[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

                              ----------                              
                                                                   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........................................................

----------
\1\ Mr. Copps did not respond to submitted questions for the 
  record.


             OVERSIGHT OF THE DIGITAL TELEVISION TRANSITION

                              ----------                              


                        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:]

                                 
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