NTIA Has Orders for 6 Million Extra Coupons, NTIA’s Baker Says

The NTIA won’t know for sure how many coupons it will be able to send out beyond the program’s original 33.5 million until it completes negotiations with its contractor, IBM, on the costs of mailing them, Baker said. She said again that the NTIA is confident it will have enough administrative funds to mail extras by drawing on savings and efficiencies in its $120 million budget with IBM. An NTIA staffer at the hearing told us that the agency estimates the first coupons from recycled funds will be mailed in mid-August.

Savings were realized, for example, when a higher than expected proportion of households ordered their two coupons at the same time, Baker said. IBM had estimated it would mail two coupons in the same envelope only 25 percent of the time, but the actual figure has been almost 90 percent, she said. The NTIA will make these points to Congress when it responds in writing soon to leading Democrats on the House Commerce Committee, Baker said. Commerce Committee Chairman John Dingell, D-Mich., and Telecom Subcommittee Chairman Edward Markey, D-Mass., wrote Baker an angry letter July 10 demanding to know why, in their view, the NTIA had mismanaged the program and why additional money would be needed to send out extra coupons (CD July 14 p2).

Subcommittee Chairman Edolphus Towns, D-N.Y., held the hearing in a health-club gymnasium in his home district in remote southeastern Brooklyn to call attention to the effect of the DTV transition on New Yorkers. But his questions for Baker quickly turned to recent converter-box shortages in Puerto Rico. Towns wanted to know how closely the NTIA stays in touch with manufacturers and retailers to ensure that store shelves won’t become empty when there’s peak demand for converter boxes just before the February cutoff. “We talk with them every day,” Baker said. There have been no “systematic, long-term, regionwide” shortages of converter boxes, she said.

The shortages in Puerto Rico have eased, Baker said. When boxes ran out, “consumers took action, which was a good thing” because it proves consumer education is working, she said. Puerto Rico has the highest proportion of over-the-air households of any market in the coupon program, at 39 percent, Baker said. Coupons have been ordered for half of the homes in Puerto Rico, the highest participation rate in the program, she said.

When consumers started complaining to local authorities, the NTIA “reached out to the retailer support network in Puerto Rico to alert them to consumer concerns” about the shortages, and to encourage retailers “to stock additional boxes,” Baker said. ‘We're providing real-time request data and redemption data to all officials, retailers and community groups so that they can get converter boxes into the areas that are requesting coupons.” Retailers in Puerto Rico “have responded to the consumers’ needs,” Baker said. The past 10 days, 60,000 coupons have been redeemed in Puerto Rico -- evidence of improved availability of boxes, she said. To put the high coupon demand in Puerto Rico in perspective, Baker said, 225,000 coupons have been redeemed there, compared with 175,000 in New York City.

None of the subcommittee’s other six members joined Towns at the hearing, but Rep. Yvette Clarke, D-N.Y., whose district is next to his, did. She is a member of the Small Business technology and subcontracting subcommittee. Towns asked Baker if the NTIA could show “flexibility” to an elderly consumer whose coupons might expire during a long hospital stay. Baker said she was “sympathetic” to the problem, but the coupons’ 90-day term was set by law and her agency can’t change it. Since coupons are “transferable” but can’t be sold, the NTIA is “encouraging” consumers whose coupons expire to ask friends, relatives or neighbors for a replacement, she said.

Clarke asked Baker whether the NTIA could show “creativity” on handling the 90-day deadline. Told by Baker that IBM could tell whether a mailed coupon has been redeemed, she asked whether the contractor could mail expiration warnings about coupons that haven’t been used within 30 days. “That’s a very interesting idea,” Baker responded, jotting a note to herself at the witness table. After the hearing, Baker told us she would take up Clarke’s suggestion with IBM. Asked if the proposal was feasible, she said it was, but added, “Everything has a cost.”

With full-power broadcasters required since April to file quarterly reports on all DTV outreach efforts, the FCC has learned from these forms that last quarter stations broadcast almost 633,000 public service announcements and 521,000 crawls, snipes and tickers, Media Bureau Chief Monica Desai told the hearing. In the quarter, the 23 full-power stations in New York’s DMA ran more than 3,300 crawls, snipes and tickers and 4,500 PSAs, she said. They also ran three half-hour of DTV informational programs among them, she said.

Two companies charged with violating the commission’s DTV tuner mandate have paid almost $422,000 total in fines, Desai said. The FCC has referred a third company to the Justice Department for collection, she said. She didn’t identify the companies, but an Enforcement Bureau spokeswoman said Precor and Regent USA paid the fines and Syntax-Brillian was referred to DoJ. Precor was slapped with a proposed fine of almost $358,000 and Regent USA $63,000 in the past 14 months. Both appeared to have paid the fines. But Syntax- Brillian has fought its $1.27 million in proposed fines tooth and nail. Its not known how its recent Chapter 11 filing will affect the commission’s ability to collect.