NAB Urges Congress to Fix TV Converter Box Coupon Program Problems
January 7, 2009
WASHINGTON, DC — National Association of Broadcasters (NAB) President and CEO David K. Rehr sent the following letter to members of Congress and the Federal Communications Commission urging Congress to find a solution to the problems resulting from the Commerce Department's recent announcement that the TV Converter Box Coupon Program has reached its $1.34 billion funding limit.
Converter boxes are the most economical way for viewers to upgrade their television sets in advance of the transition to digital television (DTV) on February 17. NAB is leading a nationwide campaign valued at more than $1 billion to help consumers prepare their homes for the upcoming switch.
January 7, 2009
The Honorable John D. Rockefeller, IV
Committee on Commerce, Science and Transportation
United States Senate
254 Russell Senate Office Building
Washington, DC 20510
The Honorable Kay Bailey Hutchison
Committee on Commerce, Science and Transportation
United States Senate
254 Russell Senate Office Building
Washington, DC 20510
Dear Chairman Rockefeller and Ranking Member Hutchison:
As you know, full-power television stations across the country will begin broadcasting exclusively in digital starting February 17, 2009. To help viewers with the cost of upgrading to digital with a converter box, Congress in 2006 authorized the National Telecommunications and Information Administration (NTIA) to administer the TV Converter Box Coupon Program, which allows households to apply for up to two $40 coupons per household that can be used toward the purchase of converter boxes.
On Monday, January 5, 2009, NTIA announced that it had exhausted its funding for the program; from now on viewers requesting converter box coupons will be put on a waiting list and will only receive coupons as other coupons expire.
The National Association of Broadcasters (NAB) urges Congress to address this issue, as millions of households are at risk of losing reception without the help of a coupon toward these converter boxes. There are a myriad of ways to address this problem, including:
- Modify the coupon redemption rate assumption: Currently 53 percent of coupons are being redeemed, but the program operates on the basis of a 100 percent redemption rate. A modification of the projected redemption rate, e.g., an assumed 80 percent redemption rate, would free up more money for coupons to be delivered to consumers.
- Additional funding: Congress could act to appropriate more money to the program. The $1.5 billion appropriated to the TV Converter Box Coupon Program permits approximately 33.5 million coupons to be redeemed. With 44.6 million coupons requested as of December 31, 2008, it appears that demand could exceed supply.
- Waiving coupon expiration: There are over 13 million expired coupons in the public domain. As you know, current law imposes an expiration date of 90 days subsequent to the issuance of the coupons. Another possible way to immediately push more coupons into the marketplace would be a modification of the expiration date that would allow coupons currently in circulation to be redeemed.
- Lifting Anti-Deficiency Act requirements: Currently, 53 percent of coupons applied for by households are being redeemed – yet government accounting requires that all outstanding coupons be accounted for as spent money. Therefore, while it is likely that only six million of the 11 million outstanding coupons will be redeemed, the five million that are not likely to be redeemed cannot be distributed to other households. Lifting the Anti-Deficiency Act requirements on the program would allow the NTIA to distribute more coupons without an additional appropriation.
One thing is certain: there have been far more applications sent to the TV Converter Box Coupon Program than anyone who designed the program would have expected. The program is successfully giving millions of Americans the help they need to upgrade to digital. But for those millions of households that rely on free, over-the-air broadcasting that have not yet applied for a coupon and need to purchase converter boxes, Congressional action is crucial to ensuring that everyone continues to have access to free over-the-air television after February 17, 2009.
We look forward to working with you to help fix this problem.
Best wishes.
Sincerely,
David K. Rehr
President and CEO
