[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
OVERSIGHT OF THE DIGITAL TELEVISION TRANSITION
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY, AND THE INTERNET
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
MARCH 26, 2009
__________
Serial No. 111-23
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
----------
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COMMITTEE ON ENERGY AND COMMERCE
HENRY A. WAXMAN, California Chairman
JOHN D. DINGELL, Michigan JOE BARTON, Texas
Chairman Emeritus Ranking Member
EDWARD J. MARKEY, Massachusetts RALPH M. HALL, Texas
RICK BOUCHER, Virginia FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey CLIFF STEARNS, Florida
BART GORDON, Tennessee NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois ED WHITFIELD, Kentucky
ANNA G. ESHOO, California JOHN SHIMKUS, Illinois
BART STUPAK, Michigan JOHN B. SHADEGG, Arizona
ELIOT L. ENGEL, New York ROY BLUNT, Missouri
GENE GREEN, Texas STEVE BUYER, Indiana
DIANA DeGETTE, Colorado GEORGE RADANOVICH, California
Vice Chairman JOSEPH R. PITTS, Pennsylvania
LOIS CAPPS, California MARY BONO MACK, California
MICHAEL F. DOYLE, Pennsylvania GREG WALDEN, Oregon
JANE HARMAN, California LEE TERRY, Nebraska
TOM ALLEN, Maine MIKE ROGERS, Michigan
JANICE D. SCHAKOWSKY, Illinois SUE WILKINS MYRICK, North Carolina
HILDA L. SOLIS, California JOHN SULLIVAN, Oklahoma
CHARLES A. GONZALEZ, Texas TIM MURPHY, Pennsylvania
JAY INSLEE, Washington MICHAEL C. BURGESS, Texas
TAMMY BALDWIN, Wisconsin MARSHA BLACKBURN, Tennessee
MIKE ROSS, Arkansas PHIL GINGREY, Georgia
ANTHONY D. WEINER, New York STEVE SCALISE, Louisiana
JIM MATHESON, Utah
G.K. BUTTERFIELD, North Carolina
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
DORIS O. MATSUI, California
DONNA M. CHRISTENSEN, Virgin
Islands
KATHY CASTOR, Florida
JOHN P. SARBANES, Maryland
CHRISTOPHER MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
BETTY SUTTON, Ohio
BRUCE BRALEY, Iowa
PETER WELCH, Vermont
Subcommittee on Communications, Technology, and the Internet
RICK BOUCHER, Virginia
Chairman
EDWARD J. MARKEY, Massachusetts FRED UPTON, Michigan
BART GORDON, Tennessee Ranking Member
BOBBY L. RUSH, Illinois J. DENNIS HASTERT, Illinois
ANNA G. ESHOO, California CLIFF STEARNS, Florida
BART STUPAK, Michigan NATHAN DEAL, Georgia
DIANA DeGETTE, Colorado BARBARA CUBIN, Wyoming
MICHAEL F. DOYLE, Pennsylvania JOHN SHIMKUS, Illinois
JAY INSLEE, Washington HEATHER WILSON, New Mexico
ANTHONY D. WEINER, New York CHARLES W. ``CHIP'' PICKERING,
G.K. BUTTERFIELD, North Carolina Mississippi
CHARLIE MELANCON, Louisiana VITO FOSELLA, New York
BARON P. HILL, Indiana GEORGE RADANOVICH, California
DORIS O. MATSUI, California MARY BONO MACK, California
DONNA M. CHRISTENSEN, Virgin GREG WALDEN, Oregon
Islands LEE TERRY, Nebraska
KATHY CASTOR, Florida MIKE FERGUSON, New Jersey
CHRISTOPHER S. MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
PETER WELCH, Vermont
JOHN D. DINGELL, Michigan (ex
officio)
C O N T E N T S
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Page
Hon. Rick Boucher, a Representative in Congress from the
Commonwealth of Virginia, opening statement....................
Hon. Cliff Stearns, a Representative in Congress from the State
of Florida, opening statement..................................
Hon. Edward J. Markey, a Representative in Congress from the
Commonwealth of Massachusetts, opening statement...............
Hon. Zachary T. Space, a Representative in Congress from the
State of Ohio, opening statement...............................
Hon. Lee Terry, a Representative in Congress from the State of
Nebraska, opening statement....................................
Hon. John D. Dingell, a Representative in Congress from the State
of Michigan, opening statement.................................
Hon. Marsha Blackburn, a Representative in Congress from the
State of Tennessee, opening statement..........................
Hon. Kathy Castor, a Representative in Congress from the State of
Florida, opening statement.....................................
Hon. Anthony D. Weiner, a Representative in Congress from the
State of New York, opening statement...........................
Hon. Anna G. Eshoo, a Representative in Congress from the State
of California, prepared statement..............................
Witnesses
Michael J. Copps, Acting Chairman, Federal Communications
Commission.....................................................
Prepared statement...........................................
Answers to submitted questions \1\...........................
Anna Gomez, Acting Assistant Secretary for Communications and
Information, U.S. Department of Commerce.......................
Prepared statement...........................................
Answers to submitted questions...............................
Christopher Wood, Vice President, Senior Legal Counsel, and DTV
Compliance Officer, Univision Communications Inc...............
Prepared statement...........................................
Gary Severson, Senior Vice President, General Manager,
Entertainment, Wal-Mart Stores.................................
Prepared statement...........................................
Gary Shapiro, President and Ceo, Consumer Electronics Association
Prepared statement...........................................
Peter Morrill, General Manager, Idaho Public Television..........
Prepared statement...........................................
Mark Lloyd, Vice President, Strategic Initiatives, Leadership
Conference on Civil Rights.....................................
Prepared statement...........................................
Robert S. Prather Jr., President, Gray Television, Inc...........
Prepared statement...........................................
Submitted Material
Statement of Qualcomm, submitted by Mr. Shimkus..................
Response of Qualcomm to questions submitted by Mr. Dingell.......
Statement of Community Broadcasters Association, submitted by Mr.
Shimkus........................................................
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\1\ Mr. Copps did not respond to submitted questions for the
record.
OVERSIGHT OF THE DIGITAL TELEVISION TRANSITION
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THURSDAY, MARCH 26, 2009
House of Representatives,
Subcommittee on Communications, Technology,
and the Internet,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:05 a.m., in
Room 2322 of the Rayburn House Office Building, Hon. Rick
Boucher (chairman) presiding.
Members present: Representatives Boucher, Markey, Weiner,
Castor, Space, McNerney, Dingell, Stearns, Upton, Shimkus,
Blunt, Radanovich, Terry, Blackburn, and Barton (ex officio).
Also present: Representatives Pierluisi and Inslee.
Staff present: Roger Sherman, Senior Counsel; Tim Powderly,
Counsel; Shawn Chang, Counsel; Amy Levine, Telecom Counsel, Mr.
Boucher; Pat Delgado, Policy Coordinator, Mr. Waxman; Philip
Murphy, Legislative Clerk; Greg Guice, FCC Detailee; Neil
Fried, Senior Minority Counsel; Amy Bender, FCC Detailee; Will
Carty, Minority Professional Staff; and Garrett Golding,
Minority Legislative Analyst.
OPENING STATEMENT OF HON. RICK BOUCHER, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF VIRGINIA
Mr. Boucher. The subcommittee will come to order. This
morning we examine the status of the digital television
transition since the passage of legislation postponing the
final date for analog signal termination from February 17 until
June 12. Much has occurred since that measure became law. Under
the thoughtful leadership of acting assistant secretary for
communications and information, Anna Gomez, the waiting list
for coupons, a major factor in our decision to postpone the
transition, has been cleared, and that truly is a major
accomplishment.
Coupons are now being sent to applicants by first class
mail so households will receive them more quickly. NTIA has
changed its guidelines and now allows households whose
previously-issued coupons had expired to reapply for coupons,
and many households are now doing so.
The FCC has bolstered its call centers, which at the time
we postponed the transition were due to inadequate resources in
total disarray. And the results of this progress are clear.
When we postponed the transition according to the Neilson
Service, 6.5 million homes were totally unprepared for the
transition and would have lost all television service had the
transition taken place as originally scheduled on February the
17th. That 6.5 million homes represented fully 5.7 percent of
all television-viewing households across the United States.
Today 4.1 million households remain unprepared; a number
that is 3.6 percent of the television-viewing public. That is a
major improvement, but much remains to be done to enable the
preparation of those homes that remain unprepared as of the
present time.
Congratulations are due to Ms. Gomez and to acting FCC
Chairman Michael Copps for this stewardship of the transition
at a truly difficult and challenging time. And I can say this
morning that I truly appreciate the work of both of these
outstanding public servants.
But challenges do lie ahead, and today's hearing has as its
purpose achieving a full understanding of those challenges and
the best means by which we collectively can address them. And
these questions, I think, need answers.
Will we have enough converter boxes to meet the demand
prior to June the 12th? I personally have some serious concerns
about whether a sufficient number of converter boxes will be
available in order to meet the demand under our current
forecast.
Could there be a spike in demand in the weeks prior to June
the 12th, similar to what was experienced during December of
last year and the early weeks of January this year, and if it
is reasonable to anticipate a spike in demand, are we prepared
for it? Will NTIA have the mechanisms in place in order to meet
that kind of elevated demand?
And what steps are being taken to make technical assistance
available to homes in low income and rural areas of the Nation
where technical help typically is not readily available?
Today's hearing will examine these and other future needs
as we prepare for the June 12 transition date. I want to thank
our witnesses for their participation this morning and welcome
each of them.
Mr. Boucher. And at this time I am pleased to recognize the
ranking member of the subcommittee, the gentleman from Florida,
Mr. Stearns, for 5 minutes.
OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Mr. Stearns. Good morning, and thank you, Mr. Chairman.
This is a case where the glass is half empty or half full, and
in this case the glass is 95 percent full, and we perhaps have
a different view of this.
We opposed delaying the transition to June 12 from February
17. We thought it was unnecessary since 95 percent of the
television homes were ready for the transition on February 1
with 2 weeks still to go. And of the roughly six million
households that were still unprepared, just under three million
were holding coupons that simply could have been used on
February 17.
To help the remaining three million homes that were still
unprepared and didn't have coupons, Mr. Barton and I, the
ranking member and I, advocated authorizing an additional $215
million in early January. The NTIA said that they would have
allowed it to clear their waiting list in time to continue with
the transition. We even would have gotten most of the money
back at the end of the unused coupons.
We certainly had enough time to do so in light of the fact
that the delay act was passed only 5 business days after its
January 29 introduction. It appears we were right that there
was no need to delay. Despite significant arm twisting, one-
third of the Nation's 1,800 full power station simply
transitioned by February 17 anyway. The sky did not fall.
The fear that consumers would overwhelm the system with
frantic telephone calls was simply unfounded. The FCC received
less than 20,000 calls a day from February 13 to the 19th, well
within its capacity, and many of the calls were just about how
to set up the converter box, which are often just simply
resolved over the phone. All total, half the Nation's full
power stations covering 193 of the countries' 210 television
stations will transition before the June 12 date.
But Congress did not delay. We decided to spend $650
million for the transition, which simply put is a waste of
money and hurting the credibility of the Federal Government.
That money did not become available until June 2, excuse me,
March 2, yet between February 1 and March 1, even before a
single coupon was issued with the additional funds, 1.4 million
more households simply became ready, with the number of
prepared households climbing to 96 percent. Of the 4.4 million
households that still needed to take action to continue
receiving television service, approximately two million were
holding at least one active coupon.
This means we allocated about $270 for each of the 2.4
million unprepared homes without a coupon, even though a
converter box simply costs under $50. The fact that the money
was not available until March 2 is also why it took until just
this week to clear the waiting list, which continued to grow
all this time.
Now, that is the unfortunate history. Now we must try to
limit the harm. We could do so by dedicating $350 million of
the funds for exclusively over-the-air homes which would pay
for two redeemed coupons for each of the 3.6 percent of homes
as of March 15 that are exclusively over the air and still
unprepared. Since we were concerned over such homes that
supposedly justified this delay, that is where we should focus
our attention. Otherwise all this headache and all this expense
will have been for nothing.
If we do focus on over-the-air homes rather than paid
television homes that are not in jeopardy of losing service, we
may get back more than half a billion dollars from both the
initial and the stimulus money once the transition is
completed. That is because the initial funding covering 33-1/2
million redeemed coupons, only 26 million have been redeemed as
of March 18. By contrast, if we continue to spend as much or
more money on pay television homes as over-the-air homes, the
Administration may find it has not made a significant dent in
the four million remaining unprepared homes. Let us not forget
that there are more than six times as money pay television
homes than over-the-air homes.
In closing, Mr. Chairman, from February 15 to March 15 we
went from 4.4 percent of all households unprepared to 3.6
percent. That is an improvement of only .8 percentage points.
Let us make sure that that is not all we get for the $650
million. Our consumer confusion, our headaches. Please work
with us to ensure that the NTIA and the FCC spends money on
over-the-air homes and saves the rest for something more
important. We may not agree on what that important thing is,
but I am sure we can find something better to spend the money
on these days than converter boxes for the vast majority of
homes that are already prepared for the transition.
Thank you, Mr. Chairman.
Mr. Boucher. Thank you very much, Mr. Stearns.
The gentleman from Massachusetts, Mr. Markey, former
chairman of this subcommittee, is recognized for 2 minutes.
OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF MASSACHUSETTS
Mr. Markey. Thank you, Mr. Chairman, very much, and I want
to commend you for holding this hearing on the digital
television transition and for assembling an excellent panel of
witnesses to testify this morning.
As you know, Mr. Chairman, this subcommittee conducted six
oversight hearings in the last Congress and received three GAO
reports at my request on the digital TV transition. We tried
very hard to keep people's feet to the fire and to try to make
the original date work.
Now that Congress has moved the date back to June 12, it is
important that we wisely use the additional time and the
additional resources to maximize consumer education and
outreach and to ensure that the least amount of disruption is
caused to consumers during this transition.
I want to commend acting FCC Chairman Copps for the
alacrity with which he has taken on the task of being our
Nation's quarterback on the transition. I also want to salute
his emphasis on the coordination he has effectuated with his
FCC colleagues; with the NTIA as well as with consumer groups
and with the television industry. I think his testimony is an
eye-watering dissection of what went wrong but also a pathway
to ensure that all will go right on June 12.
I also wanted to commend Acting Assistant Secretary Gomez
of the NTIA for the diligent work she has performed, along with
IBM to eradicate the backlog of four million coupons that were
on the waiting list. Obviously much still needs to be done to
ensure success, and I believe the testimony from the FCC and
NTIA today provide a sound blueprint for moving forward. While
we have many broadcasters already ceasing analog transmissions
in many smaller markets, we still have the largest stations in
the largest markets looming for our flash cutoff on June 12. It
is important to execute this well. I look forward to working
with you, Mr. Chairman, and with Chairman Waxman, Ranking
Members Barton and Stearns to ensure that we meet this date and
that the American public feels that the government did its job.
Thank you, Mr. Chairman.
Mr. Boucher. Thank you very much, Mr. Markey.
The gentleman from Michigan, Mr. Upton, is recognized for 2
minutes.
Mr. Upton. I am going to defer.
Mr. Boucher. The gentleman from Michigan defers his opening
statement and will have 2 minutes added to his questioning time
for the first panel of witnesses.
The gentleman from Illinois, Mr. Shimkus, is recognized for
2 minutes.
Mr. Shimkus. Thank you, Mr. Chairman.
For over 50 years we have had April 15 as the tax filing
day, and it is coming upon us, and again this year we will have
millions of people who will not file on time. And that will be
true come June 12. And that was true in February, and as much
government money and advertisement as we want to throw at it
will not change that fact.
Let us see. We have, by this Congress and this
Administration a carbon tax that will destroy the economy, we
have a plan for a one-payer healthcare system that will ration
healthcare for all, we have a reckless spending agenda that
will bankrupt this country, but what we could do in this
debate, in this hearing, Mr. Chairman, is find out how we can
save $600 million.
Now, I know in this Congress that is not a lot of money but
for most Americans it is, and that is what I hope we address in
this hearing and these questions.
