INSIDE NTIA'S DTV CONVERTER BOX PROGRAM

The National Telecommunications and Information Administration's digital-to-analog converter box program—not a catchy phrase—is critically important to TV stations and their viewers.

It’s key to preventing the loss of all access to television by millions of American TV households on the digital transition date, Feb. 17, 2009—now just 508 days away.

In 2005, Congress required the FCC to terminate all full-power analog television station licenses at midnight on Feb. 17, 2009.

When the clock strikes twelve, all stations must be digital-only and surrender their analog channels.

By this “hard date,” Congress plans to end the long digital transition and deliver its intended benefits: better TV service, billions for the federal treasury from the auction of the surrendered spectrum, and new wireless and public safety uses of the former analog channels.

But for viewers not equipped for the change, this new dawn could be a rude awakening: blank screens on the morning of Feb. 18.

Readiness for the change means having a digital set, subscribing to satellite or cable, or getting a digital-to-analog converter box.

How many could be affected? One estimate, by NAB, puts the number at 34.3 million “over the air” households. That includes 19.6 million, or 17.5 percent of the total TV audience, that get television only over the air, plus 14.7 million homes that subscribe to satellite or cable but have at least one set not connected to them.

This is a potential nightmare to consumers, broadcasters, programmers, advertisers, cable and satellite operators (whose viewers may not know why some of their screens are blank) and, last but not least, elected officials.

To prevent the undesired “morning after,” Congress allocated $1.5 billion to the NTIA, a division of the U.S. Dept. of Commerce, to administer the distribution of free coupons to subsidize viewers’ purchase of certified converter boxes.

These boxes receive digital signals and convert them to analog for reception on analog-only sets. Picture quality is projected to be better than current analog reception.

How does the program work? Starting Jan. 1, 2008, up to $1.3 billion in public funds will underwrite more than 30 million $40 coupons to be used until March 31, 2009. They will be redeemable only to buy coupon-eligible converter boxes certified as eligible by the government from certified retailers. Coupons will be coded to track use and prevent fraud. Their resale is prohibited. 

In these and most aspects, including consumer education (see below), NTIA will rely on IBM, which on August 15 was awarded a $120 million contract to assist in implementing the program.

In the first coupon phase starting Jan.1, some 20 million coupons will become available to any TV household to buy eligible boxes, which are expected to cost $50-70. In phase one, each TV household will be eligible, regardless of how it receives TV, income or other factors, for two coupons.

Viewers must request them by toll-free telephone, online, fax or mail. They must use them within 90 days of receipt, applying each coupon to purchase of a separate box (not combine them toward a single more deluxe converter).

If consumer demand exceeds phase one coupons, NTIA may notify Congress to activate phase two. In it, 11 million more coupons will be available. Unlike phase one, phase two will be limited to households certifying that they have no cable or satellite subscriptions (the group most vulnerable to loss of all TV service).

What can stations and others do to promote the success of the program?  In three words, help educate viewers.

The $1.5 billion for coupons dwarfs the $7 million ($5 million to NTIA, $2 million to the FCC) Congress allotted to educate the public about the transition itself and the coupons. As a result, the private sector must pick up the slack unless more funding is authorized.  NTIA and the FCC are “partnering” with stakeholders in the success of consumer education. 

The need for this, as a practical matter, is shown in the result of a recent survey by America’s Public Television Stations (APTS):  51.3  percent of the public is still unaware that the transition is happening.  For viewers, that awareness is a predicate to understanding the benefit of the coupons. Without it, many viewers won’t be motivated to navigate the process of obtaining and using them. 

Some audience segments are particularly at risk of being left out. For example, viewers who speak mainly or only Spanish, Chinese or another non-English language, the elderly, those lacking computers and others are doubly at risk because they are less likely than the general population to subscribe to multichannel TV (and therefore need to act prior to the hard date). They face the additional barrier of language or another obstacle to obtaining the necessary information on time and effectively.

Television stations, cable and satellite operators can use their own air and Web sites, appearances at local events and other means to educate consumers.

Assistance in doing this is readily available from NTIA, the FCC, the 160-member DTV Transition Coalition, NAB (which last month told Congress that the transition is its #1 priority, and is distributing PSAs), NCTA (which has pledged $200 million in  advertising on cable systems), among others.

This column on TV law and regulation by Michael D. Berg, a veteran Washington, D.C. communications lawyer and the principal in the Law Office of Michael D. Berg, appears monthly. He is also the co-author of FCC Lobbying: A Handbook of Insider Tips and Practical Advice. He can be reached at mberg@michaelberglaw.com or 202-298-2539.

Note: This article provides general guidance only and is not a substitute for individualized legal advice for particular situations.