting the aging community like the Meals on Wheels program 
in Wilmington where we both made sure that information was 
getting through them to the people that were having their meals 
delivered and then also made sure that those people had the 
opportunity to apply for the coupons and get converter boxes. 
So we have been trying to work with those organizations. That 
has been working through the Assistant Secretary, helping us 
with the contacts at the local level.
    The Chairman. Were they cooperative?
    Mr. Martin. In general, actually I would say that HHS and 
the efforts from the localized aging organizations have been 
very helpful. I think that has been one of the things that has 
been very helpful. The United States Postal Service has been 
very helpful. They put up posters in all of the post offices 
throughout the country. They have done that once already. They 
are going to do that again for us later on. Those are two of 
the agencies that have been the most helpful in trying to help 
us get the message out.
    The Chairman. Chairman Martin, we are going to do our best 
to make certain that your $20 million will be made available. 
Would that be sufficient to meet the deadline, February 17, 
2009?
    Mr. Martin. I do not know for sure if it will end up being 
sufficient. I know that when we were asking for that money a 
year ago, through our appropriations process, I went to all of 
the Commissioners on the Commission and said how much money did 
they think that we could possibly need. And I came back and we 
talked about what we would do with the resources. And I asked 
for the maximum amount of money that any Commissioner 
identified that we could possibly need.
    In addition to working with other organizations, we have 
also been looking at what we would end up doing as far as 
taking out, for example, advertisements. The AARP magazines 
would actually have a coupon attached to the advertisement they 
could just clip and mail in to NTIA to make sure that that 
would be able to be provided to them. So we are doing as much 
as we can think of. Whether that will ultimately be enough or 
not, I do not know. I certainly know we need at least that 
much.
    The Chairman. Mr. Goldstein, I want to thank your agency 
for keeping us apprised of the numbers and concerns that you 
have.
    Mr. Goldstein. Certainly, Senator, I would be happy to.
    The Chairman. Those numbers led us to believe that this 
hearing was necessary, and I think it is.
    Mayor Saffo, your experiment has been very helpful to us 
because we hope we can learn a lot from that. We thank you for 
your presence here.
    Mr. Saffo. Thank you, sir.
    The Chairman. To all of you, thank you very much. I have 
got to get back to my meeting.
    [Whereupon, at 3:59 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. Kevin J. Martin
    Question 1. In Wilmington, one converter box manufacturer 
collaborated with the government to provide converter boxes for 
residents of nursing homes. Is there a similar plan in place nationally 
to help the elderly residents in nursing homes and assisted living 
centers obtain converter boxes and install them?
    Answer. An invaluable lesson learned from Wilmington is that DTV 
transition success depends on the commitment and collaboration of the 
local community, including local industry, governmental and 
nongovernmental organizations. In Wilmington, the Commission worked 
directly with local firefighters and other local, community-based 
organizations to help consumers install converter boxes. Building on 
that experience, the Commission recently solicited contracts from grass 
roots and community-based organizations to assist consumers, 
particularly consumers who are elderly, homebound or have limited 
mobility, with the procurement and installation of digital TV converter 
boxes and related equipment. Commission staff is currently reviewing 
the bids, and we plan to get these contracts in place as quickly as 
possible.

    Question 2. Will the lack of converter box installation assistance 
across the country inhibit a successful transition?
    Answer. As described above, the Commission recently solicited 
contracts from grass roots and community-based organizations to assist 
consumers, particularly consumers who are elderly, home-bound or have 
limited mobility, with the procurement and installation of digital TV 
converter boxes and related equipment. Commission staff is currently 
reviewing the bids, and we plan to get these contracts in place as 
quickly as possible.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                        to Hon. Kevin J. Martin
    Question 1. Chairman Martin, do you believe that the Federal 
Communications Commission (FCC) has the authority to adopt a quiet 
period rule?
    Answer. I am not sure whether the Commission has the statutory 
authority to adopt a quiet period. In light of the shift from analog to 
digital television, Congress provided the Commission, in section 
614(b)(4)(B) of the Communications Act, with the authority to 
``establish any changes . . . necessary to ensure cable carriage of 
[digital] broadcast signals.'' In the past, I have taken the position 
that this provision gives the Commission broad authority to adopt 
carriage regulations, including, for example, the authority to require 
the carriage of broadcast stations' multicast signals. Unfortunately, 
the Commission has not agreed with my interpretation of this provision, 
and instead has embraced a narrower interpretation of our authority in 
this area. Thus, if the Commission does have the authority to require 
carriage of multicast signals, then I agree that we also have the 
authority to adopt a quiet period. If, however, we do not have the 
authority to require carriage of multicast signals, then I am not sure 
whether we have the authority to adopt a quiet period.

    Question 2. It is my understanding that you have reached out to a 
number of stakeholders on this issue. Have you found the industry 
willing to work with the FCC to find a voluntary agreement?
    Answer. Broadcasters have proposed a voluntary quiet period that 
would extend for roughly 2 weeks before and after the February 17, 2009 
transition date. Not all large broadcasters have agreed to participate. 
This approach also does not have the agreement of the cable operators 
and other MVPDs, who prefer a mandatory and enforceable quiet period 
that begins in December.

    Question 3. If the FCC were to promulgate rules surrounding a quiet 
period, would those rules require a notice-and-comment rulemaking 
proceeding? It is my understanding that many retransmission consent 
agreements expire at the end of 2008. Could these rules be done in an 
expedited manner in order to minimize the potential for consumer 
disruption?
    Answer. I do not believe we needed to issue a Notice of Proposed 
Rulemaking.

    Question 4. A number of timeframes have been suggested for a quiet 
period. Again, to minimize any consumer disruption prior to the 
transition to digital television, are certain timeframes more 
appropriate than others?
    Answer. It is important for the Commission to minimize any 
potential burdens consumers may face as they transition to digital on 
February 17, 2009. To this end, I believe that a quiet period beginning 
a few weeks before would be sufficient to minimize any potential 
consumer confusion.

