Digital TV Budget Sufficient, NTIA Says

http://www.washingtonpost.com/wp-dyn/content/article/2008/07/28/AR2008072802543.html?nav=rss_technology

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In response to criticism from key lawmakers, the federal agency in 
charge of preparing viewers for the switch to digital television said it 
has enough money to meet consumer demand.

The National Telecommunications and Information Administration, a bureau 
of the Commerce Department, is administering a $1.5 billion program to 
distribute $40 coupons to help consumers pay for the converter boxes 
they will need to continue watching analog televisions after Feb. 17. 
The boxes cost $50 to $80. The NTIA awarded a contract to IBM to perform 
administrative duties, such as taking coupon orders and mailing them to 
consumers.

Two weeks ago, Democratic Reps. John D. Dingell (Mich.), chairman of the 
House Commerce Committee, and Edward J. Markey (Mass.), chairman of that 
committee's telecommunications and Internet panel, questioned the NTIA's 
management of the program. In a letter to the agency, Dingell and Markey 
suggested that the $120 million contract with IBM did not cover funds to 
pay for the administrative costs associated with coupons that are not 
redeemed and then reissued. Such a shortfall, the letter said, could 
prevent some consumers from getting the equipment they need.

In a letter delivered late Friday, the NTIA said its contract with IBM 
has sufficient funds to meet the program's demands. Meredith Atwell 
Baker, acting assistant secretary for communications and information, 
said the NTIA has "initiated action with IBM to order an additional 
quantity of 6 million coupons" using the funds from unredeemed and 
expired coupons. She said that the $1.5 billion allotted for the program 
by Congress "will be sufficient."

IBM's contract with the NTIA calls for the distribution of 33.5 million 
coupons. But Dingell said he is concerned that the additional coupons 
will not be enough to meet demand.

"We will continue to monitor this situation closely," Markey said in 
response to Baker's letter. "Every consumer who needs a coupon should 
receive one and the NTIA must not try to cover any administrative 
shortfalls by taking money away from the consumer coupon fund."

Demand for the coupons has been high, with about 105,000 requests a day. 
Redemption rates, however, have not kept pace. Of the more than 21.3 
million coupons that have been requested, 6.6 million have been 
redeemed, according to the NTIA, for a redemption rate of 46 percent. 
For households that rely on antennas to receive television signals, the 
redemption rate is slightly higher at 55 percent.

The program has sparked a larger-than-expected market for converter 
boxes. The NTIA said last week that more than 150 converters have been 
certified, including 63 that will allow viewers to continue watching 
analog signals from the low-powered stations that are not yet switching. 
Currently, 46 models are on store shelves. Sales are expected to pick up 
during the holiday season.

The Federal Communications Commission has run more than 32,000 tests on 
the boxes submitted by manufacturers. To ensure that converters are 
available in time, manufacturers must notify the NTIA of plans to submit 
any more in September.
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