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Converter Box News, FCC Blasted, Etc.

December 16, 2007

The NTIA on Tuesday announced that more than a hundred retailers have now been certified to sell subsidized digital-to-analog converter boxes. The new plan is to start distributing coupons on February 17, 2008 (that's likely before boxes will be generally available). More below.

FCC Chairman Kevin Martin was blasted by both Republicans and Democrats (and two other FCC Commissioners) at Thursday's Senate oversight hearing. More below.

The GAO (Government Accountability Office) just released a report on the DTV transition faulting the FCC, and the government in general. More below.

I have added a link on my home page to Univision's DTV transition web page. I've got the link below for the three excellent video segments that comprised the half hour DTV education special aired on December 1.

And finally, I ran across an example of the cable industry's DTV transition education campaign -- scare tactics, actually, to get more antenna people to sign up for digital cable.


The NTIA's Tuesday press release said that eight of the largest consumer electronics retailers -- Best Buy, Circuit City, Kmart, RadioShack, Sam's Club, Sears, Target, Wal-Mart -- have been certified to participate in the TV Converter Box Coupon Program along with more than 100 other retailers, representing more than 14,000 stores throughout the nation.

No word on when these retailers would have boxes on their shelves, but Best Buy has recently stated that they would not be ready to go until around April 1. Best Buy is the largest electronics chain in the country.

Neither amazon.com nor onecall.com was on the list of participating retailers (there's still time to sign up). Some internet retailers will not be participating because of the incompatibility of their systems with payment for a single item by both government coupon and consumer credit card. We'll have to wait and see if the program ends up being a brick and mortar phenomenon.

Coupons will be distributed beginning February 17, 2008. That's the plan, although methinks someone was being just a little bit too clever setting that date and not basing distribution on when retailers will be ready to start selling the boxes. It might not be the best plan to send out coupons and then have consumers angrily put them away and forget about them because no one has the boxes for sale. In any case, the coupons are valid for 90 days after you get them so the first people to get coupons will have until the middle of May to use them.

If you let them expire, they won't give you any more.

You can request a coupon four ways:

  • Apply online at www.dtv2009.gov. This website will officially be active on January 1.
  • Call the Coupon Program 24-hour hotline 1-888-DTV-2009 (1-888-388-2009), TTY 1-877-530-2634
  • Mail a coupon application to: PO BOX 2000, Portland, OR 97208-2000
  • Fax a coupon application to 1-877-DTV-4ME2 (1-877-388-4632)

Here's a look at what the written application looks like.

IBM had earlier said at a hearing that they would start taking applications a week before January 1, to make sure everything was working properly, but at the press teleconference on Tuesday, acting NTIA chief Meredith Baker contradicted this, stated they would not be open for business before January 1. I'm going to start checking a week before in any case.

She also said the education campaign was "well underway." Ha! There are education campaign documents from IBM (program administrator) now available: the education plan and the consumer testing results.

The education plan struck me as being prepared by marketing people using standard dogmatic methodogies. Define the target audience and then plan a strategy that will reach as many of them as efficiently as possible. If you reach 50% or 60%, you're doing well. They are still targeting the seniors, minorities, rurals, etc.

The problem is for the transition you have to reach everyone, i.e. 100% of TV viewers. Making presentations at senior centers helps those older people who are socially active and go to senior centers (a minority), and putting articles in the AARP magazine is nice, but that also reaches a small minority of seniors (by way of examples).

And what about the rest of us?

The focus should be on TV messages, and it's not.

The press release says that converters by DigitalSTREAM, Zenith, Magnavox, and Philco have been certified for purchase with coupons and more are expected in the next several weeks. When asked during the teleconference how many other boxes are in the process of being certified, Baker said that information was proprietary.

Well, of course the manufacturer information is proprietary, but the number being tested is certainly not. Baker seems to be following Kneuer's dissembling (she was his deputy).

We'll no doubt get manufacturer announcements at the Consumer Electronics Show (CES), beginning January 7.


The GAO has just released to the public its 54-page report "DIGITAL TELEVISION TRANSITION -- Increased Federal Planning and Risk Management Could Further Facilitate the DTV Transition." There is also a short summary available.

