Digital Television Transition: Issues Related to an Information  
Campaign Regarding the Transition (06-SEP-05, GAO-05-940R).	 
                                                                 
The United States is currently undergoing a transition from	 
analog to digital broadcast television. This transition offers	 
the promise of more television programming options, interactive  
television, and high-definition television. An additional goal of
the digital television (DTV) transition is for the federal	 
government to reclaim radiofrequencies--or spectrum--that	 
broadcasters currently use to transmit analog television signals.
Because of the virtual explosion of wireless applications in	 
recent years, there is considerable concern that future spectrum 
needs--both for commercial as well as government purposes--will  
not be met. The spectrum that will be cleared at the end of the  
DTV transition is considered to be highly valuable spectrum	 
because of its particular technical properties. In all, the DTV  
transition will clear 108 megahertz (MHz) of spectrum, which is a
fairly significant amount. In the 1997 Balanced Budget Act, the  
Congress directed the Federal Communications Commission (FCC) to 
reallocate 24 MHz of the reclaimed spectrum to public safety	 
uses. Since the terrorist attacks of September 11, 2001, there	 
has been a greater sense of urgency to free spectrum for public  
safety purposes. The remaining returned spectrum will be	 
auctioned for use in advanced wireless services, such as wireless
high-speed Internet access. The return of the radiofrequency	 
spectrum at the end of the transition will thus provide many	 
benefits to society by easing the spectrum scarcity facing public
safety first-responders, engendering economic growth and consumer
value from spectrum redeployed to wireless services, and	 
affording revenues to the federal government from the proceeds of
a spectrum auction. Due to Congressional interest in the DTV	 
transition, we testified before the House Subcommittee on	 
Telecommunications and the Internet, Committee on Energy and	 
Commerce, on May 26, 2005; February 17, 2005; and July 21, 2004, 
and on issues related to the DTV transition. Additionally,	 
Congress asked us to report on the information Americans need to 
know about the DTV transition. As such, this report specifically 
focuses on information campaign issues that we have not 	 
previously discussed. We are providing (1) stakeholder views on  
Americans' knowledge of the DTV transition, (2) stakeholder views
on how government and industry might most effectively communicate
critical DTV information, and (3) information on efforts by	 
Germany and the United Kingdom to inform their citizens about the
DTV transitions taking place in those countries.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-940R					        
    ACCNO:   A35697						        
  TITLE:     Digital Television Transition: Issues Related to an      
Information Campaign Regarding the Transition			 
     DATE:   09/06/2005 
  SUBJECT:   Comparative analysis				 
	     Consumer education 				 
	     Digital television 				 
	     Foreign governments				 
	     Government information dissemination		 
	     Public television					 
	     Radio frequency allocation 			 
	     Strategic planning 				 
	     Television 					 
	     Television broadcasting				 
	     Stakeholder consultations				 
	     Germany						 
	     United Kingdom					 

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GAO-05-940R

A

United States Government Accountability Office Washington, D.C. 20548

September 6, 2005

The Honorable Joe Barton
Chairman
The Honorable John D. Dingell
Ranking Minority Member
Committee on Energy and Commerce
House of Representatives

The Honorable Fred Upton

Chairman

The Honorable Edward J. Markey

Ranking Minority Member

Subcommittee on Telecommunications and the Internet Committee on Energy
and Commerce House of Representatives

Subject: Digital Television Transition: Issues Related to an Information
Campaign Regarding the Transition

The United States is currently undergoing a transition from analog to
digital broadcast television. This transition offers the promise of more
television programming options, interactive television, and
high-definition television. An additional goal of the digital television
(DTV) transition is for the federal government to reclaim
radiofrequencies-or spectrum-that broadcasters currently use to transmit
analog television signals. Because of the virtual explosion of wireless
applications in recent years, there is considerable concern that future
spectrum needs-both for commercial as well as government purposes-will not
be met. The spectrum that will be cleared at the end of the DTV transition
is considered to be highly valuable spectrum because of its particular
technical properties. In all, the DTV transition will clear 108 megahertz
(MHz) of spectrum, which is a fairly significant amount. In the 1997
Balanced Budget Act, the Congress directed the Federal Communications
Commission (FCC) to reallocate 24 MHz of the reclaimed spectrum to public
safety uses. Since the terrorist attacks of September 11, 2001, there has
been a greater sense of urgency to free spectrum for public safety
purposes. The remaining returned spectrum will be auctioned for use in
advanced wireless services, such as wireless

                Page 1 GAO-05-940R Digital Television Transition

high-speed Internet access.1 The return of the radiofrequency spectrum at
the end of the transition will thus provide many benefits to society by
easing the spectrum scarcity facing public safety first-responders,
engendering economic growth and consumer value from spectrum redeployed to
wireless services, and affording revenues to the federal government from
the proceeds of a spectrum auction.

