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Glitches Abound in Digital Television Transition

Congress hears of coupon troubles, consumer awareness shortcomings

By Martin H. Bosworth
ConsumerAffairs.com

June 11, 2008 

The House Subcommittee on Telecommunications and the Internet used its fifth DTV hearing to focus on the results of the $40 coupon vouchers offered through the Commerce Department's National Telecommunications and Information Administration (NTIA). The coupon program has been criticized for issuing vouchers that expire within 90 days, without opportunity for replacement or renewal.

Subcommittee chairman Ed Markey (D-MA) said that "As more coupons reach the 90-day expiration date we will have more and better data on the rate at which the coupons are being redeemed. This will shed additional light on the potential financial and administrative needs for the program."

Dr. Bernadette McGuire-Rivera, NTIA's assistant administrator, testified that "As of June 3rd, of the 16 million coupons requested, more than 14.6 million have been mailed to consumers. A coupon ordered today can be expected to be issued and mailed within 10 to 15 business days."

Rivera said the postage costs of sending out more coupons require attention.

"Given the statutory 90-day expiration date of each coupon and the resulting importance of timely delivery, NTIA is reaching out to the U.S. Postal Service to request that coupon mailings be given priority attention," Rivera said.

Rivera also noted that recent requested changes to the program, such as allowing coupons to be sent to P.O. boxes and senior care facilities, might require the NTIA to "access more funding" to cover the increased costs.

But the NTIA issued a statement after the hearing saying it "has no plans to ask Congress for any additional funds."

Lack of awareness

The level of consumer awareness -- or lack of it -- about what the DTV transition entails was also a hot topic, thanks to a new report from the Government Accountability Office (GAO) detailing various issues relating to the switchover. The GAO conducted a survey of American households to determine their level of information regarding the transition. Among the GAO's findings:

• 84 percent of respondents polled had heard of the transition, but a smaller percentage of people have more specific knowledge of the transition. date and why the transition is taking place. Households which were directly affected by the transition had more specific and direct knowledge than those that were not.

• Over 50 percent of the households polled had heard of the coupon subsidy program for converter boxes, but less than a third of the respondents knew where and how to obtain coupons.

• 30 percent of respondents who would be unaffected by the transition still indicated they would make plans for it, a symptom of misinformation and confusion among the public, the GAO said.

"35 percent of over-the-air only homes and 52 percent of homes with at least one unconnected analog television set are unprepared for the transition," said House Commerce Committee chairman John Dingell (D-MA). "Those numbers suggest that much work remains to educate consumers, including seniors, non-English-speaking households, and other vulnerable populations."

Federal Communications Commission (FCC) chairman Kevin Martin testified that while there was still room for improvement, "Numerous reports indicate that consumer awareness of the upcoming transition has risen significantly." Martin cited statistics from the Consumer Electronics Association reporting that the percentage of consumers surveyed who were aware of the DTV transition jumped from 41 percent in August 2006 to 74 percent in January 2008.

"That more and more viewers are aware of the transition is a step in the right direction," Martin said. The next phase of the consumer education campaign emphasizes the actions that consumers need to take to be prepared."

Catching the converters

Availability of set-top converter boxes to process the digital signals was also cited as a concern. Critics charge that even though many retailers have signed up to sell converter boxes, consumers were having difficult times finding and purchasing them before the coupons expired.

John Ripperton, Radio Shack's vice president for supply chain management, testified that "the demand for converter boxes is higher at this time than was anticipated," and that Radio Shack was implementing special programs such as direct orders from its shipping centers to cope with the growing interest from customers.

Ripperton also asked the NTIA to continue providing detailed coupon redemption data.

"This is particularly important right now so that retailers can appropriately target shipment of their inventory to the areas that have the most active coupons," Ripperton said.

Although several retailers have enabled the converter box coupons to be used online, the larger retail chains require them to be redeemed in person. Big-box retailers such as Best Buy, Circuit City, and Radio Shack itself were recentlyfined by the FCC for selling televisions without warning labels notifying consumers that the set would require a converter box to receive digital signals.

What to do

The following sites have more information about the analog-to-digital transition:

• Our Dawn Carlson provides a thorough overview of what you need to know.

• Visit the FCC's official DTV site to get more information.

• Apply for a converter box coupon at the NTIA's converter program Web site.

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