As previously reported, GAO thinks there is no unified plan for the transition, and nobody is in charge. Their findings and recommendations, in part, include:

"Despite these efforts, GAO found no comprehensive plan or strategy to measure progress and results. Such planning includes managing and mitigating risks, which can help organizations identify potential problems before they occur and target limited resources."

"GAO recommends that FCC, in conjunction with public and private stakeholders, develop a comprehensive plan for the various aspects of the DTV transition."

The FCC and the NTIA were given the opportunity to respond to the report before its public release. FCC Chairman Martin was miffed at the contents of the GAO report, saying it did not give the Commission due credit for its work. He also was upset when the GAO did not include the 99-page written FCC response as an addendum to the GAO report (GAO provides a link instead).

The FCC response contains a couple of new tidbits.

The FCC's low power station digital transition schedule is to be determined in a proceeding initiated by the first quarter of 2008.

It also said the FCC's Media Bureau staff is working on the draft of the Third Periodic Review Order now and "planning for Commission consideration and adoption in November 2007." We now know a draft was not circulated internally until December and the item has not been included on the agenda for the December meeting. That means no action telling broadcast stations the specific details of what they need to do for the transition until January at the earliest (not November).


On Thursday the Senate held an FCC oversight hearing. The Senators were not happy.

Each of the Commissioners delivered their opening statements, starting with Chairman Martin.

Nary a word about the DTV transition. He said the two most important issues before the Commission were media ownership rules and reforming the Universal Service Program.

It's his proposed media ownership rules that had everyone upset. That's the new rules he plans to adopt at the FCC's December 18 meeting that would allow big newspaper media conglomerates to buy up TV and radio stations in the same city, which would tend to shut out local owners and a diversity of expression within a given market.

Despite all the opposition from Congress and others, Martin (with the support of the other two Republican Commissioners) is determined to press ahead, allegedly without adequate public input.

He claims the new rules are necessary to keep financially pressed newspapers from going out of business. Many Senators declared that the financial health of newspapers was not the FCC's business, and others noted that notwithstanding some recent belt-tightening and restructuring, newspapers were still making a nearly twenty percent return.

Commissioner Copps (one of two Democratic Commissioners) countered Martin, saying the FCC is "poised to make some bad decisions."

Copps said they should be paying more attention to other more pressing problems behind the loss of readership of newspapers. He said there needs to be more attention paid to the DTV transition, which is a potential disaster.

Commissioner Adelstein said the public does not want their local media outlets owned by a national conglomerate. He cited the DTV transition as a more time sensitive issue, saying we should already have completed the education plan and issued technical rules for broadcasters so that they can complete their construction of final digital facilities.

In his written statement, Adelstein noted that there "are a total of 1,812 stations that will be serving the American people after the transition but, to date, only approximately 750 are considered to have fully completed construction of their digital facilities and are capable to broadcast in digital only in the final position from which they will broadcast."

My note: About five percent of stations are still not on the air with any digital signal (about 90 stations), and many more are not yet high-definition capable.

Republican Commissioners Tate and McDowell didn't have much of substance to say, perhaps preferring to stay out of the line of fire.

Then it was the committee members' turn.

Chairman Inouye said he found the tone of Martin's response to the GAO DTV transition report regrettable, and wanted assurances from Martin that the FCC would fully cooperate with the GAO in future studies.

Ted Stevens, as usual, was all over the map, shifting topics in mid-sentence. At one point he seemed to admit that it had been a mistake two years ago to purge consumer education provisions from the DTV transition law.

Rockefeller, citing faulty FCC policies and priorities, suggested that the FCC be completely overhauled next year.

Senator Kerry attacked in no uncertain terms, suggesting that improved broadband infrastructure in the U.S was more important that media consolidation. He was very critical of the FCC/newspaper connection.

Senator Amy Klobuchar demonstrated a consumer rather than business bias by urging improved broadband speed and better cell phone consumer protection (e.g. prorating early termination fees and simplified bills and handset portability).

She worried about the digital TV transition in Minnesota. She said a lot of her constituents do not have local electronics stores and many do not know about the transition.