Due to your interest in the DTV transition, we testified before the House
Subcommittee on Telecommunications and the Internet, Committee on Energy
and Commerce, on May 26, 2005; February 17, 2005; and July 21, 2004, and
on issues related to the DTV transition.2 Additionally, you asked us to
report on the information Americans need to know about the DTV transition.
As such, this report specifically focuses on information campaign issues
that we have not previously discussed. We are providing (1) stakeholder
views on Americans' knowledge of the DTV transition, (2) stakeholder views
on how government and industry might most effectively communicate critical
DTV information, and (3) information on efforts by Germany and the United
Kingdom to inform their citizens about the DTV transitions taking place in
those countries. See enclosures I, II, and III for our recent testimonies
related to the DTV transition.

In preparing this report, we obtained information from a variety of
stakeholders, including companies in several key industry segments,
government officials, telecommunications experts, and representatives from
industry trade and consumer groups. We interviewed these stakeholders
because of their knowledge and involvement with the DTV transition and the
varying perspectives they may have had. There may be other views on
information issues related to the DTV transition that are not represented
by the stakeholders we contacted. Specifically, we interviewed 45
stakeholders, including 9 consumer electronics manufacturers, 4
electronics retailers, 7 broadcasters, 5 television station owners, 2
cable television providers, and 1 satellite provider. We also met with FCC
staff and several individuals who are considered experts in the

1Some of this spectrum-24 MHz-has already been auctioned.

2GAO, Digital Broadcast Television Transition: Several Challenges Could
Arise in Administering a Subsidy Program for DTV Equipment, GAO-05-623T
(Washington, D.C.: May 26, 2005); Digital Broadcast Television Transition:
Estimated Cost of Supporting Set-Top Boxes to Help Advance the DTV
Transition, GAO-05-258T (Washington, D.C.: Feb. 17, 2005); and
Telecommunications: German DTV Transition Differs from U.S. Transition in
Many Respects, but Certain Key Challenges Are Similar, GAO-04-926T
(Washington, D.C.: July 21, 2004).

                Page 2 GAO-05-940R Digital Television Transition

telecommunications industry. The industry trade and consumer groups we
contacted include AARP, the American Cable Association, the Association of
Public Safety Communications Officials, the Association of Public
Television Stations, the Cellular Telecommunications and Internet
Association, Cable Television Laboratories Incorporated, the Consumer
Electronics Association, the Consumer Federation of America, the Minority
Media and Telecommunications Council, the National Association of
Broadcasters, the National Cable & Telecommunications Association, and the
Satellite Broadcasting and Communications Association.

We conducted our work between August 2004 and August 2005 in accordance
with generally accepted government auditing standards.

Background 	With traditional analog technology, television pictures and
sounds are converted into "waveform" electrical signals for transmission
through the radiofrequency spectrum.3 These analog signals fade with
distance, so consumers living further from a television tower will
experience pictures that are distorted or full of "snow." With digital
technology, pictures and sounds are converted into a stream of digits
consisting of zeros and ones. Although digital signals also fade over
distance, because each bit of information is either a zero or a one, a
digital television set or receiver can adjust for minor weaknesses in the
signal to recreate the zeros and ones as originally transmitted. Thus,
pictures and sound generally retain their high quality unless significant
fading of the signal occurs, at which point the transmission cannot be
corrected and there is no picture at all.

Digital technology uses the radiofrequency spectrum more efficiently than
analog technology and, as a result, provides greater flexibility in terms
of the television content that television stations can provide. Television
stations can transmit a single analog signal in the 6 MHz of radio
spectrum allocated to each television station. In contrast, with digital
technology, television stations can use that 6 MHz of spectrum to
simultaneously transmit multiple signals in standard definition digital
format, a concept known as "multicasting." The television station could
use the full 6 MHz of spectrum to provide high-definition television,
which provides roughly

3The radiofrequency spectrum is the part of the natural spectrum of
electromagnetic radiation lying between the frequency limits of 9
kilohertz and 300 gigahertz. It is the medium that makes possible wireless
communications, including cellular and paging services, radio and
television broadcasting, radar, and satellite-based services.

Page 3 GAO-05-940R Digital Television Transition

twice as many lines of resolution and thus creates a television picture
that is much sharper than traditional analog television service.4 To
facilitate the transition from analog to digital television, the Congress
and FCC provided each full-powered television station (both commercial and
public) with an additional 6 MHz of radiofrequency spectrum so that
stations could transmit both an analog and digital television signal; that
is, each local television station now has 12 MHz of spectrum, 6 MHz for
their analog signal and 6 MHz for their digital signal. Once the
transition is complete, broadcast stations will operate solely in digital
and must return the 6 MHz of additional spectrum to the government.