I yield back my time.
Mr. Boucher. Thank you very much, Mr. Shimkus, for your
normal moderate statement. He and I are friends. He knows I can
say that and get away with it.
The gentleman from Ohio, Mr. Space, is recognized for 2
minutes.
OPENING STATEMENT OF HON. ZACHARY T. SPACE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OHIO
Mr. Space. Thank you, Mr. Chairman. I appreciate the
opportunity to come together today to discuss progress made
towards this Nation's full conversion to digital television. It
is very clear to me that this process has not been an easy one.
Rather our shift from analog to digital has involved a
significant amount of time, energy, resources, and creativity.
And further such efforts are ongoing, necessarily providing
support for months to come.
Whether one favored the delay or not, I think most will
agree that because of the phased approach we find ourselves in
now we have learned some very good lessons that continue to
enable us to adjust and improve consumer outreach and
education. The NTIA, the FCC, our broadcasters, cable
providers, retailers, suppliers, service groups, public
entities, local officials have all truly joined forces in an
effort to shepherd the transition through to completion.
In Ohio's 18th district WOSU, the PBS station out of
Columbus, Ohio, has done some very good work in preparing our
communities. Through an FCC contract WOSU has been able to
provide DTV outreach through walk-in centers, a call center,
and installation assistance and numerous public events. They
partnered with Life Care Alliance and the Central Ohio Area
Agency on Aging to reach thousands of the estimated 100,000
over-the-air households in Ohio, many of which are senior
citizens. WOSU's DTV coupon donation program received national
recognition from PBS and served as a model for other
communities across the country.
I understand that there is much more to be done, but I
believe WOSU's case serves as an example of how members in the
community can work together to ensure that all citizens have
the information they need to prepare for the last phases of the
digital transition.
I look forward to hearing from our witnesses and thank you,
again, Mr. Chairman, for calling attention to this issue.
Mr. Boucher. Thank you very much, Mr. Space.
The gentleman from Nebraska, Mr. Terry, is recognized for 2
minutes.
OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEBRASKA
Mr. Terry. Thank you, Mr. Chairman, for holding today's
hearing, and I appreciate our witnesses being here to help us
through.
In informance of the current status and as probably many on
this committee know I was vocally opposed to the delay, knowing
that there is always going to be a certain percentage of people
that are never ready, and we can't just delay something because
people didn't get ready or we didn't get to 100 percent.
Now, one TV station in my market still held with the
February date, and that is WWT. It is interesting on the
transition date how few calls they received. Many of us were
prepared for an onslaught of thousands, and it turned out to be
a few hundred. They had phone banks ready, United Way, 211, and
we just didn't see the level of activity. And most of the
complaints that were coming in they needed help with the scan.
Thirty-three inquiries on that date were about how to get a
coupon, that they did not have a coupon. Now, out of a DMA of
412,000 people and 33 of the inquiries were how do I get a
coupon now since we just lost channel six is a very tiny
percentage, and that is eight-one thousandths of 1 percent.
So I appreciate the boldness of WWT channel six for going
forward because I am now convinced on June 12 the calls will
probably be the dozens and not the hundreds, and there is
probably very few out there that are left that aren't prepared.
So I wanted to thank them publicly and in fact, Mr. Prather
is from Bray TV, the owner of the TV station this year on the
next panel, and I welcome you.
I yield back.
Mr. Boucher. Thank you very much, Mr. Terry.
The gentleman from California, Mr. McNerney, is recognized
for 2 minutes.
Mr. McNerney. Mr. Chairman, I am going to waive my opening
statement.
Mr. Boucher. Thank you very much, Mr. McNerney. I see that
the gentleman from Michigan, Mr. Dingell, Chairman Emeritus of
our committee has joined us, and the gentleman is recognized
for 5 minutes.
OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Dingell. Mr. Chairman, you are most kind and courteous,
and I thank you. I commend you for the initiative that you are
showing and making certain that the DTV transition is subject
to adequate oversight and is properly conducted.
As we are all painfully aware the DTV transition has been
fraught with great difficulty since it was mandated in 2005,
and particular grave errors by the National Telecommunications
and Information Administration, NTIA, and the Federal
Communications Commission, the FCC, during the previous
Administration in their management of the DTV converter box
coupon program and consumer education efforts were in large
part to blame for the Congress's passage of legislation to
postpone the DTV transition date.
As I support no further postponement of this deadline, I
look forward to cooperating with you, Mr. Chairman, in robust
oversight of the programs associated with DTV. And I would urge
you to continue your vigorous efforts in this matter because I
have great fears that the transition will be successful unless
it is watched very closely. And to see to it that it works in a
way which his going to create minimal inconvenience to the
Nation's consumers.
During numerous hearings in the 110th Congress I asked
representatives of NTIA whether they had sufficient funding for
the converter box program. Despite a report in 2008, by the
Government Accountability Office that NTIA would be unprepared
to cope with a surge in consumer demand for converter coupons,
NTIA consistently stated that it had adequate funding with
which to meet consumer demand for these coupons and to see to
it that and assured us that the coupons were both sufficient in
number and being properly handled.
This as we recently have learned was patently false, and I
think we have to get NTIA's commitment today that it will be
forthright and cooperative with the Congress in making certain
that the converter box program is properly administered with a
view towards providing coupons to every consumer who applies
for them and to assure that the conduct of the program is done
well, expeditiously, and that we don't have to contemplate the
extension again of a program that has already gone on over
long.
Similarly, I look forward to a frank discussion with the
FCC about the role that it plays in consumer education and
outreach about the DTV transition. Prior attempts at these
vital activities were disastrously mismatched and proven to be
largely ineffectual, something that we must strive to avoid at
all costs in moving forward.
Also, because of the DTV Delay Act, extending FCC's
authority to auction spectrum, we must ask frank questions
about the agency plan for preventing waste, fraud, and abuse in
these auctions, which have to my experience rarely been well
conducted.
I hope to have a productive conversation with our other
witnesses about several additional issues related to this
matter, including ongoing concerns of many people about DTV's
transition effect on low income persons, minorities, and
elderly populations, and the financial capacity of public
television broadcasters to cope with the transition and the
adequacy and availability of the supply of computer boxes to
meet the consumer demand.
Again, Mr. Chairman, I want to thank you for your
enlightened interest in seeing to it that the Nation's
transition to digital television is properly conducted and does
not cause vast inconvenience to the people we serve.
I yield back the balance of my time.
Mr. Boucher. Thank you very much, Chairman Dingell, for
those remarks.
The gentlelady from Tennessee, Ms. Blackburn, is recognized
for 2 minutes.
OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TENNESSEE
Ms. Blackburn. Thank you, Mr. Chairman. Welcome to Mr.
Copps, and I want to welcome Ms. Gomez. I think this is your
first appearance with us, so we welcome you. And thank you for
the hearing, sir. I appreciate that.
Fortunately for consumers and members of the subcommittee,
the world didn't come to an end on February 17 when stations
began transitioning to an all digital signal. In the seventh
district alone in Tennessee, my Congressional district, eight
full power broadcast stations have already made a full digital
transition in advance of the June deadline, and three more are
slated to make that move by May 1.
This parallels the national trends, where roughly one-third
of full power broadcast affiliates have already made the
switch. Federal and private sectors officials report minimal
customer disturbance. That is a good thing.
In short, this is working. This is no doubt a product of a
vigorous public, private partnership invested in an
unprecedented public education campaign, funded in large part
by our Nation's broadcasters and cable television providers. In
the intervening period between passage of the DTV Delay Act and
the committee's proceedings today, the NTIA is now current in
distributing converter box coupons, the must ballyhooed two
million customer waiting list is cleared, and NTIA claims to be
processing new requests in less than 2 weeks per requesting
consumer. This is certainly positive, and I congratulate the
agency for its diligent work.
The question we must ask while Congress considers a budget
resolution that will increase federal spending to 28.5 percent
of our Nation's GDP, is it what cost? The DTV Delay Act and
companion funding from H.R. 1 unleashed the federal flood gates
to the tune of $650 million to aid a transition that was
already running smoothly. And I realize that in DC that is not
a lot of money, but where I come from it is, and I believe that
money must be recouped, if possible, on behalf of the American
taxpayer when the DTV transition is complete.
As I stated during consideration of the DTV Delay Act
Congress's priority must be to ensure connectivity for
exclusively over-the-air homes, remaining from the overall
group of 4.1 million unprepared households.
Thank you, Mr. Chairman. I appreciate the time, and I yield
back.
Mr. Boucher. Thank you very much, Ms. Blackburn.
The gentlelady from Florida, Ms. Castor, is recognized for
2 minutes.
OPENING STATEMENT OF HON. KATHY CASTOR, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Ms. Castor. Thank you, Mr. Chairman, and welcome to our
witnesses.
At the outset of the Obama Administration they learned that
the switch to DTV had been badly mismanaged. Millions of
Americans who had applied for converter coupons languished on
waiting lists while the February deadline approached. Consumer
education programs have been successful, but over six million
households were completely unprepared. The affected households
tended to be disadvantaged with the elderly and non-English
speakers particularly hard hit.
Worse, progress in setting up call centers to deal with the
inevitable confusion of transition day was almost non-existent.
In short, millions of televisions were on a trajectory to go
dark on February 17 without adequate resources to help them
navigate the transition.
Congress was forced into a difficult decision to delay the
transition until June. Since then everyone has made significant
progress in reaching households and helping them prepare. Since
the passage of the DTV delay 2.4 million digital converter
coupons have been redeemed. Replacement coupons have been sent,
households that inadvertently allowed their coupons to--
households that had been aware their coupons had expired, even
better, first class mail rather than the bulk rate was employed
to avoid further delays. Call centers are going up, and the
number of bilingual operators has increased so that all
Americans are able to get help with the transition if they need
it.
I encourage everyone to continue to work diligently to
ensure that the DTV transition in June goes smoothly and that
the most vulnerable Americans are not left behind. I am
confident that we can do this, and I look forward to your
testimony.
Mr. Boucher. Thank you, Ms. Castor.
The gentleman from New York, Mr. Weiner, is recognized for
2 minutes.
OPENING STATEMENT OF HON. ANTHONY D. WEINER, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW YORK
Mr. Weiner. Thank you, Mr. Chairman, and thank you for
holding this hearing. If anyone doubts the power of
Congressional oversight, I would note that in preparation for
today's hearing on Tuesday alone 91,000 people requested
coupons, and last week I guess in anticipation of your tough
questions 1.6 million, if I am reading this right, coupons were
issued, more than just about any other month in recent months.
I acknowledge what our colleague from Illinois points out
that there are a lot of people who were left out in the cold,
and maybe the solution was to just turn off their television
coverage, which would have been the result of the transition
when it was originally scheduled. As with so many things this
Congress is endeavoring to do, we are mopping up for the last
Administration. We are going to be doing that a lot. We are
going to be taking mistakes that were made and trying to fix
them.
But I don't know who we would have punished by saying, oK,
tough tacos, you are going to lose your service. And I think
Congress was not prepared to do that. There were a lot of
mistakes that were made, but I hope we also use this
opportunity to take advantage of the glitch. Mr. Copps points
out in his testimony something that others have observed that
having this as a staged transition might have been the better
way to go originally, you know, doing it--what other nations
have done to give an opportunity to learn stage by stage. Maybe
we can take this window of time that has been presented by some
transition and going on to learn some of the lessons.
I think there was a pretty, there was some wisdom in
arguing to do that at the outset, and maybe if we use this
opportunity, we do what our friend Robin Manuel refers to not
letting any crisis go to waste, maybe this is also an
opportunity for us to learn, and I appreciate the chairman
holding this hearing to permit us to do that.
Mr. Boucher. Thank you very much, Mr. Weiner.
The gentleman from Washington State, Mr. Inslee, who has
since departed.
The gentleman from Puerto Rico, Mr. Pierluisi, not a member
of the Commerce Committee, has been welcomed to our hearing
today, and I am pleased to now recognize him for 2 minutes.
Mr. Pierluisi. Chairman Boucher, Ranking Member Stearns,
members of the subcommittee, thank you for providing me with
the opportunity to speak today.
I asked to participate in this hearing because I think it
is appropriate for the record to reflect that the DTV
transition has been especially problematic for the many of the
four million U.S. citizens I represent. Now that the transition
date has been extended until June, it is my hope that the
deficiencies in planning that gave rise to these problems can
be addressed. I know that today's oversight hearing reflects
your determination, Mr. Chairman, to make certain that recent
history does not repeat itself.
I want to emphasize at the outset that the problems
experienced in Puerto Rico to date did not result from lack of
awareness on the island about the transition. Community and
media organizations serving Puerto Rico, working in conjunction
with the Commerce Department, did a terrific job of informing
consumers about the steps that they needed to take in order to
avoid a loss of service. I think this stands in contrast to
certain jurisdictions in the states, where outreach efforts
were less successful.
In a somewhat ironic twist, however, residents of Puerto
Rico encountered problems precisely because they heeded this
guidance too well. Upon being advised of the impending
transition, my constituents did not hesitate. They applied for
coupons quickly and in droves. The sheer number of coupon
requests made from households in Puerto Rico should not have
come as a surprise. It is common knowledge that Puerto Rico
relative to the states has a large percentage of residents that
rely on analog TVs.
Although Puerto Rico ranks about 25th in total population
size among U.S. jurisdictions, island residents have sought
more coupons than all but seven states. As of March 17, about
2.1 million coupons had been requested by the island. This is
about 80 percent of the amount requested by New York, a State
with five times our population. And it is roughly three times
the amount requested by Kentucky or Oregon, which have
comparable population sizes.
For some island residents who requested these coupons, the
system worked as designed. They received the coupon, went to a
participating island retailer, and used the coupon to offset
the cost of the converter box. But for far too many of my
constituents the process did not proceed as planned. As in the
states some households in Puerto Rico requested coupons but
were placed on a waiting list because demand exceeded supply.
Other households obtained a coupon but found their local
retailers no longer had boxes in stock, and therefore, had to
wait. While they waited their 90-day coupon expired. Based on
intuition and some anecdotal evidence, I think this scenario
may have been more common in Puerto Rico than in any other
jurisdictions.
In August, 2008, letter sent in response to Puerto Rico's
request that coupons be reissued to individuals whose coupons
had expired, the Secretary of Commerce----
Mr. Boucher. Let me ask the gentleman if he could wrap up.
He is well--a minute beyond his time at this point.
Mr. Pierluisi. OK. I will wrap it up.
Mr. Boucher. Thank you.
Mr. Pierluisi. Noted that the law did not prohibit an
individual whose coupon had expired from obtaining for free an
unexpired coupon from a generous friend or family member.
Frankly, that was a way to go, but it didn't help.
My purpose today is not to cast blame, because that is not
constructive and because there is probably enough to go around.
I want to look forward, not back, and to make sure that we do
what is necessary before June to make this transition as
seemly, seamless as possible.
Mr. Boucher. Thank you very much, Mr. Pierluisi.
Mr. Pierluisi. Thank you, Mr. Chairman.
Mr. Boucher. The gentleman from Washington State, Mr.
Inslee, is recognized for 2 minutes.
Mr. Inslee. I will waive, Mr. Chair.
Mr. Boucher. Thank you very much, Mr. Inslee.
We now turn to our first panel of witnesses, and I am
pleased--I am sorry. Were you--I am sorry, Mr. Blunt.
Mr. Blunt. Mr. Chairman, I don't want to slow up the panel,
and I will just----
Mr. Boucher. I didn't see you arrive. Mr. Blunt, you are
recognized for 2 minutes.
Mr. Blunt. Thank you, Mr. Chairman. I will submit a
statement for the record. I am pleased you are having this
hearing. Certainly in my Congressional district I think all of
our transition will be done by the middle of April. One of our
stations already made their transition by themselves on
February the 17th. I think they were convinced that their
analog equipment might not last much longer than that, and I am
going to be interested to see how this scattershot transition
that we are now in occurs around the country, but I am anxious
to hear the witnesses. I am glad you had the hearing, and I
will submit a statement for the record.
Mr. Boucher. Thank you very much, Mr. Blunt.