    Question 5. If prior to the transition to digital television, a 
broadcaster and relevant multi-channel video distributor are unable to 
reach an agreement on the carriage of signals, what authority does the 
FCC have to resolve this dispute so that consumers are not 
unnecessarily harmed?
    Answer. We have no direct authority to resolve a dispute. 
Broadcasters and MVPDs have a statutory obligation to bargain in good 
faith. Specifically, section 325(b)(3)(C)(ii) of the Communications Act 
prohibits broadcasters from ``engaging in exclusive contracts for 
carriage or failing to negotiate in good faith'' for retransmission 
consent. Section 325(b)(3)(C)(iii) similarly prohibits MVPDs from 
``failing to negotiate in good faith'' with retransmission consent 
broadcasters. Our rules at 47 C.F.R.  76.65 detail these prohibitions, 
and the Commission has clearly stated that actions taken in the context 
of a retransmission consent negotiation that are ``sufficiently 
outrageous, or evidence that differences among . . . agreements are not 
based on competitive marketplace considerations, [will] . . . breach a 
[negotiating entity's] good faith negotiation obligation.'' The 
Commission has authority to act in such cases, and either party in a 
retransmission consent negotiation can file a complaint with the 
Commission if they believe the other party is acting in bad faith.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                          Hon. Kevin J. Martin
    Question 1. Chairman Martin, there are around 100 over-the-air 
broadcast stations that will be allowed to reach only 85 percent of its 
population for a time after the DTV hard date. On the hard date, if a 
consumer no longer receives a digital signal from a station they used 
to receive analog signal from, how will the consumer know that his or 
her inability to receive an over-the-air signal is not the result of 
the `digital cliff' or a reduction in coverage due to the station's 
digital antenna located at a different site than the analog antenna 
(such as in Wilmington), but because the station is not broadcasting at 
its full power?
    Answer. These stations are required to notify affected consumers. 
Specifically, stations that have received permission to operate their 
digital signal at less than their full authorized facilities for a time 
after the end of analog TV service (and will therefore serve a reduced 
portion of their analog viewers or not serve them at all for a time) 
are required to notify viewers on their analog channels in advance of 
the transition date about the station's planned delay in construction 
and operation of post-transition digital service and inform them about 
how they can continue to receive the station. Notifications must occur 
every day on-air at least four times a day including at least once in 
prime time for the 30 days prior to the station's termination of full, 
authorized analog service. Notifications must include: (1) the 
station's call sign and community of license; (2) the fact that the 
station must delay the construction and operation of its post-
transition service; (3) information about the nature, scope, and 
anticipated duration of the station's post-transition service 
limitations; (4) what viewers can do to continue to receive the 
station, i.e., how and when the station's digital signal can be 
received; and (5) the street address, e-mail address (if available), 
and phone number of the station where viewers may register comments or 
request information. These viewer notifications are in addition to, and 
separate from, stations' notification requirements under our DTV 
Consumer Education Initiative.

    Question 2. Chairman Martin, I am told that broadcasters in 
Washington State's three DMAs are hesitant to conduct a ``soft test'' 
because of the complexity of the message required in order to not 
confuse consumers that will still be able to continue receiving analog 
signal over translators after the hard date. Additionally, Direct TV 
and EchoStar are still in the process of upgrading the set-top box of 
their customers in the state that currently do not receive local-into-
local service. I am told installations will occur throughout the fall 
with the final installations in the Yakima--Tri Cities DMA scheduled 
for January. Until they receive the new set-top box from their 
satellite provider, some of these consumers would be unduly concerned 
after a ``soft test'' that they are not prepared. I see the value of 
the ``soft test''. Is it possible for the Commission to work with my 
state' s broadcasting association to develop messaging for a soft test 
during the next month or so that would not confuse analog translator 
viewers and some satellite television viewers?
    Answer. We would be happy to work with the Washington Broadcaster 
Association to coordinate and provide assistance related to running 
soft tests. I have instructed staff to contact the Washington 
Broadcaster Association.

    Question 3. Chairman Martin, does the FCC currently have the 
authority to issue rules to set a hard date for broadcast low-power, 
Class A, and translator television stations, or is a change of statute 
required?
    Answer. Section 336(f)(4) of the Communications Act, adopted as 
part of the Community Broadcasters Protection Act of 1999, gives it the 
discretion to determine the end of the transition period for Class A, 
TV translator, and LPTV stations.

    Question 4. Chairman Martin, I have received communications from 
constituents who after installing the converter box, can not receive 
digital UHF over-the-air television signals, but if they detach the 
converter box they can still receive analog UHF signals. A local 
television station told one such individual that UHF signals are much 
more line-of-sight dependent and due to the hilly terrain the digital 
signal was blocked. Western Washington has a considerable amount of 
hilly terrain. In fact, there are a number of translator stations 
operating today in Washington to fill in these gaps in coverage. If it 
proves that the switch to digital causes the over-the-air signals of 
some of UHF stations to be blocked by terrain in some areas, would the 
FCC be willing and able to open an expedited window for the 
construction of television translator stations for those affected 
stations?
    Answer. Yes, the FCC would be willing and able to open an expedited 
window for the construction of television translator stations for those 
affected stations.