There are over 1,700 commercial and noncommercial (such as public)
television stations in the United States. Commercial television stations
produce local programming, such as local news, and may get their remaining
programming content through an affiliation with one of the top seven
television broadcast networks (ABC, CBS, Fox, NBC, PAX, UPN, and WB).
Other commercial television stations are independent. Public television
stations operate as nonprofit, community-based organizations. While public
stations produce local programming, many stations are affiliated with and
receive programming from the Public Broadcasting Service.

Households can view television signals through three primary means. First,
a household can rely on over-the-air television and receive the television
signals directly from television stations through a rooftop antenna or
antennae attached to the television sets in their home. Second, a
household can receive television signals from cable companies, which
deliver the signals from cable facilities to subscribers' homes via a
localized network

4Current analog television sets display about 480 lines of resolution;
high-definition television sets display up to 1,080 lines of resolution
and are often "widescreen" format, similar to movie theater screens.
High-definition sets offer improved picture and audio quality.

                Page 4 GAO-05-940R Digital Television Transition

of cable lines.5 Third, households can receive television signals from a
direct broadcast satellite company.6

As we have previously reported, households with analog televisions sets
that rely solely on over-the-air signals must take action to be able to
view digital broadcast signals after the DTV transition is complete.7
Options available to these households include (1) purchasing a digital
television set that includes a tuner capable of receiving, processing, and
displaying a digital signal; (2) purchasing a digital-to-analog converter
box, which converts the digital broadcast signals to analog so that they
can be viewed on an existing analog set;8 or (3) subscribing to a cable or
satellite service to eliminate the need to acquire a digital-to-analog
converter box. Without some form of public information campaign, these
households might not be aware of the impending changes related to the DTV
transition and the actions they need to take.

Many Stakeholders Believed That American Households Do Not Fully Understand the
                                 DTV Transition

In 2002, we reported that consumer knowledge about the DTV transition and
its implications was low. 9 In fact, a survey we conducted found that 83
percent of respondents had never heard of or were only somewhat aware of
the transition. Therefore, in November 2002, we recommended that FCC
explore options to raise public awareness about the DTV transition and the

5The facility where cable operators originate and distribute cable service
in a geographic area is referred to as a "headend." Cable operators
receive and package television signals from a variety of television
stations and networks and distribute the signals over coaxial wires
emanating from the headend and terminating at subscribers' residences.

6In the markets in which satellite companies provide so-called
"local-into-local service," local television stations' signals are
transmitted to satellites orbiting above the equator, and then are
provided to subscribers in the local market through satellite
retransmissions.

7GAO-05-258T.

8Viewers with digital-to-analog converter boxes would not actually see the
broadcast digital signal in a digital format. They would be viewing that
signal after it has been converted, by the converter box, to be compatible
with their existing analog television set.

9GAO, Telecommunications: Additional Federal Efforts Could Help Advance
Digital Television Transition, GAO-03-7 (Washington, D.C.: Nov. 8, 2002).

                Page 5 GAO-05-940R Digital Television Transition

impact it will have on the public.10 FCC developed a Web site
(www.dtv.gov) to provide consumer information on the DTV transition. This
Web site provides information about DTV news, terms, and regulatory
information, as well as a listing of digital and high-definition
television programming and a consumer's guide for digital television sets.
FCC told us it has also developed several consumer publications on DTV, in
English and Spanish, and co-authored a "tip sheet" with the Consumer
Electronics Association and the Consumer Electronics Retailers Coalition
that is being distributed through major consumer electronics retail stores
and Web sites. FCC said its staff has met with a number of organizations
about possible joint DTV consumer education efforts, including AARP, the
Alliance for Public Technology, Hispanic Technology and Telecommunications
Partnership, and the Federal Citizen Information Center. Additionally, FCC
told us they have participated in several widely attended consumer events,
such as the National Council of La Raza annual conference and AARP's
"National Event & Expo," to assess DTV consumer information needs and to
disseminate current information about the transition. According to FCC,
its Consumer Center also provides DTV information through a toll-free line
and by e-mail and postal mail. Consumers also may subscribe to FCC's
Consumer Information Registry to receive updates about the DTV transition.
Additionally, some retailers we contacted told us they have made efforts
to provide information about the DTV transition. For example, one retailer
said his business advises customers about the DTV transition and the
implications it will have on analog television. A manufacturer we
contacted said that the Consumer Electronics Association is doing a great
deal to educate consumers.

Despite these efforts, several of the stakeholders we interviewed believed
that consumers are still confused and do not understand the DTV
transition. For example, one broadcaster we spoke with stated that
consumers do not understand the difference between the DTV transition and
high-definition television, and that few people are even aware that the
transition is taking place. Further, a retailer told us that many
consumers do not understand that after the transition, analog signals will
no longer be used to transmit television signals; rather, he said those
consumers believe that they will always have a choice between viewing
analog and digital signals, similar to the manner in which they can choose
between digital and film cameras. This retailer also said that because
analog television sets are

10GAO-03-7.

