Cable or Satellite Viewers Should Get DTV Coupons, CEA, NAB, MSTV Argue

CEA’s teaming up with MSTV and NAB to file comments jointly was a major surprise because CE and broadcasters often were at each other’s throats during the long DTV transition debate. “Consistent with the language and intent of the statute, NTIA should adopt a first-come, first-served process for distributing coupons,” rather than adopt means- testing that favors lower-income households, they said. “Given the special circumstances of this project, NTIA should also adopt technical requirements, including minimum performance requirements, for digital converter box eligibility,” they said. “The MSTV/NAB digital converter box project demonstrated that converters can be high-quality, low-cost and easy for consumers to use.” In a symbolic burying of the hatchet with broadcasters, CEA was endorsing the very MSTV/NAB DTV converter box project it had previously ridiculed.

These minimum-performance requirements “reflect the consensus of the broadcast and consumer electronics industries for the specific purpose of the narrowly-tailored NTIA program,” the groups said: “The minimum requirements that NTIA adopts to ensure consumers’ ability effectively to receive broadcast signals should not preclude converter box features that improve over-the-air reception or enhance the usability or user convenience of the converter box.”

So including an electronic program guide (EPG) or smart antenna interface shouldn’t disqualify a box from eligibility for the program, they said. Consumers expect an EPG “as part of the contemporary everyday viewing experience, and smart antennas are useful in various circumstances to assure reliable service,” they said. As for energy standards, NTIA “should be prepared to review and, as appropriate, adopt the specifications being worked on under EPA’s Energy Star program through joint industry and government collaboration,” they said: “It should stand firm against the efforts of any individual state to impose its own specifications.”

Balancing timeliness against protecting consumers from faulty devices, NTIA should direct manufacturers to test their own products and transmit the results to the FCC, “the agency expert in such matters,” they said: “The FCC should then review those results in an expedited manner, with the power to interdict defective or below-standard devices.” CE makers and the broadcast industry “will fully support and implement consumer education programs,” the groups pledged: “The retail industry, which has much experience in coupon and similar programs, will also have an important role in making a success of this critical program.”

Urging that cable or satellite households not be excluded from the coupon program, CEA, MSTV and NAB said it’s “well recognized that, in many households, more than one set is in use at any particular time.” For example, in many U.S. homes where grandparents, parents and children live together, “family members often live in separate living quarters or rooms within the house and rely on over-the-air television reception, even while the television in the main family room is connected to cable or satellite service,” they said.

Under NTIA’s “narrow construction” of the DTV legislation, “these family members would not be eligible to obtain converter box coupons,” they said. “In addition, lower-income households may consist of more than one family, each of which might own an analog television. In other households, some may wish to watch English-speaking programs, while others rely on multicultural programming. These users should not be disenfranchised, whether they are viewing in a home where the first set is an over-the-air analog set or a set served by a MVPD.”

LG Electronics -- one of 2 CE makers designing a reference-standard box for the NAB/MSTV project -- made recommendations that closely mirrored those of CE and broadcasters. LG urged NTIA to: (1) Expand the eligibility requirements, ensuring that no household with an analog-only set reliant on over-the-air television service is excluded from participating in the coupon program. (2) Permit manufacturers to include a limited range of “no frills” functions -- such as EPGs and smart-antenna inputs -- in eligible converter boxes so that they will work well and be easy to use. (3) Adopt minimum performance requirements for eligible boxes to ensure reliable reception and ease of consumer use. (4) Adopt minimum energy efficiency standards for eligible boxes. (5) Take additional steps to help consumers learn about the program, apply for coupons and use their converter boxes.

NTIA also should consider granting “some flexibility” to consumers who receive coupons and tried to redeem them in the 3-month window mandated, but might find shortages at retailers. In those situations, a consumer should be able to submit the coupon and co-pay to a retailer in exchange for a “rain check” for an eligible box when one becomes available, LG said.

The Consumer Electronics Retailers Coalition (CERC) disagrees with NTIA’s proposal that retailers “not be compensated” for the costs of participating in the DTV converter coupon program, the group said. DTV converter boxes are “a unique, limited-occasion product” likely to be subject to unique laws of supply, demand, and subsidy, CERC said: “There are simply too many novel costs and risk factors, and imponderables, for NTIA to place these investments, expenses and risks solely on the backs of retail vendors who come forward to participate in this program.”

Whether the coupon is electronic -- as CERC recommends - - or paper, “present commercial channels cannot support all of the functions necessary for this program to be fair, efficient and free of fraud,” the group said: “Unless anticipated and accounted for in the process by which NTIA’s vendors are funded, any otherwise acceptable solution would impose very significant fixed and variable costs on retailers,” it said.