[Federal Register Volume 72, Number 50 (Thursday, March 15, 2007)]
[Rules and Regulations]
[Pages 12097-12121]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-4668]



[[Page 12097]]

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DEPARTMENT OF COMMERCE

National Telecommunications and Information Administration

47 CFR Part 301

[Docket Number: 0612242667--7051--01]
RIN 0660-AA16


Rules to Implement and Administer a Coupon Program for Digital-
to-Analog Converter Boxes

AGENCY: National Telecommunications and Information Administration, 
Commerce.

ACTION: Final rule.

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SUMMARY: In this document, the National Telecommunications and 
Information Administration (NTIA) adopts regulations to implement and 
administer a coupon program for digital-to-analog converter boxes. This 
rule implements provisions of section 3005 of Public Law 109-171, known 
as the Digital Television Transition and Public Safety Act of 2005. 
This action amends 47 CFR Chapter III by adding part 301.

DATES: These rules become effective April 16, 2007.

ADDRESSES: A complete set of comments filed in response to the Notice 
of Proposed Rulemaking is available for public inspection at the Office 
of the Chief Counsel, National Telecommunications and Information 
Administration, Room 4713, U.S. Department of Commerce, 1401 
Constitution Avenue, N.W., Washington, D.C. The responses can also be 
viewed electronically at http://www.ntia.doc.gov.

FOR FURTHER INFORMATION CONTACT: Milton Brown, NTIA (202) 482-1816.

SUPPLEMENTARY INFORMATION:

                            TABLE OF CONTENTS
 
                                                               Paragraph
                           Heading                                No.
 
I. Background................................................       001
II. Discussion...............................................       004
  A. Eligible U.S. Households................................       004
  B. Coupon Value and Use Restrictions.......................       012
  C. Application Process.....................................       019
  D. Coupon Expiration.......................................       023
  E. Coupon-Eligible Converter Box...........................       026
  F. Manufacturer Certification..............................       096
  G. Retailer Participation..................................       103
  H. Consumer Education......................................       125
III. Procedural Matters
 

I. Background

    1. The Digital Television Transition and Public Safety Act of 2005 
(the Act), among other things, directs the Federal Communications 
Commission (FCC) to require full-power television stations to cease 
analog broadcasting and to broadcast solely digital transmissions after 
February 17, 2009.\1\ The returned analog television spectrum is to be 
auctioned, and the Act directs the FCC to deposit receipts from that 
auction into a new Treasury Fund to be known as the Digital Television 
Transition and Public Safety Fund (the Fund).\2\
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    \1\ See Title III of the Deficit Reduction Act of 2005, Pub. L. 
109-171, 120 Stat. 4, 21 (Feb. 8, 2006) (the Act). Section 3002(a) 
of the Act amends Section 309(j)(14)(A) of the Communications Act of 
1934 so that analog full-power television licenses will terminate on 
February 17, 2009. Section 3002(b) of the Act directs the FCC to 
terminate analog television licenses for full-power stations by 
February 18, 2009.
    \2\ Section 3004 of the Act.
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    2. Recognizing that consumers may wish to continue receiving 
broadcast programming over the air using analog-only televisions not 
connected to cable or satellite service, the Act authorizes NTIA to 
create a digital-to-analog converter box assistance program (Coupon 
Program). Specifically, Section 3005 of the Act directs NTIA to 
implement and administer a program through which eligible U.S. 
households may obtain via the United States Postal Service a maximum of 
two coupons of $40 each to be applied towards the purchase of a Coupon-
Eligible Converter Box (CECB).\3\ To implement the Coupon Program, the 
Act authorizes NTIA to use up to $990 million from the Fund for the 
program, including up to $100 million for program administration 
(Initial Funds).\4\ A contingent level of $510 million in additional 
funds is authorized upon a 60-day notice and certification to the 
Committee on Energy and Commerce of the House of Representatives and 
the Committee on Commerce, Science, and Transportation of the Senate 
that the initial funding level is insufficient to fulfill coupon 
requests for eligible U.S. households (Contingent Funds).\5\ NTIA is, 
therefore, authorized to expend up to a total of $1.5 billion for the 
program, including up to $160 million for administration. Assuming the 
entire administrative amount is taken into account, $1.34 billion would 
be available for distributing up to 33.5 million coupons. This section 
also authorizes NTIA, beginning on October 1, 2006, to borrow not more 
than $1.5 billion from the Treasury to implement the program. NTIA must 
reimburse the Treasury for this amount, without interest, as recovered 
analog television spectrum auction proceeds are deposited into the 
Fund.\6\
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    \3\ See subsections 3005(c)(1)(A), (c)(4) of the Act.
    \4\ NTIA intends to enter into a contract for services to 
administer the Coupon Program through a separate program acquisition 
plan. The contractor will be responsible for establishing and 
managing the systems and processes through which some of the final 
rules may be applied. In this document, ``NTIA'' should be 
understood to be either NTIA or its contractor.
    \5\ Section 3005(c)(3) of the Act.
    \6\ Section 3005(b) of the Act.
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    3. On July 25, 2006, NTIA published a Notice of Proposed Rulemaking 
(NPRM) and Request for Comment in the Federal Register on ways to 
implement and administer such a program pursuant to the Act.\7\ NTIA 
also held meetings on November 14 and 15, 2006, to afford interested 
parties the opportunity to clarify comments submitted in response to 
the NPRM.\8\
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    \7\ Request for Comment and Notice of Proposed Rules to 
Implement and Administer a Coupon Program for Digital-to-Analog 
Converter Boxes, Notice of Proposed Rulemaking, 71 FR 42,067 (July 
25, 2006).
    \8\ Summaries of these ex parte meetings are posted on NTIA's 
website at http://www.ntia.doc.gov.
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II. Discussion

A. Eligible U.S. Households

    4. After February 17, 2009, households may make one or more of 
several consumer choices to achieve digital-to-analog conversion, such 
as via cable or satellite service (where available), or through a 
converter device.\9\ In the NPRM, NTIA proposed to define those U.S. 
households eligible to participate in the Coupon Program as ``those 
households that only receive over-the-air television signals using 
analog-only television receivers.''\10\ NTIA further proposed to make 
households that receive cable or satellite television service, even if 
those households have one or more analog television signals not 
connected to such service, ineligible for the Coupon Program.
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    \9\ Not all local television signals are uplinked and delivered 
to satellite homes today. The extent to which satellite subscribers 
will have digital-to-analog conversion of local signals available to 
them after February 17, 2009, will depend on the availability of 
``local-into-local'' offerings from satellite providers.
    \10\ NTIA proposed to define a ``television household'' as a 
``household with at least one television . . . consisting of all 
persons who currently occupy a house, apartment, mobile home, group 
of rooms, or single room that is occupied as separate living 
quarters and has a separate U.S. postal address.'' See NPRM, 71 FR 
at 42,068.
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    5. Many commenters disagreed with NTIA's proposed definition and 
argued that all consumer households should be eligible to receive 
coupons.\11\ Given the

[[Page 12098]]

funding level and the possibility that many households with cable or 
satellite service may wish to purchase a converter box, commenters 
expressed concern about excluding any household.\12\ Commenters also 
expressed concern about those consumers that may need to rely on over-
the-air capabilities in times of emergency. Some commenters argued that 
the Act and the legislative history do not support NTIA's proposed 
definition and that the Agency lacks the statutory authority to limit 
the eligibility requirements.\13\ For example, in Joint Industry 
Comments, the commenters argued that the Act and the legislative 
history, as well as practical considerations, ``preclude any 
implementation of the program that would exclude from coupon 
eligibility analog sets in cable or satellite-served homes not 
connected to those services.''\14\ Likewise the Consumer Electronics 
Retailer Coalition (CERC) argued that there is no basis in the Act or 
the legislative history to support the standard proposed in the 
NPRM.\15\
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    \11\ See Association for Maximum Service Television, Consumer 
Electronics Association, and National Association of Broadcasters 
(Joint Industry) Comments at 5-11; Thomson Comments at 2; Archway 
Marketing Service Comments at 2; LG Electronics Comments at 5; 
Community Broadcasters Association Comments at 3; Consumer 
Electronics Retailers Coalition (CERC) Comments at 5; AARP Comments 
at 5; MTVA Comments at 3; Joint Consumer Comments at 2-8; APTS 
Comments at i; RadioShack Corporation Comments at 3-6; Sodexho 
Comments at 4.
    \12\ See Letter to Hon. John M. R. Kneuer from Hon. John D. 
Dingell, Hon. Edward J. Markey, Hon. Henry A. Waxman, Hon. Frank 
Pallone, Jr., Hon. Bart Gordon, Hon. Eliot L. Engel, Hon. Ted 
Strickland, Hon. Lois Capps, Hon. Tom Allen, Hon. Rick Boucher, Hon. 
Sherrod Brown, Hon. Bart Stupak, Hon. Gene Green, Hon. Diana 
Degette, Hon. Mike Doyle, Hon. Jan Schakowsky, (Letter from Members 
of the House Energy and Commerce Committee) (Nov. 15, 2006) at 2.
    \13\ Joint Consumer Comments at 2-8; Richard Brittain Comments; 
Joint Industry Comments at 5.
    \14\ Joint Industry Comments at i.
    \15\ CERC Comments at 5.
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    6. Several comments raised other points in favor of expanding 
eligibility beyond that proposed in the NPRM. For example, some 
commenters noted that even cable and satellite households may need the 
ability to receive signals over the air in times of emergency or severe 
weather.\16\ Others noted that limiting coupons to over-the-air-only 
households could disadvantage satellite customers who receive their 
local broadcast signals over the air.\17\ Operators of Class A and LPTV 
stations noted that these facilities will continue to broadcast in 
analog after February 17, 2009, that most of these facilities are not 
eligible for cable or satellite must carry and that NTIA should not 
deny converter-box subsidies to households that rely on analog 
receivers to watch Class A and LPTV stations over the air, even if they 
have another means to view digital full-power stations.\18\ Consumers 
Union contended that denying converter boxes to all households would 
cause disruptions in service that could undermine consumer support for 
the digital television transition.\19\ RadioShack suggested that 
limiting eligibility could reduce demand for converter boxes, thus 
raising their costs and potentially harming low-income households.\20\
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    \16\ See, e.g., Marvin Clegg Comments at 1; Richard Brittain 
Comments at 1; Thomson Comments at 2.
    \17\ See, e.g., Richard Brittain Comments at 1.
    \18\ Community Broadcasters Association Comments at 5. Section 
3002 of the Act permits Class A and LPTV facilities to broadcast in 
analog after February 17, 2009. Moreover, a cable system must carry 
a LPTV facility only if it meets certain limited requirements. 47 
U.S.C. Sec.  534(h)(2).
    \19\ Joint Consumer Comments at 9.
    \20\ RadioShack Comments at 7.
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    7. NTIA recognizes that limiting eligibility as proposed in the 
NPRM would be difficult to enforce. There are no lists of households 
that only receive over-the-air television broadcasts. Moreover, as the 
Government Accountability Office (GAO) recognized, it would be a highly 
challenging task to obtain a list of cable and satellite subscribers in 
order to identify over-the-air-reliant homes by the process of 
elimination.\21\ In fact, it would be difficult for NTIA to determine 
which U.S. households currently have, or plan to obtain, an analog 
television set requiring a CECB. Moreover, efforts to confirm 
eligibility would likely delay reasonable and timely distribution of 
coupons.\22\ Unless NTIA devoted substantial resources to review 
applicants'certifications of eligibility, there would be potential for 
waste, fraud and abuse.\23\ Such efforts could also substantially 
increase the costs of administering the program.\24\
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    \21\ See ``Digital Broadcast Television Transition: Several 
Challenges Could Arise in Administering a Subsidy Program for DTV 
Equipment,'' GAO-05-623T (May 26, 2005) at 11-13 (GAO Challenges 
Report). In addition to the cable industry's reluctance to give the 
government access to its subscriber lists, GAO noted that it would 
be difficult to merge information across the more than 1,100 cable 
and satellite companies in the United States. GAO Challenges Report 
at 12.
    \22\ See, e.g., RadioShack Comments at 8.
    \23\ See, e.g., Thomson Comments at 2.
    \24\ See, e.g., Archway Marketing Services Comments at 2.
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    8. Upon careful consideration of all arguments raised in the 
comments for and against limiting household eligibility criteria, NTIA 
has decided not to initially limit household eligibility in the Coupon 
Program to households reliant exclusively on over-the-air broadcasts 
for television service. Accordingly, the Final Rule permits coupons to 
be distributed initially to all U.S. households. As proposed in the 
NPRM and consistent with the definition used by the U.S. Census Bureau, 
a ``household'' consists of all persons who currently occupy a house, 
apartment, mobile home, group of rooms, or single room that is occupied 
as a separate U.S. postal address.\25\ NTIA received a comment from 
SunBelt Multimedia Company that requested the household definition to 
be expanded to allow multiple families residing at a single address to 
each count as a household, based on the community or income 
criteria.\26\ NTIA recognizes that multiple families may exist in 
households as defined by this Final Rule, however, it would be 
administratively difficult to determine the number and location of 
these households and to establish a definition based on community or 
income criteria.
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    \25\ See U. S. Census Bureau, http://www.census.gov (Current 
Population Survey -- Definitions and Explanations).
    \26\ Sunbelt Multimedia Company Comments at 11.
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    9. Recognizing that funds allocated for this program are limited 
and the possibility that over-the-air reliant television households may 
lose television service as a result of this decision, NTIA will permit 
open eligibility on a first-come, first-served basis while the Initial 
Funds are available (i.e., until coupons valuing $890,000,000 have been 
redeemed and issued but not expired, in accordance with Section 
3005(c)(2)(B) of the Act).\27\ The Act permits funding of the program 
to increase by $510,000,000 to a total of $1,500,000,000 upon 
certification to Congress that the initial allocated amount of 
$990,000,000, the Initial Funds, is insufficient to fulfill coupon 
requests.\28\ If such Contingent Funds are available for the Coupon 
Program, the eligibility for those coupons provided from Contingent 
Funds will be limited to over-the-air-only television households 
(Contingent Period). Consumers requesting those coupons during the 
Contingent Period must certify to NTIA that they do not subscribe to a 
cable, satellite, or other pay television service. NTIA makes this 
decision balancing the demand uncertainty and funding limitations with 
the need to prioritize contingency funds for over-the-air reliant 
households which will lose total access to television broadcasts after 
the transition date.
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    \27\See supra, para 2.
    \28\See Section 3005(c)(3)(ii) of the Act.
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    10. NTIA did not propose to consider ``economic need'' as part of 
the eligibility requirement, but solicited comment on whether it should 
be considered and, if so, how it should be determined. NTIA received 
comments opposing adoption of eligibility criteria

[[Page 12099]]

encompassing economic need because of the complications involved in 
such an analysis. Some commenters also asserted that NTIA lacks such 
statutory authority.\29\ Other commenters, however, supported the idea 
of adopting a means test and suggested that NTIA use income or 
participation in other federally supported programs as a basis of 
determining eligibility. For example, the American Association of 
People with Disabilities suggested that NTIA adopt a program similar to 
the FCC Lifeline-Linkup phone subsidy program which uses 135 percent of 
the poverty level or persons who are beneficiaries of other federal 
assistance programs as a basis for eligibility.\30\
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    \29\ See Carolyn McMahon Comments; Stored Value Systems, Inc. 
Comments at 4; Consumer Union, Consumer Federation of America, and 
Free Press Comments at 9-10; Sodexho Comments at 5; Letter from 
Members of the House Energy and Commerce Committee at 2.
    \30\ See American Association of People with Disabilities 
Comments at 8 (the federal programs cited by AAPD include Medicaid, 
Food Stamps, Supplemental Security Income, Federal Public Housing 
Assistance, Low-Income Home Energy Assistance Program, Temporary 
Assistance to Needy Families, The National School Lunch Program's 
Free Lunch Program, Bureau of Indian Affairs General Assistance, 
Tribally Administered Temporary Assistance for Needy Families, Head 
Start, Tribal National Lunch Program).
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    11. NTIA agrees that including economic need as an eligibility 
factor in the Coupon Program would be a complicated process. 
Furthermore, because this is a one-time program, it would not be cost 
effective to develop eligibility requirements and verification systems 
such as those used by other federal assistance programs, such as Food 
Stamps. NTIA noted in the NPRM that neither the Act nor the legislative 
history suggests such a requirement. Accordingly, NTIA will not 
consider economic need as part of an eligibility requirement for the 
coupon program. Moreover, the Agency will only make the Coupon Program 
available to individual U.S. households, as proposed in the NPRM, not 
businesses, schools, or other entities as suggested by one 
commenter.\31\ The Act states that a ``household'' may obtain coupons, 
and there is nothing in the legislative history or the comments that 
suggests that Congress intended to extend eligibility beyond 
households.
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    \31\ See Jon Kaps Comments (arguing that schools should be 
eligible to participate in the Coupon Program).
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B. Coupon Value and Use Restrictions

    12. Consistent with the Act, NTIA proposed in the NPRM to issue $40 
coupons to be redeemed only at certified retailers when purchasing a 
CECB. The Agency also proposed to place identifying serial numbers on 
the coupons to keep track of the number of coupons issued to and 
redeemed by consumers as well as to minimize fraud, such as 
counterfeiting. NTIA did not propose a specific form of the coupon, but 
requested comment on whether the Agency should issue a paper coupon or 
an electronic coupon card.
    13. NTIA proposed to restrict each individual coupon to the 
purchase of one CECB. Consistent with the Act, NTIA also proposed to 
prevent coupon holders from using two coupons in combination toward the 
purchase of a single CECB. To prevent fraud, NTIA also proposed to 
prohibit coupon holders from returning a converter box to a retailer 
for a cash refund or for credit towards the purchase of another item. 
However, the Agency did propose to permit the even exchange for another 
CECB in the event of defective or malfunctioning equipment.
    14. One commenter argued that a buyer should be able to use the $40 
coupon to buy a converter box with deluxe features.\32\ Best Buy 
supported only ``even'' exchanges of devices and opposed allowing 
consumers to return converters for a cash refund or for credit towards 
the purchase of an upgraded device.\33\ RadioShack recommended that 
statements such as ``No Cash Value'' or ``Exchange Only for Eligible 
Converter'' be clearly printed on the coupon and in accompanying 
consumer material.\34\
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    \32\ Robert Diaz Comments.
    \33\ Best Buy Comments at 4.
    \34\ RadioShack Comments at 13.
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    15. Consistent with the Act, the value of the coupons issued will 
be $40. In no case may consumers receive any cash value for the 
coupon.\35\ If the cost of a CECB is less than $40, retailers will only 
be reimbursed for the retail price of the box. Likewise, consumers 
cannot receive a refund or credit towards the purchase of another item 
if the price of the CECB is less than the $40 value of the coupon. 
Retailers and consumers are also prohibited from using two coupons in 
combination towards the purchase of a single CECB. NTIA recognizes the 
opportunities for fraud and abuse by permitting consumers to receive a 
cash refund for the value of the coupon or for credit towards another 
item outside of the program. Therefore, NTIA will permit an exchange 
only for another converter box certified under these regulations.\36\
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    \35\ To further prevent fraud, the Final Rule states that 
consumers may not sell, duplicate or tamper with the coupon.
    \36\ However, if a consumer returns a CECB to a retailer, the 
retailer may refund to the consumer that portion of the purchase 
price not covered by the coupon.
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    16. Some commenters supported the use of a paper coupon. For 
example, one commenter stated that it was Congressional intent to issue 
a paper coupon with UPC coupon-type barcode, which brick-and-mortar 
retailers and clearinghouses could handle in the same fashion as 
manufacturers' cents-off coupons because this would minimize the cost 
of the overall program.\37\ Another commenter stated that the paper 
coupon was both straightforward to use and provides for a fast and 
economical means to mail eligible applicants their coupons in a short 
time frame.\38\ Moreover, paper coupons could have several security 
features, including unique serial numbers, barcodes, security paper and 
consumer identification.\39\ Many of the comments, however, addressed 
the problems associated with paper coupons including the potential for 
fraud, delay in retailer reimbursement and increased administrative 
costs.\40\
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    \37\ See Richard Brittain Comments.
    \38\ See Poorman-Douglas & Hilsoft Notifications Comments.
    \39\ Id.
    \40\ See CERC Comments at 7-8; Archway Marketing Services at 5-
6.
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    17. Other commenters, particularly retailers, supported the use of 
an ``electronic coupon card'' (ECC) on which the $40 value can be 
credited towards the purchase of a CECB. Many commenters agreed that 
use of the ECC was the most efficient way to administer the program as 
well as the best way to reduce fraud.\41\ CERC stated that an ECC 
should (a) bear a ``use by'' date on its surface and should be coded to 
expire after the time indicated on its surface; (b) carry a unique 
serialized number (encoded in a magnetic strip and printed in human-
readable form on the card) that can be transmitted to a central 
database immediately upon submission for on-line verification; and (c) 
provide clear and succinct rules concerning coupon use.\42\ CERC also 
noted that the use of ECCs would permit more consumer friendly 
converter exchanges.\43\ It was also noted that the use of ECCs would 
facilitate real-time transmission of information on redemption rates 
which is important because transmission delays may limit NTIA's ability 
to monitor performance or to request additional congressional

