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More Details on Gov't Coupon Program

October 14, 2007

NTIA has released its contract with IBM to administer the converter box coupon program, in response to a Freedom of Information request from the trade publication Consumer Electronics Daily. Contained in its voluminous parts are little tidbits of things to come. You can check out the whole contract (I wouldn't advise it) here. The best source of information is IBM's proposal, which is Attachment I to the contract, entitled "Performance Work Statement." At 57 pages, not light reading, but I've laid out the the more interesting highlights below.

The FCC has announced the first two of its DTV consumer education workshops targeting specific "at-risk" population elements. The first will focus on issues relating to seniors (November 8), and the second will focus on how best to take the transition message to minorities and non-English speaking consumers (December 4). Additional workshops are planned over the next sixteen months to discuss the problems facing people with disabilities, low-income earners, and those living in rural areas. All of this is just talking about what needs to be done, mind you.


IBM was selected to plan and administer the government's digital-to-analog converter box subsidy program just last August 15, so they've been at it for just a couple of months, but they had already thought about it quite a bit in order to develop their winning proposal.

From the consumer's perspective, their ideas on getting the word out about the coupon program, and the actual process of requesting, receiving, and redeeming the coupons will be of most interest. IBM is also responsible for recruiting, educating, and certifying participating retailers, whose skill in executing their responsibilities will be critical to the success of the program.

The coupons: they will be plastic, and will look like retailer gift cards (which look like credit cards). They will be printed with eight colors and have a holographic image for security. The identification number will be coded to make counterfeiting difficult, and will be printed on the card as well as recorded electronically. They will be processed through the Mastercard network, so they should work virtually everywhere.

They will arrive in your mailbox in a distinctive envelope so you're less likely to toss it in the trash with the junk mail. Inside the packet will be instructions for use, a list of eligible converter boxes, and a list of certified retailers.

To request the coupons (or if you have questions), you can visit the web site or call the toll-free number. IBM intends for these to be up and running a week before the Congressionally mandated January 1, 2008 start date for the program (just to make sure there are no glitches). You can also request coupons via fax or snail mail.

The call center will be staffed with real people, 24/7! There will be operators there who can speak six languages besides English.

They do not plan to start distributing coupons before April 1, 2008 (specified by the tardy NTIA), but IBM suggests it can be ready sooner if there is pressure to do that.

Their test and demonstration phase depends on the availability of retailers willing to play guinea pig, but as the retailers pointed out over a year ago, the holiday shopping season is not the time to play with their sales systems. IBM suggested in its proposal that it would be reaching out to retailers at electronics industry events, specifically mentioning the National Retail Federation's January 2008 conference, "in order to communicate directly with the retailer community and obtain feedback.

Retailers have until March 31, 2008, to apply for certification to sell converter boxes within the coupon program.

The consumer education program: IBM claims its "Get the Picture" consumer education effort "will be seen as a model of effective consumer outreach for years to come."

Their "Get the Picture" tag line is touted for its "familiarity, brevity, and double meaning -- 'get the facts' but also 'get your TV working right'."

IBM plans to launch a mass media campaign (i.e. TV), at a time "mutually agreed by NTIA and the National Association of Broadcasters." (NAB) They say "Preliminary indications are that the kickoff will be scheduled for the early spring 2008 time period."

They are recommending a "major launch of the campaign, since public awareness and education campaigns depend on rising momentum and repetition of messages."

They plan to supplement the media campaign with "teaser" materials, including 200,000 stakeholder brochures (trifold, B&W + one color), 50,000 posters (four color, 17" x 22"), 1,000,000 consumer information cards (4" x 9", B&W + one color), and 1,000,000 reminder magnets. (Refrigerator magnets!)

Targeting and expected demand contour: IBM is planning to use research data developed by the NAB and the industry's DTV Transition Coalition in designing the education campaign (which I expect will be a contribution to the industry's planned marketing campaign). They refer to six Coalition focus groups: one with Coalition "stakeholders," two with Hispanic over-the-air TV viewers, and three with over-the-air viewers from the general population. IBM is recommending that additional focus groups be conducted for seniors and the African American population "to glean data about their understanding of the transition and messages that will resonate with them."

I guess they assume skin color somehow affects cognition. Very strange.

Finally, a chart!

IBM compares their expected take-up of coupons with a typical consumer response to a direct-mail campaign, which would usually have a moderate uptake when people first receive a notice and then another moderate spike when the deadline is near. With the coupon program, they don't expect any action until after the planned education campaign in April (except from a few miscreants who already know about the transition). Then they seem to expect a fairly steady demand (with procrastination, etc.) until November, with a huge spike coming in the weeks before the end of the transition.

It seems quite idealized to me. Or perhaps panic setting in due to late education efforts. They perhaps have been smitten by the rose-colored glasses of the industry lobbyists. But, might happen that way. We shall see.


Until next week, which will see the industry's Coalition announcing more about their vaunted consumer marketing campaign (Monday), and DTV transition hearings at both Senate and House (Wednesday).