Page 6 GAO-05-940R Digital Television Transition

priced much lower than digital sets, consumers with no knowledge of the
DTV transition or when it will occur are not eager to adopt DTV equipment.

 Stakeholders Viewed Advertisements as the Most Effective Means to Communicate
                                DTV Information

Of the 35 stakeholders who responded to our question about the most
effective mechanism to inform the public about the DTV transition, 22
believed that public service announcements, such as television
advertisements, should be the primary form of communication. For example,
a retailer told us that television would be the most effective mechanism
because it is the medium that most people use. A trade group
representative said that, in his opinion, using public service
announcements on television would reach at least 60 percent of the people.
Several of the stakeholders who were in favor of television advertisements
also believed that the information campaign should be coupled with other
forms of advertisement. For example, a broadcaster told us that in
addition to television advertisements, other items such as books,
pamphlets, and information packets should be made available at retail
locations and other places of interest. A trade group representative said
that a variety of advertising mechanisms should be used, including
commercials and newspaper advertisements.

Some stakeholders believed that other approaches could be used to inform
the public about the DTV transition. For example, a number of broadcasters
we interviewed stated that an effective approach to inform consumers would
be to place labels on analog televisions at retail locations stating that
the analog sets would not be able to receive digital broadcast signals
after the transition is complete without being connected to some device or
service. An electronics manufacturer told us that digital and
high-definition television program information should be listed in
newspapers, television guides, and the Internet to inform the public. A
television station owner told us that a task force consisting of
broadcasters, press, and government officials should be established with
consumer education as the focal point.

Stakeholders who responded to our question on which entity should be
responsible for implementing a public information campaign had differing
opinions. Eleven stakeholders stated that broadcasters should be primarily
responsible, 10 said that the government should have primary
responsibility, and another 4 believed that all parties involved in the
transition should play a role in educating the public on the DTV
transition. For example, a television station owner told us that the
campaign should be a partnership between the government, broadcasters,
advertisers,

                Page 7 GAO-05-940R Digital Television Transition

manufacturers, and cable and satellite companies, but that the government
should take the lead. A trade group representative told us that all groups
should play a role, but that broadcasters should begin utilizing public
service announcements immediately. One broadcaster told us that the
government is responsible for informing the public, but that it should
work with manufacturers, retailers, and broadcasters in doing so.

A majority of stakeholders who responded to our question about the
appropriate timing for a public information campaign believed that the
campaign should start as soon as possible. For example, an electronics
retailer told us that the information campaign is already late and should
begin immediately. A trade group representative said that the information
campaign should begin as soon as possible to begin influencing the
purchase of DTV equipment. Several of the responding stakeholders told us
that the information campaign should be tied to a point in time before the
actual transition date. For example, a representative of an electronics
manufacturer stated that consumer education should begin 6 to 12 months
prior to the end date of analog service because the consumer education
would be "background noise" if it begins too early. A trade group
representative also told us that the information campaign should begin at
least 1 year before the transition date.

Several of the stakeholders we spoke with noted that a prerequisite for an
effective information campaign is certainty as to when the transition will
actually take place. In particular, some stakeholders told us that with
certainty regarding the transition's completion, they could take steps to
more effectively raise the level of pubic awareness about the transition
and its implications. Some stakeholders we spoke with also told us that it
is important for any public information campaign to be consistent, stating
that a unified effort by industry and government participants would be
effective at reducing consumer confusion. For example, one retailer told
us that the consumer confusion is driven by poor education, and that a
unified message would be most effective to educate the public. Another
consideration for an effective information campaign that was discussed
with us is ensuring that information about the transition is communicated
in multiple languages. Since many stakeholders suggested using television
advertisements to inform the public, it might be beneficial to produce and
broadcast these advertisements in Spanish. According to a broadcaster, a
large percentage of Spanish-speaking households watch over-the-air
television exclusively.

                Page 8 GAO-05-940R Digital Television Transition

Legislation introduced in the Senate and a House staff draft of
legislation contains requirements for consumer education related to the
DTV transition.11 In particular, the legislation requires labels to be
placed on analog television sets informing consumers that the televisions
will not be able to receive digital broadcast signals after the transition
is complete, unless it is connected to a digital tuner; digital-to-analog
converter box; or cable, satellite, or other multichannel video service.
The bills also require FCC to educate consumers about the deadline when
analog signals will be terminated and about the options consumers have to
continue to receive broadcast programming. The House staff draft of
legislation requires (1) television broadcasters to air public service
announcements and (2) cable and satellite providers to include a notice of
the DTV transition in billing statements.