[[Page 12100]]

funding.\44\ There were, however, concerns expressed about the use of 
ECCs. For example, ORC Macro noted that these cards may not be 
compatible with electronic scanning devices used by participating 
retailers, and that the requirement for electronic systems may 
eliminate small retailers from participating.\45\ NTIA also received 
conflicting comments on whether ECCs could be encoded to limit use to a 
specific product.\46\ Retailers suggested that ECCs may require 
significant up-front costs for software, payment processing and 
employee training.\47\
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    \41\ See Joint Industry Commenters at 22; CERC Comments at 7-8; 
Samsung Electronics Comments at 2; Joint Consumer Comments at 17; 
Best Buy Comments at 2; RadioShack Corporation Comments at 10.
    \42\ CERC Comments at 6-9.
    \43\ Id. at 8.
    \44\ Joint Consumer Comments at 17.
    \45\ ORC Macro Comments at 3.
    \46\ Archway Marketing Services Comments at 6; Sodexho Comments 
at 9; Best Buy Comments at 2: CERC Comments at 7; Stored Value 
Systems, Inc. Comments at 8.
    \47\ Best Buy Comments at 2; CERC Comments at 6.
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    18. The coupons will not carry any ``stored value,'' but the 
appropriate amount will be identified on the cards and authorized for 
redemption when matched to the central database to verify each 
transaction. In light of the comments received, particularly those from 
retailers, NTIA will provide coupons that are capable of electronically 
encoding information that is necessary for the program to run 
efficiently and permit electronic tracking of transactions. NTIA also 
believes that electronically encoded coupons will reduce opportunities 
for fraud in the program. NTIA notes that electronic information may be 
encoded on paper coupons as well as plastic cards.\48\
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    \48\ An example of a paper card with electronic tracking 
capability would be a MetroCard, used in the Washington D.C.-area 
Metro system.
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C. Application Process

    19. NTIA proposed to require coupon applicants to submit the 
following information: (1) name; (2) address (no Post Office Box); (3) 
the number of coupons required, not to exceed two coupons; (4) a 
certification that they only receive over-the-air television signals 
using an analog-only (NTSC) television receiver; and (5) a 
certification that no other member of the household has or will apply 
for a coupon. Furthermore, consistent with the Act, NTIA proposed to 
commence the application period on January 1, 2008 and conclude on 
March 31, 2009. If an applicant does not specify the number of coupons 
needed, NTIA proposed sending the applicant one coupon. Also consistent 
with the Act, NTIA proposed sending the requested coupon(s) via the 
United States Postal Service.
    20. Few of the comments raised concerns about the information NTIA 
proposed to require consumers to provide as part of the application 
process. CERC, however, argued that certifications that a household 
receives only over-the-air television signals and that no one else in 
the household will apply is neither consistent with the Act, nor 
practical nor fair.\49\ Council Tree Communications Inc. argued that 
NTIA should allow for ``alternative methods of delivering the coupons 
to Indian Reservations and Alaskan Native Villages.''\50\ Some 
commenters encouraged the Agency to make applications available in 
foreign languages.\51\ With respect to the application period, one 
commenter suggested that the time period be extended to December 31, 
2009, because consumers may not understand the need for a converter box 
until their televisions go dark after February 17, 2009.\52\
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    \49\ CERC Comments at 9.
    \50\ Council Tree Communications Inc. Comments at 1.
    \51\ Sunbelt Multimedia Co. Comments at 12.
    \52\ Robert Diaz Comments.
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    21. The Final Rule requires applicants to provide NTIA with only 
the information necessary for NTIA to fulfill a coupon request. 
Accordingly, applicants for coupons must provide the following: (1) 
name; (2) address; (3) the number of coupons that they require; and (4) 
a certification as to whether they receive cable, satellite, or other 
pay televison service. NTIA is sensitive to privacy concerns and is not 
requesting unnecessary personal identification information, such as 
social security numbers. Multifamily residences (i.e., a residence 
occupied by more than one family unit) will not be eligible for more 
than two coupons unless each household is occupied as separate living 
quarters and has a separate U.S. postal address. Coupons will be mailed 
via the U.S. postal service along with the terms and conditions of use. 
Given the sensitivity of commenters to the prevalence of Post Office 
Boxes in rural America, NTIA will make allowances for households on 
Indian Reservations, Alaskan Native Villages and other rural areas 
where Post Office Boxes are the only means of mail delivery. Residents 
of Indian reservation, Alaskan Native Villages and other rural areas 
without home postal delivery may be requested to supply additional 
information to identify the physical location of the household. With 
respect to the application period, NTIA will adhere to the period 
provided in the legislation; thus NTIA will accept applications only 
between January 1, 2008 and March 31, 2009.\53\
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    \53\ Section 3005(c)(1)(A) of the Act.
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    22. Commenters agreed with NTIA's proposal to make application 
forms widely available.\54\ NTIA will administer the program to make it 
accessible particularly to those in need of coupons. As part of the 
consumer education program, consumers will be made aware of the various 
ways to access and submit applications for the Coupon Program. NTIA 
will ensure that applications and accompanying materials are available 
in other languages consistent with its obligations under Executive 
Order 13166, ``Improving Access to Services for Persons with Limited 
English Proficiency,'' (Aug. 11, 2000).\55\ The Final Rule provides 
that coupons may be requested by mail, by phone and electronically 
(e.g., by email or through a website).
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    \54\ AARP Comments at 9-10.
    \55\ The Department of Commerce Limited English Proficiency 
guidelines are provided on the Department's website at http://www.osec.doc.gov/ocr/doclepplan2003.pdf.
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D. Coupon Expiration

    23. According to the Act, coupons issued under this program are to 
expire three months after issuance. Accordingly, NTIA proposed to print 
an expiration date on each coupon and proposed that the expiration date 
be three months after the coupon's issuance date. NTIA defined issuance 
date as the date upon which the coupon is placed in the U. S. mail.
    24. Although commenters agreed with NTIA's proposal to print an 
expiration date on the coupon, many thought that the proposed 
expiration date of three months after the coupon's issuance should be 
extended. The time that commenters suggested the date be extended 
varied from three to ten days after issuance to take into consideration 
such matters as the rural location of the consumers, homebound or 
disabled consumers, slow mail delivery and coupons lost in the 
mail.\56\
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    \56\ Susan Stanke Comments; Richard Brittain Comments; AARP 
Comments at 10; Best Buy Comments at 3; RadioShack Comments at 9; 
Sunbelt Multimedia Co. Comments at 11. See also Ralph L. Mlaska 
Comments (coupons issued in first 6 months of the year should expire 
in December; coupons issued in the last 6 months should expire in 
July of the following year); George McLam Comments (program should 
last all of 2009).
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    25. As stated above, the Act requires NTIA to issue coupons that 
expire three months after issuance. NTIA believes that three months is 
reasonable and allows ample time for consumers to receive and use the 
coupons. The expiration date will encourage

[[Page 12101]]

consumers to use coupons promptly and will permit NTIA to use funds 
from expired coupons to issue coupons to other households. Accordingly, 
NTIA adopts a rule that coupons will be issued with an expiration date 
of three months after the issuance date. Three months will further be 
defined as 90 calendar days to provide a uniform redemption period for 
all coupon recipients. The issuance date will be the date the coupon is 
placed in the U. S. Mail.

E. Coupon-Eligible Converter Box

    26. The Act defines the term ``digital-to-analog converter box'' (a 
CECB) as ``a stand-alone device that does not contain features or 
functions except those necessary to enable a consumer to convert any 
channel broadcast in the digital television service into a format that 
the consumer can display on television receivers designed to receive 
and display signals only in the analog television service, but may also 
include a remote control device.''\57\ NTIA's Final Rule adopts 
technical specifications and features required for a CECB to qualify 
for the Coupon Program. Manufacturers are free to market converter 
boxes which do not comply with the requirements of the Final Rule, 
although such devices would not be eligible for the Coupon Program.
---------------------------------------------------------------------------

    \57\ See Section 3005(d) of the Act.
---------------------------------------------------------------------------

    27. NTIA acknowledges that many sections of the NPRM incorporate 
standards or rules adopted by the FCC regarding digital television 
transmission or receiver requirements, and also incorporate industry 
standards and guidelines adopted by the Advanced Television Systems 
Committee (ATSC), CEA or other organizations.\58\ NTIA's incorporation 
of these industry standards and guidelines or FCC standards and rules 
into its regulations is intended to assist converter-box manufacturers 
by gathering NTIA's basic converter-box requirements in a single place. 
NTIA's regulations do not supercede the FCC's authority, affect any FCC 
requirement or revise any of the industry standards and guidelines 
discussed in this document. In these regulations, NTIA adopts technical 
specifications and features required for a CECB. NTIA recognizes that 
CECBs are not currently available to consumers, and that manufacturers 
will have barely 12 months to bring converter boxes compliant with NTIA 
specifications to market, less than the typical 18-month manufacturing 
cycle.\59\
---------------------------------------------------------------------------

    \58\ FCC receiver standards are set forth at 47 CFR 15.117; FCC 
transmission standards are set forth at 47 CFR 73.682. Examples of 
industry standards and guidelines incorporated in this Final Rule 
are ATSC A/74 and CEA 909.
    \59\ Thomson Comments at 8.
---------------------------------------------------------------------------

    28. NTIA underscores that the converter boxes that will be eligible 
for this program are in development and are not yet commercially 
available. NTIA cannot warrant the performance, suitability or 
usefulness of any CECB.
    29. The NPRM requested comment on NTIA's proposed rule to define 
the converter box eligible for the Coupon Program. The NPRM presented 
several guidelines which NTIA used in developing the proposed rule and 
analyzing the comments submitted by the public. These guidelines 
include the ability of consumers to continue receiving broadcast 
programming in the same receiving configuration (e.g., same household 
antenna, same location) as used for the existing analog reception; that 
the CECBs be inexpensive but meet a minimum performance level; and that 
they should be easy to install and operate.\60\
---------------------------------------------------------------------------

    \60\ NPRM, 71 FR at 42,069-70.
---------------------------------------------------------------------------

    30. The NPRM requested comment on several related issues, including 
the appropriate minimum technical capabilities for CECBs, their 
features; and the extent to which NTIA should consider certain 
standards, such as energy efficiency, in determining the type of 
converter box that would be eligible for the Coupon Program. Comment 
was also sought on how NTIA can determine whether a converter box meets 
the requirements of the Coupon Program and how the CECBs should be 
identified so the public is informed that a specific box is eligible 
for a coupon. Comments were received on each of these issues as well as 
additional areas. Each of these is discussed in the following sections.
a. Minimum Technical Specifications: ATSC Guidelines A/74 and FCC Part 
73
    31. The NPRM stated that ``[f]or purposes of the coupon program, 
NTIA proposed certain standards for a minimum-capabilities converter 
box that simply converts an ATSC terrestrial digital broadcasting 
signal to the analog National Television Standards Committee (NTSC) 
format.''\61\ The NPRM proposed that the converter box should be 
capable of receiving, decoding and presenting video and audio from 
digital television transmissions as specified in FCC Part 73 (47 CFR 
Part 73) and that meet the ATSC Recommended Practice: Receiver 
Performance Guidelines ATSC A/74 (A/74).
---------------------------------------------------------------------------

    \61\ Id. at 42,069.
---------------------------------------------------------------------------

    32. NTIA received many comments regarding the technical 
specifications proposed in the NPRM. All the comments agreed that A/74 
should form the basis of the technical specifications for the CECB.\62\ 
One commenter, Zoran, urged NTIA to adopt, but not exceed, the A/74 
guideline. Zoran stated that ``[e]xceeding A/74 on a basic set top box 
calls for over engineering and the use of non-commodity parts that 
increase cost exponentially.''\63\ Many of the commenters recommended 
that NTIA adopt performance specifications for the converter box that 
go beyond the receiver guidelines contained in A/74. The Joint Industry 
Comments noted that there have been ongoing improvements in technology 
since the A/74 guidelines were adopted in 2004 that would enable NTIA 
to set reasonable requirements exceeding A/74 performance levels in 
some areas and also to fill in some requirements for performance levels 
where A/74 only specified test procedures.\64\ MTVA, an association of 
television stations that serve the New York City metropolitan area, 
echoed the Joint Industry Comments and indicated that it may be 
possible to improve on the A/74 performance levels with the fifth 
generation of VSB decoder chips and new RF tuners that have been 
developed since A/74 was adopted.\65\ Charles Rhodes, former Chief 
Scientist of the Advanced Television Test Center, that tested the DTV 
systems adopted by the FCC in 1996, stated that A/74 was just a 
guideline and was never intended to serve as a minimum performance 
standard.\66\
---------------------------------------------------------------------------

    \62\ See e.g., Funai Comments at 7; Microtune Comments at 1; 
Motorola Comments at 2.
    \63\ Zoran Comments at. 2.
    \64\ Joint Industry Comments at i. See also LG Electronics 
Comments at 10; Samsung Comments at 2; Thomson Comments at 4.
    \65\ MTVA Comments at 9-10.
    \66\ Charles W. Rhodes Comments at 1.
---------------------------------------------------------------------------

    33. The New America Foundation et al (NAF) also recommended that 
NTIA establish performance specifications beyond those contained in A/
74.\67\ NAF's concerns regarding NTIA converter-box specifications 
extend beyond the delivery of digital television to those who currently 
depend on analog television. NAF argued that the quality of the 
converter boxes NTIA mandates will affect the utility of the white 
spaces within TV channels 2-51

[[Page 12102]]

and noted that, in an FCC NPRM on ``Unlicensed Operation in the 
Broadcast Bands'' (Docket 04-186), the FCC expressed concern that low-
quality DTV receivers could severely impact the utility of the white 
spaces within TV channels 2-51.''\68\ NAF suggested that 
desensitization performance of the converter boxes should be considered 
and should be equivalent to most of the stand-alone TV sets presently 
marketed. NAF also proposed that detailed engineering measurements be 
made of the susceptibility of current DTV receiver designs to 
interference from out of band signals.\69\ NAF noted that the FCC was 
conducting tests that will not be available until mid-2007, but 
presented preliminary results of the three receiver tests it funded at 
the University of Kansas.\70\ Raising another issue regarding 
interference, MTVA recommended that NTIA adopt MTVA specifications for 
NTSC into DTV taboo channels (television channels that cannot be used 
because of interference with other channels).\71\ MTVA did not provide 
laboratory or real world measurements supporting its recommendation or 
information on whether manufacturers can currently build DTV equipment 
capable of meeting proposed specifications.
---------------------------------------------------------------------------

    \67\ See Comments from New America Foundation, Media Access 
Project Consumer Federation of America, Wireless Internet Service 
Providers Association (Wispa), Acorn Active Media Foundation 
Community Technology Centers' Network, Champaign Urbana Community 
Wireless Network (Cuwin), The Ethos Group, and Freenetworks.org 
(collectively, referred to hereafter as NAF Comments).
    \68\ NAF Comments at 2; See also Charles W. Rhodes Comments at 
1.
    \69\ NAF Comments at 5.
    \70\ NAF 2nd Comments (November 16, 2006).
    \71\ MTVA Comments at 17.
---------------------------------------------------------------------------

    34. The comments filed by these organizations all highlight areas 
where the commenters believe the A/74 Receiver Performance Guidelines 
of June 18, 2004, do not provide a sufficient level of performance for 
the CECB. The technical comments and thoughtful recommendations of 
these commenters prompted NTIA to reexamine the NPRM proposal that the 
A/74 guidelines be adopted as the performance specifications for the 
CECBs.
    35. While all of these commenters recommend that NTIA adopt 
specifications or tests to qualify a CECB that go beyond those in the 
A/74 guidelines, they each present differing technical 
recommendations.\72\ NTIA shares the concern of the commenters that 
CECBs perform at a level to meet the reception needs of the American 
public. NTIA has carefully analyzed the recommendations presented by 
the commenters, and has seen no scientific data that any proposed set 
of technical specifications will ensure any given level of performance 
of converter boxes in real-world environments. Many of the commenters 
recommend that further tests be performed.\73\ Given the requirements 
of the Act that coupons be available for CECBs early in 2008, there is 
time neither for additional analysis testing as proposed by the 
commenters nor for the establishment of industry-accepted standards 
following such tests.\74\
---------------------------------------------------------------------------

    \72\ For example, while A/74 does not require any specific 
number of field ensembles to be successfully demodulated, the Joint 
Industry Comments recommended that a converter box successfully 
demodulate 30 of the 50 field ensembles included in A/74. Joint 
Industry Comments at Appendix 4. Rhodes recommends that ``tests of 
ACI [adjacent channel interference] should be carried out over the 
full range of D [desired] signal powers that will exist within the 
coverage area of the transmitter,'' while A/74 only specifies three 
desired signal power levels. Rhodes Comments at 4. MTVA stated that 
multiple interfering signal tests are important but said that 
reasonable interference levels are not yet known. MTVA Comments at 
15. NAF indicated that in addition to the A/74 guidelines, tests 
must also include desensitization performance. NAF Comments at 5.
    \73\ For example, the MTVA noted that ``reasonable interference 
values are not yet known at this time, but should be investigated 
(with lab testing) in the near future recognizing current tuner 
technology.'' MTVA Comments at 15. See also Charles Rhodes Comments 
at 7 (``testing should cover the same desired signal power range as 
in single Taboo testing above....It is my intention to actually 
perform these tests in my own laboratory in the next few months''); 
NAF Comments at 5 (``detailed engineering measurements as to the 
susceptibility of current DTV receiver designs to interference from 
out-of-band signals are needed.'').
    \74\ ``[A]ssuming NTIA adopts final rules by January 1, 2007, 
manufacturers will have barely 12 months to bring compliant 
converter boxes to market-less than the typical 18-month 
manufacturing cycle.'' Thompson Comments at 8.
---------------------------------------------------------------------------

    36. While NTIA cannot guarantee the performance of the CECBs, NTIA 
intends that coupons be used for converter boxes using current 
technology available in the marketplace. To this end, NTIA recognizes 
that digital reception technology has advanced in the two years since 
the adoption of A/74. Further, NTIA recognizes that in order to qualify 
a converter box to meet minimum specifications, it must, in the words 
of the Joint Industry Comments ``fill in some requirements for 
performance levels where ATSC A/74 only specified test 
procedures.''\75\
---------------------------------------------------------------------------