Senator Boxer likened the DTV transition as a "train coming down the track, Chairman, and you're going to be blamed for this." She told Martin to slow the media ownership proceeding and speed up the DTV process.

She then raised the question of transparency and openness in the FCC. She cited Commission reports that had been buried and never released because they were at odds with a favored position. She said the FCC Inspector General was appointed by the Chairman, and that he had colluded in keeping the study in question buried. She said she was going to introduce legislation to ensure an independent and unbiased Inspector General.

With respect to the particular report she was talking about, she read from an e-mail that a former politially appointed Media Bureau chief (Ferree) had written to have the study quashed.

My own recollection is that Ferree left the Commission to take a highly compensated industry lobbyist position. It was under his tenure that the FCC would have permitted the TV industry to continue building analog TVs up to six months after the originally scheduled end of the transition (12/31/06), and well beyond what any reasonable consumer would have expected. He also rebuffed calls for consumer warning labels on analog TVs, going back years. A stated FCC priority then was to avoid any disruption of TV production, as would have resulted if consumers had known analog TVs would become obsolete.

Boxer asked Copps and Adelstein about the buried reports. Adelstein was very troubled by the incident. Copps agreed. Martin stated that the Inspector General gave the opinion that no law was violated by the report being buried. Ethics?

Boxer was irked by that response. She didn't want reports deep-sixed for political reasons.

Senator Cantwell asked Martin if he still intended to finalize the media ownership rules on the 18th in the face of Congressional opposition. He did. Asked by Cantwell to comment, Adelstein cited an FCC memo that outlined desired results for studies that had not yet been conducted. And there were also decisions made on proposed rules before public comments were due.

Nasty stuff.

Senator Nelson (Florida) asked Martin if he wanted to be on the side of the companies or the consumers? He asked how new revenue for newspapers from internet advertising compared to the loss of income from lower circulations? Nelson suggested the FCC had not considered the full facts in its media consolidation decision.

And then it was Senator Claire McCaskill's turn.

Right off she declared that openness was a real problem for the Commission. She said favored lobbyists had more access to closed Commission information than most of the other Commissioners.

She's worried about the DTV transition while the FCC Chairman seems to be obsessed with media consolidation.

McCaskill noted that there are still no DTV consumer education rules. She said we're seventeen days from the converter box program and yet the FCC has not adopted any regulations.

Martin characterized DTV transition education and the converter box program as two separate issues.

McCaskill disputed that, saying they were not separate. She noted the FCC education rule was not even on the agenda for the next meeting.

Martin cited progress: the table of channel allotments was finished.

McCaskill countered by declaring there were eleven stations in Missouri in need of FCC approval before they could build out their final digital facilities (she knows her stuff).

Martin replied that the 3rd periodic review regulations had been circulated for review.

McCaskill retorted that the proposed rule had been released last May and the draft order was just circulated last week. She told Martin his priorities were out of place.

Martin claimed seven months from proposed rule to final was "very swift." As a personal note, that's bullshit!

McCaskill told him there was no plan, no goals, and what is being done is late. She commented on the newly published list of pending FCC regulatory actions, noting that it was a very long list with many items very old. She said that didn't tell the public what actions were being currently considered for adoption. And votes were not public.

Adelstein later said the broadcaster technical rules should have been finished earlier, and said the draft rules being circulated were problematic--at this late date broadcasters needed more flexibility.

And so it went . . .

Will anything come of it?


I missed the December 1, half-hour Univision TV special on the DTV transition, but the three video segments that made up the show are available for viewing on their transition video web page. My high school Spanish is more than rusty after all these years but it's still clear that this was a very engaging and informative show.

The three segments are: 1) Do you have a digital or analog television?, 2) The historical change to digital television, and 3) The benefits of digital television.

Worth a look, even if you don't habla Espanol.


I came across this bit of cable industry educating the American public about the DTV transition on the web site www.consumerist.com. The text on the back of the post card in essence says if you use an antenna, your TV service is going to be cut off unless you subscribe to cable.


Until next week . . .

On Tuesday the FCC will hold its monthly open meeting, but unless there is a change in the agenda, there will be no DTV transition items. I will poke around in the dockets to see if there have been any recent ex parte lobbyist meetings on the three important pending transition items.