Two Other Countries Have Been Engaged in Extensive Public Information Campaigns
              to Inform Their Citizens about Their DTV Transitions

We found that Germany and the United Kingdom undertook extensive public
information campaigns regarding their DTV transitions. As we reported in
July 2004,12 the Berlin authorities and broadcasters provided considerable
information to the public, the media, and retailers about what the
transition would entail, what consumers needed to do, how they would
benefit by transitioning to digital television, and where to get
assistance if there was confusion about what equipment was necessary or if
there were problems with equipment or reception. This effort was planned
and coordinated among many parties, resources were dedicated to the
information campaign, and nearly everyone we spoke with told us it was a
critical factor to the rapid DTV transition in Berlin. We also were told
that a short consumer education period was best for informing households
about the DTV transition; in Berlin, the consumer education effort lasted
approximately 4 weeks and cost approximately 800,000 Euro ($984,160).13

In preparation for their DTV transition, the United Kingdom (1) developed
an action plan that identified a series of events that needed to occur to
ensure the transition was completed and (2) formed various strategic
groups charged with raising public awareness and knowledge of the DTV

11Senate bill S. 1268; House staff draft entitled, Digital Television
Transition Act of 2005.

12GAO-04-926T.

13This amount does not include the value of commercial time that
broadcasters devoted to the DTV transition. We used the July 13, 2004,
exchange rate of 1.2302 to convert Euros into U.S. dollars, which was
current at the time our previous report was issued.

                Page 9 GAO-05-940R Digital Television Transition

transition. Membership in these groups consisted of government and
consumer group representatives, broadcasters, manufacturers, and industry
experts. These groups developed a specific project plan to raise awareness
and educate the public through information campaigns, research on DTV
market conditions, training of stakeholders, and product labeling.
Additionally, a not-for-profit company has been tasked to lead a major
communication campaign to educate the public about the DTV transition and
ensure everyone knows what is happening, what they need to do, and when
they need to take action. The not-for-profit company will coordinate with
television manufacturers, retailers, consumer groups, and others to ensure
that the transition is properly implemented.

In both Germany and the United Kingdom, the countries have devoted
resources to determine what people understood about the DTV transition.
During our work on the DTV transition in Berlin, German broadcasters told
us that studies were conducted to determine citizens' experiences with the
transition and to determine what was confusing to them as they
transitioned to digital. The United Kingdom also undertook research to
evaluate the human effects of the transition, specifically with regards to
how this would affect the elderly and disabled members of their society.
They tested the individuals' experiences in transition to digital
television in two villages, and subsequently used questionnaires and
interviews with members from the trial areas to measure changes in
attitudes on a larger scale before and after digital installation.

Agency Comments 	We provided FCC with a draft of this report for their
review and comment. On August 8, 2005, we met with the Chair of FCC's
Digital Television Task Force and other FCC staff within the Media Bureau
and the Consumer and Governmental Affairs Bureau to discuss the report.
FCC officials provided information regarding the Commission's efforts to
educate consumers about DTV and suggested technical corrections, which we
incorporated into the report as appropriate.

We are sending copies of this report to interested congressional
committees; the Chairman, FCC; and other interested parties. The report is
available at no charge on GAO's Web site at http://www.gao.gov. If you
have any questions concerning this report, please contact me on (202)
512-2834 or [email protected]. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last page
of this report.

               Page 10 GAO-05-940R Digital Television Transition

Key contributors to this report were Amy Abramowitz, Michael Clements,
Andy Clinton, Simon Galed, Eric Hudson, Bert Japikse, and Sally Moino.

Mark L. Goldstein Director, Physical Infrastructure Issues

Enclosures -3

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Table 1: Information on Rebate and Voucher Programs GAO Reviewed