    \75\ Joint Industry Comments at 1.
---------------------------------------------------------------------------

    37. Having reviewed the comments filed by many parties, NTIA has 
accepted the technical recommendations of the Joint Industry Comments 
as the basis for the minimum technical specifications of the CECB. The 
Joint Industry Comments represent a collaboration by the broadcast 
industry and the consumer electronics industry to present a set of 
technical specifications which both industries believe can provide the 
American consumer with a high-quality, low-cost and easy-to-use CECB. 
The Joint Industry Comments use the A/74 guidelines as the basis for 
their proposal, but propose several revisions to reflect advances in 
technology in the two years since the A/74 standard was adopted. 
Further, they propose target performance levels in several areas where 
A/74 only specifies test procedures. The NAB and MSTV have funded the 
development of converter-box prototypes from two manufacturers which 
they state demonstrate that the technical specifications they propose 
are ``clearly achievable in practical products designed to be amenable 
to production in mass manufacturing quantities. Further, the project 
results provide tangible evidence that a high-quality, low-cost 
converter box can be built with measured performance that exceeds the 
levels specified in the ATSC A/74 Recommended Practice on Receiver 
Performance in several important areas and consequently can provide 
reliable reception under a variety of real-world conditions.''\76\
---------------------------------------------------------------------------

    \76\ Id. at 13.
---------------------------------------------------------------------------

    38. NTIA believes that CECBs should be produced according to 
specifications currently accepted by major manufacturers. It would be 
contrary to the public interest if coupons were used to purchase 
converters designed with obsolete or poorly performing components.\77\ 
On the other hand, some commenters suggested technical specifications 
that have not been widely agreed upon nor quantified; and products in 
widespread commercial deployment have not been tested to these 
specifications. The technical specifications adopted by NTIA should 
provide American consumers with an economical CECB containing state-of-
the-art technology available today from manufacturers within the time 
frame required by the Act.
---------------------------------------------------------------------------

    \77\ Letter from Members of the House Energy and Commerce 
Committee at 2 (stating that converter boxes should, at a minimum, 
replicate the picture and audio quality consumers experience today 
when watching their analog televisions).
---------------------------------------------------------------------------

    39. Therefore, NTIA adopts the required minimum features and 
technical specifications in Technical Appendix 1 of the Final Rule. In 
addition, NTIA specifies permitted and prohibited features of a CECB in 
Technical Appendix 2.
b. Converter-Box Antenna Inputs
i. Smart Antenna
    40. The NPRM proposed that the only input to the converter box 
shall be for an external antenna. The NPRM stated that ``[a] single 
input (Type F connector) ensures that only an antenna can be

[[Page 12103]]

connected to eligible boxes thus ensuring use of such boxes as for 
over-the-air television reception only.''\78\ The F-type connector is 
the standard antenna input in most television receivers. While the F-
type connector was supported by all who commented on antenna inputs, 
many commenters requested that an additional antenna input be permitted 
in the CECB. Most of the comments proposing an additional antenna input 
requested the flexibility to include an interface for a technology 
known as a smart antenna.\79\ A smart antenna allows for automatic 
electronic steering and signal-level control so a consumer can receive 
the best signal for each channel. The Joint Industry Comments stated 
that in many markets, television stations' transmitters are located on 
different sides of the population center due to separation requirements 
or other practical considerations outside their control. In these 
instances, consumers can achieve the best reception using 
electronically steered smart antennas.\80\
---------------------------------------------------------------------------

    \78\ NPRM, 71 FR at 42,070.
    \79\ A standard for smart antenna interfaces is defined by the 
CEA-909 Antenna Control Interface standard, which is included in the 
A/74 guidelines, Section 4.2.
    \80\ Joint Industry Comments at 17.
---------------------------------------------------------------------------

    41. MTVA stated that in difficult reception environments, the DTV 
video and audio is either perfect or nonexistent and the use of a smart 
antenna can mean the difference between having good DTV service or no 
service.\81\ CERC noted that a smart antenna would ``better allow 
consumers to adjust for propagation characteristics and set 
capabilities. This may minimize consumer disappointment and post-sale 
product exchanges.''\82\
---------------------------------------------------------------------------

    \81\ MTVA Comments at 5-6.
    \82\ Zoran Comments at 3; but see CERC Comments at 10.
---------------------------------------------------------------------------

    42. Zoran, however, opposed the use of a smart antenna and only 
supported the use of a passive antenna. RadioShack supported the option 
of a smart antenna interface in a CECB. In its comments, RadioShack did 
not propose that a smart antenna interface be mandated as it will add 
unnecessary cost for many consumers, but recommended that it should be 
an option in a certified converter box for those consumers who seek 
it.\83\
---------------------------------------------------------------------------

    \83\ Radio ShackComments at 20.
---------------------------------------------------------------------------

    43. NTIA recognizes that DTV reception can be difficult in many 
regions of the country. The NPRM stated that ``[i]deally, a converter 
box should be able to receive digital broadcast signals in the same 
receiving configuration (e.g., same household antenna, same location) 
as used for the existing analog reception.''\84\ NTIA notes, however, 
recent GAO congressional testimony indicating that antenna reception of 
digital signals may vary based on a household's geography and other 
factors.\85\ In addition, antennas configured for primarily VHF service 
may not be as effective as many stations switch to UHF frequencies.
---------------------------------------------------------------------------

    \84\ NPRM, 71 FR at 42,069.
    \85\ See GAO Challenges Report at 6.
---------------------------------------------------------------------------

    44. After reviewing the comments from Joint Industry Comments, MTVA 
and others, as well as the GAO congressional testimony, NTIA concludes 
that many consumers may wish to use smart antennas. While NTIA expects 
that the industry will continue to work on improving the performance 
and reduce the cost of both passive and active smart antennas, NTIA 
believes that many consumers will benefit from smart-antenna technology 
to receive over-the-air digital television broadcasts. It is clear, 
however, that a smart-antenna interface will add to the cost of the 
converter box and will not be needed by many households.
    45. In order to permit the inclusion of a smart antenna, but not 
add to the cost of the converter box for those who do not require this 
capability, the Final Rule will permit, but not require, manufacturers 
to include in their CECBs the circuitry and connectors associated with 
the so-called smart-antenna interface.
ii. Bundling
    46. In its comments, Funai supported the use of a smart antenna and 
recommended that ``the `bundling' of such an antenna with a DTA box 
should not preclude eligibility for the subsidy.''\86\ Funai suggested 
that ``[a]lthough prices may fluctuate due to market conditions, we 
conservatively estimate that it is possible to price a DTA and Smart-
Antenna bundle at less than $100.''\87\ NTIA does not believe that the 
bundling of a smart antenna with a converter box meets the requirement 
of the Act which defines a CECB as a ``stand-alone'' device.\88\ The 
purchase of a smart antenna at the same time a consumer purchases a 
converter box equipped with a smart-antenna interface will ease the 
installation and operation of the converter box for many people. 
Manufacturers or retailers may wish to offer combined purchases of 
converter boxes with smart antenna interfaces and smart antennas at 
promotional prices. The CECB, however, must be presented for sale at 
all outlets as a stand-alone single unit and cannot be sold conditioned 
on the purchase of any other items.
---------------------------------------------------------------------------

    \86\ Funai Comments at 10.
    \87\ Funai 2\nd\ Comments at 1-2.
    \88\ See Section 3005(d) of the Act.
---------------------------------------------------------------------------

iii. CEA-909
    47. CEA-909 is the current industry standard for a smart antenna 
interface. MTVA stated that ``eligibility should not be limited to only 
devices that comply with this standard (CEA-909) since such a 
requirement could preclude or delay technological advances in this area 
that are now being considered.''\89\ NTIA recognizes that technological 
advances are being made in many areas of digital television 
broadcasting. In order for this program to proceed so converter boxes 
can be available to the public in 2008, however, NTIA must establish a 
Final Rule to specify CECBs which manufacturers will build during 2007. 
A reference to this standard will be included in the Final Rule for the 
program.
---------------------------------------------------------------------------

    \89\ MTVA Comments at 5.
---------------------------------------------------------------------------

iv. 300 Ohm Inputs
    48. The Community Broadcasters Association (CBA) did not object to 
NTIA's proposal that a CECB have an RF input, but recommended that 
``manufacturers who choose to add a 300-ohm input with screw terminals 
should not be penalized for doing so.''\90\ The CBA comments included 
no further explanation or information supporting this recommendation. 
NTIA recognizes that use of 300-ohm antenna inputs is old technology 
and has no information on the number of television receivers in use 
today that are equipped only with 300-ohm antenna inputs. NTIA also 
recognizes that many inexpensive indoor ``rabbit-ear'' antennas have 
300-ohm connectors. NTIA notes that manufacturers of television 
receivers commonly include inexpensive matching transformers to connect 
300-ohm ribbon leads to Type F inputs rather than including built-in 
300-ohm antenna inputs, and that such transformers are commonly 
available where television receivers are sold. We believe that the use 
of these inexpensive transformers is the most economical method of 
meeting the needs of those consumers who have television receivers 
which only contain 300-ohm inputs. The Final Rule, therefore, will 
permit, but not require, manufacturers to include matching transformers 
to connect 300-ohm ribbon leads to the required Type F connectors. The 
Final Rule will also permit manufacturers to

[[Page 12104]]

provide connectors for 300-ohm inputs on the CECB.
---------------------------------------------------------------------------

    \90\ CBA Comments at 6. Richard Brittain also noted that older 
sets still have 300-ohm ribbon leads and screw terminals instead of 
Type F connectors. See Richard Brittain Comments.
---------------------------------------------------------------------------

c. Analog Signal Pass Through
    49. The National Translator Association recommended that the CECBs 
pass analog signals directly through without processing or 
modification.\91\ The CBA also requested that NTIA require that CECBs 
pass through an analog signal, either actively or passively. CBA noted 
that Class A and LPTV stations are not subject to the February 17, 2009 
end-of-transition deadline, applicable to full-power stations. It 
indicated that it was important that the converter box not block the 
analog signal.\92\ LPTV licensee Island Broadcasting noted that 
thousands of LPTV stations in the United States will remain analog 
after the transition and are not carried on a cable system or other 
multi-channel video delivery service. Island recommended that the 
converter box contain a feature to pass through the analog signal from 
the antenna to the TV receiver, either when the box is shut off, the 
signal is passed, or by means of a built in by-pass switch.\93\ Funai, 
however, noted that ``[a]n analog pass through, while conveniently 
retaining legacy analog TV support, would degrade the RF noise 
performance of all so-equipped DTA tuners by 3dB-a penalty that could 
not be recovered by any consumer with such a unit.'' Funai recommended 
that a consumer purchase a separate switch and/or external splitter to 
receive analog television.\94\
---------------------------------------------------------------------------

    \91\ National Translator Association Comments at 1.
    \92\ CBA Comments at 3.
    \93\ Island Broadcasting Comments at 2. Similar comments were 
filed by the Association of Public Television Stations (APTS), which 
recommended ``that NTIA allow eligible converter boxes to contain a 
built-in and easily workable A/B switch.'' APTS Comments at 30. 
Richard Brittain recommended a pass through of analog signals if the 
box is turned off. See Brittain Comments.
    \94\ Funai, 2\nd\ Comments at 2 (Nov. 17, 2002).
---------------------------------------------------------------------------

    50. NTIA is sensitive to the needs of consumers who will wish to 
continue to view over-the-air analog television during and after the 
digital transition. Not only will many consumers continue to rely on 
analog television reception of Class A stations, LPTV stations and 
translators after the transition, many consumers who purchase the CECB 
will require the ability to receive analog television signals during 
the transition period as not all full-power television stations in the 
United States have completed their digital build-out. NTIA, however, is 
reluctant to require an analog pass through feature because it will 
result in a reduction in received signal level and in increased cost to 
all consumers who purchase a CECB. The amount of reduction in receiver 
sensitivity and increased cost is dependent on how the analog pass 
through feature is implemented. This reduction may not be noticeable to 
consumers who receive strong signals in urban areas, but may mean that 
consumers who receive marginal digital and analog signals will be 
unable to receive television signals via the CECB. NTIA notes that 
switches and external splitters are commonly available where television 
sets are sold. A single A/B switch will not fully bypass a CECB, 
however, creating a difficult wiring scenario for the consumers. 
Splitters and their inherent loss as well as additional cabling makes 
their use less than optimal in fringe reception areas. NTIA strongly 
urges manufacturers to take into consideration the needs of consumers 
to receive analog television along with digital television in the 
development of CECBs and to investigate minimal signal loss solutions 
that would ensure an acceptable analog signal pass-through. In the 
Final Rule, NTIA permits that the converter box to pass through the 
analog signal from the antenna to the TV receiver.
d. Converter-Box Outputs
i. RF and Composite Video Outputs
    51. The NPRM proposed that the converter box contain the following 
outputs: Composite video and stereo audio (all three RCA connectors) 
and Channel 3 or 4 switchable (NTSC) RF (Type F connector) output. 
RadioShack recommended that NTIA permit the inclusion of an RF 
modulator output as an option, but not require this feature. RadioShack 
stated that ``there are only a limited number of households with 
televisions requiring RF modulators, and of those households, many have 
already purchased RF modulators in order to connect such devices as DVD 
players and game consoles, etc. Thus, mandating that all consumers pay 
extra for a product they do not need or may already have in order to 
satisfy the needs of a smaller number of consumers seems inconsistent 
with Congress' desire to subsidize a reasonably priced converter 
box.''\95\
---------------------------------------------------------------------------

    \95\ RadioShack Comments at 19.
---------------------------------------------------------------------------

    52. Most commenters on the subject supported the inclusion of both 
composite video/audio and RF outputs in the converter box. THAT 
Corporation (THAT Corp.) noted in its comments that ``[t]o utilize 
these (composite video) outputs, consumers must be able to connect 
three separate cables from these converter box outputs to three 
corresponding inputs on the TV monitor. . . such a hookup requires a 
degree of technical competence lacking in many consumers.''\96\ All 
receiver manufacturers supported the inclusion of both RF and composite 
outputs as did comments received from other members of the public. A 
few commenters suggested that NTIA permit the converter box to include 
an S-video output.\97\ S-video is an analog output which delivers 
standard definition video to the television receiver.
---------------------------------------------------------------------------

    \96\ THAT Corp. Comments at 8-9.
    \97\ For example, Zoran, Brittain, and Diaz recommended that 
NTIA permit S-video as an output. See Zoran Comments at 1; Richard 
Brittain Comments; Diaz Comments at 1.
---------------------------------------------------------------------------

    53. As noted earlier, NTIA seeks to ensure that the CECB will be 
easy to install and operate. The RF output is very easy to use as it 
only requires the consumer to connect a single cable between the 
converter box and the analog television. The Final Rule, therefore, 
requires that the CECB include an RF output and also requires that the 
CECB include composite outputs for those consumers who wish to continue 
to use the features provided by this technology. NTIA will also permit 
a S-video output which provides a better standard definition picture 
using a simple and inexpensive hookup with one cable.
    54. In its comments, Funai recommended that NTIA clarify the types 
of outputs that would not be permitted in a CECB. Funai commented that 
``we feel that it is inappropriate to extend Coupon Program eligibility 
to devices that support high-definition (HDTV) viewing, i.e., a display 
with higher-than-standard definition video resolution.''\98\ Funai then 
listed a series of connectors which it felt should not be permitted in 
the NTIA supported converter box. Funai requested that the following 
connectors be excluded from the converter box program: Digital Video 
Interface (DVI), high-definition multimedia interface (HDMI), analog 
component video (YPbPr), computer video (VGA), as well as USB IEEE-1394 
(sometimes trademarked as iLink or Firewire), or IEEE-802.3 (Ethernet) 
or IEEE-802.11 (wireless).\99\ Funai further recommended that ``any 
device that includes an integrated display intended for use as the 
primary video presentation should be ineligible for the Subsidy.''\100\
---------------------------------------------------------------------------

    \98\ Funai Comments at 11.
    \99\ Id. at 11-12.
    \100\ Id.
---------------------------------------------------------------------------

    55. In the NPRM, NTIA proposed that ``the converter box would not 
be required to render pictures and sound at more than standard 
definition

[[Page 12105]]

quality.''\101\ This proposal follows from the definition of a 
converter box contained in the Act, which limits the converter box to a 
unit so ``the consumer can display on television receivers designed to 
receive and display signals only in the analog television 
service.''\102\ If NTIA were to permit any digital output to the CECB, 
then it would cease to be a digital-to-analog converter and would 
become a digital tuner capable of providing a digital signal to a 
television monitor. This would clearly be beyond the plain language of 
the Act which states that the CECB shall ``convert any channel 
broadcast in the digital television service into a format that the 
consumer can display on television receivers designed to receive and 
display signals only in the analog television service.''\103\
---------------------------------------------------------------------------

    \101\ NPRM, 71 FR at 42,069-70.
    \102\ See Section 3005(d) of the Act.
    \103\ Id.
---------------------------------------------------------------------------

    56. Therefore, NTIA specifies in the Final Rule those connectors 
that will not be permitted in a CECB. Likewise, NTIA clarifies in the 
Final Rule that CECBs are prohibited from containing items such as 
display screens, recorders or storage devices that go beyond the simple 
task of converting a digital television signal to an analog signal for 
display on analog television receivers.
ii. Audio outputs
    57. Two organizations, the WGBH National Center for Accessible 
Media (NCAM) and THAT Corp., commented on NTIA's proposal that the 
outputs include stereo audio. The NPRM proposed that ``[t]he outputs 
shall be channel 3 or 4 (NTSC modulated signals), composite video (NTSC 
baseband), and audio (stereo).''\104\
---------------------------------------------------------------------------

    \104\ NPRM, 71 FR at 42,070.
---------------------------------------------------------------------------

    58. THAT Corp. requested that NTIA clarify the stereo requirement 
proposed in the NPRM. They noted that the proposed output with 
``composite video (NTSC baseband), and audio (stereo)'' will provide 
the analog television receiver with a stereo audio signal. THAT Corp. 
continued stating that the proposed output on ``channel 3 or 4 (NTSC 
modulated signals)'' does not, by itself, provide a stereo signal to 
the analog television receiver. THAT Corp. notes that ``the RF output 
will contain stereo (left/right) audio information if, and only if, the 
output contains BTSC stereo audio information.''\105\ They recommended 
that NTIA specify that the RF output must contain BTSC stereo audio 
information.
---------------------------------------------------------------------------

    \105\ THAT Corp. at 13. ``BTSC'' derives from the Broadcast 
Television Systems Committee, an industry group convened in the late 
1970s that, primarily, added additional audio channels to NTSC, 
allowing stereo (left and right) audio and a second audio program 
(SAP) channel to be broadcast. In 1984, the FCC developed rules and 
specified a pilot tone for BTSC. See Second Report and Order, Docket 
No. 21323, Rad. Reg. 2d (P&F) 1642 (1984). See Multichannel 
Television Sound Transmission and Audio Processing Requirements for 
the BTSC System in OET Bulletin No. 60, Revision A (Feb. 1986).
---------------------------------------------------------------------------