    Question 5. Chairman Martin, Mayor Saffo testified that Wilmington 
participated in a regional, analog television e-cycling day? Do you see 
a benefit for the FCC to provide consumers information regarding the e-
cycling of analog television in its communications on DTV?
    Answer. Yes, there is a benefit to informing consumers about their 
options for recycling their analog televisions as part of our outreach. 
The Commission, together with the Environmental Protection Agency, 
issued a joint advisory regarding the DTV transition and the importance 
of e-cycling analog TVs. This advisory is attached and available on the 
www.dtv.gov website. We have disseminated the advisory to individual 
consumers as well as consumer groups at outreach events. We will 
continue to include this messaging throughout the transition, and will 
look for opportunities, as we did in Wilmington, to work with local 
officials and groups to provide consumers options at a local level for 
e-cycling of their analog sets.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                       Hon. Josefina G. Carbonell
    Question 1. Will the lack of converter box installation assistance 
across the country inhibit a successful transition?
    Answer. The Administration on Aging (AoA) has continued to work 
with our Federal, State and local partners to call attention to the 
issues related to converter box installation for seniors as we believe 
it is a critical piece in the overall success of the transition. We 
know that many seniors, who are frail, have disabilities, live alone or 
are homebound may have challenges installing the converter boxes once 
obtained. Some may not be able to physically move their TV or the 
furniture associated with it in order to install the converter box, or 
they may have difficulty understanding the technology needed to connect 
and operate the converter box and related antennae.
    I am very pleased that some action is being taken to assist those 
who are frail or homebound who may need this additional assistance in 
the physical installation of the boxes once they are secured, and we 
applaud our Federal partners for being responsive to the issues we have 
raised. Recently the FCC requested proposals for grassroots and 
community-level efforts around direct assistance in securing and 
installing converter boxes and establishing help lines to help educate 
consumers and answer queries. Several major aging organizations, 
members of AoA's vast national aging network, involved in the 
transition who have been concerned about this aspect of the transition 
have applied for those funds in order to provide this assistance to 
those they serve. The National Telecommunications and Information 
Administration (NTIA) will also use funds set aside from the ``DTV 
Transition Assistance Act'' (Assistance Act), Public Law 110-295, to 
provide consumer assistance with the DTV transition. NTIA will reserve 
up to $4.5 million for awards under this authority for unsolicited 
proposals that can be awarded by November 15, 2008. NTIA acknowledges 
the need not just to inform consumers about the Coupon Program but to 
provide where appropriate and feasible hands-on assistance to 
vulnerable Americans who may have difficulty completing the 
application, picking up a converter box or connecting it to their TV 
sets.
    We were also heartened that Secretary Gutierrez announced that 
residents of nursing homes, assisted living facilities, and households 
that use a post office box will be able to request converter box 
coupons. Anything we can do to assist vulnerable seniors with this 
transition will further its success.
    In some parts of the country, AoA's national aging services network 
is already stepping in to help. In Virginia, for example, the Fairfax 
County government including the area agency on aging has asked its 
employees to volunteer to help senior citizens and the disabled make 
the transition to digital TV by volunteering to help install the 
converter boxes and in turn qualify for 16 hours of annual paid leave. 
In Wilmington, North Carolina where the pilot early transition took 
place on September 8, the FCC contracted with local fire departments 
and other community organizations to assist seniors who have difficulty 
obtaining or installing the converter boxes. To help senior citizens 
make the transition in Westland, Michigan, the local government access 
channel, WLND-TV, the mayor and the city government, including the 
local area agency on aging, hosted a digital forum in a local senior 
center. These are only some examples of efforts being made by the 
national aging network around the country to smooth the transition 
process. We anticipate that the network will be poised and ready to 
assist throughout the entire transition process with whatever resources 
they might be able to devote to this initiative.

    Question 2. Generally, what have we learned about meeting the needs 
of the elderly from the test run in Wilmington, NC?
    Answer. I am pleased that the September 8 early transition pilot 
test that took place in Wilmington, North Carolina was successful in 
large part for seniors. One thing that was made clear was the 
extraordinary value of the local aging network working in a 
collaborative way in the Wilmington community in ensuring that older 
persons were aware of the transition and that appropriate assistance 
was available to not only respond to questions from seniors and their 
families, but also to arrange for hands-on assistance in installing the 
boxes if needed.
    The Cape Fear Council of Governments, which is the local area 
agency on aging for Wilmington, worked closely with the mayor, the FCC 
and other local entities to ensure that the transition would go 
smoothly for vulnerable elders. It was this collaboration with the 
aging and disability network agencies, faith-based organizations, local 
government, media outlets and interested citizens that aided in the 
transition. Through HELP lines funded by the FCC responding to 
questions, the active participation of two fire departments that 
combined visits with smoke alarm checks, seniors in the community were 
for the most part ready for the transition.
    One of the major lessons learned from the September 8 pilot test, 
according to the local aging network, was the need for repetitive 
education to the community in particular education tailored to older 
persons, their families, and the aging/health/human services agencies 
working with these populations. In addition, providing information to 
individuals on the local Disaster Special Needs Registry, both in 
printed form and through phone calls, was beneficial.
    It is important to note that the local aging network also found 
that the current financial situation was a significant factor in the 
provision of consumer education, assistance with converter box 
procurement, installation and post transition troubleshooting for those 
they serve, and that they have had to rely on overworked personnel and 
volunteers. In addition, for older persons who utilize the over the air 
transmission for their TV reception, there were some individual 
economic challenges to affording the co-pay for the converter boxes, 
being able to afford a new antenna, and/or transportation to a store to 
purchase the box or the antenna.
                                 ______
                                 