Page 22 GAO-05-623T

                                               The program was                
                                               launched with a  Advertised in 
                                                  high profile    water bills 
                                              press conference            and 
                                                   attended by   newsletters; 
                                                  regional and        allowed 
                                               national press;  installers to 
                                                then used main      advertise 
                                               stream media to      program's 
                                  Information      promote the   availability
                                dissemination          program 
                                    Length of      August 2000       Ongoing; 
                                      program     through June     started in 
                                    existence             2006           2003 
                                                                     About 18 
                                                                    months to 
                                                                   implement; 
                                               About 12 months    majority of 
                                               total; 6 months  this time was 
                                                 to design the          spent 
                                                 program and 6   coordinating 
                                              months to secure       with the 
                                                       funding  various water 
                                Time required                   agencies that 
                               to develop and                            were 
                                    implement                   participating 
                                      program                  in the program 
                                    Number of                                 
                               persons served              879    142 in 2004
                                                      Start up                
                                                administrative                
                                               costs were 26.4                
                                                 percent; once                
                                   Percent of  the program was Administrative 
                                       budget     established,      costs not
                                 allocated to   administrative  separated out
                               administrative    costs were 14   from general
                                        costs          percent   agency costs
                                                                   $45,000 in 
                                 Total budget       $1 million  2004 and 2005 
                                                     Must be a      Must be a 
                                                   resident of     Sacramento 
                                                    Santa Cruz   County Water 
                                                  County, also         Agency 
                                                 must attend a customer (with 
                                  Eligibility  safety training    a high flow 
                                 requirements            class       toilet ) 
                                                                    Ultra-low 
                                                                flush toilets 
                               Item/commodity                  (that use only 
                                   subsidized                  1.6 gallons of 
                                              Electric-powered      water per 
                                                      bicycles         flush) 
                                               Ecology Action,                
                                Administering   Inc. on behalf                
                                       entity    of Santa Cruz      County of 
                                                       County,    Sacramento,
                                                    California     California
                                                                      Rebate; 
                                               Rebate; maximum   rebates vary 
                                                rebate is $375    from $75 to 
                                 Subsidy type                        $125 per 
                                   and amount                          rebate 
                                                                   Sacramento 
                                                    Santa Cruz   County Water 
                                               County Electric         Agency 
                                                 Bike Commuter  Ultralow Flow 
                                                     Incentive  Toilet Rebate 
                                 Program name          Program        Program 

               Page 35 GAO-05-940R Digital Television Transition

                                             Provided                         
                                             handouts at                      
                                             retail stores                    
                                             and LADWP                        
                                             branch                           
                                             offices,       Worked with rehab 
                                             advertised on    and independent 
                                             radio, placed    living centers, 
                                             inserts in      advocacy groups, 
                                             all             subscriber based 
                                             residential          emails, and 
                                             utility          newsletters for 
                                             bills,                    groups 
                                             created         representing the
                                             special page    deaf and hard of
                                             on LADWP web   hearing. Also did
                                             site, had     a one-time stuffer
                                             kick-off          in phone bills
                                             event at Home 
                                             Depot that    
                                             was carried   
                                 Information on local news 
                               dissemination stations      
                                   Length of      Ongoing;                    
                                     program    started in   Ongoing; started 
                                   existence         2002.            in 2003
                                                  Original                    
                                                   program 
                                               development 
                                              was lengthy; 
                                                   program 
                                               implemented 
                               Time required   in 3 months 
                              to develop and          once 
                                   implement    contractor 
                                     program     was hired      Not available
                                             Approximately                    
                                   Number of     6,000 per 
                              persons served          year                260
                                             Approximately                    
                                                     $1.18 
                                               million, or 
                                             39 percent of 
                              Percent of         the total 
                              budget            budget, is 
                              allocated to      for labor, 
                              administrative marketing and 
                              costs              materials      Not available
                                Total budget    $3 million           $650,000 
                                                                    Medically 
                                                            certified as deaf 
                                                 Must be a or hard of hearing 
                                                     LADWP    and low income, 
                                                  customer     defined as 185 
                                                               percent of the 
                                 Eligibility                  federal poverty 
                                requirements                            level 
                                                    Energy   Text telephones, 
                              Item/commodity     efficient      printing text 
                                  subsidized   appliances,  telephones, phone 
                                             lighting, and     signalers, and 
                                                   windows          amplifier 
                                               Los Angeles                    
                                                  Dept. of           Colorado 
                               Administering     Water and Commission for the 
                                      entity         Power   Deaf and Hard of 
                                                  (LADWP),            Hearing
                                                California 
                                Subsidy type                                  
                                  and amount        Rebate            Voucher
                                                  Consumer           Colorado 
                                                    Rebate Telecommunications 
                                              Program (for          Equipment 
                                                    Energy       Distribution 
                                                 Efficient            Program 
                                Program name     Products) 

                              Page 23 GAO-05-623T

               Page 36 GAO-05-940R Digital Television Transition

                     Information                             
                    dissemination       c            c
                      Length of      Ongoing;     Ongoing;   
                       program      started in   started in  
                      existence        1974         1964     
                     Time required                           
                    to develop and              
                         implement              
                           program      c            c
                                   7.6 million  21.3 million 
                      Number of     in fiscal    in fiscal   
                    persons served  year 2003    year 2003   
                                     About 28                
                    Percent of       percent,                
                    budget           includes   
                    allocated to    nutrition   
                    administrative services as    About 10
                    costs              well       percent
                                   $4.5 billion    $23.9     
                                    in fiscal    billion in  
                                    year 2003   fiscal year  
                     Total budget                   2003     
                                   185 percent  130 percent  
                                    of federal   of federal  
                                     poverty      poverty    
                                    guideline,   guideline,  
                     Eligibility   among other  among other  
                     requirements    criteria     criteria   
                    Item/commodity                           
                      subsidized       Food         Food
                                   Department    Department  
                                   of                of      
                    Administering  Agriculture, Agriculture, 
                        entity     Food and       Food and   
                                   Nutrition     Nutrition   
                                   Service        Service    
                     Subsidy type   Voucher a    Voucher b   
                      and amount                
                                     Special                 
                                   Supplemental              
                                    Nutrition   
                                   Program for   Food Stamp
                                      Women,      Program
                                   Infants, and 
                                     Children   
                     Program name     (WIC)     