    59. NCAM recommended that the converter boxes' audio outputs 
support the Secondary Audio Program (SAP) service where video 
description for blind individuals is provided. NCAM indicated that 
video description within digital television signals will be delivered 
via multiple ancillary audio services (including alternate language 
audio) and these additional audio channels should be available via the 
subsidized converter box.\106\ NTIA notes that television stations are 
not required to broadcast video descriptions.\107\ None of the 
commenters provided information regarding the number of digital 
television stations providing video description services, the number of 
people served by such services, or the number of manufacturers 
currently building digital television equipment capable of processing 
such services. NTIA believes that it would be desirable for 
manufacturers to include a capability in CECBs that will enable the use 
of SAP type services, including video description.\108\ We note that 
because digital television encodes audio in a different manner than the 
encoding used in analog television, digital television does not utilize 
the SAP channel present in analog television. Standards and guidelines 
for digital television audio are contained in ATSC publications A/52, 
A/53 and A/54.\109\ Section 6.6 of A/54 provides for two types of main 
audio service and six types of associated services, including 
associated services for the visually impaired (VI). The A/54 standard 
also permits the transmission of secondary language programming and 
reserves associated audio services for the hearing impaired (HI) and 
for emergencies (E). Because of the important public services that may 
be provided by these associated audio services, NTIA will permit CECBs 
to be capable of processing these associated audio services broadcast 
by a digital television station, particularly as more stations provide 
them in the coming years.
---------------------------------------------------------------------------

    \106\ Combined Comments of NCAM, American Association of People 
with Disabilities, and Information Technology and Accessible 
Interface Rehabilitation Engineering Research Center, Trace Center-
University of Wisconsin-Madison Comments at 2 (hereafter NCAM 
Comments). The secondary audio program channel is provided under the 
BTSC standard and the FCC does not require nor restrict the use of 
the SAP channel.
    \107\ See Motion Picture Ass'n of Am. v. FCC, 309 F.3d 796 (D.C. 
Cir. 2002) (holding that the FCC did not have statutory authority to 
issue video description regulations).
    \108\ Congress enacted this coupon program ``[t]o help consumers 
who wish to continue receiving broadcast programming over the air 
using analog-only televisions.'' H.R. Rep. No. 109--362, at 201 
(2005) (Conf. Rep.). Consistent with that guidance, NTIA encourages 
manufacturers to incorporate features that enhance accessibility.
    \109\ Audio standards for digital television are contained in 
ATSC A/52, Digital Audio Compression Standard, (AC-3); ATSC A/53, 
and ATSC Digital Television Standard; guidelines for implementation 
of ATSC audio are contained in ATSC A/54, Recommended Practice: 
Guide to the Use of the ATSC Digital Television Standard.
---------------------------------------------------------------------------

    60. Manufacturers may provide output for the main channel audio 
service and associated audio services on the RF Type F connector by 
using either of the following two methods. NTIA will permit 
manufacturers to follow current industry practice regarding RF outputs 
for audio/video equipment which provides a mono RF output which is 
switchable between a station's main channel audio and other associated 
audio services. In this instance, consumers could use a button on the 
converter box remote control to select the RF output for a station's 
monaural main channel audio or toggle through a station's visually 
impaired (VI) or other associated audio services. NTIA will also permit 
manufacturers to provide BTSC Multichannel Television Sound (stereo 
audio) in the RF output. The BTSC stereo audio signal and included SAP 
carrier will provide stereo main channel or visually impaired or other 
associated audio service to the television receiver as selected by the 
consumer. Consumers will also have the option of receiving stereo audio 
through the converter box's left/right audio outputs (RCA connectors).
iii. Multicast Reception
    61. Funai asked NTIA to clarify its interpretation of the Act which 
defines the converter box in part, as a device ``to enable a consumer 
to convert any channel broadcast in the digital television service.'' 
Funai stated that the converter box ``should provide access to all 
`sub-channels' of a DTV transmission, i.e., the so-called `major and 
minor' channels that may be transmitted as a `multicast' by the 
broadcast operator.''\110\ NTIA believes that multicast capability is 
an integral feature of digital television transmission and the Act 
clearly intends that the CECB convert all channels, including those 
that are multicast. NTIA notes that the Act's definition requires the 
converter box to ``enable a consumer to convert any channel broadcast 
in the digital television service into a format

[[Page 12106]]

that the consumer can display on television receivers designed to 
receive and display signals only in the analog television 
service.''\111\ The Act, therefore, does not permit the output to 
another device such as a computer which might be required to capture 
streams of data included on the digital television transport stream. 
The Final Rule will clarify that a CECB is required to receive, decode 
and display all channels, including multicast channels, broadcast by 
digital television station that can be displayed on an analog 
television receiver.
---------------------------------------------------------------------------

    \110\ Funai Comments at 7.
    \111\ See Section 3005(d) of the Act (emphasis added).
---------------------------------------------------------------------------

e. Requirements for Closed Captioning, Emergency Alert System (EAS) and 
Parental Controls (V-Chip)
    62. NTIA proposed in the NPRM that CECBs comply with FCC 
requirements for Closed Captioned, Emergency Alert System (EAS) and the 
required parental controls (V-chip).\112\ Several commenters noted that 
the FCC Rules require that television tuners decode Captioning and 
Parental Control (V-Chip) and, therefore, NTIA regulations are not 
required in this regard.\113\
---------------------------------------------------------------------------

    \112\ NPRM, 71 FR at 42,070.
    \113\ The FCC's Closed Captioning receiver requirements are 
contained in 47 CFR 15.122 and incorporate the CEA 708 standard 
``Digital Television (DTV) Closed Captioning'' which was developed 
from the CEA 608 standard. The FCC's Parental Control (V-Chip) 
receiver requirements are contained in 47 CFR 15.120 and incorporate 
the EIA/CEA-766-A standard. ``U.S. and Canadian Region Rating Tables 
(RRT) and Content Advisory Descriptors for Transport of Content 
Advisory Information using ATSC A/65-A Program and System 
Information Protocol (PSIP).'' FCC requirements for Closed 
Captioning and Parental controls were noted by Thomson, Funai and 
Brittain. Thomson Comments at 3; Funai Comments at 7; Richard 
Brittain Comments at 5.
---------------------------------------------------------------------------

    63. Several commenters state that there are no FCC-imposed specific 
EAS requirements on television receivers at this time.\114\ NTIA notes 
that the FCC requires that all digital television stations participate 
in the Emergency Alert System after December 31, 2006.\115\ The 
Emergency Alert System is an important way that national, state and 
local emergency management personnel reach the public with emergency 
messages. It is, therefore, in the public interest that all television 
viewers be able to receive and display EAS messages. The Final Rule 
will include a requirement that, in order to be eligible to participate 
in the NTIA Coupon Program, a CECB must be capable of receiving, 
decoding and displaying EAS messages broadcast by digital television 
stations as required by the FCC Rules.\116\
---------------------------------------------------------------------------

    \114\ Funai, Thomson and Richard Brittain noted that there were 
no FCC rules regarding EAS applicable to television receivers. Funai 
Comments at 7; Thomson Comments at 3; Richard Brittain Comments at 
5.
    \115\ In the Matter of Review of the Emergency Alert System, 
First Report an Order and Further Notice of Proposed Rulemaking, FCC 
05-191, November 3, 2005.
    \116\ 47 CFR Part 11.
---------------------------------------------------------------------------

    64. NTIA believes that it is helpful to manufacturers that the 
Final Rule provide a comprehensive listing of features required for a 
CECB. With regard to Closed Captioning and Parental Controls, NTIA will 
require that CECBs comply with the FCC receiver requirements for Closed 
Captioning and Parental Controls and NTIA will not impose any 
requirements beyond those contained in the FCC Rules.\117\
---------------------------------------------------------------------------

    \117\ 47 CFR 15.120, 15.122.
---------------------------------------------------------------------------

f. Tuning Capability to All Television Channels 2-69
    65. There was no opposition to the NPRM proposal that the converter 
box tune to all television channels, 2-69. This proposed rule 
reaffirmed the FCC Rules that ``TV broadcast receivers shall be capable 
of adequately receiving all channels allocated by the Commission to the 
television broadcast service.''\118\ NTIA clarifies that the CECB is 
required to receive signals for those television channels that will be 
``out of core'' (channels 52-69) once the digital transition is 
complete.
---------------------------------------------------------------------------

    \118\ 47 CFR 15.177(b).
---------------------------------------------------------------------------

    66. In its comments, CBA notes that it is important that the tuning 
capability of boxes not stop at channel 51 because Class A and LPTV 
stations are permitted to operate on channels 52-69 on a secondary 
basis even after the February 17, 2009 deadline when full power 
stations must broadcast within the FCC's ``core'' channels, 2-51. 
Moreover, operation on temporary companion digital channels will be 
permitted on channels 52-59, even after the end of the full-power 
transition; and temporary flash-cut digital operations is permitted on 
channels 60-69 when no other channel is available.\119\
---------------------------------------------------------------------------

    \119\ CBA Comments at 6; see also MTVA Comments at 11; Joint 
Industry Comments at Appendix 1.
---------------------------------------------------------------------------

    67. NTIA did not receive comments opposing the action. The Final 
Rule contains the requirement that the CECB receive all television 
channels 2-69.
g. Remote Control
    68. In the NPRM, NTIA proposed that the CECB be operable by and 
include a remote control. The Act specifically permits NTIA to require 
a remote control, and remote control units are now standard with almost 
all consumer video equipment such as television receivers, VCR and DVD 
players and recorders. There were few comments on the requirement to 
include a remote control. Brittain noted that there may be ``real-world 
reasons for requiring a remote (such as to provide the minimum ATSC 
functionality).''\120\
---------------------------------------------------------------------------

    \120\ Richard Brittain Comments at 5.
---------------------------------------------------------------------------

    69. NCAM called NTIA's attention to the difficulty the blind and 
visually handicapped have in using remote controls. NCAM recommended 
that the CECB's remote control contain dedicated keys which provide 
direct access to the closed captioning function and the SAP/video 
description function.\121\ To that extent NCAM directed NTIA's 
attention to Section 508 related to products purchased by the Federal 
government. Section 508 applies to all Federal agencies when they 
develop, procure, maintain or use electronic and information 
technology.\122\ Although converter boxes may fall under the definition 
of electronic and information technology, NTIA is not developing, 
procuring, maintaining or using CECBs; therefore, Section 508 is not 
applicable to CECBs in NTIA's program. Nevertheless, NTIA strongly 
urges manufacturers to take into consideration the needs of consumers 
with disabilities in the development of CECBs.
---------------------------------------------------------------------------

    \121\ NCAM Comments at 3. NCAM also suggested the inclusion of a 
``talking menu'' which can read out the functions that are 
highlighted on an on-screen menu. Id.
    \122\ See 29 U.S.C. 794d.
---------------------------------------------------------------------------

    70. In order to ease customer use of the remote control, the Final 
Rule will require that the remote control is supplied with batteries 
and uses standard technology and codes commonly used by television 
manufacturers as part of remote controls provided with television 
receivers. The standard codes for the remote control will be included 
in the CECB instructions so consumers can, at a minimum, program an 
existing remote control to turn on and off both the converter box and 
their existing analog television receiver. The Final Rule will also 
permit the manufacturer to provide a programmable remote control which 
can accept the code of the consumer's existing analog receiver and 
related video/audio equipment.
h. Program Information Displays (Electronic Program Guide)
    71. Many commenters raised the issue of whether the inclusion of an 
electronic program guide would disqualify a converter from being 
eligible for the Coupon Program. The Joint Industry Comments stated 
that the requirement that broadcasters transmit program

[[Page 12107]]

content information is included in the FCC's adoption of the ATSC A/65 
standard regarding transmission of Program System Information Protocol 
(PSIP), including program content details in digital television 
broadcast signals. They felt that this requirement ``is premised on the 
FCC's conviction that a mechanism for locating digital channel and 
program content, including multicast channels, is an integral feature 
of the digital television experience.''\123\
---------------------------------------------------------------------------

    \123\ Joint Industry Comments at 16-17; see also 47 CFR 73.682.
---------------------------------------------------------------------------

    72. The inclusion of an electronic program guide was supported by 
television receiver manufacturers Samsung, Thomson and LG Electronics. 
LG Electronics noted that ``[e]ase of use is particularly important 
given the ability of digital broadcasters to transmit multiple program 
streams (i.e, multicast) via their DTV signals.''\124\ CERC recommended 
that the converter boxes contain program guides and the capability to 
process PSIP data because such features may be of assistance to 
consumers that are inexperienced in finding and tuning digital 
channels. They also note that the components and software for 
displaying PSIP data are commonly included in the manufacture of 
televisions.\125\
---------------------------------------------------------------------------

    \124\ LG Comments at 7.
    \125\ CERC Comments at 10.
---------------------------------------------------------------------------

    73. Gemstar-TV Guide International (``Gemstar'') requested that 
NTIA permit the inclusion of hardware and software that would enable a 
consumer to receive Gemstar's TV Guide On Screen electronic program 
guide or other third-party guides. Gemstar notes that distribution of 
television program information is required by the A/65 standard, which 
defines the PSIP. The PSIP also includes information about the 
multicast channels and contains the parental control (V-chip) 
information required by the FCC. Gemstar further notes that many 
televisions are equipped with built-in capability to receive and 
display Gemstar's TV Guide On Screen service. Gemstar stated that it is 
working with the Society of Cable Telecommunications Engineers 
regarding the Digital Video Standard 706 ``VBI-in-MPEG'' which will 
allow carriage of existing analog standard definition video VBI signals 
in digital broadcast transmissions.\126\
---------------------------------------------------------------------------

    \126\ Gemstar Comments at 6-8.
---------------------------------------------------------------------------

    74. RadioShack sought clarification that it would be permissible to 
include full PSIP capability and noted that over-the air television 
viewers will see the number of broadcast channels increase fourfold and 
thus having the television appropriately display the channels is an 
important feature for these viewers. RadioShack also noted that because 
the functionality is imbedded in chips already, providing this 
functionality adds no cost to the box.\127\
---------------------------------------------------------------------------

    \127\ RadioShack Comments at 20.
---------------------------------------------------------------------------

    75. After reviewing the comments received on the NPRM, NTIA 
requires that the converter box receive, decode and display information 
contained in the PSIP broadcast pursuant to the A/65 standard. NTIA 
notes that television receivers must decode the PSIP in order to 
display the parental controls required by the FCC. The basic capability 
of decoding PSIP information, therefore, is already required of all 
converter boxes. Moreover, with PSIP functionality incorporated in ATSC 
tuner chips, it would be costly and impractical to require 
manufacturers to build converters without such functionality.
    76. Further, NTIA will permit, but not require, a CECB to display 
other electronic program information. As noted by many of the 
commenters, this capability will assist the consumer in navigating 
through the many channels that will be provided by digital 
broadcasters. NTIA believes the means to achieve such electronic 
program information should be left to the judgment of individual 
receiver manufacturers who will be permitted to make hardware and 
software modifications necessary to display electronic program 
information.
i. Software Upgrades
    77. Several commenters recommended that NTIA require that a CECB be 
capable of receiving software updates from an over-the-air terrestrial 
broadcast distribution service.\128\ Update Logic noted that the 
converter boxes are essentially small computers which contain a set of 
software programs, software that has bugs and needs updates. They also 
noted that in everything from PCs to cell phones to ATMs, routine and 
multiple software upgrades have been installed to fix errors, improve 
quality and maintain functionality. The converter box will be no 
different.\129\
---------------------------------------------------------------------------

    \128\ Letter from Members of the House Energy and Commerce 
Committee at 2 (CECBs should have the capability to be updated, 
modified, or repaired in circumstances where problems arise).
    \129\ Update Logic Comments at 1.
---------------------------------------------------------------------------

    78. CBA noted that digital television technology is likely to 
advance in the not-too-distant future, as equipment manufacturers seek 
to make the system more robust and efficient. If upgrade capability is 
forbidden, then the boxes that qualify for subsidies may become 
obsolete and may be discarded before the end of the useful life of 
their electronic components. In no event should the program impose a 
restriction that will shorten the useful life of the product.\130\
---------------------------------------------------------------------------

    \130\ CBA Comments at 6-7.
---------------------------------------------------------------------------

    79. NCAM echoed these comments and added that over-the-air software 
download mechanisms are available to assure the continuing successful 
operation of the boxes and should be required as part of the 
maintenance program that should also be put in place by manufacturers 
of the devices. Software downloads will accommodate any potential 
future changes to emergency alerting, closed captioning or V-chip 
parental control ratings as they may develop.\131\ Both the NAF and the 
National Council of Women's Organizations reiterated that converter 
boxes should have the capability of receiving software downloads to 
repair problems and make necessary updates.\132\
---------------------------------------------------------------------------

    \131\ NCAM Comments at 4-5.
    \132\ NAF Comments at 7; NCWO Comments at 1.
---------------------------------------------------------------------------

    80. National Datacast indicated that an industry standard for 
software downloads exists. ``The broadcast and CD industry anticipated 
the need for firmware updates and created the ATSC `Software Data 
Download Specification' (A-97) which was ratified in 2004.''\133\
---------------------------------------------------------------------------

    \133\ National Datacast Comments at 1.
---------------------------------------------------------------------------

    81. After reviewing these comments, NTIA believes that the 
automatic software download and upgrade capability proposed by the 
commenters is a desirable feature that could materially ease the 
consumer's use of the CECB. The use of automatic software upgrades 
could benefit both manufacturers in updating software and the users in 
upgrading a CECB's authorized features. It is NTIA's understanding that 
this automatic software update feature was only recently field tested 
and is not currently commercially available, even in expensive 
television receivers\134\ NTIA is reluctant to require that 
manufacturers include in a CECB this new technology which is just 
emerging from field tests. The Final Rule will, therefore, permit a 
CECB to receive and decode software pursuant to ATSC Standard A-97.
---------------------------------------------------------------------------

    \134\ Field tests were completed of the ``UpdateTV'' technology 
in July 2006 and the service is expected to be commercially 
available in 2007. Update Logic Comments at 5.
---------------------------------------------------------------------------

j. Energy Specifications
    82. In response to its request for comments on whether and to what 
extent NTIA should consider energy usage in determining eligibility

[[Page 12108]]

criteria,\135\ several comments urged NTIA to either adopt minimum 
requirements or, on a permissive basis, encourage manufacturers to 
incorporate certain energy efficiency features. In addition to several 
comments generally urging NTIA to address energy usage, three areas of 
specific recommendations emerged from the comments: (1) an automatic 
power down feature and maximum power level for converters in ``sleep'' 
or standby mode; (2) a maximum power level in the ``on'' or operating 
mode; and (3) the effect of an NTIA energy specification on various 
state regulations and proposals.
---------------------------------------------------------------------------

    \135\ NPRM, 71 FR at 42,070.
---------------------------------------------------------------------------

    83. The majority of comments support adoption of some type of 
energy usage requirement into the eligibility criteria for CECBs.\136\ 
With respect to NTIA's proposal to consider the CECB's cost, comments 
advised NTIA to consider that energy costs could raise the box's 
overall cost. According to the American Council for an Energy-Efficient 
Economy (ACEEE), a converter without energy usage limits of any kind 
would cost ``more than two times more to operate over its estimated 5 
year life than its estimated $40-$50 purchase cost.''\137\ Comments 
assert that energy standards for CECBs would reduce the energy cost for 
U.S. consumers, thereby lowering the overall cost of ownership.
---------------------------------------------------------------------------

    \136\ Natural Resources Defense Council (NRDC) Comments at 4; 
American Council for an Energy-Efficient Economy (ACEEE) Comments at 
1; Letter from Members of the House Energy and Commerce Committee at 
2.
    \137\ ACEEE Comments at 1.
---------------------------------------------------------------------------

    84. The record suggests that significant operating cost and energy 
savings could be achieved by requiring CECBs to include an auto power-
down feature and standby power limits. The Environmental Protection 
Agency (EPA) estimated that televisions are not in use in typical 
households for 18-20 hours per day, yet converter boxes may remain on 
during that time if no one turns them off or if there is no automatic 
power-down feature.\138\ The EPA urged NTIA to require an auto power-
down feature, to mandate that products be shipped with the feature 
enabled, and also suggested an auto power down feature after four hours 
of user inactivity, combined with a one watt power limit in standby 
mode.
---------------------------------------------------------------------------