We now welcome our first panel of witnesses, and we are
honored to have with us this morning the acting chairman of the
Federal Communications Commission, Mr. Michael Copps, a
longstanding member of the commission, and also the acting
assistant secretary for communications and information at the
Department of Commerce, Ms. Anna Gomez. And without objection
your prepared written statements will be made part of the
record. We would welcome your oral summaries. Please keep those
to approximately 5 minutes so that we have ample time for
questions.
And Mr. Copps, we will be pleased to begin with you.
STATEMENTS OF MICHAEL J. COPPS, ACTING CHAIRMAN, FEDERAL
COMMUNICATIONS COMMISSION; AND ANNA GOMEZ, ACTING ASSISTANT
SECRETARY FOR COMMUNICATIONS AND INFORMATION, U.S. DEPARTMENT
OF COMMERCE
STATEMENT OF MICHAEL COPPS
Mr. Copps. Good morning, Chairman Boucher, Ranking Member
Stearns----
Mr. Boucher. And just a little technical matter for the
Chairman of the FCC, could you turn your microphone on, please?
Thank you.
Mr. Copps. Thank you very much. I have a formal statement
that I request be included in the record.
Mr. Boucher. Without objection.
Mr. Copps. Thank you for inviting me this morning.
Priority number one for me since my appointment as acting
chair 2 months ago has been to shepherd the DTV transition to
smoother pastures. We strive each day to carry out the
provisions of the Delay Act in such a way as to ease the
transition for millions of anxious viewers while at the same
time providing legislatively-mandated flexibility and balance
for our TV stations.
We had no detailed roadmap for this. What we had and have
the commitment to get this job done better than it was getting
done. Every day my FCC team and I rely to achieving a
successful balanced outcome. Some may think we have erred too
much one way. Others may say the other. At the end of the day
maybe all I can ask is for what Harry Truman once said should
be his epitaph, ``We are trying our damnedest.''
It was clear to me long before I became acting chair and
had a chance to look under the hood that the country was not
ready for a nationwide transition on February 17, not with the
coupon program out of money and a long waiting list. Not with
rampant consumer confusion that I saw everywhere I traveled.
Not absent provisions for hands-on community assistance,
particularly for the most vulnerable of our populations. There
was no coordinated plan, no one making sure that the private
and public sectors had every opportunity to combine their
assets and get this job done, that neither of us could do alone
but that working together we might just have a shot at even at
this late date.
Thank you for the Delay Act. It clearly recognized that
consumers were not ready for February 17, and it gave them a
few extra months to prepare. The Act made it possible to avoid
a consumer backlash of high order in February, but we are
nowhere near out of the woods. Little more than a third of our
full power commercial stations have transitioned, and at this
point only 2.5 percent of households are in markets that have
completely transitioned to digital.
So I am happy to look back today, but this is a story whose
main chapters remain to be written. Now, some may say that we
won't be ready on June 12 either, and that there will still be
consumers left behind, and it is true. This transition will not
be seamless. You can count on some level of confusion, that
level being determined by how well we do our job between now
and June 12. There is time to make a real difference.
Here is some of what we are doing at the FCC to learn from
the past and make that difference. We are focusing day and
night on consumer education. We are repackaging our messages
and adding vital new components to them. Starting April 1, for
example, stations must modify their, notify their viewers about
specific areas that may lose signal coverage no matter what
consumers do, about the possible need for new antennas, and the
need to rescan.
Stations also must publicize the location and operating
hours of walk-in centers and telephone contact information for
the station and the call center. We are going to do everything
we can to put boots on the ground. One lesson we have learned
is the urgent need for hands-on assistance, including walk-in
help centers and in-home assistance for consumers who need it,
and there are lots of them. Seniors, folks with disabilities,
citizens for whom English is not the primary tongue. So we are
finalizing agreements with AmeriCorps and fire fighters to
provide outreach and in-home assistance to consumers across the
country, and we will be soliciting bids from other
organizations. While we will be serving all markets, we will
put special focus working with NTIA on a target list of 49 hot
spots that are particularly risky.
And we will deploy a viable call center system to respond
to calls for help. We have been working closely with our
industry partners to establish a single, nationwide number for
consumers to call. Our cable and broadcast industries really
stepped up to the plate on this. With a few months to go we can
now take it to the next level to provide more in-depth training
for agents to handle longer and more technical calls and to
improve the tools available to them for handling problems and
referring consumers to help centers and other resources.
There is another problem I have briefly to mention. Signal
coverage. For all of its bounty, the digital signal propagates
differently than analog. Stronger in some places, it is weaker
in others. For 2 years I pressed without much success for more
studies and analysis of these differences because in some cases
viewers are not going to receive these signals even if they
have their boxes and their antennas hooked up. We are trying to
deal with this, but even with the things we can begin to do
like distributed transmission systems and fill-in translators,
solutions are not going to be everywhere in place by June.
I believe consumers have a right to know this, and that is
why we are requiring stations to notify viewers of coverage
problems, and that is why we launched a new tool on our Web
site where consumers can type in their home addresses and find
out what stations they should be able to receive and what kind
of antennas they might need to receive them.
Before I close I would like to recognize the efforts and
sacrifices of our FCC team, as fine a group of public servants
that I have encountered in my years in Washington. I thank my
two friends and colleagues, Commissioner Jonathan Adelstein and
Rob McDowell for their tireless outreach and the leadership
they and their staffs provide.
I thank Assistant Secretary Gomez and her talented team at
NTIA for bringing a real sense of urgency to our new level of
inter-agency cooperation. Huge thanks go to industry,
broadcast, cable, satellite, consumer electronics, retailers,
and others. We have a real partnership with them now, like I
have been pushing for for years. I thank all the consumer civil
rights, religious, and public interest groups who worked on
behalf of the citizens of this great country, and a final
thanks to so many everyday citizens across this land who reach
out to help a friend, a relative, or a neighbor. Tip O'Neil
once said that all politics is local. Well, the DTV transition
is local, too. In fact, it is downright personal, and it will
require that personal touch if we are to succeed. Working
together we can and we will make a huge difference for
consumers.
Thank you again for the opportunity to testify today. I
would be happy to hear your comments, suggestions and try to
respond to any questions that you may have.
[The prepared statement of Mr. Copps
follows:]*************** INSERT A ***************
Mr. Boucher. Thank you very much, Chairman Copps.
Ms. Gomez. And you might pull that microphone a bit closer.
STATEMENT OF ANNA GOMEZ
Ms. Gomez. Thank you, Chairman Boucher, Ranking Member
Stearns, and members of the subcommittee. Thank you for your
invitation to testify this morning on the DTV transition and
the TV converter box coupon program. I am Anna Gomez, and I
serve as the Acting Assistant Secretary of Commerce for
Communication and Information.
To date the coupon program has distributed 52.7 million
coupons to more than 29 million U.S. households. Of these,
consumers have redeemed nearly 26 million coupons at
participating retailers for digital-to-analog converter boxes,
and we will likely have many more requests for coupons before
the program concludes.
As you all are aware, the DTV transition and the coupon
program were in a crisis situation at the beginning of this
year when we hit our coupon funding limit and were forced to
create a waiting list for millions of coupon requests. We have
made much progress since then, but we still have much work to
do. From my first day at NTIA last month I have made it a top
priority to minimize the number of people who could lose over-
the-air TV as a result of the analog shutoff.
Thanks to the foresight and leadership of the President and
Congress with the passage of the Delay Act last month, millions
more people will have the opportunity to get prepared for the
transition and to take advantage of the coupon program.
In addition to extending the transition date, the Delay Act
extended the deadline for coupon applications to July 31,
authorized us to reissue coupons to consumers whose coupons
expired without being redeemed, and provided use with
flexibility to deliver coupons by faster means.
The Recovery Act provided $650 million in funding to
implement these new improvements. Of that at least $490 million
will be used for the distribution of at least an additional
12.25 million coupons. Up to 90 million will be available for
consumer education and technical assistance, and 70 million
will cover the cost of distribution and other administrative
expenses.
We appreciate the flexibility Congress provided by
permitting NTIA to increase the allocation for coupons and to
prioritize coupon distribution to consumers totally reliant on
over-the-air broadcast service if necessary. This flexibility
will enable us to adjust quickly to meet the needs of this
unprecedented effort.
We also moved swiftly to make related modifications and
improvements to our operational systems. In addition, we are
now distributing all coupons using first class mail. All these
actions are expected to reduce delivery time for coupons from
21 to 9 business days approximately.
Most importantly I am pleased to report that 5 days ago the
coupon program was able to eliminate entirely the waiting list
for coupons. We are, again, able to fulfill coupon requests as
they are received and approved.
As important as these additional coupons and process
improvements are to the success of the digital transition, our
education and outreach efforts are just as vital. We are
tailoring these efforts to educate people of the various ways
to become ready now for the digital transition, but it by
obtaining a converter box with or without a coupon, by buying a
digital television, or by subscribing to a pay television
service. We want to do everything we can to ensure that those
who need help can get it.
We are also making improvements to our outreach efforts
based on lessons we have learned. For example, beginning last
month the FCC, NTIA, and the White House significantly ramped
up our coordination and accelerated efforts to ensure consumers
have the information and assistance they need.
We are also redoubling our efforts with the public, private
partnerships that have already helped millions of households
prepare for the DTV transition. Our non-profit partners, for
example, have served a vital feet-on-the-ground function to
help inform the public of the new transition deadline and to
assist those who still need to prepare. I would especially like
to recognize the efforts of the Leadership Conference on Civil
Rights Education Foundation and the National Association of
Area Agencies on Aging or N4A, who receive NTIA grants to
provide outreach and assistance to targeted populations. Thanks
to the additional funds provided by Congress, NTIA grants to
both of these organizations will be extended through the
summer, allowing them to continue their outstanding efforts to
help people prepare.
We also have learned that more outreach to vulnerable
populations is needed, along with new and creative approaches
to reach these consumers. We are, therefore, recalibrating our
messaging and outreach activities and undertaking various
public education activities to respond to our current
challenges. For example, in addition to running paid ad and
public service advertising through radio and print outlets and
on transit systems and bus shelters and key markets, we are
developing new training modules that can be used by our
partners, grantees, and others to ensure consistency and
accuracy of our messaging.
In conclusion, Mr. Chairman, let me thank you again for
extending the transition deadline and providing NTIA with
critically-needed funding for additional coupons and consumer
outreach. Thanks also to Chairman Copps, Commissioners
Adelstein and McDowell, and the NTIA and FCC staff for their
ongoing commitment to a successful DTV transition and for
working with us to maximize our effectiveness.
Finally, I would also like to note that Commerce Secretary
Locke is fully committed to ensuring the success of the DTV
transition and is already focused on the clarity and quality of
our consumer education efforts. With all of us working together
we can usher in a successful end to the DTV transition.
And I will be happy to answer your questions. Thank you.
[The prepared statement of Ms. Gomez
follows:]*************** INSERT B ***************
Mr. Boucher. Thank you very much, Ms. Gomez, Chairman
Copps. We appreciate your testimony this morning and
congratulations to both of you on a job well done in managing
this transition through a difficult, very difficult period.
Ms. Gomez, as I suggested in my opening statement, I am
concerned about whether or not there are going to be enough
converter boxes available to meet the demand that will arise
between the present time and June the 12th, and I make
reference to the document which your office prepared with data
as of 4:00 yesterday afternoon that indicates that there are
currently about 9.2 million, almost 9.3 million active coupons
in circulation. These are coupons that you have issued, that
have been mailed, that as of this moment have not been
redeemed.
And I understand that the current redemption rate for
coupons is approximately 60 percent. Is that correct?
Ms. Gomez. That is right.
Mr. Boucher. And so if you just do the simple math, 60
percent of 9.2 million would be 5.5 million converter boxes
that we could expect to be claimed based upon redemptions of
the coupons currently in circulation. And that number does not
take into account the purchase of converter boxes without
coupon support, some amount of which happens, and it certainly
doesn't take into account the new demand for converter boxes
that will arise based on coupons issued from this day forward,
which will be now on June the 12th.
And so we can reasonably estimate that the demand for
converter boxes is going to be well beyond this 5.5 million
converter box number, and that is the number we know as of
today based on the current redemption rate just on coupons
already issued.
The Consumer Electronics Association will testify later
this morning that they anticipate only about 4.2 million
converter boxes being needed all the way to June the 12th, and
just based on the math I have done here and reported that seems
to me to be a very low number.
So my question to you is do you share that concern? And do
you have any information that can enlighten up about the total
projection of converter boxes that may be needed up until June
12?
Ms. Gomez. Yes. Actually, I do share that concern. We--
about whether inventory----
Mr. Boucher. Is your microphone on, Ms. Gomez? If not, pull
it----
Ms. Gomez. I do share that concern.
Mr. Boucher. All right. Good.
Ms. Gomez. Sorry. About whether inventory levels will be
sufficient to get us through the end of not just June 12 but
the demand that will also follow beyond June 12. Up until now
the inventory levels have been good, and we have terrific
retailers that voluntarily participate in our program. In order
to be able to participate in our program, they do have to
follow some rules, and our rules require those participating
retailers to maintain inventory at commercially-reasonable
levels.
In order to keep our retailers informed of the demand at
least from the coupon program, we do have a specific program
that is geared completely towards keeping retailers informed
about request rates. We do this by zip code. We have a lot of
information on our Web site that is dedicated to providing
retailer information. So our efforts are to ensure that
retailers understand in their areas where they need to be
maintaining a certain amount of inventory. And then retailers,
if needed, can order boxes with sufficient amount of time.
It was good news to hear I think at your last hearing that
the manufacturers were going to be able to manufacture boxes in
a shorter timeframe, but it certainly is something that is
worth keeping an eye on because if every coupon is redeemed,
there won't be sufficient boxes to meet that demand.
Mr. Boucher. OK. Thank you very much. Let me ask you one
additional question. Some on this panel have suggested that you
should only send coupons to over-the-air-only households. In
other words, households that have no cable or satellite
subscription but rely completely on over-the-air television to
receive service.
I disagree with that. I think those households clearly
should be the priority----
Ms. Gomez. Uh-huh.
Mr. Boucher. --but I think that households that have a
cable or satellite subscription but perhaps have televisions on
a different floor where the cable or satellite wires don't run
and where those televisions are over-the-air dependent should
be able to get coupons to the extent that you have coupons
available to supply them.
So my question to you is what is your approach, and what
will be your approach going toward June 12 in terms of the
homes to which you are supplying coupons pursuant to requests?
Ms. Gomez. Yes. NTIA does share the concerns that
completely unprepared households are able to prepare themselves
before the transition date. Our current program, thanks to the
delay, we were able to change our rules so that we are, in
fact, able to prioritize over-the-air household coupon requests
should the need arise. We are going to carefully monitor the
number of requests that we get to make sure that if we get
ourselves into another situation where we see a possible end of
our funding limit, then we can begin prioritizing over-the-air
households and make sure that they get those coupons.
Mr. Boucher. But at the present time you are honoring
requests without regard to whether they are over-the-air only
or households that simply need converter boxes. Is that
correct?
Ms. Gomez. That is correct. We are honoring requests for
all households that apply for the coupon.
Mr. Boucher. Let me encourage you to continue doing that,
prioritizing as need be to the over-the-air-only households.
They should be the first priority. But to the extent that you
have coupon availability beyond those, you should also honor
the requests coming from households that simply need converter
boxes but also have a cable or satellite subscription.
My time has expired, but I am going to take the liberty of
asking Mr. Copps a question, and I will be generous with other
members.
Mr. Copps, you mentioned in your testimony the problems
associated with the fact that digital signals do not have the
same propagation characteristics as analog signals, and there
will be households that can get an analog signal from a given
television station that when this transition occurs will not
get the digital signal from that same station. Implying, of
course, the need to do something about antenna readjustment or
antenna replacement.
And you and I have both been to White Haven, England, and
seen firsthand the circumstances that pertained there when they
transitioned to digital a couple of years ago. And what struck
me on that visit was the extraordinary number of antennas that
had to be replaced entirely. It was more than 10 percent of the
total. And we are now seeing that problem arise here in some of
the markets that have transitioned, and we have concern that
additional rural areas in particular will experience this
problem on June the 12th.