                             Source: GAO analysis.

  aMost state agencies distribute WIC benefits through checks or vouchers that
 enable recipients to purchase specific foods each month. A few state agencies
 distribute WIC foods through warehouses or deliver the foods to participants'
                                     homes.

bThe Food Stamp Program provides low-income households with coupons or
electronic benefits that recipients use as cash at most grocery stores.

 cFor long-standing programs, we did not obtain information on time required to
  develop and implement the program and to disseminate information to eligible
                                 participants.

Page 24 GAO-05-623T

Page 37 GAO-05-940R Digital Television Transition

               Page 38 GAO-05-940R Digital Television Transition

               Page 39 GAO-05-940R Digital Television Transition

               Page 40 GAO-05-940R Digital Television Transition

               Page 41 GAO-05-940R Digital Television Transition

          Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

subscribers, rather than purchased. Nevertheless, in cases where cable and
DBS subscribers need new equipment, we assume that the financial support
provided to them would be equivalent to that provided to over-theair
households.

Table 1 provides the cost of a subsidy program under the assumption that
cable and DBS providers downconvert broadcasters' signals at their
facilities in a manner that enables them to continue to transmit those
signals to subscribers as they currently transmit broadcasters' signals.
In this case, cable or DBS subscribers do not require any new equipment,
so only over-the-air households-approximately 21 million American
households-would need new equipment. As shown in table 1, there is
considerable variation in the cost of the subsidy program depending on the
level of a means test and the price of the set-top box.

Table 1: Estimated Cost of Set-Top Box Subsidy, Assuming Cable and DBS
Downconversion, only Over-the-Air Households Are Subsidized

Cost of subsidy, by estimated cost of set-top box (dollars in millions)
Assumption about means test Percent of over-the-air households eligible

Number of households

subsidized (in millions) $50 set-top box $100 set-top box

Means test at 50% of over-9.3
200% of the-air $463 $925
poverty level households (7.8 - 10.7) ($391 -$534) ($782 -$1,068)

Means test at 67 % of over-12.5
300% of the-air $626 $1,252
poverty level households (10.9 -14.1) ($545 -$707) ($1,090 - $1,415)

No means test 	All over-the-air 20.8 $1,042 $2,083 households (19.1 -22.6)
($954 -$1,130) ($1,907 - $2,259)

Source: GAO.

Notes: Ninety-five percent confidence intervals in parentheses.

Analysis based on the status of television households in 2004.

Table 2 provides the cost of a subsidy program under the assumption that
cable and DBS providers are required to transmit broadcasters' digital
signals in the same format as they are received. Under this scenario,
nearly all over-the-air households and most cable and DBS subscribers will
not have the equipment in place to view high-definition digital broadcast
signals. Although subscribers typically rent, rather than purchase,
set-top boxes, we assume that the same level of subsidy is provided to
these

Page 14 GAO-05-258T

               Page 57 GAO-05-940R Digital Television Transition

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

households as is provided to over-the-air households to defray the cost of
having to obtain a new or upgraded set-top box from their provider.

Table 2: Estimated Cost of Set-Top Box Subsidy, No Cable or DBS
Downconversion, Subsidy Provided to Over-the-Air and Cable and DBS
Households

Cost of subsidy, by estimated cost of set-top box (dollars in millions)

Assumption about means test Percent of U.S. households eligible

Number of households

subsidized (in millions) $50 set-top box $100 set-top box

                                  Means     31% of    35.1   $1,753    $3,506 
                                   test                             
                                at 200%                     ($1,633           
                                     of households  (32.7         - ($3,266 - 
                                poverty            -37.5)   $1,873)   $3,745)
                                  level                             
                                  Means     50% of    55.5                    
                                   test                      $2,775    $5,551
                                at 300%                     ($2,646           
                                     of households  (52.9         - ($5,293 - 
                                poverty            -58.1)   $2,904)   $5,809)
                                  level                             
                               No means Nearly all   106.2   $5,312   $10,624 
                                                            ($5,257           
                                   test households  (105.1        -  ($10,514 
                                                         -  $5,367) -$10,734)
                                                    107.3)          

Source: GAO.

Notes: Ninety-five percent confidence intervals in parentheses.

Analysis based on the status of television households in 2004.