    \138\ EPA Comments at 2.
---------------------------------------------------------------------------

    85. A supplementary comment was received from the Joint Industry 
Comments with the additional support of the Natural Resources Defense 
Council (NRDC) and the CERC\139\ requesting NTIA adopt two energy use 
performance specifications: (a) converters shall use no more than two 
watts of electricity in a ``Sleep'' state, and (b) converters shall 
meet an automatic power-down requirement after four hours of 
inactivity.\140\ The Joint Industry Energy Comment also recommended 
these settings be enabled at the factory as default settings that could 
be changed by the consumer.\141\
---------------------------------------------------------------------------

    \139\ Letter of CERC, The Association for Maximum Service 
Television, Inc., National Association of Broadcasters, and Natural 
Resources Defense Council to Honorable John M.R. Kneuer, (Joint 
Industry Energy Comments) (Oct. 25, 2006).
    \140\ This measurement is in accordance with industry standard, 
CEA 2013-A.
    \141\ Joint Industry Energy Comments at 4.
---------------------------------------------------------------------------

    86. Walmart also supported an automatic standby mode after four 
hours with a maximum allowable standby level of two watts.\142\ The 
standby energy level of two watts is also consistent with the CEA's 
voluntary standard CEA-2013 and is appropriate for the narrow purposes 
of the converter coupon program.\143\ No comments opposed adoption of a 
four-hour standby trigger or a two watt standby energy level. NTIA 
believes that consumers will benefit significantly from an automatic 
power-down feature triggered after four hours of inactivity and a 
``sleep'' state operating power level of two watts. Therefore, NTIA 
will require these performance capabilities for eligible converters.
---------------------------------------------------------------------------

    \142\ Walmart Comments at 2; see also NRDC Comments at 4; ACEEE 
Comments at 1.
    \143\ CEA Standard 2013, Digital STB Background Power 
Consumption.
---------------------------------------------------------------------------

    87. ACEEE calculated that significant cost savings could be 
realized through capping a CECB's operating power limits at eight 
watts, a reduction from an estimated 17 or 18 watts.\144\ No other 
comments suggested an operating limit be imposed. Walmart stated that 
while it is ``very supportive of efforts to reduce the `On-mode' power 
use due to the additional energy savings they can provide, we are 
deferring such discussions to other policy forums such as ENERGY STAR 
and state standard setting procedures.''\145\
---------------------------------------------------------------------------

    \144\ See EPA Comments at 2; ACEEE Comments at 1.
    \145\ Walmart Comments at 2.
---------------------------------------------------------------------------

    88. We are aware that, on January 31, 2007, the EPA's ENERGY STAR 
program adopted voluntary specifications for converter boxes. The EPA's 
voluntary specifications include one watt power consumption during the 
``sleep'' mode and also include eight watt power consumption during the 
``on'' mode.\146\ NTIA's requirements for a CECB include two watt power 
consumption during the ``sleep'' mode, and does not include a 
specification for power consumption during the ``on'' mode. NTIA urges 
manufacturers participating in the Coupon Program to adopt those ENERGY 
STAR specifications.
---------------------------------------------------------------------------

    \146\ The EPA ENERGY STAR specifications are available on the 
Internet at http://www.energystar.gov/ ia/partners/product--specs/ 
eligibility/dtas--elig.pdf.
---------------------------------------------------------------------------

    89. Some comments assert that cost savings could be achieved by 
adopting a single, national pre-emptive energy consumption 
standard.\147\ These parties are concerned that by permitting states to 
enact their own energy efficiency standards for converter boxes, the 
cost would rise for all converter boxes as manufacturers attempt to 
design, manufacturer, test and distribute boxes that comply with 
varying requirements of individual states. Motorola generally opposed 
including energy standards into the regulations, but said that to the 
extent that an energy requirement is considered, it should be 
instituted at the Federal level and not the state level to avoid 
inconsistent and costly requirements.\148\
---------------------------------------------------------------------------

    \147\ Joint Industry Energy Comments at 20; LG Comments at 11; 
Walmart Comments at 2; CERC Comments at 11; APTS Comments at 30.
    \148\ Motorola Comments at 3.
---------------------------------------------------------------------------

    90. NTIA is adopting these performance capabilities solely for the 
purpose of implementing the Coupon Program and does not intend to 
influence any other Federal or state agency activity regarding energy 
efficiency guidelines or requirements for CECBs. Converter boxes are 
not yet commercially available and manufacturers are willing to design 
and produce them as new products with these energy efficiency 
requirements.\149\ NTIA is also persuaded by those comments regarding 
the cost savings that can be achieved by converter boxes that 
incorporate energy efficient standards.
---------------------------------------------------------------------------

    \149\ LG Comments at 11-12; Thomson Comments at 6.
---------------------------------------------------------------------------

k. Other proposals regarding the converter box specifications.
    91. KTech, a manufacturer of DTV equipment, provided several 
recommendations regarding features of the CECB. KTech recommended that 
the CECB contain a LED power light to allow users to determine if the 
external power is connected to the unit. KTech noted that ``a `power-
good' display function [should be] allowed on the converter as a 
possible health and status display of the unit.''\150\ NTIA has 
determined that a power light LED will be useful to consumers in the 
operation of the CECB, and the Final Rule will

[[Page 12109]]

require a power light indicating when the unit is turned on.
---------------------------------------------------------------------------

    \150\ KTech Comments at 4.
---------------------------------------------------------------------------

    92. KTech believes that, as written, the NPRM only permits an 
antenna input and does not state that an external AC/DC power input 
connector is allowed on the CECB. In the Final Rule, NTIA clarifies the 
power input connections and also responds to several comments regarding 
the use of battery power. Brittain noted that, as a safety measure, 
``many people have a second, battery-operated TV for use if the power 
goes out; virtually all of these are analog, and it will likely be 
years before similar DTVs are available at an affordable price.'' He 
recommended that the Final Rule ``should be written so as not to 
prohibit battery-powered boxes, which would be a necessity for battery-
powered TVs.''\151\ Because of the public interest benefit, the Final 
Rule, therefore, permits, but does not require, manufacturers to 
provide converter boxes that operate on battery power as well as those 
which use an external AC/DC power input.
---------------------------------------------------------------------------

    \151\ See Richard Brittain Comments.
---------------------------------------------------------------------------

    93. KTech also recommends that NTIA require that the CECB display a 
variety of technical measurements to assist consumers in improving 
television reception. KTech notes a variety of possible reception 
impairments (e.g., multi-path interference and signal blockage). KTech 
recommends that the CECB display test measurement results for RF power 
level expressed in dBm, measured Signal-to-Noise Ratio number expressed 
in dB, measured Bit Error Rate and other technical measurements that 
could aid the consumer in taking steps to improve signal 
reception.\152\
---------------------------------------------------------------------------

    \152\ KTech Comments at 4.
---------------------------------------------------------------------------

    94. NTIA recognizes that television signal reception for some 
consumers will present challenges, whether analog or digital. As 
discussed earlier, to assist consumers in improving signal reception, 
the Final Rule permits the inclusion of a smart antenna interface in 
the signal box. NTIA notes that the A/74 guidelines states that ``[t]he 
capability to display received signal quality conditions on a quasi-
real time basis is a feature that should be included in all digital 
broadcast receivers.'' To further assist consumers in improving signal 
reception, we include in the Final Rule provisions that require 
manufacturers to include software which will display on the television 
receiver signal strength and permit the display of other operating 
parameters chosen by the manufacturer. Display of signal information on 
the television receiver will provide information to the consumer at 
minimal cost. NTIA will not, however, specify exactly what such signal-
quality information should contain. NTIA will follow the guideline of 
A/74, that ``[m]eans to achieve such signal quality indications should 
be left to the judgment of individual receiver manufacturers.''\153\
---------------------------------------------------------------------------

    \153\ Advanced Television Standard Committee, Standard A/74, 
section 4.7 ``Consumer Interface-Received Signal Quality 
Indicator.''
---------------------------------------------------------------------------

    95. Brittain recommends that the CECB come with a Type F cable to 
connect the RF output of the converter box to the RF input of the 
television receiver.\154\ Because most consumers who purchase a CECB 
will require at least a cable of this type, we believe that such an RF 
cable is integral to the use of the converter and should be required. 
The Final Rule will, therefore, require that manufacturers supply an RF 
cable and also permit manufacturers to supply additional cables, such 
as a cable with three RCA connectors, if they desire.
---------------------------------------------------------------------------

    \154\ Richard Brittain Comments.
---------------------------------------------------------------------------

F. Manufacturer Certification

    96. In the NPRM, NTIA proposed that manufacturers self-certify that 
their CECBs meet NTIA's performance specifications and reserved the 
right to test CECBs that have been self-certified to ensure that they 
meet NTIA's technical eligibility requirements.\155\ NTIA sought 
comment on this proposal and other compliance testing and verification 
procedures that could be used for the Coupon Program.
---------------------------------------------------------------------------

    \155\ NPRM, 71 FR at 42,070.
---------------------------------------------------------------------------

    97. Several commenting parties referred to the FCC's well-
established three-tiered approach for Equipment Authorization.\156\ 
Most supported NTIA's proposal that, after successful testing, 
manufacturers self-certify that their CECBs meet the NTIA eligibility 
features and functionality; some recommended that the manufacturer's 
test results be submitted to a third party for an independent level of 
review.\157\ Most parties felt that ``certification,'' the most 
stringent level of FCC technical approval, applicable to new 
technology, computers, cell phones and other non-television products, 
was inapplicable to CECBs. Motorola said that a third-party 
certification process would decrease the amount of time available for 
product development and would increase the costs of bringing the device 
to market.\158\ RadioShack opposed government testing of each model 
certified as it would burden manufacturers and delay product 
introduction.\159\
---------------------------------------------------------------------------

    \156\ ``Verification'' or self-certification; ``Declaration of 
Conformity'' which requires testing by third-party laboratories 
selected from an accredited list; and ``Certification'' under which 
the FCC itself tests products prior to approval. The procedures are 
described at http://www.fcc.gov/oet/ea/procedures.html#sec1.
    \157\ Thomson Comment at 7; LG Comments at 10; CERC Comments at 
10-11; Funai Comments at 12-13.
    \158\ Motorola Comments at 2.
    \159\ RadioShack Comments at 21.
---------------------------------------------------------------------------

    98. Most commenters supported an approval process proposed by the 
Joint Industry Comments, termed ``verification plus.'' The Joint 
Industry Comments stated the following:
     Rather than developing a new and untested conformity assessment 
program, the Joint Industry Commenters urge that NTIA leverage the 
existing resources of the FCC, the longstanding expert agency in this 
area, to conduct an efficient and accurate conformity assessment 
process. Specifically, NTIA should adopt a ``verification plus'' 
process, based on the FCC's present, well-established and well-
understood verification procedures. Under these procedures, 
manufacturers would be responsible for conducting compliance testing at 
their own facilities or through an independent laboratory contracted by 
the manufacturer. This process would ensure efficiency and avoid delays 
that would occur if the FCC or any other third-party entity were 
required independently to test every converter box. To ensure the 
integrity of the program, however, the FCC, most likely through its 
Office of Engineering and Technology, should have the ability to be 
involved in the approval process before the devices are released to 
market. To this end, manufacturers should be required to submit their 
test results, along with appropriate samples of the tested equipment, 
to the FCC. The FCC should then review test results to ensure 
conformity between the converter boxes and the NTIA's performance 
standards which themselves are based on standards endorsed by or known 
to the FCC. If the FCC does not alert NTIA and the manufacturer of any 
problem within 15 days of when the data were submitted, the device 
should automatically qualify for the program. If the FCC does issue 
notification of a problem, however, it should expedite its own testing 
and rapidly notify NTIA and the manufacturer of any

[[Page 12110]]

noncompliance.\160\
---------------------------------------------------------------------------

    \160\ Joint Industry Comments at 21-22.
---------------------------------------------------------------------------

    99. NTIA will adopt the FCC's verification process as the core of 
its technical acceptance plan to identify CECBs. As noted, several 
stakeholders in the Coupon Program, including manufacturers, retailers 
and broadcasters, support this proposal. This approval process will not 
unduly burden manufacturers and will not add significant costs or delay 
to the development and production of CECBs.
    100. NTIA believes it is not procedurally sound for converters to 
become ``automatically'' eligible for the Coupon Program without agency 
confirmation. While manufacturers may market any converter or other 
device including digital-to-analog decoding functionality outside of 
the Coupon Program, NTIA intends to use a central electronic tracking 
database to track retailers' point-of-sale (POS) transactions including 
authorization of coupon redemptions and sales data of CECBs.\161\ 
Action is required, therefore, by NTIA to load and update eligibility 
data (e.g., product SKU) for each model approved by NTIA.
---------------------------------------------------------------------------

    \161\ Letter from Members of the House Energy and Commerce 
Committee at 3 (coupon program should be designed so that retailers 
can provide updated information concerning the inventory of 
converter boxes in order to remedy supply difficulties promptly).
---------------------------------------------------------------------------

    101. Therefore, the Final Rule requires manufacturers to conduct 
tests or have independent laboratories conduct tests to demonstrate 
that each converter model meets the features and performance 
specifications set forth in our regulations for CECBs. It also requires 
manufacturers to provide detailed certified test results along with a 
sample of the tested equipment to NTIA and its designee. NTIA has 
entered into an agreement with the FCC by which the FCC may review the 
manufactures' converter box test results submitted to NTIA. The FCC may 
test converter boxes, if necessary. NTIA will base its decision to 
approve each converter box upon its consultation with the FCC. A Public 
Notice will be published subsequent to issuance of the Final Rule to 
provide manufacturers with specific address and contact information 
regarding the required submission of these materials. NTIA will record 
the date test results and sample models are received and will notify 
the manufacturer of the date by which the agency intends to make a 
determination of eligibility. In general, NTIA will attempt to ensure 
that the review of test results and any additional testing are 
completed within the 15-day period proposed by the Joint Industry 
Comments. As promptly as possible, NTIA will issue a statement of 
eligibility or non-eligibility for each converter model submitted by a 
manufacturer. The agency will attempt to meet demand, although the 
pacing of manufacturer submissions may be uneven. Because it is 
impossible to determine at this time how many manufacturers will submit 
test results and equipment, whether multiple models will be built by 
each manufacturer, and when converters will be proposed for inclusion 
in the Coupon Program, NTIA must allow flexibility to establish the 
appropriate time frame for agency review. As noted above, NTIA will 
promptly include make and model number information in its POS data, 
consumer education materials and other files used to identify CECBs.
    102. Finally, NTIA reserves the right to test CECBs. As an 
additional means to ensure that converters made available to the public 
as part of the Coupon Program meet NTIA's technical specifications, 
NTIA may select converters to test at any time during the course of the 
Coupon Program. If a converter box appears not to meet NTIA's technical 
specifications, NTIA will follow a process similar to that used by the 
FCC in consulting with the manufacturer. If a converter box model is 
subsequently found not to meet the features and performance 
specifications set forth in the Final Rule, that model will no longer 
be eligible for the Coupon Program.

G. Retailer Participation

    103. In the NPRM, NTIA noted that participation by retailers in 
this program would be voluntary, and that NTIA would not compensate 
retailers that choose to participate. Given the nature of the program, 
NTIA proposed to permit consumers to redeem coupons at retailers that 
have established production and distribution channels and who have 
demonstrated that they can redeem coupons expeditiously and 
efficiently.\162\ NTIA proposed to require retailers to adhere to and 
enforce coupon restrictions such as prohibiting coupon holders from 
using two coupons in combination towards the purchase of a single CECB 
and prohibiting consumers from using coupons to purchase any device 
other than an eligible converter box, pursuant to these regulations. 
NTIA proposed to reimburse retailers within 60 days after receiving 
sales information related to CECBs.\163\
---------------------------------------------------------------------------

    \162\ NPRM, 71 FR at 42,070.
    \163\ Id.
---------------------------------------------------------------------------

    104. Several comments were received from retail companies, 
organizations and members of the public addressing these proposals and 
raising other issues affecting retailers. NTIA believes that the 
regulations of this one-time program should not discourage retailer 
participation. Some comments noted that there has not been a 
government-sponsored program involving retailers quite like the Coupon 
Program, but that other government programs such as the USDA's Food 
Stamps and Women, Infants and Children's benefits may provide examples 
for NTIA to follow.\164\
---------------------------------------------------------------------------

    \164\ RadioShack Comments at 2-3.
---------------------------------------------------------------------------

    105. Commenters made recommendations and asked NTIA for 
clarification with respect to (a) retailer obligations to predict or 
meet demand for CECBs; (b) legal liability and additional operating 
costs for retailers who voluntarily participate in the program; (c) the 
timing for retailers to be ready to redeem coupons; (d) need for 
confidential treatment of sales data; (e) retailer certification 
criteria and procedures; (f) payment terms to retailers; and (g) 
consumer and retailer appeals.
a. Retailer Obligations to Predict or Meet Demand
    106. CERC stated that retailers and manufacturers should not be 
subject to sanction for an inability to predict or meet demand. They 
pointed out that the demand for converters may peak in the millions and 
then drop toward zero, all within a period as short as 90 days. At the 
end of the Coupon Program, excess inventory may be unsellable at any 
price.\165\ RadioShack opposed an obligation on the part of the 
retailer to maintain inventory in all stores at all times because it 
would be burdensome and perhaps impossible to meet such a 
requirement.\166\
---------------------------------------------------------------------------

    \165\ CERC Comments at 4.
    \166\ RadioShack Comments at 16.
---------------------------------------------------------------------------

    107. NTIA recognizes that the product cycle for converters is 
unknown and perhaps atypical of consumer electronics products 
generally. Furthermore, NTIA does not want retailers to decline to 
participate because they feel that our requirements are too burdensome 
or unrealistic. Therefore, NTIA will clarify that retailers are 
expected to follow commercially reasonable practices in ordering and 
managing inventories of CECBs.
    108. CERC raised a related point in response to NTIA's proposal 
that retailers accept the obligation ``to honor all valid coupons that 
are tendered in

[[Page 12111]]

the authorized manner.''\167\ A reasonable interpretation, according to 
CERC, is that a retailer will honor valid coupons ``if the retailer is 
offering subsidized Converters for sale at the time the coupon is 
presented by the consumer.''\168\ NTIA agrees and will not expect 
retailers to attempt to redeem coupons if they have no CECBs available 
for sale.
---------------------------------------------------------------------------

    \167\ See NPRM, 71 FR at 42,070.
    \168\ CERC Comments at 11.
---------------------------------------------------------------------------

b. Legal Liability and Additional Cost for Retailer Participation
    109. CERC described NTIA's statement in the NPRM that retailers 
must certify ``under penalty of law'' as ``insufficiently vague to 
offer guidance yet daunting in their possible consequence.''\169\ CERC 
stated that any interested retailer would reasonably want to be fully 
aware of the potential for liability, to third parties as well as to 
the government, before agreeing to participate.\170\ Similarly, 
RadioShack asked us to clarify what was meant that retailer 
certification statements would be made ``under penalty of law.'' They 
suggested that penalties ``would only apply to intentional efforts to 
defraud the program and that unintentional non-compliance or error 
would not be subject to penalties.''\171\
---------------------------------------------------------------------------

    \169\ CERC Comments at 12 (quoting NPRM, 71 FR at 42,070).
    \170\ Id.
    \171\ RadioShack Comments at 16.
---------------------------------------------------------------------------