And so my question to you broadly spoken is what are you
doing to assist in getting people prepared for this
eventuality, and what should we be thinking about in terms of
aiding you in that effort?
Mr. Copps. Well, it requires, I think, a new level of
education, and this was not a message that went out early
enough. Again, I think if we had had the kind of public sector,
private sector partnership I have been harping for for 2 years,
we would have identified a problem like this much earlier on
than the time that we actually did. We focus so much on the
boxes, boxes, boxes, and people got their boxes, and then ran
into these antenna problems. So we are requiring in the
consumer education that stations do, going forward that we
educate people about the antenna problem.
We have a new tool on our FCC DTV webpage to instruct
people on the strength of the signals coming into their
specific zip code. You can just type in your zip code, and you
will find the stations and that strength that they are
broadcasting at and the direction they are coming from, help
you to aim your antenna and things like that. But there is, you
know, you could have 5 or 10 percent of the people that are
going to experience this problem. It is not going to be
resolved by June. We should have done these kinds of studies
much earlier on and identify the problem. There are things we
can do. We are trying to get distributed transition systems
going to strengthen signals and all that, but they all take
time, and they take money for a hard-pressed industry right
now.
Mr. Boucher. Thank you, Mr. Copps, Ms. Gomez.
The gentleman from Florida, Mr. Stearns, is recognized for
5 minutes.
Mr. Stearns. Thank you, Mr. Chairman.
Ms. Gomez, welcome to our committee and for your first time
I suspect, and so we appreciate that. The gentleman from New
York indicated this is totally mismanaged. Of course, Mr.
Markey was chairman the last 2 years and Mr. Upton,
distinguished gentleman from Michigan, they had hearing after
hearing, so I don't know if mismanagement is a good appellation
to put on this because I think they were on top of it.
In fact, you heard Ms. Blackburn indicate that no one had
any problem with the transition in her Congressional district.
Mr. Terry indicated there were 33 calls out of 412,000
households. And Mr. Upton in his Congressional district in
Michigan had one call, and my Congressional district we
transitioned also.
So I appreciate everybody's apprehension here about this
being mismanaged, but I think the evidence so far has been that
it seems to be working at least in several of the Congressional
districts here on the Republican side, so--and I commend Mr.
Markey and Mr. Upton for all the work they did on this.
Assistant Secretary Gomez, the theory behind this delay was
that 5 percent were unprepared homes. The stimulus legislation
obviously gave an extremely wide latitude on how to spend this
roughly $650 million in additional funding. Shouldn't we just
spend $350 million to cover two redeemed coupons for each
remaining unprepared, exclusively over-the-air home and return
the rest of the money, which I think would be a good signal to
the people out there in American that we are trying to do
things with less money and return what we don't need?
Ms. Gomez. Well, under the Act and our goals are to provide
the coupons to every requesting household as you know. So while
we do share the concern about making sure that over-the-air
households are prepared, as I mentioned, we are going to make
sure that they are able to provide the coupons to those
households if we end up in another situation where we have a
wait list possible. And so what we knew back in January was
that we had about 6.5 million households unprepared. Since that
time we have been able to provide coupons to 1.2 million over-
the-air households, so we are making progress. We want to make
sure that we are able to provide the coupons to the households
that aren't themselves prepared for the rest of this time. And
we are going to monitor carefully.
Mr. Stearns. Well, have you ruled out the possibility that
you will return money? Because there is a lot of people have
coupons, there are seven million coupons that have been
unredeemed and then with this new money you will have totally
more, even if you take out the administration costs and the
education costs, you are still going to have a lot of money.
You will have I conjecture almost 20 million coupons out there,
and you got four million homes times two is eight million, so
you could possibly have more coupons than households that need
it. Is there a possibility in your mind that you would return
the money that you don't use?
Ms. Gomez. Well, any money that goes unused will be
returned at the end of the program.
Mr. Stearns. Well, oK. In the legislation the stimulus
package allowed the NTIA to transfer some or all of the 90
million in consumer education funds to the FCC so as long as
give the House and Senate appropriator the five-day advanced
notice, has the NTIA transferred any money to the FCC yet?
Ms. Gomez. No. The money hasn't been transferred yet. In
fact, we have our request to Congress prepared, and that should
be coming shortly. That will delineate how the FCC plans to use
that money.
Mr. Stearns. And how much are you talking about?
Ms. Gomez. We are talking about $65 million at this point.
Mr. Stearns. How did you come up with $55 million as
opposed to $20 million or $100 million? How did you come up
with $55 million?
Ms. Gomez. It is actually $65 million. We worked----
Mr. Stearns. Sixty-five.
Ms. Gomez. Yes.
Mr. Stearns. Not $55. It is----
Ms. Gomez. Right. It is $65.
Mr. Stearns. How did it go from $55 to $65? Just a slip?
Ms. Gomez. Yes.
Mr. Stearns. Wow. Ten million dollars.
Ms. Gomez. Yes. We worked with the FCC closely, and they
came up with the projections of what they would need. They sent
us a request, and we did take a look at it. We will be
providing, like I said, a letter that delineates how
specifically each of those categories are going to be used.
Mr. Stearns. Can you send that letter to Chairman Boucher
and myself?
Ms. Gomez. Certainly.
Mr. Stearns. I mean, that would be--I think, Mr. Boucher,
you would like a copy of that, and I would like to--whether it
is $55 or $65.
Ms. Gomez. Yes.
Mr. Stearns. Mr. Copps, she indicated that the FCC was
intimately involved or involved with coming up with this
request. You might want to comment.
Mr. Copps. Yes. We are looking at, as I said, a new level
of consumer education and outreach. We are planning to use
those millions and put out some requests for proposal in the
very near future which will help to ensure that the call center
operation is up and running and calibrated the way it should be
for help centers and in-home assistance and for media buys and
public relations.
Because the request for proposals have not gone out yet,
they tell me it is best not to get into saying how much in each
one of those categories because you can kind of mess up the
bidding process in doing that, and I have no desire to do that.
But I think based on the proposals that we have put forward and
also some of the work we are talking about with AmeriCorps and
the fire fighters, that it is going to be a tremendous return
on investment. A lot of this is going to be just getting
processes going with the fire fighters and with AmeriCorps, and
they will mobilize, but a lot of the labor that will come to it
will be volunteer labor. So I think we are going to get a
really good return on the investment.
Mr. Stearns. OK. Mr. Copps, I just wanted to congratulate--
you and I are probably the only ones talking about during this
transition having a demonstration project, and I remember when
you came to my office, you and I both agreed and----
Mr. Copps. Right.
Mr. Stearns. --there is very few of us that did, and as it
turned out we did a demonstration project in Wilmington, North
Carolina, and you know, the chairman of the FCC was up here,
and it turned out it was very successful. Obviously there were
some people that did call but relative to the percentage it
worked very well, which I think went to another part of our
attempt to try and manage this.
So with that, thank you, Mr. Chairman.
Mr. Boucher. Thank you very much, Mr. Stearns.
The gentleman from Michigan, Mr. Dingell, is recognized for
5 minutes.
Mr. Dingell. Mr. Chairman, first, Mr. Copps and Ms. Gomez,
congratulations. Welcome to the committee.
Mr. Copps. Thank you.
Mr. Dingell. Ms. Gomez, as you are aware, NTIA during the
previous Administration stated to this subcommittee that it had
adequate funding with which to meet consumer demand for digital
television converter boxes. As we have learned, this was quite
untrue.
What have you done to correct this situation?
Ms. Gomez. Yes, sir. Well, thanks to the additional money
that Congress provided to us through the Recovery Act, we are
able now, we were able last week to clear out the wait list of
coupons and now to dedicate more resources to funding coupon
requests.
Mr. Dingell. Will you have sufficient funds to meet your
charges under the law?
Ms. Gomez. Well, I certainly hope so.
Mr. Dingell. Hope won't do when you got a bunch of bad
consumers.
Ms. Gomez. That is correct, which is why what we are doing
is retargeting and refocusing our efforts, because we want to
make sure that those consumers that need this program the most
are educated and understand their need to get that money today,
get the coupons today so that they can prepare themselves
immediately.
Mr. Dingell. See, I saw when we did this, we first gave
NTIA $5 million to publicize it. That was clearly not enough.
We gave you more money later, I think $90 million. And we now
find ourselves in a situation, though, where I see nothing
going on out there in terms of public information flow to the
consumers about this. So I am curious. Will you commit to us to
keeping us fully informed about the status of the level of
funding and the availability of coupons and the availability of
the converter boxes?
Ms. Gomez. Yes. I will commit to do that. We will continue
to provide information.
Mr. Dingell. Now, Ms. Gomez, how does NTIA currently
predict consumer demands for those coupons?
Ms. Gomez. We actually don't have a prediction today for
what the consumer demand will be. We have been able to learn--
--
Mr. Dingell. Don't you need to know that?
Ms. Gomez. Well, the truth is now that we are reissuing, we
are permitting the reissuance of coupons for consumers that had
their coupons expire, we expect to have demand increase, but we
need to monitor over the next several weeks to see now that we
have advertised the availability of reissuance to see how much
that increases the level of demand from consumers today.
Mr. Dingell. We have given you additional time, additional
money, and you now have until some time in June when you have
got to see to it that you have gotten all your coupons out, you
got all your coupons back, everybody has got a converter box so
we don't have a bunch of mad consumers on our hands. And I can
just tell you that I anticipate full well we are going to have
some angry people calling our offices about the fact that this
has not been properly handled.
How can you assure us that you are going to meet your
deadline, and how can you ensure us that you are going to have
the adequate number of coupons, the adequate number of boxes,
and that they are going to be in place?
Ms. Gomez. We are planning for making sure that we target
the populations that most need this type of help, because it is
true, you are actually right, the coupon program isn't going to
be what makes sure that by June 12 all consumers don't call
your offices. So what we have to do is dedicate our resources
to making sure that we provide both the technical assistance,
which is what the FCC is working on, as well as make sure there
are community partnerships or public, private partnerships, our
friends in the broadcast industry and the cable industry,
continue to help us to provide that assistance to consumers.
That is the way that we are going to be able to make sure that
the outreach is there, even if we don't----
Mr. Dingell. You have not comforted me.
Mr. Copps, you have indicated in your testimony that you
have new problems which apparently are coming to my attention
for the first time with regard to how the difference in
coverage in the service areas of analog versus digital is going
to impact. What are you doing to make sure that we are going to
have full service across the entire service area of these new
digital broadcasting operations?
Mr. Copps. We are not going to be able to ensure that we
have full coverage of digital signals in current broadcasting
areas. We are going to try to alleviate the problem that is out
there. We are going to try to educate consumers to the extent
of the problem to forewarn them and hopefully to forearm them
by calling upon the stations to help us to get that message
out, and then try to encourage whatever technical solutions are
realizable between now and June, but as I said in my statement,
things like putting up new translator stations, distributing
transmission systems are time consuming and costly. So this is
one of those problems that, again, because of the lack of
coordination didn't come to everybody's visibility soon enough.
Mr. Dingell. So lack of coordination between who? FCC,
NTIA?
Mr. Copps. No. I think the lack of, the lack for the last
few years of a really coordinated public, private sector
partnership where we really had interagency coordination. I was
part of the Y2K exercise in the previous Administration, the
two previous Administrations ago. I was Assistant Secretary of
Commerce, and I knew what a coordinated interagency, public
sector, private sector partnership looked like where the
leadership was involved, where we were coordinated with the
White House, all the agencies were there, and we were
contacting business and identifying problems early on and
making mid-course corrections and devising solutions. We are
trying to invent that kind of process here in the last 2 months
that should have been up and running 2 years ago.
Mr. Dingell. And that is one of the unfortunate things. Mr.
Copps, you have indicated that FCC is working with NTIA to
develop a list of hot spots to ensure a more targeted consumer
approach. How have FCC and NTIA determined these hot spots, and
are both of your agencies confident that this approach is
success, and what more has to be done? I will ask you to
respond and Ms. Gomez also.
Mr. Copps. Well, I am hopeful. We are working to identify
those hot spots, and there are some 49 of them based on the
latest Neilson data on DMA numbers, percentages of over-the-air
households, coupon requests, redemption rates, poverty rates, a
whole bunch of different criteria to really show us where the
most vulnerable areas are and where we need to be devoting the
limited resources that we are capable of deploying for this.
Mr. Dingell. So the answer is you don't really have the
resources you need to identify these areas.
Mr. Copps. Well, we are identifying them. We will have
hopefully additional resources. Again, not enough that I am
going to sit here and guarantee that everything is going to go
assumingly well.
Mr. Dingell. Ms. Gomez, do you have adequate resources, and
are you in any better shape than Mr. Copps, the FCC, are in to
address this problem?
Ms. Gomez. I can say that we are working very hard to
address the problem, and we are very grateful for the ability
to work with the FCC.
Mr. Dingell. So your answer is you have not solved the
problem. Do you have the resources you need to address it in
the time that you confront between now and the 12th of June?
Ms. Gomez. I do think we have the resources, particularly
with the resources that we got from the Recovery Act from the
Congress.
Mr. Dingell. I have used 2 minutes and 44 seconds more than
my time, Mr. Chairman. I apologize to you and the members of
the committee.
Mr. Boucher. Thank you very much, Mr. Chairman. Your
questioning has enlightened all of us, and the time was
certainly well spent.
The gentleman from Michigan, Mr. Upton, is recognized for 7
minutes.
Mr. Upton. Thank you, Mr. Chairman, and I am not going to
use all my time because we have been notified we are going to
have a series of votes on the floor momentarily. So I do want
to--just a couple things.
First, I guess some of us won't be here for the second
panel. I want to praise particularly in Michigan, all of our
folks, the NAB and others, they did really a terrific job in
getting the word out. They actually did polling in Michigan,
and I want to say something like 95 percent of the folks knew
that they had to make some change, and I will make a little
joke at the expense of my guy here, Joe Barton. Joe Barton was
so convinced. He has cable now. This is a new thing for him,
but even Joe was asking about how to get a cable box and hope
Mr. Copps, he might be able to go help him hook it up, and I
assured him that that was really not the case and not needed.
But in all kidding aside, the industry and the cable folks
just did a marvelous job, and our broadcasters and particularly
I did a number of things with my local broadcasters in
Kalamazoo and South Bend, two markets that cover our district
in southwest Michigan, and with our retailers, and looked at a
number of different folks, and it worked without a hitch. And
some of them have changed, and of course, when I worked with
Mr. Markey and Mr. Boucher as well, and obviously Mr. Barton
and Mr. Dingell as we crafted this legislation a number of
years ago, this was the number one recommendation by the 9/11
Commission. Get it done, because if we have something else
happen, this is the number on thing to make sure that our
citizens were, are protected in the future.
And they trashed, frankly, the 9/11 Commission trashed the
Congress 2 or 3 years ago when they didn't think we had moved
fast enough, and of course, that was one of the reasons that a
number of us objected to the delay because the word was out.
And a number of us coauthored, Mr. Stearns was a big part of
that, too, legislation that was introduced at the end of, I
think in the last session as well as the beginning of this
session, legislation that would actually provide the accounting
fix to allow the coupons still to go out, but we just wouldn't
take it down from the spending until they were actually
redeemed rather than when they were mailed out. Of course, you
have a number of coupons that were never used, and you have got
a number of them that are still laying in someone's desk, in
their desk drawer for maybe weeks to come until they go to
Sears or Best Buy, wherever they have to go.
But my question is this, and before I yield back, it is
fairly clear when you look at the numbers that we are going to
have a number of coupons, A, never redeemed, the $650 million
that was in the stimulus package, I think the number was about
what, four million homes not being serviced as of March 1 in
terms of over-the-air. Is that right, Ms.--so if you--and yet
we provided enough money in the stimulus for 12 million
coupons, so if you have got four million unredeemed homes, and
they each get two coupons, and they really need them unlike Joe
Barton, you are going to have hundreds of millions of dollars
that is never going to be, need to be spent? Right?
So what happens to that money in June? What happens to the
money that is not used because we have done too many of these
coupons or they are never redeemed?
