Congressional Affairs:
Subcommittee on Telecommunications and the Internet, Committee on Energy and Commerce, U.S. House of Representatives

Oral Testimony of Meredith Attwell Baker
Acting Assistant Secretary of Communications and Information
National Telecommunications and Information Administration
U.S. Department of Commerce

Before the

House Telecommunications & the Internet Subcommittee
Hearing on the “Status of the DTV Transition: 154 Days and Counting”

September 16, 2008

Thank you, Mr. Chairman, Ranking Member Stearns, and members of the Subcommittee.  I appreciate the opportunity to testify before you today.

Educating Americans about the options for the digital television transition and administering an efficient and consumer-friendly Coupon Program have been the top priority for NTIA over the last two years.  With 154 days to go until the DTV switch occurs, we have made significant progress. 

Since the Program’s launch on January 1st, and through September 10th, 2008, the volume of coupon applications has been strong:  nearly 27 million coupons have been requested from over 14 million households.  This is equivalent to more than 105,000 average household requests for each of the 260 days the Program has been operational.  In the last 30 days, average household requests were up to 111,000 per day.

The rate of coupon redemptions has likewise been strong:  over 10 million coupons have been redeemed through September 10th – a rate of 49 percent for all coupons and 55.4 percent for coupons used by over-the-air only households.

The cooperation of converter box manufacturers and retailers has greatly contributed to our consumer-friendly Program and we appreciate their partnership.  As of September 10th, we have certified 156 converter boxes, including 82 boxes with analog pass-through and at least one, Winegard, that works with a battery pack.  The Program also now includes more than 2,300 participating retailers with over 29,000 outlets in all 50 states and territories, along with 35 online and 13 telephone retailers.  The list includes does two notable recent additions – Amazon.com and Office Depot.

To develop and implement outreach for the increased Coupon Program participation by over-the-air households, NTIA correlated current participation rates with the best available industry data.  We estimate that 75 percent of over-the-air households that are potential purchasers of converter boxes have requested coupons as of September 1.  In other words, the Coupon Program participation by over-the-air households is on track in 187 of the nation’s 210 television markets.  NTIA is working hard to implement specific outreach plans in the 23 markets where participation rates in the Coupon Program are lower than expected.  This is a tool and it will continue to evolve.  We will continue to share this with members of the Subcommittee.
           
We believe our consumer education efforts are working.  Based on the Wilmington test pilot held on September 8, we learned that strong and steady demand for coupons and boxes can stem a rush in the final days leading up to the transition.  We also learned that it is important for consumers to act early so that they have ample time to address any technical issues that might arise in installing a converter box.
           
NTIA has also now adopted messaging to “apply, buy, and try” converter boxes.  Consumers should “apply” early, “buy” a converter box, and “try” the box to ensure that it works, trouble-shooting for any issues they may experience well in advance of February 17, 2009.

The success of the Wilmington pilot shows that when governments, industry and nonprofit groups coordinate closely, as is the case in Wilmington, the whole truly does become greater than the sum of its parts.

Last Friday, 24 federal agencies convened at the White House to discuss strategies to better coordinate activities across Executive branch agencies to enhance consumer education and assistance to our target populations.  It was very encouraging to hear see how USDA, the VA, HHS and IRS, among others, are helping millions of vulnerable Americans prepare for the digital transition.  We continue to explore how these good practices can be applied to other Federal agencies to reach a broader cross-section of Americans who rely on over-the-air television.

I’d like now to turn briefly to how NTIA is responding to a couple of key challenges that we have faced administering the Coupon Program.

First, the final rule for the nursing homes and post office box changes is at the Office of the Federal Register and is awaiting publication.  We are pleased to be taking this step to make the Coupon Program more inclusive.

In the same vein, the Department of Commerce submitted draft legislation to Congress last week to be able to maximize the number of coupons NTIA could distribute while not exceeding the $1.5 billion in total funds authorized for the Program.  The legislation provides NTIA with statutory flexibility, if needed, to utilize funds from other programs, and to spend up to $7 million to cover administrative expenses of the Coupon Program associated with the high demand.  Any additional sums for such purposes are authorized upon approval of OMB and 15-day notice to the House Energy and Commerce Committee and Senate Commerce Committee.

Assuming that consumer requests for coupons will increase as the February 17 transition date nears, as we all do, NTIA wants to be prepared as it possibly can be to maximize consumer participation in the Coupon Program.  Without the flexibility to increase administrative spending, if needed, NTIA will be able to distribute 44.5 million coupons.  We believe that the draft legislation is a responsible and prudent approach to address potential additional demand for coupons, and I urge its immediate consideration.

Thank you again for the opportunity to testify today.  I will be happy to answer any questions.