    110. The Act did not include any specific government remedies or 
civil or criminal penalties for violations or non-compliance with the 
statute or the regulations promulgated by NTIA thereunder. Retailers 
should be aware, however, that other statutes provide for civil or 
criminal penalties for wrongdoing in connection with federal programs 
such as the Coupon Program.\172\ For example, the False Claims Act 
establishes penalties for ``any person who knowingly presents, or 
causes to be presented, to an officer of employee of the United States 
Government . . . a false or fraudulent claim for payment or 
approval.''\173\ NTIA clarifies that it does not intend to sanction 
retailers for unintentional non-compliance or error. NTIA encourages 
retailers and other participants in the Coupon Program to familiarize 
themselves with the laws that impose liability for making false 
statements to the Federal government, for making false claims, or 
engaging in other activities that violate Federal law.
---------------------------------------------------------------------------

    \172\ See e.g., 18 U.S.C. 1001 (``False Statement Statute''); 31 
U.S.C. 3729 (False Claims Act).
    \173\ 31 U.S.C. 3729(a).
---------------------------------------------------------------------------

    111. CERC and other commenters expressed concern that they may 
incur substantial costs to participate in the program. CERC stated that 
the ``[c]onverter is a unique, limited occasion product that is likely 
to be subject to unique laws of supply, demand, and subsidy. As a 
matter of public policy, there are simply too many novel costs and risk 
factors, and imponderables, for NTIA to place these investments, 
expenses, and risks solely on the backs of retail vendors who come 
forward to participate in this program.''\174\ The electronically 
trackable coupon will necessitate custom changes to retailers' point of 
purchase systems. RadioShack added that ``[i]n a normal retail 
environment, a retailer would likely consider this cost as an 
investment, amortized against the sales life of the many products sold 
in its stores. . .[But] there is nothing against which to amortize this 
cost - - the shelf life of the eligible converter box is as short as 
the 18 months of the program and the system upgrade is only required 
for the purchase of the few models of eligible converter boxes.''\175\ 
Best Buy also pointed out that their ``current electronic processing 
systems are not able to limit an Electronic Coupon Card to a single 
product purchase.''\176\
---------------------------------------------------------------------------

    \174\ CERC Comments at 11.
    \175\ RadioShack Comments at 17.
    \176\ Best Buy Comments at 2.
---------------------------------------------------------------------------

    112. CERC stated that it would be prudent to use some of the 
administrative funds authorized for the Coupon Program for ``NTIA's 
contract(s) with its vendor(s) to provide--in light of the apparent 
inadequacy of existing commercial channels--for the distribution of the 
necessary software and other system support to participating retailers 
as an included cost of the program.''\177\ RadioShack said such 
payments could be ``considered analogous to the manufacturers' common 
payment to retailers of fees for the handling of their manufacturing 
coupons.''\178\ In the NPRM, NTIA stated that it will not compensate 
retailers for participating in the program. NTIA maintains that it does 
not intend to compensate retailers directly for participation in the 
program. NTIA, however, fully intends to distribute and process coupons 
consistent with reasonable commercial practices that do not place undue 
burdens on participating retailers.
---------------------------------------------------------------------------

    \177\ CERC Comments at 11.
    \178\ RadioShack Comments at 17.
---------------------------------------------------------------------------

c. Timing of Retailers to be Ready to Redeem Coupons
    113. Best Buy urged NTIA and its contractor to ``avoid the holiday 
months of October, November, December and January to require 
participating retailers to implement or upgrade any POS systems.''\179\ 
Best Buy stated that because these months include the heaviest shopping 
traffic and volume of transactions of the year, it could not risk any 
costly down time of its systems or employees caused by complicated 
upgrades.\180\ CERC said that ``once into the holiday shopping season, 
it would be very difficult for retailers to modify their point of sale 
and other hardware and software systems so as to be ready by January 1, 
2008.''\181\
---------------------------------------------------------------------------

    \179\ Best Buy Comments at 2.
    \180\ Id.
    \181\ CERC Comments at 4.
---------------------------------------------------------------------------

    114. NTIA reiterates that it is its intent to establish regulations 
and procedures that are reasonable and practical in light of commercial 
constraints. The Act requires NTIA to accept requests for coupons 
between January 1, 2008 and March 31, 2009, and thus, it proposed that 
retailers be ready to redeem coupons starting January 1, 2008, 
consistent with the statutory guidance. NTIA expects widespread 
retailer POS system modifications to occur in the first quarter of 
2008.
d. Confidential Treatment of Sales and Inventory Data
    115. Consistent with the legislative history regarding measures to 
reduce fraud and abuse, NTIA intends to establish a system for coupon 
redemption that is easily audited.\182\ NTIA will need to ensure that 
only valid coupons are redeemed by those actually requesting them, how 
many CECBs are being sold, how many are available in the market, and 
how demand is pacing for the program's initial and contingent funding. 
NTIA will need cooperation from retailers to provide reports of that 
nature. CERC pointed out that NTIA will receive ``sales data, 
pertaining to individual retailers and manufacturers, that ordinarily 
would be held confidential by these entities. Accordingly, it will be 
necessary to protect the non-aggregate sale data of particular 
retailers and their vendors, as highly confidential.''\183\ RadioShack 
urged NTIA to clarify that its vendor ``will retain such proprietary 
information confidentially'' and that it

[[Page 12112]]

will ``not be released to the public or to other retailers or 
manufacturers.''\184\
---------------------------------------------------------------------------

    \182\ See Conf. Rep. at 202.
    \183\ Id. at 12.
    \184\ RadioShack Comments at 15.
---------------------------------------------------------------------------

    116. Again, because NTIA wishes to encourage participation by a 
wide range of retail entities in the Coupon Program, competitively 
sensitive or proprietary information provided by retailers in non-
aggregated form to NTIA will be treated confidentially consistent with 
federal law and regulations, including Freedom of Information Act 
requests and court orders.
e. Retailer Certification and Procedures
    117. Commenting parties generally supported NTIA's proposal that 
retailers comply with specific requirements by certifying that they 
will: (1) provide information to customers about the necessity for and 
the installation of a CECB; (2) have in place systems that can be 
easily audited as well as systems that have the ability to prevent 
fraud and abuse in the Coupon Program; (3) are willing to be audited at 
any time during the course of the Coupon Program; (4) have the ability 
to electronically provide NTIA with sales information related to 
coupons used in the purchase of CECBs, specifically tracking each 
serialized coupon by number with a corresponding certified converter 
box purchase; and (5) will only submit coupons for redemption as a 
result of purchases of CECB models certified by NTIA.\185\
---------------------------------------------------------------------------

    \185\ NPRM, 71 FR at 42,070.
---------------------------------------------------------------------------

    118. CERC stated that certification should entail representations 
by retailers that they have ``established production and distribution 
channels and have demonstrated that they can redeem coupons 
expeditiously and efficiently.''\186\ Radio Shack urged NTIA to require 
participating retailers ``to demonstrate that they have experience in 
consumer electronics retail.''\187\
---------------------------------------------------------------------------

    \186\ CERC Comments at 11.
    \187\ RadioShack Comments at 15.
---------------------------------------------------------------------------

    119. NTIA agrees that retailers must have experience in consumer 
electronics retail sales sufficient to support the sale of CECBs as an 
additional CE product. We do not think that this program is appropriate 
for brand new ventures, either of the bricks and mortar type or online 
sellers. NTIA agrees with CERC that demonstrated capabilities as to 
staff, training, capacity to carry inventory and to order and take 
delivery of CECBs through commercial channels is important.\188\ As a 
result, retailers will need to certify that they have been engaged in 
the consumer electronics business for at least one year prior to their 
application. This requirement may be waived by NTIA upon a showing of 
good cause. A determination of ``good cause'' will be based on a 
showing of what is the best interest of the coupon program. This 
application process will provide NTIA with information well in advance 
of the 2008 launch of which retailers will participate and what markets 
will be served.
---------------------------------------------------------------------------

    \188\ CERC Comments at 11.
---------------------------------------------------------------------------

    120. The comments from retailers were unanimous that NTIA should 
dispense with the proposed consumer certifications regarding 
eligibility. CERC said that the two per household limit ``can be 
complied with by the simply electronic means of not allowing the system 
to allocate more than two coupons to any specific household 
address.''\189\ RadioShack said that ``fraud would be minimized by use 
of an electronic coupon card'' with several suggestions on how the 
request, distribution, and redemption system would work.\190\ NTIA 
agrees that an electronically trackable system will enable NTIA to 
reduce the chance that no more than two coupons are sent to a given 
household. NTIA agrees that retail employees should not be placed in 
the position of having to judge whether a particular customer is 
eligible to purchase the product. However, NTIA expects retailers to 
report suspicious patterns of customer behavior to NTIA. Recognizing 
that many scenarios may exist for fraudulent activity, NTIA will leave 
it to the retailer's discretion as to the type of behavior that 
requires notification to NTIA.
---------------------------------------------------------------------------

    \189\ CERC Comments at 9.
    \190\ RadioShack Comments at 10-11.
---------------------------------------------------------------------------

    121. Some commenters addressed the need for retailers to provide 
information to customers about converter boxes. In support of NTIA's 
proposal, RadioShack said that retailers should be required to 
demonstrate that their sales people have received ``specific training 
on the necessity for and use of the converter box so that consumers can 
ask questions and receive accurate answers. [B]ecause the need for 
specific features and capabilities will vary based on the age and 
location of televisions, knowledgeable sales people are essential to 
the success of the converter box program.''\191\ Best Buy said that 
``[w]hile it is reasonable to expect participating retailers to inform 
consumers on which converter boxes are eligible for the coupon subsidy, 
they should not be legally required to invest in displays, placards, or 
advertisements. Retailers should be allowed flexibility to incorporate 
the list of eligible converters into existing consumer education and 
communications plans and materials at their own discretion.''\192\ NTIA 
agrees and will not specify how retailers are to market or promote 
CECBs.
---------------------------------------------------------------------------

    \191\ RadioShack Comments at 15.
    \192\ Best Buy Comments at 3.
---------------------------------------------------------------------------

f. Payment Terms.
    122. NTIA proposed that retailers participating in the Coupon 
Program would be required to present to the Government coupons for 
payment within 30 days of the redemption transaction and retain hard 
copies of sale information for one year, and that payment from the 
Government would be made to the retailer for all validly redeemed 
coupons within 60 days of receipt by the Government.\193\ Commenting 
parties asserted that if an electronic system is used, there would be 
no need for a records retention requirement, and that the proposed 60-
day payment would be unnecessarily long.
---------------------------------------------------------------------------

    \193\ NPRM, 71 FR at 42,070.
---------------------------------------------------------------------------

    123. RadioShack said that ``a retailer may be reluctant to 
participate in the program, knowing that they are in effect lending the 
government $40 for each sale for at least 60 days.''\194\ Instead, 
RadioShack suggested that ``reimbursement should occur immediately upon 
a transaction. . . [W]ith an electronic coupon card system, the 
reimbursement would be automatic with the transaction, saving an 
endless amount of time in the transaction settlement process.''\195\
---------------------------------------------------------------------------

    \194\ RadioShack Comments at 16.
    \195\ Id.
---------------------------------------------------------------------------

    124. Payments from program funds to retailers will be accomplished 
in a commercially reasonable manner. While it may be possible for 
payment to occur within a day or two if an electronically trackable 
system is used, payments will typically be processed no later than 3 
business days after the retailer submits an authorized transaction to 
NTIA or its contractor. For purposes of these payments to retailers, 
``business day'' means a calendar day other than a Saturday, Sunday or 
a federal holiday. To ensure that vendors are paid promptly, they will 
be required to complete a Central Contractor Registration (CCR). CCR 
validates the registrant information and electronically shares the 
secure and encrypted data with the federal agencies' finance offices to 
facilitate paperless payments through electronic funds transfer (EFT). 
To ensure payment to the retailer and provide a closed loop audit 
trail, NTIA will require retailers to provide positive verification 
that payment has been received for authorized coupon redemption 
transactions. With respect

[[Page 12113]]

to retaining hard copies of sales information for one year, in view of 
the decision to allow the use of ECCs, NTIA will not require retailers 
to retain hard copies of this information. However, for auditing 
purposes, sales information must be retained for at least one year and 
to the extent that retailers choose to retain it electronically, they 
should be prepared to convert it to a hard copy format if requested by 
NTIA.

H. Consumer Education

    125. Many commenters offered suggestions about effective means of 
educating consumers about the Coupon Program. While the program 
regulations will not directly address consumer education issues, NTIA 
will carefully consider the many commenters' advice as it develops a 
comprehensive consumer education campaign. In addition, the comments 
demonstrated the link between consumer education and other aspects of 
the proposed Rule, such as coupon eligibility, application process and 
certification of eligible boxes and participating retailers. Commenters 
offered many useful suggestions about educating consumers about the 
Coupon Program. Mindful of the need to manage our consumer education 
resources effectively and to work cooperatively with the consumer 
electronics and broadcast industry, community organizations, and the 
FCC, NTIA will build on the commenters' suggestions to develop a 
comprehensive consumer education effort.

III. Procedural Matters

Paperwork Reduction Act

    The Paperwork Reduction Act (PRA), 44 U.S.C. Chapter 35, requires 
federal agencies to seek and obtain OMB approval before undertaking a 
collection of information directed to ten or more persons. Under the 
PRA, a rule creates a ``collection of information'' where ten or more 
persons are asked to report, provide, disclose, or record 
``information'' in response to ``identical questions.''
    In the NPRM, NTIA invited comment on three information collections 
required for the implementation of the Coupon Program. To successfully 
administer the Coupon Program, NTIA requested approval on three 
collection requirements and reporting requirements for: (1) The 
applications that households must submit to receive coupons; (2) the 
certification form for retailers that will sell the converter boxes and 
submit coupons for redemption; and (3) the certification form and 
recordkeeping and reporting requirements for manufacturers regarding 
converter boxes eligible for the coupon program. Specifically, comments 
were invited on (a) whether the collection of information is necessary 
for the proper performance of the functions of the agency, including 
whether the information will have practical utility; (b) the accuracy 
of the agency's estimate of burden including the validity of the 
methodology and assumptions used; (c) ways to enhance the quality, 
utility; and clarity of the information collected; and (d) ways to 
minimize the burden of the collection of information on those who are 
to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology.
    NTIA received over 100 comments in response to the NPRM. There were 
no comments submitted specifically with respect to the information 
collection and recordkeeping requirements. The comments to the NPRM and 
the analysis to the NPRM, however, resulted in changes or modifications 
from the proposed rule to the Final Rule. Accordingly, NTIA has 
modified certain aspects of the information collection and reporting 
requirements. These modifications are discussed below.
    (1) Title: Application for the Digital-to-Analog Converter Box 
Coupon
    Type of Request: New Collection
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average .25 hours (15 minutes) per 
transaction
    Respondents: U.S. households
    Estimated Number of Respondents: 110 million
    Estimated Number of Responses per Respondent: 1
    Estimated Total Annual Burden on Respondents: 27,500,000 hours
    This new information collection is for the application required to 
request and receive a coupon to purchase a digital-to-analog converter 
box. This collection of information is necessary for NTIA to provide 
the benefit to U.S. households as directed in the Act. In the NPRM, 
NTIA estimated the public reporting burden for this collection to 
average .25 hours (15 minutes) per respondent. The NPRM identified the 
respondents affected by this information collection as U.S. television 
households that receive over-the-air television in an analog format. 
The estimated number of respondents was 21 million U.S. television 
households. Because the Final Rule has been changed to include all U.S. 
households, the estimated number of respondents is 110 million. This 
estimate assumes that all U.S. households with analog television sets 
will apply for a coupon. The Final Rule requires consumers to submit 
the following: (1) name; (2) address; (3) the number of coupons 
requested; and (4) a certification as to whether they receive cable, 
satellite, or other pay televison service.
    The OMB Approval Number of the information collection will be 
provided in a subsequent Federal Register notice.
    (2) Title: Certification for Retailer to Accept and Redeem Coupons 
for the purchase of a Digital-to-Analog Converter Box Coupon
    Type of Request: New Collection
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average .25 hours per respondent
    Respondents: Retailers that accept coupons for digital-to-analog 
converter boxes
    Estimated Number of Respondents: 10,000
    Estimated Number of Responses per Respondent: 1
    Estimated Total Annual Burden on Respondents: 2,500 hours
    As part of the coupon program, retailers that choose to participate 
in the program by selling converter boxes must accept the coupons from 
consumers and then seek reimbursement from the Federal Government. The 
Final Rule requires retailers that wish to participate in the program 
to submit a form to the agency which requires them to self-certify to 
that they: (1) have been engaged in the consumer electronics retail 
business for at least one year; (2) have completed a Central Contractor 
Registration; (3) have in place systems that can be easily audited as 
well as systems that can provide adequate data to minimize fraud and 
abuse in retail redemption and government payment for coupons; (4) 
agree to have coupons box sales audited at any time during the term of 
participation in the coupon program by the U. S. Government or an 
independent auditor at no expense to the retailer; (5) will provide 
NTIA electronically with redemption information and payment receipts 
related to coupons used in the purchase of converter boxes, 
specifically tracking each serialized coupon by number with a 
corresponding converter box purchase; (6) agree only to accept coupons 
for, and receive payment from authorized purchases made for CECBs.
    The OMB Approval Number of the information collection will be 
provided in a subsequent Federal Register notice.
    (3) Title: Certification of Digital to Analog Converter Box
    Type of Request: New Collection

[[Page 12114]]

    Estimate of Burden: Public reporting burden for this collection is 
estimated at 1.25 hour per respondent
    Respondents: Companies that manufacture digital to analog converter 
boxes who request NTIA certification
    Estimated Number of Respondents: 10
    Estimated Number of Responses per Respondent: 1
    Estimated Total Annual Burden on Respondents: 12.5 hours
    Manufacturers that wish to participate in the program must submit a 
notice of intent to NTIA at least three months prior to submitting test 
results and sample models of converter boxes. The notice shall include 
a brief description of the proposed converter box, including permitted 
as well as required features, and the date which the proposed converter 
box is expected to be available for testing. The notice of intent shall 
supply the name, title and address and phone number of an individual 
responsible for the manufacturer's submission. When the manufacturer 
submits its converter box to NTIA, it shall also provide test results 
along with a certification of the testing supervisor as to their 
authenticity, completeness, and accuracy.
    The OMB Approval Number of the information collection will be 
provided in a subsequent Federal Register notice.

Executive Order 12866

    This Final Rule has been determined to be economically significant 
for purposes of Executive Order 12866; and therefore, has been reviewed 
by the Office of Management and Budget (OMB). In accordance with 
Executive Order 12866, and Economic Analysis was completed outlining 
the costs and benefits of implementing this program. The complete 
analysis is available from NTIA upon request.

Executive Order 12988

    This Final Rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. NTIA has determined that the rule meets the 
applicable standards provided in section 3 of the Executive Order, to 
minimize litigation, eliminate ambiguity, and reduce burden.

Congressional Review Act

    This rule has been determined to be major under the Congressional 
Review Act, 5 U.S.C. 801 et seq.

Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act, an Initial 
Regulatory Flexibility Analysis (IRFA) was prepared and published with 
the NPRM.\196\ A copy of the IRFA was provided to the Chief Counsel for 
Advocacy of the Small Business Administration. Although NTIA 
specifically sought comment on the costs to small entities of complying 
with the Final Rule, no commenters provided specific cost information. 
NTIA has carefully considered whether to certify that the Final Rule 
will not have a significant impact on a substantial number of small 
entities. NTIA continues to believe the Final Rule's impact will not be 
substantial in the case of small entities. However, NTIA cannot 
quantify the impact the Final Rule will have on such entities. 
Therefore, in the interest of thoroughness, NTIA has prepared the 
following Final Regulatory Flexibility Analysis (RFA) with this Final 
Rule in accordance with the Regulatory Flexibility Act.\197\
---------------------------------------------------------------------------

    \196\See NPRM, 71 FR at 42,072, Appendix A.
    \197\ See 5 U.S.C. Sec.  604.