Ms. Gomez. Well, at the end of the program any money that
is left over will be de-obligated. It will be returned to the
Treasury.
Mr. Upton. And will that be--and when will that decision be
made? Because, of course, the transition date is June 12. So
let us say someone says, oh, it might finally be time. We will
use Mr. Shimkus's example. April 15 with taxes, June 12, so
maybe they call that 800 number or get online or figure out how
to do it. Maybe they go June 5, they get the coupon, so it is
really good until August or September. Right? At what point do
you actually say enough is enough?
Ms. Gomez. Yes. Under the law we were able to extend the
date or the law extended the date for folks to apply for
coupons to July 31. So if you take into account processing----
Mr. Upton. That will take you to the end of the fiscal
year. So----
Ms. Gomez. Further beyond that I would think.
Mr. Upton. Yes. So what--so the un-obligated balance, what
happens to that? At what point do you say, Treasury, here is
your money back? I hope you say that.
Ms. Gomez. I don't know if there is a specific deadline for
that. I am sorry. I would have to go back and make sure I
checked that.
Mr. Upton. Mr. Copps, do you know? Do you all weigh in on
that decision at all or not? Are you completely out of that?
With the money.
Mr. Copps. No. I don't know. Technically it would go back,
I would assume, if we are going to go out of the coupon
granting business, and you give it the time to get those
redeemed, and at that time the money is left over, it goes
back. I would hope that would be before the end of the fiscal
year, but I can't tell you.
Mr. Upton. And Ms. Gomez, what happens to the--if you have
got, you know, millions of coupons that perhaps don't actually
get delivered, is there still a fee that I guess in this case,
what, IBM would collect? I mean, is there still a processing
fee that is paid out to the private sector for those or not?
Ms. Gomez. You know, that is a good question, and I am
sorry. I am going to have to get back to you on that one
because I am not sure how exactly under the contract the--
what--how exactly those fees are----
Mr. Upton. I know the votes are starting. I will yield back
my time. Thank you. Thank you both.
Mr. Boucher. Thank you very much, Mr. Upton. We have votes
now pending on the floor but I think time for one more member
to ask questions, and I am pleased to recognize the gentlelady
from Florida, Ms. Castor, for 5 minutes.
Ms. Castor. Thank you, Mr. Chairman. Would you all address
the status of the call centers? Are you finding that the call
centers have adequate capacity to handle current volumes of
calls? Do we have enough bilingual operators? What are the wait
times that callers can expect, and then what plans do you have
in place to handle the surge in calls on and after the
transition date?
Mr. Copps. Well, we are in the process of getting ready to
put out a request for proposal for our call centers to mutrice
the FCC call center. That is already existent. There were some
problems with that. We are working mightily to correct those, I
think most of them, and did a fine job. I was up in Gettysburg,
Pennsylvania, where our call center is located a couple of
weeks ago, and the agents up there were saying we really would
like to have more training. So now we have an opportunity to do
more training and give them a level of technical proficiency
and responsiveness that they presently don't have. So we are
going to be working on that.
With regard to the bilingual, no, we don't have enough. I
think you can make the case, and my friend Colin McSlarough in
the cable industry has observed that only 2 percent of
Hispanics lived in areas that have completed transitioned
already, but 13 percent of the calls that came in were from
Spanish-speaking people. So I think if we play this out a
little bit, you are going to see that we are going to have to
have the ability to do much better with regard to that.
I want to make one other response on the call center thing,
though, too, because lots of folks are saying, well, you didn't
get all those calls. I would also note that we have had 14-1/2
million hits on our Internet site, and you know, we all got to
kind of acclimate ourselves to the new world we live in, but I
suspect perhaps a percentage of those people who might
otherwise have taken to the telephones have gone on the
Internet. We are trying to put better tools and help up there
to inform them, and I think that is something we need to take
into our calculation as we go forward, too, but we are
cognizant of the limitations we had on the program, and we are
dedicated to trying to make it better. Industry was a huge help
in the period leading up to February 17. They continue and will
continue their call center operations until the middle of
April, and then we will have to adjust after that and make sure
that we can handle everything through the other resources that
exist.
Ms. Castor. Thank you, and I will yield back.
Mr. Boucher. Thank you very much, Ms. Castor.
Mr. Weiner, actually, Mr. Radanovich has joined us from
California, and he would be next in the order. We have bills
pending on the floor. It would be nice if we could excuse this
panel without having to come back. After the gentleman perhaps
asks 2 minutes worth of questions and----
Mr. Radanovich. I got one question to ask. That will be
great. Thanks. Thank you, Mr. Chairman. I appreciate it and
thank you for being here.
Assistant Secretary Gomez, the Delay Act allows the NTIA to
issue downloadable coupons. My understanding, however, is that
both the NTIA and retailers have previously expressed fraud and
implementation problems with downloadable coupons. Are you
still considering using downloadable coupons?
Ms. Gomez. No. We have decided not to issue downloadable
coupons. It is my belief that a year ago downloadable coupons
would have been a really good idea.
Mr. Radanovich. Uh-huh.
Ms. Gomez. Unfortunately, with the short amount of time
that we have left and the population that we have left to
reach, it was our feeling both for purposes of trying to
develop something that would withstand waste, fraud, and abuse
issues, as well as something that would be usable, it would
probably be a little too late by the time we got the systems up
and running.
Mr. Radanovich. OK. All right. Thank you very much. Thank
you, Mr. Chairman.
Mr. Boucher. Thank you very much, Mr. Radanovich.
Mr. Weiner from New York.
Mr. Weiner. Thank you. I will be brief. First of all, I
signed up for a coupon several weeks ago, and it hasn't
arrived, so I don't know. Maybe you can look it up. It is you
know, Askan Avenue, Forest Hills, New York.
Mr. Copps, is there any way of telling whether we are going
to have wide-scale problems in large urban areas where there is
all kinds of different topography that is guided by tall
buildings, sometimes parks, sometimes communities, suburban
communities were sometimes the broadcast signal has to pass
through a city to get to the suburbs? Do we have any good, I
mean, I know there have been a couple of times I have read that
there have been tests they flipped off in the middle of the
night just to see how it works.
Do we have any sense whether that is going to be a problem?
Mr. Copps. I have that sense, I guess it would be largely
anecdotal from traveling around, that there are, indeed, going
to be problems. Everywhere I go I run into people who are
experiencing such problems already. So there is no question in
my mind but that they exist, and we are going to have to deal
with them. Again, I think that we were remiss in not getting
those kind of studies done and on the shelf long before we got
into these waning months of the transition.
And those large urban areas also worry me, not just because
of the technical limitations of the--and the propagation
characteristics of the digital signal, but because there are so
many low-income people there, and there are so many people for
whom English is not the primary language, and they are more
difficult to reach, and there are seniors there and minorities
there.
So that is where a tremendous part of our outreach----
Mr. Weiner. But even if it is running well, even if the
system runs well, even if it gets there, I mean, do we have a
good sense in a city like New York, for example, where a lot of
people already have their antennas and they are hooked up. Do
we have a sense whether the signal is reaching them? I mean, to
some degree we are going to have a problem and some people are
going to fear that they just hooked it up wrong, it is going to
be a problem like on that level. But do we have a sense that
the technology is going to reach these people?
Mr. Copps. I think in most cases if you have done
everything right with the computer, with the converter boxes
and the antenna and all the rest, you are going to be all
right, but it is not going to be ubiquitous, and there are
going to be those people calling your office and my office who
say, hey, I listened to you. I got the box, I got the antenna,
I know I am aimed in the right direction, and I am still not
getting the signal. What are you going to do about it?
Mr. Weiner. Well, I appreciate it.
Mr. Copps. I hear that wherever I go.
Mr. Weiner. Thank you, and in knowing how government
bureaucracy sometimes engages in overkill, I just need one, I
don't need seven people showing up at my house. I don't need
200 of them showing, just that one will be great.
Mr. Boucher. Thank you very much, Mr. Weiner.
I am going to ask unanimous consent that NTIA's weekly
converter boxes coupon program status update be placed in the
record. Without objection, so ordered.
Thanks to this panel. You have done an excellent job. Your
testimony this morning has also been very enlightening. We
appreciate you joining us. We have seven votes pending on the
floor, and that means the next panel will take up when we can
return.
So until that point probably 45 minutes to an hour from
now, this subcommittee stands in recess.
[Recess]
Mr. Boucher. The subcommittee will reconvene. My apologies
for the lateness of the time here.
We now welcome our second panel for the afternoon. Mr. Mark
Lloyd is Vice President of Strategic Initiatives for the
Leadership Conference on Civil Rights, Mr. Peter Morrill is the
General Manager of Idaho Public Television, Mr. Robert Prather
Jr. is the President of Gray Television, Mr. Gary Severson is
Senior Vice President and General Manager of Entertainment for
the Wal-Mart Stores, Mr. Gary Shapiro is President and Chief
Executive Officer of the Consumer Electronics Association, and
Mr. Christopher Wood is Vice President, Senior Legal Counsel,
and DTV Compliance Officer for Univision Communications. We
welcome each of our witnesses and without objection your
prepared written statement will be made a part of the record.
We would welcome now your oral presentations and as that you
keep those to approximately 5 minutes.
And Mr. Wood, we will be pleased to begin with you.
STATEMENT OF CHRISTOPHER WOOD, VICE PRESIDENT, SENIOR LEGAL
COUNSEL, AND DTV COMPLIANCE OFFICER, UNIVISION COMMUNICATIONS
INC.; GARY SEVERSON, SENIOR VICE PRESIDENT, GENERAL MANAGER,
ENTERTAINMENT, WAL-MART STORES; GARY SHAPIRO, PRESIDENT AND
CEO, CONSUMER ELECTRONICS ASSOCIATION; PETER MORRILL, GENERAL
MANAGER, IDAHO PUBLIC TELEVISION; MARK LLOYD, VICE PRESIDENT,
STRATEGIC INITIATIVES, LEADERSHIP CONFERENCE ON CIVIL RIGHTS;
AND ROBERT S. PRATHER JR., PRESIDENT, GRAY TELEVISION, INC
STATEMENT OF CHRISTOPHER WOOD
Mr. Wood. Chairman Boucher, Ranking Member Stearns and
members of the subcommittee, my name is Chris Wood, and I am
Vice President and Senior Legal Counsel of Univision
Communications where I have responsibility for DTV compliance
matters. I appreciate very much the opportunity to speak with
you this afternoon about our efforts to ensure that the
Hispanic community is prepared for the digital transition,
together with our public and private partners.
Univision is the country's leading Spanish language media
company. Our assets include the Univision Network, the
TeleFutura Broadcast Network, which provide an array of news,
information, sports, and entertainment programming. We also own
and operate more than three dozen full-powered television
stations, which will be making the transition to digital
television.
But Univision is more than just a broadcasting company. Our
stations and our networks are integral parts of the community
and the culture of U.S. Hispanic households. Spanish language
viewers depend on Univision or Univision for not just sports
and entertainment programming but also as an essential and
reliable source of news, weather, and emergency information.
And a significant number of the viewers who rely on Univision
also rely exclusively on over-the-air television.
So the impact of the digital transition is particularly
important to our company. When our CEO, Joe Uva, testified
before this subcommittee in October of 2007, he told you that
Univision was committed to being an industry leader in
educating and information viewers about the upcoming digital
transition. That month Univision launched Una Neuva Aira Ava de
Vial, our campaign to prepare Hispanics and Spanish-speaking
television viewers for the digital transition.
That was 6 months before the FCC required any broadcaster
to undertake DTV educational initiatives. Since launching that
campaign Univision has created and broadcast four half-hour DTV
specials. We have included DTV educational messages in our most
popular programming. We have covered transition issues in our
national and local news and public affairs programs, and we
have aired well over 100,000 DTV educational PSAs, featuring
members of Congress and Univision personalities.
Univision also hosts a Spanish-language DTV transition Web
site that has received over seven million page views. Univision
has used its strong ties to the local Hispanic communities and
its markets to launch a grass root initiative that we call Es
Quadron de Hital, or digital squads, in which our stations have
reached out directly to their communities through local
activities. Altogether Univision has sponsored more than 250
community events in its markets.
For example, we have hosted 25 town hall meetings that have
been attended by thousands of viewers. We have also supported
events hosted by members of Congress in their own districts. We
have organized and funded phone banks. We have participated in
48 soft analog tests to help our analog viewers determine
whether they are prepared for DTV.
Univision was fully prepared to complete the DTV transition
on the original cutoff date of February 17. Now that the
transition has been extended to June 12, we realize that more
remains to be done in the community. Many Hispanic households
have yet to achieve an acceptable state of DTV readiness.
Although Neilson reports that Hispanic households are less
prepared for the digital transition than the general
population, it is also clear that our outreach efforts are
working and that the preparedness gap between Hispanic
households and households at large has diminished significantly
over the past 3 months.
So mindful of our unique connection to the Hispanic
community, Univision will focus now on continuing educational
and informational efforts on the steps viewers need to take in
order to be fully prepared to receive digital signals by the
June 12 transition date. We are working as we speak today to
implement the expanded DTV consumer education requirements now
required by the FCC.
I would like to acknowledge the leadership and the guidance
of Chairman Boucher and Ranking Member Stearns and, of course,
their staffs. Your support is critical to enabling us to ensure
that all viewers, especially the Hispanic viewers who depend on
our service to their communities, are prepared for the
transition.
Mr. Chairman, I appreciate the opportunity to discuss our
efforts, and I would be glad to answer any questions you may
have.
[The prepared statement of Mr. Woods
follows:]*************** INSERT C ***************
Mr. Boucher. Thank you very much, Mr. Wood.
Mr. Severson.
STATEMENT OF GARY SEVERSON
Mr. Severson. Chairman Boucher, Ranking Member Stearns, and
members of the subcommittee, thank you for inviting me to
appear before your subcommittee on behalf of Wal-Mart Stores
and the Consumer Electronics Retailers Coalition or CERC.
Since joining Wal-Mart in 1994, I have managed a variety of
merchandising departments. I am currently Senior Vice President
and General Manager of Entertainment, which includes
electronics.
I believe that we are going to complete our transition to
digital television successfully. Aside from Congressional
oversight, much of the credit for a successful converter boxes
program should go to the leadership and staff of the NTIA past
and present. CERC is also working with the FCC staff very
constructively today on the final and crucial stages of
consumer education and outreach. We are proud that retailers
training and education efforts have received high marks from
the FCC. As other CERC witnesses have told the subcommittee,
the DTV transition has been a professional experience without
precedent, made more complex and challenging by adjustments to
the program.
Wal-Mart's converter box demand increased in the days
leading up to each local transition, but we have been meeting
each challenge and are confident we will meet the final ones.
Wal-Mart has worked to ensure that our customers are aware of
the transition. Our stores have featured the converter boxes
through special displays, a 30-second video running in the
electronics area, a countdown clock to February 17, print
advertising space, and in-store signing.
In advertising terms alone we value in the millions of
dollars the time that Wal-Mart's in-store video network devoted
to educating our customers about the DTV transition. Wal-Mart,
like other CERC members, has participated in community-based
efforts to reach the underserved population, including FCC-
sponsored field activities and the successful DTV Road Show
Education Campaign, which made many stops at Wal-Mart stores
across the country.
Conversations will continue--excuse me. Conversions will
continue one by one through June 9 with the balance of
television stations transitioning on June 12. Communicating
clear, concise, market-specific advice to consumers over this
period will be a particular challenge. Currently we are
changing signs in our stores to direct consumers to Web sites
and telephone numbers to obtain the most accurate and up-to-
date local information. We are also considering new in-store
electronic messaging for our TV wall and point of sale.
Wal-Mart remains a leading seller of coupon-eligible
converters. Over 90 percent of our converter sales have been
made with the assistance of coupons. To date all of our models
have been sold under $50, a highly-competitive price among
retailers.
Once we saw that the coupon waiting list would be cleared,
we started air freighting converter boxes to our stores. As the
weeks progress, we will be very well situated to serve
anticipated future demand of our customers through the end of
June. Projecting store needs on a weekly basis we are generally
able to restock very quickly and remedy gaps in supply. Minor
delays have occurred only when external events upset the supply
or demand cycles. We have not been encountering many consumer
problems as customers understand that fluctuating inventory
levels has been a fluid situation.
