Now Hear This Newsletter, October 9, 2008 Posted by Bob at 10/08/08 08:20 PM

For months now the Commerce Department office in charge of the government’s digital television conversion box coupon program has been insisting it has enough money to make sure everyone who wants to get two of the $40 coupons will be able to do so.

But now the head of the Federal Communications Commission says he is seriously worried the coupon program might run out of money as millions of consumers rush to prepare for the February 2009 national transition from analog to digital broadcasting. That could mean millions of consumers who depend on free, over-the-air television won't be able to get the government coupons.

That clashes sharply with recent testimony before the House Energy and Commerce Committee by Meredith Atwell Baker, director of the National Telecommunications and Information Administration, the arm of the Commerce Department charged with running the $1.5 billion DTV converter box program.

Rather than running out of money, Baker told lawmakers she thought the coupon program might be in a position to return as much as $300 million to the U.S. Treasury.

FCC Chairman Kevin Martin says he has serious doubts about Baker’s fiscal assurances, however.

"While I do not have access to NTIA's projections and detailed analyses, I am concerned that the total funding required to satisfy demand may prove to be insufficient," Martin wrote in a letter sent to House Energy and Commerce Chairman John Dingell this week.

At the heart of Martin’s doubts are findings from the early switchover to digital that took place in the Wilmington, NC television market last month.

For example, Martin says the number of households relying exclusively over-the-air broadcasting which requested coupons in Wilmington was 39 percent higher than NTIA’s estimates. Extrapolated nationally, that would mean there are about 19 million households that rely exclusively on over-the-air broadcasting, about 5 million more than the 14 million estimate used by NTIA.

Martin also says NTIA has likely underestimated redemption rates for the coupons because its calculations are based on the first few weeks of the program earlier this year. As the February national switchover nears, Martin says the redemption rates are likely to jump sharply.

Martin also notes that NTIA has recently announced a new consumer education campaign called “apply, buy and try” which encourages consumers to redeem their coupons sooner rather than later in order to test their converter boxes. “If this program proves to be successful, we could see a continued acceleration in redemption rates,” Martin warned in his letter.

In addition, Martin warns that NTIA’s estimates do not account for recent changes in the program to allow people living in nursing homes and those using post office boxes to apply for and receive coupons.

“Given these factors, it is difficult to predict whether the coupon program is adequately funded,” wrote Martin. ”Accordingly, I am becoming increasingly concerned about the funding of this program.”

In other words, Martin is saying the estimates NTIA is using to make its funding calculations are not only wrong, but likely very wrong. And NTIA is using those lowball estimates and calculations to assure Congress the coupon program is not only adequately funded, but will likely have a surplus of more than $300 million when all is said and done.

No matter how you calculate it, it’s long past time for NTIA to get real about the numbers underpinning its optimistic assurances to Congress about funding for the converter box coupon program.

comments (8)

1 Posted by Dick Talbott at 10/09/08 01:35 PM

Sounds like another inefficient government program run by bureaucrats trying to secure their position as long as possible. The government postponed implementing mandatory digital TV before and they may have to do so again; probably at the last minute. All change is not necessarily for the better. Considering the current economic delimma, the U.S.A. must learn to live with what they have and not allow instant gradification to rule.

2 Posted by Richard Keene at 10/09/08 02:20 PM

WITH ALL THIS GARBAGE GOING ON WITH OUR GOVERNMENT I THINK IT'S HIGH TIME WE GET A NEW GOVERNMENT. ONE FOUL UP AFTER ANOTHER, THESE IMECILES THAT WE ELECTED ARE BOUND TO DESTROY THIS COUNTRY FOR THEIR OWN MONETARY GAINS. THE TIME IS NOW TO THROW ALL THE CRETINS OUT OF WASHINGTON AND START A NEW GOVERNMENT THAT IS RESPONSIBLE TO WE THE PEOPLE!
R.N.KEENE

3 Posted by Linda Carraway at 10/09/08 03:05 PM

There's always a 'tricky Dick' switch when it comes to anything our government does. I've chosen to let other folks deal with the February changes. I'm putting my TV into hibernation, having abandoned cable almost 3 years ago. I won't miss it. The internet will keep me up on things.

4 Posted by M Smith at 10/10/08 06:52 AM

I have been unable to get coupons as I only get mail at a post office box for personal reasons. I own my own home, and have been here for over 20 years. I don't see why I should have to put up a street mailbox just to get the @#$% coupons.

5 Posted by Edward Craig at 10/10/08 06:39 PM

I seem to have missed redeeming my coupon. On the other hand, I mostly use my TV for watching DVDs. So I cease viewing the vast wasteland in February. Not all that big a thing, I think.

6 Posted by R. Leather at 10/12/08 02:58 PM

And what of the cost to have a tv specialist trouble shoot boxes that don't seem to decode properly ....Self installers aren't sure whether their boxes are working right.
Also better figure on the rising unemployment rate throwing a great many more viewers back out into analog frequencies when they can't afford to pay a cable service bill anymore. We can all thank the our self-serving good ol' boy club leaders for their criminal neglect in this area as well.

7 Posted by Kevin Leroux at 10/17/08 01:06 AM

I wrote this to the TV Converter Box Coupon Program tonight after repeated attempts to track and receive the 2 coupons that were originally approved in February 2008, but not deliverable at that time due to the rush of applications received by an ill-prepared government agency.

The latest response was:
Your coupons were mailed on 4/25/08; however your coupons have since expired. By law, we are not able to issue coupon replacements under any circumstances including coupons that were lost during postal delivery. Perhaps a friend or family member who does not need their coupons could pass them along to you. While it is illegal to sell coupons, giving a coupon for free to a family member, friend, or neighbor is not prohibited under Program regulations.

Sincerely,
STEPHANIE GOLDMAN
Consumer Support
TV Converter Box Coupon Program

"Your program has been flawed from the start. Your inability to respond to the initial response to the program was evident from the start and evidently has lead to your failure to deliver what you professed to, and continue to profess to, in costly advertising. Your failure to respond to my previous appeals further substantiates that observation. Your claim that the coupons were mailed is without merit, and that they may have been "lost" during postal delivery is a slight against the USPS. That you cannot issue replacements under any circumstance is not an excuse, it is an admission of the failure of the program. That you offer a way around the "rules" is an embarrassment to all involved in this government fiasco!"

Now I see that there is an even greater problem with this program on the horizon. I agree with comments 1 and 2.

8 Posted by aa at 11/16/08 10:12 PM

my coupons expired!