1. Succinct Statement of the Need for, and Objectives of the Rule:
    NTIA is issuing this Final Rule because of a statutory mandate to 
create and implement a coupon program that will affect the public under 
Section 3005 of the Digital Television Transition and Public Safety Act 
of 2005.\198\ The Act requires the Federal Communications Commission 
(FCC) to require full-power television stations to cease analog 
broadcasting after February 17, 2009. After that date, households using 
analog-only televisions will no longer be able to receive over the air 
television broadcasts unless the television is connected to a converter 
box that converts the digital signal to analog format. As a result, the 
Act authorizes NTIA to create a program whereby U.S. households can 
apply for $40 coupons to be used towards the purchase of digital-to-
analog converter boxes.
---------------------------------------------------------------------------

    \198\ See Title III of the Deficit Reduction Act of 2005, Pub. 
L. 109-171, 120 Stat. 4, 21 (Feb. 8, 2006).
---------------------------------------------------------------------------

    The Final Rule sets forth a framework to implement the coupon 
program as authorized by the Act. The Final Rule also provides clear 
guidance for consumers, manufacturers, and retailers regarding 
eligibility, responsibilities, and certifications.

2. Summary of the Significant Issues Raised by the Public Comments in 
Response to the IRFA; Summary of the Assessment of the Agency of Such 
Issues; and Statement of Any Changes Made in the Rule as a Result of 
Such Comments:
    The only comments that directly responded to the IRFA were those 
submitted by Stored Value Systems, Inc. (Stored Value), although other 
comments submitted in response to the NPRM addressed issues raised in 
the IRFA.\199\ Stored Value commented on the IRFA section regarding 
``Alternatives to Minimize Burdens.'' In that section, NTIA stated that 
the proposed self-certification by retailers for certain compliance 
requirements was less burdensome than other alternatives such as 
requiring third-party compliance, or instituting a process whereby NTIA 
certified compliance.\200\ NTIA stated that either of those options 
would involve additional steps in the certification process and would 
therefore increase time and cost.\201\ Although Stored Value agreed 
with our analysis, it added that ``not pursuing either option would not 
necessarily relieve the program or associated stakeholders with 
conducting similar additional steps and most likely would add even 
increased time and cost, or possible program delay.''\202\ NTIA 
maintains that a third-party certification of retailer credentials 
would add costs and delay implementation of the program. The Final 
Rule, therefore, permits retailers to provide self-certification as to 
the program requirements.
---------------------------------------------------------------------------

    \199\See Stored Value Comments at 46.
    \200\See NPRM, 71 FR at 42,074, Appendix A.
    \201\Id.
    \202\ Stored Value Comments at 46.

3. Description and Estimate of the Number of Small Entities to Which 
the Rule will Apply Or an Explanation of Why no Such Estimate is 
Available:
    The RFA requires agencies to provide a description and an estimate 
of the number of small entities to which the rule will apply or an 
explanation of why no such estimate is available.\203\ Under the RFA, 
the term ``small entity'' has the same meaning as the terms ``small 
business,'' ``small organization'' and ``small governmental 
jurisdiction.''\204\ To the extent that this rule affects small 
businesses, the affect would be on businesses in the retail or 
manufacture of digital-to-analog converter boxes. The Small Business 
Administration defines small entities in the ``radio, television and 
other electronic stores'' sector as those organizations with less than 
$8 million in annual revenue.\205\ With respect to equipment 
manufacturers, the SBA defines those small entities as those with less 
750 employees.
---------------------------------------------------------------------------

    \203\ 5 U.S.C. 604(a)(3).
    \204\ 5 U.S.C. 601.
    \205\ See U.S. Small Business Administration Table of Small 
Business Size Standards Matched to North American Industry 
Classifications Systems Codes, http://www.sba.gov/size.
---------------------------------------------------------------------------

    As stated in the IRFA, NTIA does not have precise information on 
the number

[[Page 12115]]

of qualifying small businesses that are in the manufacturing or 
electronic retailing sectors that would be affected by the Final Rule. 
The digital-to-analog converter box is not commercially available today 
and the life of this particular product is limited. Thus, there is no 
readily available data that would assist NTIA in making an estimate as 
to the number of ``small business'' retailers or manufacturers that 
would be affected by the regulations. Moreover, none of the comments 
submitted in response to the NPRM addressed the number of small 
entities to which these regulations will apply.
    According to data from the U.S. Census Bureau, there were 1014 U.S. 
companies in 2002 that manufactured radio and television communications 
equipments, and approximately 1010 of these firms were classified as 
small entities having fewer than 750 employees.\206\ Specific figures 
for the number of firms that manufacture television equipment are 
unavailable, however, NTIA believes that some of these companies are 
capable of manufacturing a converter box pursuant to the standards 
provided in the Final Rule. In fact, several electronic equipment 
manufacturers submitted comments in this proceeding. There was no 
indication that any of these manufacturers were small businesses. To 
the extent that there exist small entities capable of manufacturing a 
converter box pursuant to the standards provided in the Final Rule, the 
extent to which they choose to participate in the coupon program will 
be a business decision and not based on any mandatory action resulting 
from this Final Rule. Therefore, NTIA is unable to predict with any 
certainty the number of small entities that will consider the coupon 
program an advantageous business opportunity. Moreover, the comments 
submitted in response to the proposed rule did not provide data that 
would assist NTIA in making such an estimate.
---------------------------------------------------------------------------

    \206\See U. S. Census Bureau, 2002 Economic Census, Industry 
Statistics by Employment Size, Radio and Television Broadcasting and 
Wireless Communications Equipment Manufacturing (NAICS Code 334220), 
Table 4, available at http//www.census.gov/econ/census02.
---------------------------------------------------------------------------

    Likewise, it is not possible to ascertain the number of consumer 
electronic retailers that qualify as small entities for the purpose of 
this program. Certain data from trade associations, however, provide a 
glimpse of the type of small businesses that may participate in the 
coupon program. For example, the Professional Audio-Video Retailers 
Association (PARA) division of the Consumer Electronics Association 
(CEA) has more than 250 professional audio, video, home theater, and 
custom electronics specialty dealers.\207\ CEA has also formed a 
partnership with the North America Retailers Association (NARDA), a 
group of independent retailers that include consumer electronics 
retailers that represent approximately 3,500 storefronts and accounts 
for over $11 billion in annual sales.\208\ However, not all NARDA 
members may be interested in participating in the digital-to-analog 
converter box coupon program. In addition to consumer electronics, 
NARDA's members also sell and service kitchen and laundry appliances, 
consumer mobile electronics, computers and other home and small office 
products, furniture, sewing machines, vacuum cleaners, room air 
conditioners, and other consumer products. Moreover, NARDA's members 
are not limited to retailers, but also include manufacturers, suppliers 
and vendors. PARA and NARDA members may be specialty electronic dealers 
not interested in selling converter boxes. The comments submitted in 
response to the IRFA did not provide data that would assist NTIA in 
making an estimate of ``small entities.''
---------------------------------------------------------------------------

    \207\See http://www.ce.org/Membership/Divisions/98.asp.
    \208\See http://www.narda.com.

4. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements of the Rule, Including an Estimate of the 
Classes of Small Entities That Will Be Subject to the Requirement and 
the Type of Profession Skills Necessary for Preparation of the Report 
or Record:
    It should be noted again here that this coupon program is for a 
limited amount of time so there will not be any long term or recurring 
reporting, recordkeeping and other compliance requirements. Moreover, 
participation in this program is voluntary, thus any requirements would 
only occur if a retailer or manufacturer chooses to participate. As 
stated above, there is no readily available data to assist NTIA is 
making an estimate as to the number of ``small entities'' that will be 
subject to the requirements of the rule, and comments submitted in 
response to the proposed rule did not address such an estimate.
A. Manufacturers
    The Final Rule requires manufacturers that wish to participate in 
the program to submit a notice of intent to NTIA at least three months 
prior to submitting test results and sample models of converter boxes. 
The notice shall include a brief description of the proposed converter 
box, including permitted as well as required features, and the date 
which the proposed converter box is expected to be available for 
testing. As part of this notice of intent, the manufacturer shall 
supply the name, title, address and phone number of an individual 
responsible for the manufacturer's submission. When the manufacturer 
submits its converter box to NTIA, it shall also provide test results 
along with a certification of the testing supervisor as to their 
authenticity, completeness, and accuracy.
    Because these certification and recordkeeping requirements should 
be a part of a manufacturer's normal course of business, NTIA does not 
anticipate that a particular type of professional skill is necessary 
beyond that already incorporated into the manufacturer's existing 
business operations. It should be noted that most of the comments 
submitted in response to the NPRM, supported the approach adopted in 
the Final Rule whereby the manufacturer would conduct its own testing 
and submit the converter box to NTIA for ``verification plus.'' No 
comments submitted in this proceeding indicated that the compliance 
requirements of this Rule would require a particular type of 
professional skill.
B. Retailers
    The Final Rule requires retailers to have in place systems that are 
capable of electronically processing coupons for redemption and 
payment, tracking each transaction and generating reports that are 
auditable. The Final Rule also requires retailers to provide 
transaction reports to NTIA and to retain such reports for at least one 
year. Retailers are required to provide NTIA redemption information and 
payment receipts related to coupons used in the purchase of converter 
boxes. To participate in the program, retailers must have engaged in 
electronic retailing for at least one year and must register in the 
Central Contractor Registration database.
    Because these certification and recordkeeping requirements are 
typically part of a retailer's normal course of business, NTIA does not 
anticipate that a particular type of professional skill is necessary 
beyond that already incorporated into a retailer's existing business 
operations. No comments submitted in this proceeding indicated that the 
compliance requirements of this Rule would require a particular type of 
professional skill. The recordkeeping requirements for reports are 
necessary for NTIA to monitor the program to

[[Page 12116]]

ensure that coupons are being utilized and redeemed. This information 
is necessary in the event NTIA is required to request additional 
program funding. Moreover, because this is a federal government 
program, NTIA must ensure that it can be audited as necessary.
    There were comments received that the use of coupons may not be 
compatible with electronic scanning devices used by participating 
retailers and that the requirement for electronic systems may eliminate 
small retailers from participating. Moreover, some retailers suggested 
that the use of electronic coupon cards may require significant up-
front costs for software, payment processing and employee training. 
NTIA notes again that this program is voluntary, thus any costs 
incurred are a result of retailers choosing to participate. With 
respect to limiting small retailers, NTIA did not receive comments from 
any small retailers that the use of electronic systems would somehow 
discourage them from participating. On the other hand, most of the 
retailers stated that incorporating electronically encoded information 
on the coupons was necessary for the program to run efficiently. There 
was no data submitted in this proceeding indicating that small 
retailers would not have electronic systems in place. As for those 
retailers that state that electronic systems would require significant 
up front cost, NTIA reiterates that retailers are free to set the 
retail price of the converter boxes. Thus, any up-front costs incurred 
by a retailer can be recouped.
    5. Description of the Steps the Agency Has Taken to Minimize the 
Significant Economic Impact on Small Entities Consistent with the 
Stated Objectives of Applicable Statutes, Including a Statement of the 
Factual, Policy, and Legal Reasons for Selecting the Alternative 
Adopted in the Final Rule and Why Each of the Other Significant 
Alternatives to the Rule Considered by the Agency That Affect the 
Impact on Small Entities Was Rejected:
    The IRFA proposed and solicited a number of alternatives to 
minimize the economic impact on small entities. It should be noted, as 
it was in the IRFA, that any significant economic impact would not be 
caused by the Final Rule because participation in this program is 
voluntary on all levels--consumers, retailers and manufacturers. 
Likewise, there is no significant economic impact if a small entity 
chooses not to participate in the program. Nonetheless the Final Rule 
includes steps to minimize any adverse economic impact on all 
participants.
a. No Limits on Pricing of the Converter Boxes
    The Final Rule does not restrict the wholesale or retail price of 
the converter box. Thus, to the extent that manufacturers and retailers 
incur certain costs to provide the converter boxes, these costs may be 
recouped through the retail or wholesale price established by them. The 
alternative would have been to limit the retail price of the converter 
box. That alternative may cause a hardship on small entities because it 
would limit the ability of small entities to recoup costs involved in 
making the converter box available. Because this program is new and the 
demand for the converter box is uncertain, NTIA's decision to allow 
manufacturers and retailers to price the box as they deem appropriate 
should minimize economic burdens. Moreover, NTIA does not have the 
statutory authority to determine the price for the set top boxes.
b. Retaining Hard Copies of Sales Data
    In the NPRM, NTIA proposed to require retailers to retain hard 
copies of sales information for at least one year. Retailers submitted 
comments asserting that if electronic systems were used, there would be 
no need for such a records retention requirement. Accordingly, the 
Final Rule dispensed with the requirement that retailers retain hard 
copies of sales information for one year, however, retailers are still 
required to retain such information electronically for one year and to 
convert it to a hard copy format if requested by NTIA.
c. Electronic Processing of Coupons
    The comments from retailers overwhelmingly recommended the use of 
an electronic coupon card system. Retailers were concerned that unless 
an electronic system was utilized, reimbursement from the government 
would be delayed. As a result of these comments, NTIA intends to use 
retailer point of sale electronic tracking systems to authorize coupon 
redemptions and to track sales transactions of eligible devices. To 
ensure that retailers are reimbursed in a timely manner, the Final Rule 
permits retailers to register in Central Contractor Registration which 
facilitates paperless payments though electronic funds transfer. 
Alternatively, retailers would have to wait a longer period of time to 
be reimbursed by the Federal Government.

List of Subjects in 47 CFR Part 301

    Antennas, Broadcasting, Cable television, Communications, 
Communications equipment, Electronic products, Telecommunications, 
Television.

0
For the reasons set forth in the preamble, NTIA adds 47 CFR Part 301, 
which is currently reserved, with the following:

PART 301 DIGITAL-TO-ANALOG CONVERTER BOX COUPON PROGRAM

301.1 Program Purposes
301.2 Definitions
301.3 Household Eligibility and Application Process
301.4 Coupons
301.5 Manufacturers' Technical Approval Process
301.6 Retailer Participation
Technical Appendix 1
Technical Appendix 2

    Authority: Title III of the Deficit Reduction Act of 2005, Pub. 
L. No. 109-171, 120 Stat. 4, 21 (Feb. 8, 2006) (the ``Act'').


Sec.  301.1  Program Purposes.

    Pursuant to section 3005 of the Act, (The Deficit Reduction Act of 
2005), the purpose of the Digital-to-Analog Converter Box Coupon 
Program is to provide $40 coupons that can be applied towards the 
purchase price of eligible digital-to-analog converter boxes. After 
February 17, 2009, the Federal Communications Commission will require 
that all full-power television stations in the United States broadcast 
using digital television technology. Consumers who wish to continue to 
receive local broadcast television programming over-the-air using 
analog televisions not connected to cable or satellite service may wish 
to purchase digital-to-analog converter boxes in order to do so.


Sec.  301.2  Definitions.

    Act means Title III of the Deficit Reduction Act of 2005, Pub. L. 
No. 109-171, 120 Stat. 4, 21 (Feb. 8, 2006).
    Agency means the National Telecommunications and Information 
Administration of the United States Department of Commerce or its 
contractor.
    Certified Retailer means a seller of Coupon-Eligible Converter 
Boxes directly to consumers that has met the requirements for 
certification and has been identified by NTIA as certified to redeem 
coupons.
    Contingent Funds means those funds referenced in Section 3005 
(c)(3) of the Act.
    Coupon means a voucher provided by the Agency to Eligible 
Households which only may be used to purchase a Coupon-Eligible 
Converter Box from a Certified Retailer.

[[Page 12117]]

    Coupon-Eligible Converter Box (CECB) means a stand-alone device 
that does not contain features or functions except those necessary to 
enable a consumer to convert any channel broadcast in the digital 
television service into a format that the consumer can display on a 
television receiver designed to receive and display signals only in the 
analog television service. CECBs may also include remote control 
devices. CECBs must have the features required by, and meet the 
technical performance specifications listed in Technical Appendix 1.
    Department means the United States Department of Commerce.
    Eligible Household means those Households in the United States and 
its territories that make a valid request for a coupon pursuant to Rule 
301.3 within the time period specified by NTIA, but no later than March 
31, 2009.
    FCC means the Federal Communications Commission.
    State includes each of the fifty states, the District of Columbia, 
the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American 
Samoa, and the Northern Mariana Islands.
    Household consists of all persons who currently occupy a house, 
apartment, mobile home, group of rooms, or single room that is occupied 
as separate living quarters and has a separate U.S. Postal address. A 
household does not mean a Post Office Box.


Sec.  301.3  Household Eligibility and Application Process.

    (a) To apply for and receive a coupon, an Eligible Household must:
    (1) provide the name of the person submitting the request
    (2) provide a United States Postal Service mailing address
    (A) a Post Office Box will not be considered a valid mailing 
address unless (2)(B) applies
    (B) residents of Indian reservations, Alaskan Native Villages and 
other rural areas without home postal delivery may be requested to 
supply additional information to identify the physical location of the 
household, as required.
    (3) indicate the number of coupons requested, but no more than two 
coupons.
    (b) As of January 1, 2008, requests for coupons may be submitted by 
mail, telephone or the Internet on forms provided by the Agency.
    (c) Requests for coupons must be submitted to the Agency no later 
than March 31, 2009.
    (d) Once Contingent Funds are available for the Coupon Program, 
only over-the-air households will be eligible. During the period in 
which Contingent Funds are available, households must certify that they 
do not receive cable, satellite, or other pay television service.
    (e) If an applicant does not meet the above eligibility 
requirements, the request will be denied.


Sec.  301.4  Coupons.

    (a) The coupon value will be $40 or the price of the CECB, 
whichever is less.
    (b) Each Eligible Household will be limited to a total of two 
coupons.
    (c) Two coupons may not be used in combination toward the purchase 
of a single CECB.
    (d) Coupons will be sent to Eligible Households via the United 
States Postal Service.
    (e) Coupons will expire 90 days after the issuance date. Issuance 
date means the date upon which the coupon is placed with the United 
States Postal Service.
    (f) Consumers may not return a CECB to a retailer for a cash refund 
for the coupon amount or make an exchange for another item unless it is 
another CECB.
    (g) The coupon has no cash value. It shall be illegal to sell, 
duplicate or tamper with the coupon.


Sec.  301.5  Manufacturers' Technical Approval Process.