With antennas, like others, we have seen a noticeable
increase in demand. Antennas that offer the most consumer
satisfaction are those at each end of the price range; the
least expensive set-top antennas and the more expensive rooftop
antennas. Wal-Mart is making additional antenna purchases for
the balance of this year in both categories. We think that we
will be able to serve our customers well as their remaining
local stations move to their final power frequency and tower
position.
While our converters have had a very low rate of return
compared to average electronics products, our rate, our return
rate on antennas has been somewhat higher. As consumers find
the models that best suit their own needs, we understand that
other electronics retailers are seeing similar return rates on
antennas.
While we will focus on addressing the needs of our
customers in the store, we encourage all stakeholders to focus
on educating viewers on what to do after returning home. We are
pleased with efforts that encourage viewers to rescan converter
boxes frequently to capture additional channels.
Wal-Mart is pleased to testify today, Chairman Boucher.
Thank you. Additionally as we look ahead, we hope to work
closely with the committee in addressing energy use and
recycling issues, especially as they pertain to electronics. I
will be happy to answer any questions you may have. Thank you.
[The prepared statement of Mr. Severson
follows:]*************** INSERT D ***************
Mr. Boucher. Thank you, Mr. Severson.
Mr. Shapiro.
STATEMENT OF GARY SHAPIRO
Mr. Shapiro. Chairman Boucher, Chairman Dingell, Mr.
Shimkus, thank you so much, members of the subcommittee for
inviting me to testify on behalf of the Consumer Electronics
Association.
I have three main points. First, the DTV transition has
been and will continue to be an incredibly successful
partnership between government and all affected industries, the
most successful in our history.
Second, as the results of the February 17 date demonstrate,
consumer experience with the DTV transition has been
overwhelmingly positive. With our most recent survey of the
market we see ample evidence to suggest that manufacturers and
retailers will continue to meet consumer demand for converter
boxes and antennas.
Finally, in light of the program's success and the enormous
benefits arising from the migration to the digital spectrum, we
ask that you not again delay the transition beyond June 12.
We represent the $172 billion United States consumer
electronics industry. We have over 2,200 corporate members,
including manufacturers, retailers, distributors of digital
televisions, antennas, converter boxes, and a range of other
products.
More relevant for this hearing, though, this is the
industry that invented digital television, and I even have a
deep personal stake in the success. I was here over 20 years
ago when this committee held the very first hearing, and
indeed, my wife and I met over a chairlift when I overheard her
talking on her cell phone about digital television. And I
innocently asked, what is this thing called HDTV she was
talking about. I am so passionate about digital television that
my tombstone will be 16 by 9 aspect ratio.
Well, we have almost reached the end of this 20-year
process. We worked with broadcasters at WRC here in Washington
to establish the first DTV broadcast station in '96. We helped
create the advanced television test center to test all the
different proponents, and we are a founding member of the
Advanced Television Systems Committee, which set the standards
for DTV. And we have helped lead the effort to educate the
public about the transition.
We helped found the DTV Transition Coalition, which now has
200 diverse groups, a group whose mission to ensure that not
one consumer in the United States loses broadcast television
service due to a lack of information. And our aggressive effort
outreach have reached millions of consumers, retailers,
manufacturers, and legislators about the transition. We created
and operated the Web site, antennaweb.org, which we manage with
NAB, and that helps consumers choose the right antenna for
their location. We have digital tips which helps consumers
learn about the transition.
We have a video. We hired Florence Henderson of The Brady
Bunch to get to the elder people, to reach out to them, and we
have done a lot in the retailer training, consumer education
area. And I think we have been successful. We started out in
2006, 41 percent of consumers were familiar. By the end of
2007, it was 80 percent. Today Neilson, who I think understates
it, says that 96 percent of all TV homes are now aware about
the transition date and are prepared for it. If these
conservative numbers even are correct, we will be about as
close to 100 percent as you can be by June 12.
This has been the most successful industry, government
cooperative relationship probably since World War II. The first
DTV hearing held by Chairman Markey focused on this
appropriately, and the broadcasting cable, satellite, and
public interest sectors worked together in the DTV Transition
Coalition to ensure that we have been prepared to make the
switch. It has been bipartisan cooperation, and I want to
commend the FCC and the NTIA, both past and present, for the
tremendous work in running these programs. And this committee
for over 2 decades of oversight over this important transition.
I remain convinced we are fully prepared for the successful
and consumer-friendly transition. Why? First, recall that by
February 18 more than one-third of the broadcasters had fully
transitioned to digital. Prior to that day some groups were
claiming that this mini transition would leave millions without
television. It would overwhelm the FCC's call center and would
cause tremendous harm to the most vulnerable among us who
cannot be prepared in time.
The predictions of these naysayers simply did not come
true. Unfortunately, the mindset of groups that predicted
massive failures on February 18 continues to dominant their
outlook for June 12, and based on our newest information I
believe that they are wrong again.
To date roughly 26 million coupons have been redeemed, and
we are projecting about some 4.2 million coupons will be
redeemed from April until June, the June transition date. And
through talking to retailers, major retailers and
manufacturers, we believe inventory through the remainder of
the transition will be robust and sufficient to cover projected
demand over the next 3 months.
But the marketplace is such that each retailer and each box
supplier makes independent decisions, and this type of
transition has absolutely no historical precedent. Digital-type
TVs are selling well despite the recession. Last year almost 33
million sets were sold, and I am pleased to announce today that
this year to date we are up 47 percent in DTV sales over the
same period last year. And antenna cells are also selling well
in recent months.
To summarize our survey data suggest that manufacturers and
retailers will likely meet consumer demand for converter boxes
and antenna through the end of the transition, the June date.
We will not know for sure whether this is the case until the
Nation actually completes the DTV transition. This is as true
today as it would have been if we had not delayed the date for
February 17. The response to the significant recent changes
made to the coupon program, manufacturers, and retailers have
adjusted nimbly to ensure that market demands will be met.
Now, as I have been saying for the last 15 years, this
transition is historic. There will always be bumps in the road,
but we have overcome everyone of them, and they have all been
frankly more significant than what we are facing now. There is
no evidence at this point of large-scale dislocations that
would justify a further delay, which is my final point, and I
want to elaborate on it because I am seeing--I will not
elaborate on it because I saw your positive affirmation that
there will not be a delay, so I won't have to convince you why
it is great to stay the course.
So I thank you for your time, and I would be happy to
answer any questions.
[The prepared statement of Mr. Shapiro
follows:]*************** INSERT E ***************
Mr. Boucher. Thank you very much, Mr. Shapiro.
Mr. Morrill.
STATEMENT OF PETER MORRILL
Mr. Morrill. Thank you, Mr. Chairman and Ranking Members
Stearns and members of the committee, especially Mr. Dingell.
It is an honor and a pleasure to be here and for the honor to
be able to testify before you on behalf of Idaho Public
Television and the Association of Public Television Stations.
Now, I come to you from a State whose geography has always
challenged the human spirit. In 1805, our Bitterroot Mountains
nearly repelled the Lewis and Clark Expedition. The Oregon
Trail that crosses our southern desert has always been called
the world's longest cemetery due to the toll it took on
pioneering families.
Idaho public television, which reaches 97 percent of the
State's population, has worked for a decade to ensure that the
digital transition gets a little friendlier reception. Since
last July alone we have broadcast more than 52 hours of DTV
consumer education announcements. Not programs, but
announcements. Our efforts were bolstered in January by the
$35,000 DTV Consumer Assistance Grant that we received from the
FCC. We hired an additional full-time engineer dedicated to
responding to viewers' technical inquiries and produced two
programs and six informational spots discussing the transition,
including the importance of antenna placement and VHF, UHF
channel changes.
Other public television station recipients of the FCC grant
launched their own initiatives. For example, as noted by
Representative Space, WOSU from Columbus, Ohio, teamed with
local agencies for the elderly to train staff and volunteers to
install converter boxes in homes and senior residences.
Congress has specified $90 million of the stimulus funds be
steered toward DTV consumer outreach. We are hopeful that much
of that funding can be directed towards public television
stations to build upon the success of the first wave of grants.
Local public television stations have a unique combination of
public trust, technical expertise, and unmatched local access
that will enable us to provide necessary assistance.
I urge the committee to focus on the last few steps between
the antenna and the TV set, which is where consumers are going
to need the most help between now and June 12. My experience
has been that there is an over-arching need for in-home
assistance for converter box scanning and antenna installation,
particularly for the elderly. Other top priorities should be
telephone and walk-in help centers staffed with well-trained
personnel ready to help with location and station-specific
issues.
We also need to be realistic about the limits of consumer
education. As Chairman Copps noted earlier, some viewers will
not be able to receive all of the stations they did before the
transition. In those cases full station disclosure is vital.
For example, in Idaho some viewers within our service
contour will lose coverage because, well, the digital signal
doesn't travel well through those darn mountains. In late
December the FCC introduced options for stations to fill in
these holes using translators, but because of the short
timeframe and the desperate economic conditions that exist
right now, it will be extremely difficult to finance and deploy
these systems.
I respectfully request that this committee assist by
supporting digital television fill-in service by granting
stations at least 2 years to build out such systems and by
making funding available immediately without a local match
requirement.
Finally, I must emphasize the need for increased federal
funding for public television station operations to offset
dramatic declines in revenue from non-federal sources of
funding. Individual contributions, corporate underwriting,
foundation and State support constitute 85 percent of our total
operating revenue. Every day brings more news of station
programming, personnel, and service cuts. Some stations are in
a fight for survival.
In Idaho we are projecting that the State will reduce our
fiscal operating budget by nearly $300,000 from the previous
year and will eliminate our $1.1 million request needed for
capital equipment for our last major piece of the State-wide
digital conversion. Think DTV fill-in translators here.
Finally, public broadcasting provides important educational
programming, especially for pre-school children. We are the
most trusted source of news and information at a time when
media are increasingly fragmented and newspapers are failing.
We are virtually the only source remaining for cultural arts TV
programming. We ask for the support of the members of this
authorizing committee for increased federal funding so that
public television may weather this economic typhoon and
continue to provide innovative public media content and
outreach to help all Americans do the same.
Thank you very much for this opportunity, and I will look
forward to answering any questions that you might have.
[The prepared statement of Mr. Morrill
follows:]*************** INSERT F ***************
Mr. Boucher. Thank you very much, Mr. Morrill.
Mr. Lloyd, you are recognized for 5 minutes.
STATEMENT OF MARK LLOYD
Mr. Lloyd. Thank you very much. It is an honor to be here.
Thank you very much and really appreciate the leadership of
this committee and especially Chairman Emeritus Dingell for
sort of following these issues so closely and vigorously over
the years.
My name is Mark Lloyd. I am the Vice President for
Strategic Initiatives of the Leadership Conference on Civil
Rights and Leadership Conference on Civil Rights Education
Fund. LCCREF is a national social justice organization working
to establish equal opportunity in America through education and
public outreach.
We have been working on informing the public about the
digital television transition for about 2 years now, and this
work includes participating in the DTV Steering Committee and
on the DTV Coalition, presenting at national conferences, and
thanks to a grant from NTIA working on the ground in seven
markets since last December to assist vulnerable populations
make the transition to digital television. These populations
include the poor, ethnic minorities, senior citizens, and
people with disabilities.
We are working in Portland, in the Seattle, Tacoma market,
in the San Francisco Bay area, San Antonio, Minneapolis,
Atlanta, and yes, Mr. Dingell, Detroit. We are assisting with
people, filing applications for the DTV converter boxes
request, helping people identify and acquire the converter box
most appropriate to their needs, working to help people set up
the equipment in their homes to continue to receive over-the-
air television service.
We believe, as we think Congress intended, that all
Americans should have access to free, over-the-air television
service, and our work on the ground has confirmed that free,
over-the-air service is a vital lifeline for many in our
communities.
We would like to thank Congress again for adjusting the DTV
or the TV Translator Program and authorizing NTIA to distribute
additional funds for our educational work, and it is this
funding that makes our work possible in the seven cities. And
we would like to thank you for extending the transition date to
June 12 and providing additional funds to support the
educational and outreach effort.
We can assure you that many Americans in the communities
that we were working in were frankly panicked, were panicked in
December when they found out from NTIA that they had run out of
funds and that they were establishing a waiting list for
coupons. More time was clearly needed to prepare for this
transition. We can also assure you that we have made very good
use of taxpayer dollars in our outreach to vulnerable
communities.
In the seven markets that we have opened up over 16 DTV
assistant centers established relations with a couple of dozen
DTV partners and provided direct assistance for roughly 20,000
individuals in several different languages. In each of our
cities we have established coupon exchange programs. Our DTV
assistance centers and other partners help roughly 100 walk-ins
and telephone callers every day. We have connected community
groups to both mainstream public and commercial media, and our
work with ethnic media has allowed us to reach groups the
ubiquitous TV PSAs did not reach.
All of our assistance centers were inundated with calls on
February 17 and the 2 days that followed. Many of the calls
were about reception problems, but for the most part they
reflected general confusion about whether the transition was
happening or not. These calls petered out after the first few
days, but the confusion frankly still continues.
We are now providing daily news updates and reports to some
70 people working on the ground on our front lines. We call
news articles and reports about what is happening with the
transition that we get from our contacts here on the Hill, at
the FCC, at NTIA, at the White House, and with the DTV
Transition Coalition. But we also provide a central hub for all
of our different partners to learn and share with each other
how best to reach these most vulnerable, hard-to-reach
communities.
One of the key problems, continuing problems is the
reception. A converter box is simply not enough. Many of the
calls that we get are folks who need new antennas. Sometimes
they need powered antennas. We have found the FCC's online map
very useful in helping to identify potential signals at
locations, but we have also found DTV reception to be
inconsistent in the same community and in the same apartment
building.
Our local partners have been very careful to say we can
provide general guidance, but we cannot predict what channels a
viewer is going to be able to get. We believe that the work of
identifying marginalized communities before the transition is
vital. This is difficult work, but it is vital.
We have also called Long Call for a rapid response plan to
identify and serve those households which for one reason or
another will fall through the cracks. We believe this work will
continue well past the mid-June deadline. We would very much
like to continue to assist in the effort to help these
vulnerable communities keep free over-the-air television
service, was happy to hear Anna Gomez announce that we were
going to get funding, but frankly we are still in negotiation,
and we are not quite sure what that means as of this point.
I very much look forward to your questions. Again, thank
you very much for your continued oversight and interest in
these issues.
[The prepared statement of Mr. Lloyd
follows:]*************** INSERT G ***************
Mr. Weiner. [Presiding] Thank you for testifying, Mr.
Lloyd.
Mr. Prather, you are recognized for 5 minutes.
STATEMENT OF ROBERT S. PRATHER, JR.
Mr. Prather. Thank you, Mr. Weiner, Mr. Dingell. My name is
Robert S. Prather, Jr. I am President of Gray Television, and I
want to thank you for inviting us to speak here today.
Gray Television is a public company listed on the New York
Stock Exchange, headquartered in Atlanta, Georgia. We currently
own 36 stations in 30 markets, TMAs 58 to 188. In addition, we
are broadcasting 40 digital channels on our digital spectrum
through the multi-cast. We have got 17 CBS, 10 NBC, 8 ABC, and
1 lonely FOX.
We are very proud of the fact that we have got 24 stations
out of our group that are number one leaders in their markets,
16 have been number one for 50 straight years or more, which
tells you we have got a long history of being a part of the
fabric of these communities. We have one station in Huntington,
Charleston, West Virginia, that is celebrating its 60th
anniversary, and it has been number one every day since it has
been on the air. So very proud of that.
But as of February 17, 28 Gray stations transitioned to
DTV. We believe our stations give a great case study of how
preparation, community outreach, and willingness to go the
extra mile can prepare viewers for DTV. One thing we said right
up front was we want one viewer at a time, and we had every one
of our managers committed to making sure we took care of every
single viewer that called or came to the station, e-mailed,
however they wanted to contact us. We made sure that they got
taken care of.
