[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
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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.