   Response to Written Question Submitted by Hon. Maria Cantwell to 
                       Hon. Josefina G. Carbonell
    Question. Secretary Carbonell, can you describe your efforts toward 
providing direct education; one-on-one information; assistance in 
purchasing and acquiring converter boxes; and installation of the boxes 
for older adults specifically in Washington State?
    Answer. The Administration on Aging has been an active partner in 
our Nation's preparation for the digital transition since we were first 
contacted by both the FCC and the NTIA in the summer of 2007. Through 
our website, our regional offices, and various public outreach efforts, 
including a regular e-newsletter that goes out to more than 22,000 
subscribers, we continue to share information with seniors, family 
members and our national network of aging services and community 
providers which works with seniors in nearly every community in our 
country. AoA staff have participated in various meetings and forums 
coordinated by NTIA and the FCC and most recently, we have provided 
technical assistance to the FCC as it prepared for its various town 
hall meetings being held across the country including ones that have 
recently taken place in Seattle, Spokane and Yakima, WA. At these 
forums, attendees, many of whom are seniors and their caregivers, 
receive current information about the transition as well as 
demonstrations in converter box setup.
    As I indicated in my testimony, AoA's national aging network, which 
is comprised of 56 State Units on Aging, 655 local planning and service 
entities called area agencies on aging, 239 Tribal and native American 
organizations representing more than 300 tribes; 29,000 local community 
service provider organizations, and more than half a million 
volunteers, has been very active throughout the country in helping to 
prepare seniors for the digital TV transition. Leading aging 
organizations who are trusted and visible sources of information and 
assistance in the community are working hard to assist older persons to 
be prepared for the February 2009 transition. Local senior centers, 
nutrition sites, adult day care programs, home delivered meals programs 
and other community based organizations throughout Washington and 
throughout the Nation are holding information sessions and distributing 
flyers and educational materials provided by the NTIA and FCC. Many 
local organizations are working with the National Association of 
Broadcasters that has local TV broadcasters available to speak at these 
events. The Washington State Association of Broadcasters is an active 
part of the DTV Coalition, a group of national, state and community 
organizations whose mission is to ensure that no one is left out when 
the transition occurs next February. In addition, the National Asian 
Pacific Center on Aging based in Seattle is providing information on 
the digital transition through its helpline in 9 different languages to 
Asian seniors throughout the State and the country.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                         Meredith Attwell Baker
    Question 1. In Wilmington, one converter box manufacturer teamed up 
with the government and provided converter boxes for residents of 
nursing homes. This was a great cooperative effort. Is there a similar 
plan in place nationally to help the elderly residents in nursing homes 
and assisted living centers obtain converter boxes and install them?
    Answer. NTIA was an important catalyst in ensuring that nursing 
home residents in Wilmington, North Carolina, were not left behind in 
their early digital transition. Because the nursing home rule change 
was not going to be effective before the Wilmington transition, NTIA 
reached out to converter box manufacturers to encourage them to address 
this challenge. NTIA is pleased that they came forward with converter 
box donations for the small number of nursing home residents in that 
market who owned analog televisions and watched broadcast-only 
television. NTIA is also pleased that the Federal Communications 
Commission mobilized partners in Wilmington, such as local 
firefighters, to provide in-home assistance to vulnerable seniors. As 
you know, NTIA recently revised its regulations so that residents of 
nursing homes are eligible to apply for one coupon using the special 
application available on the Program's homepage. Anyone may apply on 
behalf of a nursing home resident, so in many cases, a friend, family 
member or administrator will be able to assist the nursing home 
resident with a subsequent converter box purchase and installation.
    NTIA is encouraged by the voluntary initiatives emerging to help 
vulnerable Americans prepare for the transition. Faith-based 
initiatives in particular are targeting seniors for assistance, whether 
it be helping them apply for coupons, picking up the converter box in 
the store or installing it in the home. As a partner of NTIA's, 
Interfaith Ministries in the greater Houston area is appealing to the 
members of its religious community to work through Volunteer Houston to 
assist in the installation of boxes via Meals on Wheels for Greater 
Houston.
    NTIA will also use funds set aside from the ``DTV Transition 
Assistance Act'' (Assistance Act), Public Law No. 110-295, to provide 
consumer assistance. Use of these funds may include, but is not limited 
to, partnering with, providing grants to, and contracting with non-
profit organizations or public interest groups in achieving these 
efforts.
    NTIA acknowledges the need not just to inform consumers about the 
Coupon Program but to provide where appropriate and feasible hands-on 
assistance to vulnerable Americans who may have difficulty completing 
the application, picking up a converter box or connecting it to their 
TV sets. The Agency will support the National Association of Area 
Agencies on Aging (n4a), in the form of a cooperative agreement, to 
provide one-on-one assistance to a quarter million older adults to help 
them complete the coupon application, obtain converter boxes and 
install them so they can keep their existing TV sets working. Under the 
umbrella of the ``Keeping Seniors Connected Coalition,'' a variety of 
organizations with extensive preexisting networks in neighborhoods and 
communities across the United States, will help many seniors manage the 
DTV transition. With considerable recent experience with the Medicare 
Part D Campaign, these organizations are ready to hit the ground 
running to make the transition as seamless as possible for America's 
most vulnerable seniors.

