Valued Coupons

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The federal government has spent $20 million to date to help consumers defray the retail cost of in-home devices that convert over-the-air digital TV signals to the decades-old analog format, a Department of Commerce official said last Monday.

“The program is on track and we are thrilled,” Meredith Attwell Baker, acting assistant commerce secretary for communications and information, said at a press conference at last week’s National Association of Broadcasters convention.

The goal, Baker added, was to make the program “as easy as possible for the consumers.”

RETAIL CHITS

In 2006, Congress created a $1.5 billion program allowing each household to apply for one or two $40 government coupons. After receiving their credit card-like coupons in the mail, consumers may use them at participating retail outlets like Best Buy and Wal-Mart Stores to buy converter boxes, which sell for about $50 to $60 each.

The program has funding for about 33.5 million coupons, after allowing for administrative expenses. The U.S. has an estimated 11 million to 19 million homes that rely exclusively on free, over-the-air broadcasting.

Baker discussed the program at the last NAB show before all full-power TV stations need to turn off their analog signals on Feb. 17, 2009. A successful converter-box program would keep millions of analog TV sets running and prevent their owners from immediately buying digital TV sets or obtaining pay TV subscriptions.

Old analog TV sets that rely on an antenna to receive programming won’t work without a converter box. Cable and satellite TV connections are options that would also prolong the useful life of analog TV sets.

Baker, who also heads the National Telecommunications and Information Administration, said the program has received 5.6 million applications for 10.6 million coupons. The program kicked off on Jan. 1, and NTIA’s contractor began mailing coupons Feb. 17. Coupons expire 90 days from their mailing date.

“I think we’ve mailed out about 6 million coupons now,” Baker said. “We’ve had a half-million redeemed.”

More than 1,100 retail outlets are stocking converters and accepting coupons. There are also eight online vendors in addition to four firms taking orders over the phone, Baker said.

“Best Buy, Circuit City, Radio Shack and Wal-Mart have been great leaders of this transition,” Baker said.

She also saluted NAB president David Rehr and the effort TV stations have put into a wide-ranging public education campaign with an estimated cost of $1 billion, up from $697 million since last October.

“David Rehr and the broadcast-industry leaders have just been wonderful work with and we applaud and appreciate their help in his program,” Baker said.

Some cable operators and local TV-station groups have begun working jointly on public-service announcements designed to educate the public on necessary preparations for the analog cutoff. Comcast and Raycom Media announced one such venture here last Monday.

Last September, National Cable & Telecommunications Association members pledged to contribute $200 million toward DTV consumer education, including TV ads in

English and Spanish and various Web site material.

'NONE LEFT BEHIND’

The NAB estimates that pay TV and broadcast-only homes combined have nearly 70 million analog TV sets that are broadcast-only, which could swamp NTIA’s funding for 33.5 million coupons and defeat the goal of ensuring that “no TV set is left behind,” as Rehr put it in his convention keynote speech last Monday.

NTIA rules allows any household to apply for coupons until the first $890 million is exhausted; only broadcast-only homes may apply for coupons covered by the remaining $450 million. NTIA has allocated $160 million for administrative expenses.

Actual coupon demand might not use up all the funds because millions of consumers might sign up for cable or satellite TV or replace their analog sets with new digital units that must include over-the-air digital tuners.

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