We spent over $60 million getting ready for digital
television in both transition equipment and high definition
equipment, and we spent heavily on education and production of
education material for the consumer. Our approach can best be
summed up by Brad Ramsey, our manager in Charlottesville,
Virginia, who said, ``We saw the education process as an
opportunity, not a burden.''
And in response to FCC Educational Initiative, we started
company-wide coordinated consumer education program in March of
2008. Our stations exceeded the commission's call for education
by consistently airing more public service announcements,
informational calls, and 30-minute informational segments that
the agency rules required. Our stations extended the consumer
education by regularly including DTV transition in our
newscast. In addition, many of our stations participated in
market-wide voluntary soft tests that showed viewers what would
happen if they were not prepared for the DTV transition.
Earlier this year it was clear that there was a small
percentage of television viewers that would not be ready on
February 17. For broadcasters a delay could mean many forfeited
dollars for tower crews and months of extra utility bills to
keep two transmitters going. I think Congress wisely balanced
the competing needs of unprepared viewers and broadcasters in
the DTV Delay Act.
Gravely, this station's markets were ready on February 17.
Furthermore, we believe the viewers would face the same type of
difficulties whether transition occurred in February or in
June. I personally task all our general managers with assessing
whether to proceed with the transition as scheduled or to
delay. Our general managers were instructed to consider a
number of factors, including market readiness, individual
viewer feedback, schedules for tower and equipment work, and
whether the station was moving to a different post-transition
digital channel and transmitter utility costs.
Twenty-two of our stations moved forward on the transition
plan. Eight stations decided to stay with the analog. In fact,
one of our eight stations, WHSV in Harrisonburg, Virginia,
initially moved with the transition but then reassessed its
decision 4 days later and requested authority from the
commission to resume analog broadcasts. WHSV's location in the
Shenandoah Valley in Virginia left it susceptible to a loss of
service in several communities because the station's digital
signal was blocked by mountainous terrain.
Although the majority of the viewers in the market were
ready for the transition, our general manager made the decision
to resume analog broadcast in order to use the additional time
to seek alternative methods to serve these communities.
Specifically, WHSV is working to acquire and convert TV
translator stations to carry WHSV's digital signal to those
areas where they may experience a total loss of service.
The number and complexity of viewer calls received on or
immediately after each station's transition varied
significantly by market. Yet in all markets certain trends were
clear. As expected, the volume of calls peaked on stations
transition day, declined steadily every day thereafter. The
majority of the issues could be resolved by providing
instructions over the phone, and station employees went to
extraordinary lengths to aid the handful of viewers who could
not be helped by over-the-phone instructions. In many markets
we had station employees that made house calls to assist
viewers who had more complex problems.
Over and over again Gray stations found that the calls fell
in the same basic categories; improper installation of
converter boxes, the need to rescan DTV sets or converter box
in order to receive the stations on new digital channel, and
antenna issues associated with stations that were moving from
VHF to UHF channels or vice versa. In Gray's experience
questions on how to obtain a coupon or about the status of a
coupon wait list represented a very small fraction of the calls
and even fewer from individuals who were not aware of the
digital transition.
For Gray the digital transition has been a positive
experience. The majority of Gray's viewers are ready for DTV,
but the viewers who were not fully ready, the majority of their
specific concerns could not have been identified or resolved
until a core group of stations completed the transition.
I appreciate the opportunity to appear before the
subcommittee and look forward to any questions you might have.
Thank you, sir.
[The prepared statement of Mr. Prather
follows:]*************** INSERT H ***************
Mr. Weiner. Well, thank you very much. I yield myself 5
minutes.
Mr. Prather, in some degrees you were the canary in the
coalmine on a couple of issues. Right?
Mr. Prather. Yes.
Mr. Weiner. You have the transition, you even had one that
transitioned back.
Mr. Prather. Yes.
Mr. Weiner. Is June going to be sufficient time for that
station that transitioned to move the mountains and to--I mean,
I see that there are structural problems that you face. Mr.
Morrill referred to them as well.
Mr. Prather. That is a good question. I think the real
issue in our particular case is they could get an analog signal
in these mountains, but we are on channel three, which allows--
is a better coverage in mountainous terrain. They could not get
it on our digital channel, and we are working with the,
actually with the county and the State, it is part West
Virginia, part Virginia, to set up some translators, which we
think we can get done by June where those people can still--
they are not even in our market area, but they have been used
to getting our signal for a long time, they like our local
news. We are really the dominant broadcaster in that part of
the country, and so we want to serve those people. So I think
we will be able to, and you know, our manager made the decision
to move back because she felt it was important to do the right
thing in the community.
Mr. Weiner. Well, as I referred in the question to the
panel and Mr. Copps referred to it as well, that this, you
know, weird way, the glitch here and the delay has given
opportunity for some testing that wasn't contemplated by the
original law.
Mr. Prather. I think that is true, and I think, you know,
people can learn from both the good things that happened with
us and, you know, some of the things, questions. I think the
biggest question that came up for us was antenna issues, which
frankly we didn't anticipate it. We thought it would be more
box issues but----
Mr. Weiner. Well, I have to tell you. Despite Mr. Shapiro's
ammunition that we shouldn't have delayed it and we shouldn't
delay it any further, there is--you are going to be getting a
lot of people walking into your retailer saying, hey, what have
you got for a mountain obstacle, or what have you got, I mean,
I think that we have to be prepared for.
Mr. Lloyd, we have got about 15 percent of the population
went through a transition of some sort, but it seems to me just
sort of glancing at the list, they are not communities that
have disproportionate numbers of English as second language,
not a large number of communities that have high levels of
need, not the type of communities that you were tasked with
reaching out to.
All that being said, were there some lessons in those
little pockets that you have now taken and said, oh, we are in
for a mess, or that this isn't going to be so bad? Did you
learn anything from that 15 percent population?
Mr. Lloyd. Well, mainly what we have learned is the real
importance of high touch, direct assistance for some of these
populations, and that I think it is very easy for those of us
who are relatively comfortable and sophisticated not to
understand the confusion that is created with this transition.
Even with people who have boxes, the idea that you need to
rescan the box can be very confusing, and we have gone into
homes with senior citizens, people who really view television
as a lifeline service. And really they have been in tears at
the confusion, thinking that they were going to be able to,
they were going to lose television service.
So part of what we have learned is the real importance of
being able to go in the homes, of being able to communicate
directly in language, in Mong, in Vietnamese, and obviously
Spanish and a wide variety of languages, that this is not going
to be handled easily by a PSA campaign or something that is
just going to reach the general population. These are tough
populations to reach.
Mr. Weiner. You also have a cultural sense among many
senior citizens that the television is essentially a piece of
furniture, and it turns a switch, something goes on, and I
think that one of the experiences that is going to be toughest
is that the way we are taught to think about television, we are
not used to the idea that bad reception means no reception. So
that is a cultural thing that we need to, I imagine that we
need to overcome as well.
Mr. Lloyd. Well, that is right. I mean, the other thing
just very quickly is that a number of folks that we have talked
to had cable service. They want over-the-air service. They
don't think they can continue to actually afford to continue
cable service. And so I think some of the concern about over-
the-air television and the need for over-the-air television
needs to be more fully understood.
Mr. Weiner. Uh-huh. Mr. Morrill, just, I am curious not
because I represent a community like Idaho, but what--have you
found that the fixes that you needed to do to deal with the
mountainous terrain, have you, I mean, have you found that the
technological fixes that your colleague is trying to explain
how they work by and large?
Mr. Morrill. Well, Mr. Chairman, I do want to point out
that first of all the vast majority of our viewers that view
over-the-air digital TV in Idaho are in great shape. We have
got some great mountaintop transmitter locations that provide
outstanding coverage, but we do have some persistent pockets,
primarily in mountainous communities, that do need immediate
attention by my organization, and I hope the Federal
Government. These digital fill-in areas are going to be well
served by the new guidelines set forth by the FCC.
We are hopeful that those guidelines will be updated so
that local stations will actually be able to get them on the
air in a timely basis, but it all comes down to, sir, funding.
In this economic crisis especially now I am doubtful that given
the current guidelines and funding that we aren't going to be
able to get them on unless we have your assistance.
Mr. Weiner. The gentleman from Illinois recognized for 5
minutes.
Mr. Shimkus. Thank you, Mr. Chairman. I am going to try to
go quickly.
Mr. Wood, how much has Univision paid in essence
advertising in public, you know, announcements to prepare for
the transition, the original one and edition two?
Mr. Wood. You know, I can't give you a figure. It is a
substantial amount, 100,000 PSAs, 30-second spots running in
prime time and throughout the day is probably a fairly
substantial value.
Mr. Shimkus. We are talking lots of money. Right?
Mr. Wood. Lots of money.
Mr. Shimkus. And we want to thank you for that, because
prior what we focused on, and we knew that the industry would
step up to the plate, and they have done much, multiple more
than what the government could do, and I would argue a better
job of doing that.
Mr. Severson, there was some opening statements, talk that
mentioned the fact that we will run out of digital receivers.
Do you believe that? That there won't be enough.
Mr. Severson. There won't be enough converter boxes?
Mr. Shimkus. Yes. Converter boxes for people to buy. You
probably have, Wal-Mart probably got enough for----
Mr. Severson. I don't know that anyone has established what
the right number is yet.
Mr. Shimkus. Right.
Mr. Severson. And so that is a challenge for us to all
figure out. As we react, the one thing we do, we greatly
appreciate the information that the NTIA feeds us on a constant
basis in terms of where those coupons are going, how----
Mr. Shimkus. Well, I bought my two from Wal-Mart.
Mr. Severson. Thank you.
Mr. Shimkus. I want you to know. I got my coupons, I did it
early, I listened to the great advertisements, and I have got
my antennas, and they work. So let me----
Mr. Severson. We appreciate your business.
Mr. Shimkus. Yes. Let me--Mr. Shapiro, in the debate on the
floor when we, I think foolishly, delayed this, and I shouldn't
mention this because he is not here, but Mr. Boucher promised
me on the floor that we would not delay it any further. So I
know that is your concern. I will, as he knows, will remind him
of those statements that--oh, and there he is. Perfect timing,
walking in the door.
Mr. Boucher, I was just saying how on the debate on the
floor you were pretty strong about committing not to delay this
any--you would do all in your power not to delay this anymore.
So I was just relating that story and in hopes that that will
be your continued position.
Mr. Boucher. Would the gentleman yield?
Mr. Shimkus. I would be honored to yield.
Mr. Boucher. You have an excellent memory.
Mr. Shimkus. And without notes from my staff. That is even
better.
The--I want to ask for unanimous consent for a statement
submitted by Qualcomm to be submitted in the record, Mr.
Chairman.
Mr. Boucher. Without objection.
[The information appears at the conclusion of the
hearing.]*************** COMMITTEE INSERT ***************
Mr. Shimkus. And it just points out, and Mr. Dingell is
here, and I have heard him numerous times talk about the
takings provisions of the Constitution. And one the reasons I
had real problems with this legislation is because of the
spectrum auction, a promise of a good, paid for, and then was
taken away, because of the delay, the full use of the 700
megahertz spectrum was not used as initially negotiated, and I
think the letter highlights that there was some harm done by
pushing this back, and that is what the letter actually
highlights.
This question is for the entire panel. We originally wanted
to provide coupons just to exclusively over-the-air homes, the
ones that were actually at risk for losing service. We made
paid television households eligible at the insistence of my
friends on the other side, and about half the money ended up
being spent on those homes.
In hindsight should we have stuck to our guns and focused
only on over-the-air homes? Should we do so now to make sure we
don't have to delay again?
Mr. Wood.
Mr. Wood. That is hard for me to answer. I think that is--
--
Mr. Shimkus. We love putting people in hard-to-answer
questions.
Mr. Wood. You know----
Mr. Shimkus. That is part of our job here.
Mr. Wood. --I will tell you that a substantial proportion
of our audience is over-the-air, that a greater proportion of
our audience than households at large are over-the-air
households, that that has been an obstacle for Hispanic
households in the transition, but as to who the coupons go to,
which houses, I think that is a policy matter.
Mr. Shimkus. That is fine. Mr. Severson.
Mr. Severson. I feel very similarly that we are here to
take care of the customers, and in this case you have helped
determine who those customers are.
Mr. Shimkus. OK. Mr. Shapiro.
Mr. Shapiro. I know Chairman Boucher is concerned about, as
we all are, about the number of boxes that will be left in
those final days, and that is a very difficult decision for
retailers to make an investment in a product which has a very
limited life. It is kind of like food that spoils. And
manufacturers also making that manufacturing investments
decision.
So we have done a lot of work to try to research as to what
that number will be, and we came up with an estimate that we
think is good, and we think there is enough boxes out there.
But as we have suggested before, if it comes right down to
it, if it comes down to the end and there are not enough boxes
available or there is not enough funding in the program or
whatever it is, there are other alternatives that I think
policymakers should consider. One is to have those coupons
available and to be used for basic cable service or for
satellite or for an upper-end box or even for a stripped down
TV set.
In terms of allocating them, obviously if it comes down to
the end and there is just not enough money in the program or
not enough boxes, that would be a logical triage for
policymakers to face, but I am sure the NTIA people will be
looking to you for guidance.
Mr. Shimkus. Mr. Morrill.
Mr. Morrill. I think in the perfect world, and we don't
live in a perfect world, yes, everyone should get a coupon, but
clearly it makes sense in a world where we don't have unlimited
resources that putting a priority on those homes that are
exclusively over-the-air kind of makes sense.
Mr. Shimkus. Mr. Lloyd.
Mr. Lloyd. Yes. I think it makes sense to put a priority on
over-the-air households, but I would say I don't think over-
the-air households and free and pay TV are fixed numbers. There
are people who have pay TV who want to be over-the-air, and if
they are locked in and you don't have the opportunity to get to
them, they are not going to make the switch.
Mr. Shimkus. And Mr. Prather.
Mr. Prather. You know, first of all, I think everybody in
this room would agree that digital television is a superior
product to what analog is, so I think everybody in America is
going to be getting a better product, and I definitely think
over-the-air ought to be a priority. I think if you can afford
cable, you can afford to, you know, if you need to buy a box
for one TV that is not hooked up to it, but I am a big believer
that television is very important to everybody in America.
Virtually 100 percent of the people have them, and as I said,
we are providing a superior product, much better than anybody
has ever had in the history of television.
Mr. Shimkus. Thank you, and thank you, Mr. Chairman. I will
just end by saying I am excited about the transition. I think
the public needs competitive choices, and because of the things
you just mentioned, Mr. Prather, now they really do. I have had
people leave cable. I hate to say that to some of my friends,
to go over-the-air. They no longer have that additional cost,
and they have quality and a lot more channels than they had
before.
And thank you, Mr. Chairman.
Mr. Boucher. Thank you, Mr. Shimkus.
The gentleman from Michigan, Mr. Dingell, is recognized for
5 minutes.
Mr. Dingell. Thank you, Mr. Chairman.
This question is to Mr. Shapiro. It was reported last year
you accused Congressional Democrats of fear-mongering, and I
quote there, ``when we expressed concerns about whether this
program was going to work and consumers were going to be
properly treated.'' Did you ever make that comment?
Mr. Shapiro. I am happy to say that we contacted that
reporter and asked where they got that from. I was accusing the
fear monger, of fear-mongering, which were actually individuals
in the private sector, specifically probably the consumers'
union.
Mr. Dingell. So you never said it?
Mr. Shapiro. I definitely used the word, fear-mongering,
but I wasn't referring to elected officials. I was referring to
self-declared consumer representatives.
Mr. Dingell. OK. All right. That comforts me.
Starting with Mr. Wood, and we will go across the panel
here because I would like to hear all of your judgments and
thoughts on this matter. What is, and you got to do this in
about 25 words or less because we don't have much time, but
what is the biggest single problem that has to be addressed
here? And what is the way of getting the greatest benefit to
the consumers to be achieved by this committee, the Congress,
and the regulatory agencies?
Mr. Wood. I think for the community we serve the Hispanic
households in America. I think they started out behind. I think
a greater percent are over-the-air television viewers. They had
further to go, fewer of them were connected to start with.