    Question 2. Will the lack of converter box installation assistance 
across the country inhibit a successful transition?
    Answer. Converter box installation assistance will be available 
through a number of partner organizations to promote a successful 
transition. NTIA will use funds set aside from the ``DTV Transition 
Assistance Act'' (Assistance Act), Public Law No. 110-295, to provide 
consumer assistance. The National Association of Area Agencies on Aging 
(n4a) has committed to assisting a quarter million vulnerable seniors 
with the transition, including with converter box installation, through 
partner organizations such as the Meals on Wheels Association of 
America, the National Association for Hispanic Elderly, the National 
Asian Pacific Center on Aging and the National Caucus and Center on 
Black Aged.
    I am also encouraged by the voluntary initiatives emerging across 
the country to assist people with the transition. The DTV Transition 
Coalition has developed a brochure called ``Help Your Neighbor Make the 
Switch to Digital TV'' which describes how every American can be part 
of the solution in ensuring that February 17, 2009, amounts to a smooth 
transition for consumers. It is my understanding that the National 
Association of Broadcasters is developing a Public Service Announcement 
that would reinforce this message. In addition, the Federal 
Communications Commission (FCC) is expanding its call center to be able 
to provide consumer support on technical matters and has produced easy-
to-follow videos on how to install a converter box. Both NTIA and the 
FCC are encouraging local broadcasters to publicize their telephone 
numbers and field questions related to signal reception.
    Based on what the FCC learned from the early transition in 
Wilmington, North Carolina, only about 15 percent of DTV-related calls 
made to the FCC's hotline in the two weeks following the September 8, 
2008, transition concerned difficulties with the converter box. 
According to the FCC, 90 percent of those calls were resolved fairly 
straightforwardly over the telephone. Subsequently the FCC has 
developed tips for consumers, available on the www.dtv.gov website, 
which will help them troubleshoot any outstanding issues with converter 
box set-up. NTIA is aggressively cross-promoting these resources 
through its new ``Apply. Buy. Try.'' campaign. In urging consumers to 
install their converter boxes in advance of February 17, 2009, NTIA's 
strategy is to reduce the number of consumers who resort to setting up 
their converter box after their analog signal has been shut off.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                         Meredith Attwell Baker
    Question 1. Secretary Baker, it is clear that NTIA is not going to 
reissue coupons to consumers who ordered them, but did not redeem them 
in time, without a statutory change. It is equally clear there is no 
statutory change coming. The majority of calls and e-mails from my 
constituents regarding the DTV transition concerns expired coupons. In 
Washington State, as of September 22, 123,883 converter box coupons 
were redeemed, but 134,705 have expired. I would like to get your 
thoughts on a possible workaround. First, are DTV coupons transferrable 
among consumers? Second, would it be consistent with your 
interpretation of the rules if a state or local government, business, 
or university asks its employees to order coupons online, the employee 
receives their coupons at home and brings them into the office, where 
the employer collects the coupons, and then redistributes the coupons 
to those who need them--consumers whose coupons have expired or 
consumers from hard to reach populations?
    Answer. As an initial matter, there may be a number of reasons 
consumers do not redeem coupons within the 90-day active period as set 
by statute. Some consumers may realize they did not need the coupon if 
all of their televisions are connected to cable, satellite or other pay 
TV services--or they may decide to subscribe to such services. Some 
consumers may purchase digital televisions instead of converter boxes.
    While the Coupon Program rule prohibits the sale of coupons, 
coupons issued by the program are transferrable to the extent they may 
be freely given without consideration. NTIA believes that the type of 
``clearinghouse'' that you describe would largely be outside the direct 
scope of the Coupon Program's regulations. Individual households 
participating in such programs would have to comply with the Coupon 
Program's eligibility requirements and could not accept consideration 
in exchange for the coupons. Such programs would also have to comply 
with all applicable Federal and state laws. There may also be an 
increased risk of unintended waste, fraud, and abuse with such a 
program. For example, people could be encouraged to apply for coupons 
that they do not need, or they may not follow through on donating them 
to the clearinghouse--both such outcomes would represent waste in the 
Program. In addition, the clearinghouse would need to ensure that 
active coupons are handled securely, monitor expiration dates and 
encourage prompt use of coupons. Clearinghouse leadership should take 
measures to minimize the potential for consumers to violate the ``two 
per household'' statutory limit on coupon orders.

    Question 2. Secretary Baker, I need to understand how prepared my 
state of Washington is for the upcoming DTV transition and what can be 
done to better prepare my constituents. In the table accompanying your 
written testimony, the three Washington State DMAs fall within the 
thirty areas in the country having the lowest over-the-air household 
participation rates in the coupon program. Of greatest concern is the 
Seattle-Tacoma market with a coupon program participation rate of 43 
percent. According to Nielson there are 215,240 broadcast only 
households in the Seattle-Tacoma DMA. I know that Washington State 
broadcasters and cable system operators are playing PSAs, engaging in 
public outreach, working with community group in the Seattle-Tacoma 
DMA, but it appears that effort is still falling short. What other 
steps can be taken to increase participation in the converter coupon 
program?
    Answer. The Agency is closely monitoring coupon request rates at 
the DMA level, and I share your concern that the three Washington state 
DMAs have among the lowest participation rates in the country. NTIA is 
enhancing its consumer education activities in markets with low 
participation rates to motivate over-the-air consumers to act in a 
timely manner. On September 30, 2008, NTIA launched the latest phase of 
its efforts to spur consumer action by announcing its ``Apply. Buy. 
Try.'' campaign. The campaign urges over-the-air consumers to apply for 
their coupons now--but certainly no later than the end of the year--to 
allow themselves 6 weeks to prepare for the analog shut-off date. It is 
clear from surveys conducted by the National Association of 
Broadcasters and others that awareness of the digital transition is 
near universal: however, a significant number of consumers are choosing 
to wait until closer to the end to make their decision on how they will 
transition. NTIA's campaign aims to motivate these consumers to act 
early. The Agency has reached out to grassroots organizations in these 
markets to communicate these messages to their constituents, and I am 
pleased that groups such as the Organization of Chinese Americans--
Greater Seattle Chapter and the Mid-City Concerns Meals on Wheels 
chapter in Spokane are distributing our materials.
    NTIA staff have been very active in the Seattle market. On October 
1, NTIA's consumer education director participated in a Coupon Program 
``sign-up'' event at the Jefferson Recreation Center, partnering with 
the City of Seattle Department of Information Technology and KING 5 
(NBC) Seattle. The Program's partnership manager participated in 
meetings in early June to design a coordinated outreach strategy to 
seniors, including the Seattle I-lousing Authority, Seattle Public 
Library and the City Parks and Recreation Department. NTIA is 
accelerating its work with local partners to promote the ``Apply. Buy. 
Try.'' campaign and is engaged in earned media to urge consumers who 
have not taken action to do so without delay. To date NTIA has 
conducted radio interviews in all three Washington DMAs and television 
interviews in Seattle and will continue to promote the Coupon Program 
via the broadcast media.

    Question 3. Secretary Baker, earlier this year, the availability of 
set-top boxes with analog pass-through capability was a front burner 
issue. How many manufacturers are now producing such boxes? How does 
NTIA ensure that the set-top box with analog pass-through reaches 
retailers in those parts of the country where they are most likely 
needed? Is NTIA tracking the number of set-top boxes with analog pass-
through purchased?
    Answer. In response to the concerns of the low-power television 
broadcasting community. I sent personal letters to all of the coupon-
eligible converter box manufacturers on record last winter. The 
response from manufacturers was swift and significant. By May 2008 
converter boxes with an analog pass-through function were being shipped 
to the leading retailers in the Coupon Program. Consumers today may 
choose from over 41 brands and models with an analog pass-through 
feature available in retail stores. NTIA expects retailers to meet the 
needs of their consumers and to stock analog pass-through converter box 
models in geographic areas where they are needed. We note that of the 
top ten coupon-eligible converter box models sold nationwide, four have 
an analog pass-through capability.