    (a) Manufacturers wishing to participate in the coupon program must 
submit a notice of intent to NTIA at least three months prior to 
submitting test results and sample models of converter boxes. Notices 
should be sent to DTV Converter Coupon Program, NTIA/OTIA, U.S. 
Department of Commerce, Room 4809, Washington, DC 20230, Fax Number 
202-482-4626 and provide the name, title, address, and phone number of 
an individual responsible for the manufacturer's submission. The notice 
shall also include a brief description of the proposed converter box, 
including permitted as well as required features, and the date which 
the proposed converter box is expected to be available for testing.
    (b) NTIA shall treat the notices of intent received as business 
confidential and proprietary information and will not release 
information from the notices of intent to the public unless otherwise 
required by law.
    (c) The manufacturer will supply two production sample converter 
boxes to NTIA. NTIA will provide the manufacturer with mailing 
information in a letter of acknowledgment after NTIA receives the 
notice of intent.
    (d) Each model proposed to be a CECB shall meet the performance 
specification and features set forth in Technical Appendix 1 of this 
Section. Each model proposed may also include ``permitted'' features 
set forth in Technical Appendix 2, but shall not include 
``disqualifying'' features set forth therein.
    (e ) NTIA may issue other guidance or test-bed conditions and it is 
the manufacturer's responsibility to conduct tests pursuant to any 
guidance so provided. A manufacturer shall conduct its own tests or 
have a qualified independent third party conduct the tests.
    (f) Reports of test conditions and test results must be clear and 
comprehensive so that they can be easily interpreted by NTIA and others 
reviewing them. The FCC may test converter boxes, if requested by NTIA.
    (g) Test results shall be submitted to NTIA along with a 
certification of the testing supervisor as to their authenticity, 
completeness and accuracy based on personal knowledge.
    (h) NTIA will provide prompt notice to the individual submitting 
test results whether the model has met technical approval and is or is 
not a CECB. NTIA will base its decision whether to approve each 
converter box upon consultation with the FCC.
    (i) A list of CECBs, including make and model number, will be 
maintained by NTIA and regularly distributed to participating retailers 
for use in electronic Point-of-Sale (POS) systems.
    (j) It is the responsibility of the manufacturers to resolve any 
performance or product defect issues with consumers and retailers.
    (k) NTIA shall not warrant the performance, suitability, or 
usefulness of any CECB for any use.


Sec.  301.6  Retailer Participation.

    Retailer participation is voluntary. NTIA encourages retailers to 
participate in the Coupon Program and to cooperate with NTIA and its 
contractor in the administration of an effective and efficient program 
resulting in high customer satisfaction with a minimum of waste, fraud 
and abuse.
    (a) Retailer Obligations: Certified Retailers are required to 
redeem valid coupons toward the purchase of CECBs, and
    (1) Must have systems in place that are capable of electronically 
processing coupons for redemption and payment, tracking each and every 
transaction, and generating reports that are easily auditable.
    (2) Must train employees on the purpose and operation of the Coupon 
Program. NTIA or its contractor will provide training material.
    (3) Will not be responsible for checking consumer or household 
eligibility but shall report to NTIA

[[Page 12118]]

suspicious patterns of customer behavior.
    (4) Use commercially reasonable methods to order and manage 
inventory to meet customer demand for CECBs.
    (5) Must provide transaction reports based on NTIA's requirements. 
Reports must be maintained by the retailer for at least one year. 
Business confidential and proprietary information shall not be 
disclosed to the public unless otherwise required by law.
    (b) Retailer Certification:
    (1) Retailers seeking to participate in the Coupon Program must 
apply for certification by contacting NTIA between June 1, 2007 and 
March 31, 2008.
    (2) Retailers must complete the form provided by the Agency which 
requires the retailers to self certify that they:
    (A) Have been engaged in the consumer electronics retail business 
for at least one year unless waived for good cause by NTIA. Good cause 
will be determined upon a showing by the retailer that participation 
would be in the best interest of the program. NTIA will issue a written 
determination as to whether a retailer has made a sufficient showing of 
good cause to waive this requirement;
    (B) Have completed a Central Contractor Registration (www.ccr.gov);
    (C) Have in place systems or procedures that can be easily audited 
as well as systems that can provide adequate data to minimize fraud and 
abuse in retail redemption and government payment for coupons;
    (D) Agree to have coupon box sales audited at any time during the 
term of participation in the coupon program by the U.S. Government or 
an independent auditor at no expense to the retailer;
    (E) Will provide NTIA electronically with redemption information 
and payment receipts related to coupons used in the purchase of 
converter boxes, specifically tracking each serialized coupon by number 
with a corresponding CECB purchase; and
    (F) Agree only to accept coupons for, and receive payment resulting 
from authorized purchases made for CECBs.
    (3) Retailer Certification may be revoked by NTIA if a Certified 
Retailer fails to comply with these regulations, with the terms of any 
agreement made between the Certified Retailer and NTIA, or for other 
actions inconsistent with the Coupon Program.
    (4) NTIA will not revoke retailer certification for unintentional 
non-compliance or error.
    (5) Retailers may contact NTIA for late application or dispute 
resolution for problems such as denial or revocation of certification. 
Such issues will be resolved on a case-by-case basis.

TECHNICAL APPENDIX 1

NTIA Coupon-Eligible Converter Box (CECB)

Required Minimum Performance Specifications and Features

REFERENCE DOCUMENTS

ATSC A/74, Receiver Performance Guidelines, June 2004
ATSC A/53E, ATSC Digital Television Standard, Revision E with 
Amendments No. 1 and No. 2, September 2006
ATSC A/65C, Program and System Information Protocol for Terrestrial 
Broadcast and Cable (Revision C) With Amendment No. 1, May 2006
Recommendation ITU-R BT.500-11, Methodology for the subjective 
assessment of the quality of television pictures
ATSC A/69, PSIP Implementation Guidelines for Broadcasters, June 2002

ELIGIBLE CONVERTER BOXES SHALL COMPLY WITH THE FOLLOWING MINIMUM 
PERFORMANCE SPECIFICATIONS AND FEATURES:

1. Decoder

    Equipment shall be capable of receiving and presenting for display 
program material that has been encoded in any and all of the video 
formats contained in Table A3 of ATSC A/53E. The image presented for 
display need not preserve the original spatial resolution or frame rate 
of the transmitted video format.

2. Output Formats

    Equipment shall support 4:3 center cut-out of 16:9 transmitted 
image, letterbox output of 16:9 letterbox transmitted image, and a full 
or partially zoomed output of unknown transmitted image.

3. PSIP Processing

    Equipment shall process and display ATSC A/65C Program and System 
Information Protocol (PSIP) data to provide the user with tuned channel 
and program information. See ATSC A/69 for further guidance.

4. Tuning Range

    Equipment shall be capable of receiving RF channels 2 through 69 
inclusive.

5. RF Input

    Equipment shall include a female 75 ohm F Type connector for VHF/
UHF antenna input.

6. RF Output

    Equipment shall include a female 75 ohm F Type connector with user-
selectable channel 3 or 4 NTSC RF output.

7. Composite Output

    Equipment shall include female RCA connectors for stereo left and 
right audio (white and red) and a female RCA connector for composite 
video (yellow). Output shall produce video with ITU-R BT.500-11 quality 
scale of Grade 4 or higher.

8. RF Dynamic Range (Sensitivity)

    Equipment shall achieve a bit error rate (BER) in the transport 
stream of no worse than 3x10-6 for input RF signal levels 
directly to the tuner from -83 dBm to -5 dBm over the tuning range. 
Subjective video/audio assessment methodologies could be used to comply 
with the bit error rate requirement.\1\
---------------------------------------------------------------------------

    \1\ Subjective evaluation methodologies use the human visual and 
auditory systems as the primary measuring ``instrument.'' These 
methods may incorporate viewing active video and audio segments to 
evaluate the performance as perceived by a human observer. For 
subjective measurement, the use of an expert viewer is recommended. 
The viewer shall observe the video and listen to the audio for at 
least 20 seconds in order to determine Threshold of Visibility (TOV) 
and Threshold of Audibility (TOA). Subjective evaluation of TOV 
should correspond with achievement of transport stream error rate 
not greater than a BER of 3x10-6. If there is 
disagreement over TOV performance evaluation, it will be resolved 
with a measurement of actual BER.
---------------------------------------------------------------------------

    Test conditions are for a single RF channel input with no noise or 
channel impairment. Refer to ATSC A/74 Section 4.1 for further 
guidance. (Note the upper limit specified here is different than that 
in A/74 4.1).

9. Phase Noise

    Equipment shall achieve a bit error rate in the transport stream of 
no worse than 3x10-6 for a single channel RF input signal 
with phase noise of -80 dBc/Hz at 20 kHz offset. The input signal level 
shall be - 28 dBm. Subjective video/audio assessment methodologies 
described above could be used to comply with the bit error rate 
requirement. Refer to ATSC A/74 Section 4.3 for further guidance.

10. Co-Channel Rejection

    The receiver shall not exceed the thresholds indicated in Table 1 
for rejection of co-channel interference at the given desired signal 
levels. Refer to ATSC A/74 Section 4.4.1 for further guidance.

[[Page 12119]]



                Table 1--Co-Channel Rejection Thresholds.
------------------------------------------------------------------------
                                         Co-Channel D/U Ratio (dB)
                                 ---------------------------------------
      Type of Interference        Weak Desired  (-68   Moderate Desired
                                         dBm)              (-53 dBm)
------------------------------------------------------------------------
DTV interference into DTV.......  +15.5.............  +15.5
NTSC interference into DTV......  +2.5..............  +2.5
------------------------------------------------------------------------
Notes:
NTSC split 75% color bars with pluge bars and picture to sound ratio of
  7 dB should be used for video source.
ATSC high definition moving video should be used for video source.
All NTSC values are peak power; all DTV values are average power.

11. First Adjacent Channel Rejection

    The receiver shall not exceed the thresholds indicated in Table 2 
for rejection of adjacent channel interference at the given desired 
signal levels. Refer to ATSC A/74 Section 4.4.2 for further guidance.

                                 Table 2--Adjacent Channel Rejection Thresholds
----------------------------------------------------------------------------------------------------------------
                                                            Adjacent Channel D/U Ratio (dB)
                                      --------------------------------------------------------------------------
         Type of Interference                                    Moderate Desired  (-53    Strong Desired  (-28
                                       Weak Desired  (-68 dBm)            dBm)                     dBm)
----------------------------------------------------------------------------------------------------------------
Lower DTV interference into DTV......  [gteqt]-33.............  -33....................  -20
Upper DTV interference into DTV......  [gteqt]-33.............  -33....................  -20
Lower NTSC interference into DTV.....  [gteqt]-40.............  -35....................  -26
Upper NTSC interference into DTV.....  [gteqt]-40.............  -35....................  -26
----------------------------------------------------------------------------------------------------------------
Notes:
NTSC split 75% color bars with pluge bars and picture to sound ratio of 7 dB should be used for video source.
ATSC high definition moving video should be used for video source.
All NTSC values are peak power; all DTV values are average power.

12. Taboo Channel Rejection

    The receiver shall not exceed the thresholds indicated in Table 3 
for rejection of taboo channel interference at the given DTV desired 
and undesired signal levels. Refer to ATSC A/74 Section 4.4.3 for 
further guidance.

                    Table 3--Taboo Channel Rejection Thresholds for DTV Interference into DTV
----------------------------------------------------------------------------------------------------------------
                                                              Taboo Channel D/U Ratio (dB)
                                      --------------------------------------------------------------------------
               Channel                                           Moderate Desired  (-53    Strong Desired  (-28
                                       Weak Desired  (-68 dBm)            dBm)                     dBm)
----------------------------------------------------------------------------------------------------------------
N+[sol]-2............................  [gteqt]-44.............  -40....................  -20
N+[sol]-3............................  [gteqt]-48.............  -40....................  -20
N+[sol]-4............................  [gteqt]-52.............  -40....................  -20
N+[sol]-5............................  [gteqt]-56.............  -42....................  -20
N+[sol]-6 to N+[sol]-13..............  [gteqt]-57.............  -45....................  -20
N +[sol]-14 and N+[sol]-15...........  [gteqt]-46.............  -45....................  -20
----------------------------------------------------------------------------------------------------------------
Notes: ATSC high definition moving video should be used for video source. All DTV values are average power.

13. Burst Noise

    Equipment shall tolerate a noise burst of at least 165 micros 
duration at a 10 Hz repetition rate without visible errors. The noise 
burst shall be generated by gating a white noise source with average 
power -5 dB, measured in the 6 MHZ channel under test, referenced to 
the average power of the DTV signal. The input DTV signal level shall 
be -28 dBm. Refer to ATSC A/74 Section 4.4.4 for further guidance.

14. Field Ensembles

    Equipment shall demonstrate that it can successfully demodulate, 
with two or fewer errors, 30 of the 50 field ensembles available from 
ATSC in conjunction with ATSC A/74. Error counts are not expected to 
include inherent errors associated with the start and end or looping of 
field ensembles for playback.
    Refer to ATSC A/74 Section 4.5.2 for further guidance.

15. Single Static Echo

    Equipment shall comply with either CRITERIA A or CRITERIA B, below.
CRITERIA A:
    Equipment shall tolerate a single static echo with the magnitude, 
relative to a desired DTV signal power of -28 dBm, and delay defined in 
Table 4.
CRITERIA B:
    Equipment may demonstrate compliance by tolerating a single static 
echo with the magnitude, relative to a desired DTV signal power of -28 
dBm, and delay defined in Table 5, if the equipment also demonstrates 
that it can receive 37 of the 50 field ensembles. See Field Ensembles 
requirement.
CRITERIA A:

                Table 4--Maximum Single Static Echo Delay
------------------------------------------------------------------------
                Echo Delay                     Desired to Echo Ratio
------------------------------------------------------------------------
-50 micros...............................  16 dB
-40 micros...............................  12 dB
-20 micros...............................  6 dB
-10 micros...............................  5 dB
-5 micros................................  2 dB
0 micros.................................  1 dB
10 micros................................  2 dB
20 micros................................  3 dB
40 micros................................  10 dB
50 micros................................  16 dB
------------------------------------------------------------------------

CRITERIA B:

                Table 5--Minimum Single Static Echo Delay
------------------------------------------------------------------------
                Echo Delay                      Desired to Echo Ratio
------------------------------------------------------------------------
-50 micros................................  16 dB
-40 micros................................  16 dB
-20 micros................................  7.5 dB

[[Page 12120]]

 
-10 micros................................  5 dB
-5 micros.................................  2 dB
0 micros..................................  1 dB
10 micros.................................  2 dB
20 micros.................................  3 dB
40 micros.................................  16 dB
50 micros.................................  16 dB
------------------------------------------------------------------------

16. Channel Display

    Equipment must display all channels, including multicast channels, 
broadcast by a digital television station that can be displayed on an 
analog TV receiver.

17. Closed Captioning, Emergency Alert System (EAS) and Parental 
Controls (V-Chip)

    Equipment must display (1) EAS message broadcast pursuant to 47 CFR 
Sec.  11.11 of the FCC Rules; (2) parental control information as 
required by the FCC Rules in 47 CFR Sec.  15.120 and incorporate the 
EIA/CEA-766-A standard; and (3) Close Captioning information as 
required by the FCC Rules in 47 CFR Sec.  15.122 and incorporate the 
CEA 708/608 standard.

18. Remote Control

    A remote control to operate the equipment shall be provided with 
batteries. Standard codes will be used and provided so the consumer can 
program an existing remote control to, at a minimum, change channels 
and turn on and off the converter box and the consumer's existing 
analog television receiver.

19. Audio Outputs

    The RF output must be modulated with associated audio program 
information; the RCA audio connectors must provide stereo left/right, 
when broadcast.

20. Energy Standards

    The equipment shall use no more than two watts of electricity in 
the ``Sleep'' state. Sleep state power shall be measured in accordance 
with industry standard CEA-2013-A. Eligible equipment shall provide the 
capability to automatically switch from the On state to the Sleep state 
after a period of time without user input. This capability shall be 
enabled at the factory as the default setting for the device. The 
default period of inactivity before the equipment automatically 
switches to the Sleep state shall be four hours. Eligible equipment may 
allow the current program to complete before switching to the Sleep 
state. The default energy related settings shall not be altered during 
the initial user set-up process and shall persist unless the user 
chooses at a later date to manually: (a) disable the ``automatic 
switching to Sleep state'' capability, or (b) adjust the default time 
period from 4 hours to some other value.

21. Owner's manual

    An owner's manual shall include information regarding the remote 
control codes used to permit the consumer to program a universal remote 
control. The owner's manual will include information regarding the 
availability of the main audio channel and other associated audio 
channels on the RF and left/right audio outputs.

22. LED Indicator

    The equipment shall contain an LED to indicate when the unit is 
turned on.

23. RF Cable

    The equipment will include at least one RF cable to connect the 
unit with its associated analog television receiver.

24. Signal Quality Indicator

    The equipment will display on the television receiver signal 
quality indications such as signal strength per ATSC A/74, Section 4.7.

    TECHNICAL APPENDIX 2--NTIA Coupon-Eligible Converter Box (CECB):
                  Permitted and Disqualifying Features
------------------------------------------------------------------------
                                                        Disqualifying
           Feature              Permitted Feature          Feature
------------------------------------------------------------------------
General Requirements........  ....................  Any device or
                                                     capability which
                                                     provides for more
                                                     than simply
                                                     converting a
                                                     digital over-the-
                                                     air television
                                                     signal (ATSC) for
                                                     display on an
                                                     analog television
                                                     receiver (NTSC),
                                                     including, but not
                                                     limited to:
                                                    Integrated video
                                                     display; Video or
                                                     Audio recording or
                                                     playback capability
                                                     such as VCR, DVD,
                                                     HDDVD, Blue Ray,
                                                     etc.
Antenna Inputs..............  Smart Antenna
                               interface connector
                               (CEA 909 Smart
                               Antenna Control
                               Interface standard).
                              The manufacturer may
                               supply a 300 ohm
                               connector or a
                               matching
                               transformer to
                               connect 300 ohm
                               ribbon leads to the
                               required RF antenna
                               input.
Antenna Pass-Through........  Equipment may pass
                               through a NTSC
                               analog signal from
                               the antenna to the
                               TV receiver.
                              By-pass switch to
                               permit NTSC pass-
                               through.
Bundling Antenna and          Equipment and Smart   Equipment cannot be
 Converter Box.                Antenna may be sold   sold conditioned on
                               together at           the purchase of a
                               promotional prices.   Smart Antenna or
                                                     other equipment.
Outputs (General)...........  S-Video.............  Digital Video
                                                     Interface (DVI);
                                                    Component video
                                                     (YPbPr);
                                                    High-Definition
                                                     Multimedia
                                                     Interface (HDMI);
                                                    Computer video
                                                     (VGA);
                                                    USB IEEE-1394 (iLink
                                                     or Firewire)
                                                    Ethernet (IEEE-
                                                     802.3)
                                                    Wireless
                                                     (IEEE0802.11)

[[Page 12121]]

 
Outputs (Audio).............  Equipment may
                               process associated
                               audio services
                               described in
                               Section 6.6 of A/54.
                              RF output may
                               provide monaural
                               audio for the
                               selected audio
                               channel.
                              RF output may
                               provide BTSC stereo
                               for the selected
                               audio channels.
Automatic Software Repair/    Equipment is able to
 Upgrade.                      receive and process
                               software pursuant
                               to ATSC A-97.
Program Information.........  Equipment may
                               contain software
                               and hardware
                               modifications
                               necessary to
                               display other
                               program information
                               as determined by
                               the manufacturer.
Remote Control..............  Manufacturers may
                               include a
                               programmable
                               universal remote
                               control to operate
                               the equipment and
                               other existing
                               video and audio
                               equipment.
                              Remote control may
                               have dedicated keys
                               to provide direct
                               access to closed
                               captioning and
                               descriptive video
                               functions.
Other Features..............  Equipment may be
                               operated on battery
                               power as well as
                               external AC/DC
                               power.
                              Manufacturer may
                               supply additional
                               cables, such as a
                               cable with 3 female
                               RCA connectors for
                               composite video
                               (yellow connector)
                               and stereo left and
                               right audio (white
                               and red connectors).
                              Equipment may
                               display on the
                               television receiver
                               additional signal
                               quality information
                               as determined by
                               the manufacturer.
Energy Standards............  Equipment may comply
                               with standards
                               established by the
                               EPA Energy Star
                               program or state
                               regulatory
                               authorities.
------------------------------------------------------------------------


    Dated: March 9, 2007.
John M.R. Kneuer,
Assistant Secretary for Communications and Information Administration.
[FR Doc. E7-4668 Filed 3-14-07; 8:45 am]
BILLING CODE 3510-60-S