There are two issues that stand as important caveats to the analyses we
have presented on estimated set-top box subsidy costs. The first is that
we based the majority of the analyses on survey results that provide
information on the status of American television households as of early
2004. Over the next several years, new households will be established,
some households might change the means through which they watch
television, televisions sets with integrated digital over-the-air tuners
as well as digital cable compatibility will be purchased, and some cable
and DBS households will have obtained set-top boxes capable of receiving
high-definition digital signals from their providers. Households' purchase
of certain new equipment could obviate the need for a subsidy for new
television equipment. For example, some households may purchase a digital
television set with an over-the-air tuner and begin to view digital
broadcast signals in this manner; some large televisions sold today are
required to include such a tuner and by July 2007, all television sets
larger than 13 inches are required to include a tuner. In time, these
factors could

Page 15 GAO-05-258T

               Page 58 GAO-05-940R Digital Television Transition

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

Enclosure II: GAO February 17, 2005, Testimony (GAO-05-258T)

           Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Highlights of GAO-04-926T, a testimony before the Subcommittee on
Telecommunications and the Internet, Committee on Energy and Commerce,
House of Representatives

In Berlin, Germany, the transition from analog to digital television
(DTV), the DTV transition, culminated in the shutoff of analog television
signals in August 2003. As GAO previously reported, the December 2006
deadline for the culmination of the DTV transition in the United States
seems unlikely to be met. Failure to meet this deadline will delay the
return of valuable spectrum for public safety and other commercial
purposes. Thus, the rapid completion of the DTV transition in Berlin has
sparked interest among policymakers and industry participants in the
United States.

At the request of this subcommittee, GAO examined (1) the structure and
regulation of the German television market, (2) how the Berlin DTV
transition was achieved, and (3) whether there are critical components of
how the DTV transition was achieved in Berlin and other areas of Germany
that have relevance to the ongoing DTV transition in the United States.

www.gao.gov/cgi-bin/getrpt?GAO-04-926T.

To view the full product, including the scope and methodology, click on
the link above. For more information, contact Mark L. Goldstein at (202)
512-2834 or [email protected].

July 21, 2004

TELECOMMUNICATIONS

German DTV Transition Differs from U.S. Transition in Many Respects, but Certain
Key Challenges Are Similar

The German television market is characterized by a central role of public
broadcasting and is regulated largely at the state level. Although the
federal government establishes general objectives for the
telecommunications sector and manages allocations of the German
radiofrequency spectrum, 15 media authorities organize and regulate
broadcasting services within their areas of authority. The two public
broadcasters are largely financed through a mandatory radio and television
license fee of 16 Euro ($19.68) per household, per month, or about 6
billion Euro ($7.38 billion) in aggregate per year. Today, only 5 to 7
percent of German households rely on terrestrial television. Most
households receive television through cable service, which typically costs
less than 15 Euro ($18.45) per month, or satellite service, which is free
once the household installs the necessary satellite equipment.

Berlin officials and industry participants engaged in extensive planning
for the rapid DTV transition in the Berlin test market. In Germany,
government officials and industry participants are implementing the DTV
transition largely for the purpose of improving the viability of
terrestrial television; officials do not expect to recapture radio
spectrum after the transition. Several elements of the DTV transition
apply throughout Germany. For example, Germany is implementing the
transition within specified "islands," which are typically larger
metropolitan areas, because officials thought that a nationwide DTV
transition would be too big to manage at one time. Also, the German DTV
transition focuses exclusively on terrestrial television, not cable and
satellite television. The Media Authority in Berlin specified other
components of the DTV transition for the Berlin area, including a short
(10 month) simulcast period, financial and nonfinancial support provided
to private broadcasters, subsidies provided to low-income households, and
an extensive consumer education effort.

Certain aspects of the DTV transition in Berlin and other regions of
Germany are relevant to the ongoing transition in the United States
because, even though the television market and the transition are
structured differently in the two countries, government officials face
similar key challenges. We found that much of the focus of government
officials leading up to and during the brief simulcast in Berlin was on
ensuring households who rely on terrestrial television received the
necessary consumer equipment. In the United States, most television
stations are providing a digital signal-that is, the United States is in
the simulcast phase. Thus, the challenge facing the Congress and the
Federal Communications Commission, as was the case in Berlin, is
encouraging households to purchase set-top boxes or digital televisions.
The key components of the Berlin DTV transition that enabled the rapid
deployment of set-top boxes included (1) implementing an extensive
consumer education effort; (2) providing subsidies to low-income
households for set-top boxes; and (3) setting a relatively near-term, date
certain that all stakeholders understood would be the shutoff date for
analog television.

               Page 66 GAO-05-940R Digital Television Transition

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

Enclosure III: GAO July 21, 2004, Testimony (GAO-04-926T)

(543109)

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