    Question 4. Secretary Baker, what is the methodology NTIA uses to 
project consumer demand for coupons for DTV set-top boxes through March 
31, 2009? How confident is NTIA in its projection for consumer demand 
for coupons through March 31, 2009? Your written testimony includes a 
table of over-the-air household participation rates in the coupon 
program for each of our Nation's DMAs. Why are some communities listed 
as being above 100 percent in participation? For example, Wilmington, 
North Carolina has an over-the-air household participation rate greater 
than 200 percent. Can you explain? One might read into the statistic 
that some consumers ordered coupons that did not need them and then 
transferred the coupons to others. To the best of your knowledge did 
that occur in Wilmington?
    Answer. Early in the Program's planning phase. NTIA developed an 
economic analysis that calculated a baseline market of between 20.4 and 
51.9 million converter boxes, based on estimates of the number of 
``untethered'' analog televisions in households that might require 
them. The Program made an assumption that out of this potential market, 
50 percent of households choosing the converter box option would redeem 
coupons, suggesting that between 10.2 million and 26.0 million coupons 
would be redeemed. NTIA is finalizing a plan to address expected demand 
in the Program's final months which will elaborate on a variety of 
scenarios the Agency might face and our plans to meet consumer demand.
    NTIA uses ``participation rates'' as indicators of coupon requests 
in given communities. Some communities are listed in the table you 
reference as having participation rates above 100 percent for over-the-
air households because NTIA calculated these figures based on 
information provided by the Consumer Electronics Association (CEA) that 
about sixty (60) percent of over-the-air consumers in each DMA would be 
potential purchasers of converter boxes. (Please note that a follow-up 
report released by CEA last month showed the figure had increased to 67 
percent.) The estimated market figures were compared then to the actual 
number of OTA coupon requests NTIA received from a particular DMA to 
derive the OTA participation for that community. Thus, the 
participation rate is the number of OTA requests divided by CEA's 
estimated market. In markets in which coupon requests from OTA 
households exceeded the CEA 60 percent estimated market figure, then 
the resulting participate rate is greater than 100 percent.
    Because the converter box option appears to be a more attractive 
option for many consumers as the education campaign builds awareness, 
NTIA has revised its estimates and, out of an abundance of caution, is 
now using the entire (100 percent) over-the-air household population in 
a DMA as the potential over-the-air market for coupon requests. Using 
these revised estimates the Wilmington participation rate is 
substantially lower--but still above 100 percent. Since the Program 
relies on self-certification as the mechanism for determining whether a 
household is indeed over-the-air reliant, it is to be expected that due 
to a lack of perfect knowledge among consumers, that there would be 
some error in consumers' response to the Agency's certification 
question on the application. (Please again note that NTIA's estimates 
of participation relate to coupon requests, not coupons redeemed.)

    Question 5. Secretary Baker, I understand that some Indian tribal 
representatives have expressed interest in tribes being able to secure 
the DTV coupons for distribution by those tribes to their respective 
tribal members. Is this option under consideration? What outreach 
measures are being performed by NTIA to inform or educate rural 
communities such as American Indian tribes and Alaskan Native villages? 
Does NTIA have statistics on the level of participation of various 
American Indian tribes and Alaskan Native villages in the converter box 
coupon program?
    Answer. NTIA has vigorously promoted the Coupon Program among 
Native American tribes and Alaskan Native villages. In July, I sent a 
mailing to leaders of the 563 Native American tribes and all Bureau of 
Indian Affairs superintendents and regional directors to help them 
prepare their members for the transition to digital television. My 
letter to tribal leaders encouraged them to use their existing 
communications channels to help spread the word about the Coupon 
Program and to ``consider posting information at tribal buildings and 
schools, having a call-in show about the digital transition, or holding 
information sessions with tribal elders.'' The mailing included a CD 
and hardcopy of the TV Converter Box Coupon Program Partnership Toolkit 
with fact sheets, brochures, posters and information on low-power and 
translator stations.
    NTIA staff have engaged in significant earned media outreach to 
Native American publications, print and broadcast, including Native 
Peoples, Colors NW, Seminole Tribune, and Navajo Times to secure 
interviews with NTIA spokespersons or offer resources for publication. 
In addition, we have reached out to various radio stations throughout 
the country including, Voices From the Circle, Native America Calling, 
and National Native News to secure interviews for NTIA spokespersons. 
The Agency has also reached out to former grantees in Washington state, 
such as the Suquamish and Kalispel Tribes, respectively, to provide 
assistance. In 2007 and 2008, NTIA also participated in the largest 
gathering of Native American leaders, the National Congress of American 
Indians convention, leveraging speaking opportunities and staffing a 
booth to answer questions and forge partnerships to help make the 
Coupon Program a success.
    In terms of tribal representatives securing coupons, the law is 
very clear that ``a household may obtain coupons by making a request as 
required by the regulations . . . [and] The Assistant Secretary shall 
ensure that each requesting household receives, via the United States 
Postal Service, no more than two coupons.'' This stipulation prevents 
NTIA from allowing tribal representatives to receive coupons on behalf 
of consumers, although it does not prohibit consumers from allowing 
surrogates to take their coupons to retail stores to redeem them, if 
consumers are unable to do so due to infirmity, lack of transportation 
and so forth.
    In terms of keeping statistics on Coupon Program participation by 
Native American tribe, the Agency has coupon participation data down to 
the zip code level, which it updates and posts on its website weekly. I 
have attached a table of the number of authorized over-the-air 
households that have requested coupons by zip code as of October 22, 
2008. Unfortunately the Agency does not have corresponding Nielsen data 
at that level of granularity to determine what the potential coupon 
market is for each zip code. Therefore the Agency monitors Coupon 
Program participation rates by over-the-air households at the 
Designated Market Area (DMA) level. As I discussed earlier, the Agency 
is redoubling its consumer education efforts in markets--including 
those in Washington state--with unusually low participation rates.