So as of today we see on March 15 Neilson estimated that
6.1 percent of Hispanic households are not prepared, are not
hooked up, which is 2.5 percent greater than the households as
a whole in the United States.
Mr. Dingell. What can we do about this?
Mr. Wood. The good news is that it is coming down. As of
the original transition date the number then was----
Mr. Dingell. What do we do about this?
Mr. Wood. What we are going to do is we are going to
continue to reach out and continue to bring down the number. We
are going to introduce new phases of our campaign where we
address the feedback we have gotten, Mr. Chairman. For
example----
Mr. Dingell. Do you have any advice to the committee as to
what we should see is done about this?
Mr. Wood. Well, what we are going to focus on is antennas,
the need to scan, exactly the things that Chairman Copps
mentioned in the first panel. I think that the items that they
have identified are the correct items. It is the same feedback
we have gotten.
Mr. Dingell. I got to go to the next panel members. Mr.
Severson.
Mr. Severson. Thank you. The biggest concern I have, the
biggest challenges that we have got to stop changing things.
The customer is confused, and so we just need to stick to our
guns, stick to the date, and start re-communicating things----
Mr. Dingell. What can be done about that?
Mr. Severson. I am sorry?
Mr. Dingell. What is to be done about that?
Mr. Severson. What is to be done? To make sure that we
communicate on an ongoing basis that June 12 is the date, and
that the customers understand that.
Mr. Dingell. That is regulatory agencies, the FCC and the
NTIA. What are they to do about that?
Mr. Severson. I think that the role that they are playing
with us in terms of feeding us good information is exactly what
we need because that allows us to determine future demand.
Mr. Dingell. Thank you, sir. Mr. Shapiro.
Mr. Shapiro. I can't think of a more successful public
education effort than the one of the industry and government
has worked on together for this one. I suspect that more people
know about this transition than can name the present Vice
President of the United States or the previous Vice President
of the United States. It has succeeded. The challenge is one
change is almost a bye, and it is very confusing. Our
experience of the consumers is--and we have asked a lot. We
have done research for years and years on this. Their awareness
is very high, but now they are a little confused about the date
because February has passed, and analog is still there for some
of them.
So not change----
Mr. Dingell. What would the regulatory agencies----
Mr. Shapiro. Well, I would say Congress should do no harm
and not changing it. The regulatory agencies are doing a great
job, finish out the program, declare victory, and move on. A
year from now we will look back at this and the rest of the
world will look back and say the U.S. had the most successful
transition in history. We will be the example for the world.
Europe and Japan both screwed this up and had to start over.
Mr. Dingell. I have to go to other members of the panel.
Mr. Morrill.
Mr. Morrill. Well, there have actually been some pretty
good ideas coming down the line here. I would have to say the
number one thing is continued investment in consumer education.
That would be my number one, and of course, I can't give up on
this fill-in translator issue also. Investment in that so that
people that have had high quality over-the-air service will
continue to get it after the transition.
Mr. Dingell. Mr. Lloyd.
Mr. Lloyd. Chairman Dingell, I would just say it is
extraordinarily important for this committee to continue the
close oversight of what the agencies do and to ask directly
whether or not they are making sure they are funding people who
are on the ground to get to those hard-to-reach, vulnerable
communities that the PSAs didn't get to. And, again, making
sure that there are people on the ground who are hearing from
people and that they are getting the assistance that they need
to get the service.
Mr. Dingell. Thank you. Mr. Prather.
Mr. Prather. Mr. Dingell, I think the FCC, and I think they
have done a relatively good job of this, should take the same
attitude that we took of one viewer at a time and just, you
know, have phone banks and make sure they have got people that
are trained and educated to answer these questions. We found
out that we had out of 28 stations we had roughly less than
10,000 phone calls. We answered every single one of them, and
we spent from a minute to 45 minutes with people, going through
what they need to do. I would say 80 or 90 percent of the
questions were related to how do I turn this converter box on
or how do I scan it. Probably the second was regarding the
antenna issues, going from VHF, UHF, those things.
But I don't think we left a single person feeling like they
hadn't gotten service, and like I said, we even went to
peoples' homes that were really, knew they had a problem or it
was some issue that we couldn't solve over the phone. And I
know the FCC can't go to peoples' homes, but I think the phone
banks and just the education of the people they got answering
the calls around the country can do the same thing that we have
done.
And I think most stations that are community oriented like
we are will also take that same approach, because our viewers
are our most important asset.
Mr. Dingell. Thank you. Mr. Chairman, I have a unanimous
consent request before I yield the floor. I am going to send a
letter down to the NTIA and the FCC requesting certain
information. I would ask unanimous consent that that letter be
inserted in the record and that the record be kept open to
receive the responses of the FCC and the NTIA.
Mr. Boucher. Without objection and the record will remain
open for public members to submit questions to our panel of
witnesses and for those responses to be received.
Anything further, Mr. Dingell?
The question that I want to focus on relates to the level
of assurance we have that we will have a sufficient number of
converter boxes available as we approach June the 12th.
But before I turn to that question, let me say for what
probably now is the at least tenth time, that there shall be no
further postponement of the DTV transition. And no requests for
further postponements will be entertained by this subcommittee.
Chairman Waxman has been equally demonstrative in expressing
the same viewpoint from his vantage point as full committee
chairman. So rest assured that there shall be no further
postponement.
Mr. Shapiro and Mr. Severson, my questions are going to be
primarily directed to the two of you, but other panel members
are welcome to comment as you desire.
I am concerned about whether or not we are going to have
adequate converter boxes available, and I am just looking at a
series of numbers that don't seem to match. As of yesterday in
the report that we got from NTIA there were almost 9.3 million
coupons that had been issued but not redeemed. These are active
coupons in circulation.
The current conversion rate, the redemption rate that we
have for coupons redeemed for converter boxes is right at 60
percent, and assuming that that rate is experienced from now
until June, we could certainly anticipate that as many as 5.5
million boxes would be necessary just to meet the 60 percent
conversion rate the than 9.2 million coupons currently
outstanding.
And that number doesn't take into account the fact that as
of yesterday NTIA was getting more than 100,000 new requests
for coupons every day. In fact, yesterday's number was 140,000,
and we have seen the numbers continue to climb just over the
course of the last week. It went from 91,000 on Tuesday to
140,000 yesterday, and we have seen an upward curve, a
consistent upward curve over the last month. That may continue,
and obviously many of those coupons, let us assume 60 percent,
are going to be redeemed for converter boxes.
Also unaccounted for in these numbers are the converter
boxes that people simply buy with their own money and don't use
coupons in order to purchase. I heard one witness earlier today
suggest, I believe Mr. Severson, it might have been you, that
about 90 or 95 percent of your converter boxes are coupon
supported, but you have got some significant number, 5 to 10
percent, that are not. So that is even more.
And so, Mr. Shapiro, I am a little concerned about your
estimate of only 4.2 million total boxes being needed from
April until June the 12th. That doesn't seem to square with
these numbers. And rather than just quarrel about those
numbers, let me ask what perhaps is a better question, you can
respond to all of this at once, to what extent is there close
coordination from NTIA to the retailers to the manufacturers of
information about coupon requests, coupon redemptions, so that
some realistic projections can actually be made by the
manufacturers based upon good estimates of what future demands
will be?
And if the answer to that question is right, then your 4.2
million figure gives me less concern. I mean, if there really
is good flow of information, and we can have some confidence
that manufacturers really are going to respond very quickly,
and I think you used the word, nimbly, before in order to meet
whatever the demand really is.
So it is a long question. This is what concerns me the most
about the transition from this point forward. So Mr. Severson,
Mr. Shapiro, whoever wants to begin.
Mr. Severson. I will answer from a Wal-Mart perspective and
then Mr. Shapiro can answer from an industry perspective.
As I stated before, the information that we get on a weekly
basis from the NTIA is invaluable. We get information in terms
of totals but also by zip code so that we can break those down,
look at the redemption rate, look at our market share of that
product. That allows us to not only understand where we should
be sending product, because it has to be distributed throughout
the United States, but also allows us to understand the trend
of the coupons and the redemption rates and things like that.
We are--so we analyze that data on a weekly basis by store.
Over 4,500--our systems allow us to look at that and make those
determinations and determine do we have enough product coming.
Rest assured there is always product in the pipeline, and then
when do we need to go out and order more product to be able to
manufacture and have product on hand for the month and a half
to 2 months from now that we are going to need that product.
Mr. Boucher. And how nimbly do these manufacturers respond
to your information suggesting that you are going to have an
increased demand?
Mr. Severson. Sure. So we work with two suppliers
specifically that we partnered with a year and a half ago to
determine these are folks that we do a lot of business with,
they are ones that are going to work very closely with us, they
are in it for the long haul, not just for a transactional
basis. They are going to make sure that they build a quality
product and be able to deliver it on time.
So we feel fairly confident as we work with them on an
ongoing basis to talk about the supply and also the parts that
are needed and the timing. We are in the business of taking
care of our customers. That is what we do, and so we are
reacting to our customer and how they are looking to be served
on this so that we can take care of them.
Mr. Boucher. And the manufacturers are responding
appropriately as you tell them you need new boxes?
Mr. Severson. We are their customer, and they are
responding to us. So, yes.
Mr. Boucher. So the answer is yes?
Mr. Severson. Yes.
Mr. Boucher. Are you worried? Are you worried that there
will not be enough boxes to meet the demand?
Mr. Severson. No. My biggest concern is that I will end up
with too many boxes at the end, and the demand goes away, and
then I have got nothing to do with----
Mr. Boucher. Well, you obviously have to, you know, account
for inventory and be sure that----
Mr. Severson. Absolutely.
Mr. Boucher. --you don't oversupply.
Mr. Severson. Sure.
Mr. Boucher. Mr. Shapiro, where did you get your 4.2
million number, and are you persuaded based on what you have
heard today that maybe a higher number will be required?
Mr. Shapiro. The flow of information from NTIA is very
good. I am persuaded that the number will change along the way,
it will go up or down. What we did is we have talked to----
Mr. Boucher. Well, just based on their currently
outstanding coupons and current redemption rate.
Mr. Shapiro. Well, I am not aware of the last few days
but----
Mr. Boucher. I am sorry. What?
Mr. Shapiro. --we use a 65 percent rate rather than the 60
percent rate----
Mr. Boucher. That is even higher.
Mr. Shapiro. --in terms of redemption. You might have gone
a little further out in time than we did, so maybe that
balances out, and you also have more recent data than we were
using. But what we did is we went out to major manufacturers,
major retailers, and they are very cooperative with us for the
most part. We don't get everybody, but we get most of them on
both sides. And we know that at least four manufacturers are
still making these boxes today. And they are responding to
people like Mr. Severson next to me immediately, and they are
monitoring this.
So it is a marketplace, and you know, we are very mindful
of the Anti-Trust Laws. We have considered going out with
direct questions perhaps with your signature or someone else's
like you would be very helpful in terms of trying to gather
actual data for what they are planning if you are that
concerned in terms of getting the precise number. But it is the
balance that every store is facing the same one. Do you order
too much or do you order too little? They hate to say, you
know, send a customer elsewhere, but they don't want to get
stuck with inventory which has no value.
We are already starting to see scores of these things on
eBay and Amazon at under the $40 coupon value. Now, there is a
secondary market developing. You know, the flea market is a
wonderful thing. So in terms of where we end up, the number is
starting to change, but that is a good thing, and we expect
there will be spot shortages, which--and there may even be
occasionally a minor locality or geographic shortage, but
sophisticated retailers are always moving around and respond to
a situation.
Mr. Boucher. My concern about your number is that the
manufacturers may look to you being here, being close to the
situation, following it through your trade association every
day, talking to NTIA on a regular basis, for advice as to the
number of boxes they ought to manufacture. And if 4.2 million
becomes the benchmark, we are going to fall short. We will fall
short even based on the outstanding coupons that exist today,
much less the ones that are going to be requested in the
future.
And so I am concerned about that. I welcome your suggestion
that perhaps there is a role we can play through making
appropriate inquiries to manufacturers and or retailers.
Perhaps in the course of our letters asking questions
containing the projections that we see just based on the
numbers presented and suggesting that higher number of boxes
may be necessary.
And if you would care to interact with us informally
afterwards and make more concrete suggestions about what might
be constructive in that respect, we would welcome it.
But I hope that as your manufacturers are talking with you
that you are giving them some very clear guidance about this
and sharing NTIA's current numbers so that they actually have
the benefit of that also.
Mr. Shapiro. You know, there is one thing that concerns an
association. It is the Anti-Trust Laws, and we don't give
guidance. We try to communicate the facts.
Mr. Boucher. You can share information.
Mr. Shapiro. We will be happy to share information
consistent with the law. The $140,000, the 140,000 unit a day
request for coupons, if that continues, the numbers will go up
rapidly, but the normalized rate that we were using was 70,000
coupons a day.
Mr. Boucher. It is higher today.
Mr. Prather.
Mr. Prather. Chairman, I will maybe try to relieve your
mind a little bit. I know----
Mr. Boucher. I would appreciate that.
Mr. Prather. --we haven't gotten into the big cities yet,
but in our markets, which is DMA 58 to 188, to give you an
example in Omaha, market 75, we had a little over 600 calls. We
had 33 calls asking about coupons. In Lincoln, which is market
101, we had 1,016 calls. We had two calls asking about coupons.
And Augusta, Georgia, which has a heavy minority of black,
Spanish, and Chinese, we had 3,000 calls there, but it was 90
percent related to how do I turn the box on? I mean, literally,
you know, and how do I scan it. We had less than 50 calls there
about coupons.
So in our markets, and I am saying I am not speaking for
New York City and Chicago and Detroit and all these other
places, but it didn't seem to be very much of an issue at all
in our markets----
Mr. Boucher. Well, thank you.
Mr. Prather. --if they didn't have a coupon and couldn't
get it, you think they would have been calling----
Mr. Boucher. Well, thank you for that, Mr. Prather. That is
not the problem I am really addressing. It is not the situation
about box availability today, which is adequate. It is the
situation about box availability in May when we may find that
we have a shortage. And we are not going to postpone this
transition again, so we need to get it right and----
Mr. Prather. Yes.
Mr. Boucher. --this is why we are having the hearing today
to figure out what needs to be done to make sure we don't have
future problems.
Anyone else want to comment on this? Mr. Shapiro.
Mr. Shapiro. Could I just say, Mr. Boucher, I don't know if
you were in the room when I suggested this earlier but the
back-up plan that I would suggest is if there not enough boxes
available, then the government in a big sense be ready to
declare such and allow those coupons to be used for converter
boxes which are not eligible, higher end, cable service,
satellite, or even lower-end HDTVs as a back up.
But the danger in even talking about that is then you will
have all these people who want coupons on the basis that maybe
that will occur. So it is a little bit of a catch 22, but that
is the safety valve that is possible.
Mr. Boucher. To be taken under advisement. I had sketched
out a question here about what is being done in order to help
people who are having problems with antennas once they install
their converter boxes, and I suspect everyone here who is on
the front line of offering assistance is experiencing requests
for that.
But I think you have answered those questions in response
to questions posed by other members. And it is also been quite
a long day, and you have been most patient and staying with us
through a long break while we had votes on the floor.
So I want to say thank you. This has been an
extraordinarily helpful session today. Both panels have been
superb in their testimony and have enlightened up, and we
probably will be sending some additional questions to you as
other members of the subcommittee submit their questions. When
those arrive, please respond as quickly as you can.
So with thanks to both panels of witnesses, oh, and I am
supposed to put this in the record. Mr. Shimkus, he is gone.
Well, I can, I am the only one who gets to object, and I don't
intend to. Well, so, unanimous consent is granted to place in
the record the statement of Mr. Bill Stone, Senior Vice
President of Qualcomm regarding the digital television
transition. Also the statement of the Community Broadcasters'
Association.
[The information appears at the conclusion of the
hearing.]*************** COMMITTEE INSERT ***************
Mr. Boucher. All right. No one is objecting. So without
objection.
And thank you so much for your presentations today. With
that the hearing stands adjourned.
[Whereupon, at 2:00 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]