Feds Tune In DTV Subsidy Plan

All U.S. households will be eligible for two $40 coupons to help defray the cost of digital converter boxes that analog television sets will need to view over-the-air broadcasting after Feb. 17, 2009.

The coupon program, announced Monday morning by the Department of Commerce, is part of Congress’ digital television (DTV) transition plan to move broadcasters out of their analog spectrum and auction off the vacated space to wireless broadband providers.

“We want to make sure no household is faced with losing television service,” John Kneuer, assistant secretary for communication and information, said.

Under the plan, households may begin requesting the coupons on Jan. 1 of next year. The coupons will be available through March 31, 2009. The coupons will expire 90 days after being issued. Only one coupon can be redeemed per converter box.

National Telecommunications and Information Administration (NTIA), an agency of the Department of Commerce, has set aside $990 million to fund the coupon program. Kneuer said if all those funds were used, an additional $510 million will be used but limited to households with access to only over-the-air (OTA) broadcasting.

The National Telecommunications and Information Administration (NTIA) estimates 20 million (17 percent) out of approximately 115 U.S. households rely exclusively on free OTA broadcasting.

The digital converter boxes are currently estimated to cost $50 to $60 each.

Kneuer admitted there is “uncertainty” about the number of coupons that will be needed since some consumers will opt to purchase new televisions with built-in digital tuners and others may buy DVD players with digital tuners. The coupons can only be used for basic digital converter boxes.

The NTIA also issued guidelines to manufacturers of the boxes and for retailers who will sell the boxes. The coupons will be electronically trackable and uniquely numbered, similar to gift cards, so that transactions will be verified at the point of sale.

“With the coupon program and a successful analog-to-digital transition involving the public, industry and government, the switch from analog to digital television will be completed as planned,” Kneuer said.

His comments come a little more than week after Rep. John Dingell (D-Mich.), the chairman of the House Energy and Commerce Committee, questioned the government’s preparation for the transition.

Monday morning, Kneuer refused to directly address Dingell’s suggestion that the DTV date might need to be delayed.

“There are a huge, broad range of public policy issues that need to be addressed,” he said. “There is huge potential here for our economy and innovation.”

Kneuer noted a delay in the transition would jeopardize spectrum earmarked for public safety agencies and would have a bottom line impact on the U.S. treasury since the spectrum to be auctioned is estimated to raise as much as $10 billion.

“The NTIA final rules released today move the nation closer to the all-important transition to digital television,” the DTV Transition Coalition, a group of electronics makers, broadcast and cable companies said in a statement.

“These new rules establish the parameters for a program that will allow consumers to request government-funded coupons for use in obtaining discounted access to digital-to-analog converter boxes.”

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