    Question 6. Secretary Baker, the ``DTV Transition Assistance Act'' 
allows NTIA to accelerate grant support for the digital upgrade of low 
power television and translator stations and use surplus funds for 
consumer education and technical assistance efforts. Are translator 
stations currently applying for funds under the program? What is NTIA 
doing to reach out to translator station owners and operators to make 
them aware of the changes to the program? My understanding is that to 
expedite the release of funds for consumer education and technical 
assistance under the Act, NTIA is accepting unsolicited proposals. What 
criteria is NTIA using to decide on which unsolicited proposals to 
fund? How transparent is the proposal selection process?
    Answer. Yes, low-power stations are applying for funds under the 
Low-Power and Television Translator Digital-to-Analog Conversion 
Program (Conversion Program). NTIA has received applications for this 
program from over 900 low-power television facilities. After passage of 
the Act on July 30, 2008, NTIA reviewed the program and determined that 
$3.5 million would be sufficient to fulfill its responsibilities. On 
August 28, 2008, NTIA published a notice in the Federal Register 
announcing the change in the funding availability for the Conversion 
Program. NTIA posted the notice on the Conversion Program Internet page 
and notified leaders of the national trade organizations in the low-
power television field. To be sure that the information was distributed 
to all potential Conversion Program applicants, NTIA mailed a letter in 
September to every licensee of a low-power television facility in the 
country. In October, a second announcement was mailed to every licensee 
about the change in funding. NTIA discussed the change in funding 
availability at the national convention of the Community Broadcasters 
Association, one of the two main trade groups in the low-power 
industry. NTIA also discussed the change in two public meetings NTIA 
held in October on the low-power grant programs.
    In terms of your question regarding the criteria for review of 
unsolicited proposals, I would refer you to the plan the Agency has 
developed with respect to the use of Assistance Program funds at http:/
/www.ntia.doc.gov/dtvcoupon/DTV_techassist_081015.pdf. In terms of 
publicizing the availability of these funds, the Agency determined that 
because of the specialized and urgent nature of these activities, it 
would not be in the public interest to seek full and open competition 
for this award. In the interest of expediency, NTIA will accept certain 
unsolicited proposals for use in fulfilling its mission to provide 
consumer education and technical assistance to targeted, hard-to-reach 
populations at risk of losing their television service after February 
17, 2009.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                           Mark L. Goldstein
    Question 1. According to your testimony, in areas with 
predominately senior populations, close to half (43 percent) of 
households have allowed their coupons to expire. Does GAO have a 
specific recommendation to address this problem?
    Answer. Regarding the high expiration rate of converter box coupons 
requested by seniors, we do not have a specific recommendation to 
address this issue. As we indicated in our testimony, the expiration 
rate for coupons is inordinately high in areas comprised predominantly 
of seniors. While we are able to report the request, redemption, and 
expiration rate in these areas, we have not explored the cause of the 
high expiration rate nor the effect that it might have. The National 
Telecommunications and Information Administration (NTIA) and Federal 
Communications Commission (FCC) identified seniors as one of the 
``hard-to-reach'' populations and have targeted seniors in their 
outreach efforts, but it is unclear what effect this will have on 
seniors' high expiration rate of converter box coupons.

    Question 2. Will the lack of converter box installation assistance 
across the country inhibit a successful transition?
    Answer. We have not performed work related to converter box 
installation and how this might affect the DTV transition. FCC has 
noted that after the transition in Wilmington, North Carolina, on 
September 8, 2008, it received numerous calls to its helpline regarding 
converter box problems. These problems mostly consisted of consumers' 
need to properly install their converter boxes and to re-scan for 
digital channels after installing the box. FCC has indicated that 
consumer education efforts need to instruct consumers about how to 
effectively hook up their boxes and the need to re-scan for digital 
channels after the transition date.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                           Mark L. Goldstein
    Question 1. Mr. Goldstein, do you expect NTIA to exceed its cap for 
administering the converter box subsidy program? If so, why do think it 
will happen? Given the increase in demand expected in the upcoming 
month, do you believe that NTIA has a handle on the administrative 
costs required through the end of the program?
    Answer. While we estimated potential coupon requests in our 
testimony on June 10, 2008,\1\ we did not examine NTIA's costs 
associated with administering the converter box subsidy program and 
therefore do not know if NTIA has a handle on its administrative costs 
that it might incur through the end of the program or whether it will 
exceed its cap. In our June testimony, we estimated that households 
with a landline telephone would request approximately 30.6 million 
coupons. Our estimates ranged from 25.6 million to 35.5 million coupons 
for households with a landline telephone and did not include non-
landline households or households where telephone status could not be 
determined. While we could not substantiate an assumption that other 
households would respond similarly to landline households, if they do, 
we estimated the potential for an additional 11 million coupon 
requests.
---------------------------------------------------------------------------
    \1\ GAO, Digital Television Transition: Broadcasters' Transition 
Status, Low-Power Station Issues, and Information on Consumer Awareness 
of the DTV Transition, GAO-08-881T. (Washington, D.C.: June 10, 2008).

    Question 2. Mr. Goldstein, in your testimony you said that the GAO 
found that ``households in both predominantly minority black and 
Hispanic or Latino areas were less likely to redeem their coupons 
compared with households outside these areas.'' How rigorous was the 
methodology used by the GAO to arrive at this conclusion? Why do you 
think that these populations are more likely to let their coupons 
expire? Do you think it would be valuable to perform a similar analysis 
for American Indian tribal lands?
    Answer. Our methodology employed the best available data and 
reflects coupon behavior for demographic areas (zip codes) with a 
preponderance of households in a given demographic group. Specifically, 
to draw comparisons on coupon requests, redemptions, and expirations 
across demographic differences, we analyzed the NTIA data by zip codes. 
To do so, we merged the NTIA zip code data with data from the 2000 
Census SF-3 summary file Zip Code Tabulation Areas. From the census 
data, we grouped zip codes into urban and rural categories and looked 
at coupon requests, redemptions, and expirations for zip codes that 
were over 50 percent black or Hispanic/Latino.
    We did not perform work to address the question of why certain 
population groups were more or less likely to redeem coupons.
    Additional information about population subgroups would be 
valuable; however, we did not perform work on coupon requests, 
redemptions, and expirations in American Indian and tribal lands. Since 
our methodology employed NTIA and census data by zip codes, there may 
be limitations in determining which coupon requests originated in 
American Indian and tribal lands.

    Question 3. Mr. Goldstein, of the 45 high risk areas identified by 
the FCC, how many are predominantly rural? Does GAO believe that NTIA 
is effectively implementing the converter box subsidy program in less 
densely populated areas?
    Answer. We did not analyze the demographic composition of the high 
risk areas identified by FCC, so we are unable to answer how many of 
the high risk areas identified by FCC are predominantly rural. The 45 
areas were chosen by NTIA and FCC based on areas of the country that 
have at least one of the following population groups: (1) more than 
150,000 over-the-air households, (2) more than 20 percent of all 
households relying on over-the-air broadcasts, or (3) a top 10 City of 
residence for the largest target demographic groups. The target 
demographic groups include rural households.
    While in our testimony we indicated that NTIA is effectively 
implementing the converter box subsidy program, we did not specifically 
determine effectiveness based on population density. However, our 
analyses of NTIA coupon data show that the coupon request rate of 15 
percent and redemption rate of 46 percent in rural areas are both 
slightly higher than the urban rates of 12 percent and 37 percent, 
respectively. In addition, the rate at which coupons have expired is 
lower in rural zip codes, at 25 percent, than in urban zip codes at 32 
percent.
                                 ______
                                 
  Response to Written Question Submitted by Hon. Daniel K. Inouye to 
                            Hon. Bill Saffo
    Question. In your testimony, you mentioned that the vast majority 
of calls received right after the switch were from seniors, or family 
members and friends calling on behalf of a senior, who needed hands-on 
assistance to install the converter box. In your view, what could have 
been done in the planning stages of Wilmington's transition to prevent 
this type of predicament among the senior population on the day of the 
transition?
    Answer. Although the FCC did an excellent job promoting when the 
switchover was to occur, many of these seniors either saw the 
advertisements and ignored them or had no way of getting the assistance 
they needed (ordering the coupons, getting out to purchase a box, 
installing the box) before the switchover. This caused a huge influx of 
calls immediately after the switchover by frustrated seniors who now 
had no access to television at all. To better service the senior 
population with the switch to digital cable, I feel the following would 
be helpful:
    Have people in place to assist seniors with the boxes before the 
date of the switch. This includes helping the seniors to apply for the 
coupon, purchase the box and antenna, and install the box.
    Easier access to ordering the coupons would be helpful as well. 
Many seniors do not have interne access and ordering the coupons by 
mail is difficult for them. It would be a good idea to allow seniors to 
order the coupons over the phone and, for those who need the extra 
help, have someone available to help them order the coupon by phone. 
Advertise directly to the senior population through senior centers, 
meals-on-wheels, social services, etc.
    Have accessibility to free digital boxes and antennas for those who 
did not know about coupon program or do not have the resources to use 
the coupon program. Once the switchover occurs, these seniors need 
immediate television access for emergency purposes and the coupon 
program takes time.
    Provide stickers (in large print) to label the new remote. Also, 
provide simple operating instructions to give to seniors (also in large 
print). The addition of a new remote is very difficult for many seniors 
to understand.
    Provide additional service for those seniors who need ongoing 
assistance. All it takes is to accidentally change the main television 
to the wrong channel, and the digital box will not work properly. This 
has been a frustration for many seniors who have called for assistance 
multiple times.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                            Hon. Bill Saffo
    Question 1. Mayor Saffo, in your testimony you said that ``they 
(FCC) seemed to be everywhere educating our residents and answering 
their questions.'' Wilmington is a moderately sized city with a 
percentage of over-the-air households less than the national average 
and a percentage of non-English speakers less than the national 
average. How much of the financial cost of the Big Switch preparations 
and its immediate follow-up was borne by the City of Wilmington? From 
discussions you may have had with other mayors, do you believe that 
most cities have the resources available to provide the same level of 
customer service as the focused Federal effort in Wilmington?
    Answer. The FCC funded the entire project for the digital switch. 
The City of Wilmington did not incur any out of pocket expenses, 
however, we did donate some ``in-kind'' support such as facilities, 
staff time etc. The City of Wilmington has a total of 1000 employees 
and without the support of the FCC, this would have been a very 
challenging project for the City to implement.

    Question 2. Mayor Saffo, could you describe what the City learned 
as a result of the two soft tests conducted. Were any translator 
stations involved in the tests? If so, were viewers of the analog 
translator stations confused by the test?
    Answer. The City of Wilmington learned immediately how many people 
needed help who thought they had hooked up their converter boxes 
properly when, in fact, they did not. My recommendation would be to 
conduct several soft tests prior to the switch over as we only 
conducted two in Wilmington leading up to the transition and that the 
test be done, if at all possible, during prime time viewing slots when 
more people are watching.

    Question 3. Mayor Saffo, in addition to your city's fire 
department, what other organizations did you consider to provide 
technical assistance to seniors and other with installation of their 
set-top boxes?
    Answer. The Department of Social Services, the Department of Aging, 
Meals on Wheels, all senior centers, faith based groups such as 
churches and synagogues as well as young volunteers from our local 
university.

    Question 4. Mayor Saffo, how successful was the television e-
cycling day? Do you see a benefit for the FCC to provide consumers 
information regarding the e-cycling of analog television in its 
communications on DTV?
    Answer. New Hanover County had been conducting e-cycling days since 
March 2008 on the last Saturday of every month. We stressed that a new 
television was not necessary; that a converter box was available. Total 
of 80 tons of electronic equipment was collected (from March-
September)--half of that was actual television sets. An important key 
to our success was having our TV stations provide information to their 
viewers on up-coming e-cycling events and to encourage keeping old 
televisions sets out of our landfills through participation in these 
events. Our stations conducted almost monthly interviews with Lynn 
Bestul, Solid Waste Planner with the New Hanover County government, to 
get information out to the public. He suggests conducting two events 
before and one event right to get a majority of the televisions.
    An event costs $1,300 as we paid $0.13/lb for television set 
recycling.

                                  
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