DTV Coupon Program ‘A Great Success,’ Ex-NTIA Chief Says

Baker claims she’s unfazed personally by criticism that her agency botched the job. “My skin’s gotten thicker in the little over a year since I got the job,” Baker said. “I honestly believe that everyone knows we did an excellent job of managing the program. That’s Washington, and rhetoric is rhetoric. But I think the people who had anything to do with the program, they know that we managed it in the most effective and transparent way that we could -- that we were given a difficult situation and made the best of it.”

She repeated that the NTIA first told Congress in its “final phase plan” Nov. 6 that the program risked reaching its funding limit by mid-January (CD Jan 9 p1). Still, the NTIA report discounted that scenario as “highly unlikely” to occur. Baker said NTIA filed reports with Congress at least every week updating the situation once the surge in requests began soon thereafter. Any reports she filed on the Hill she also gave to the Obama transition team, Baker said.

The NTIA under Baker “ran a very strict program because Congress gave us a very tight legislative package,” Baker said. Asked if she regretted any of the decisions the NTIA made, Baker said she wishes now the agency hadn’t been so restrictive at first in barring post office box households from ordering coupons. The NTIA justifiably was “very worried” about waste, fraud and abuse, and loosening the rules to be more “generous” toward those households came with the experience of running the program, she said. Another regret is that negotiations with IBM “lasted a lot longer than I wish they had” over how much the NTIA should pay to process extra coupons from money recycled from expired vouchers, Baker said. “Those were very difficult negotiations. But what we were trying to do was to be very good stewards for the taxpayers’ money.”

Baker said she has no regrets about sending coupons via lower-cost standard-rate [bulk] mail, though critics now cite that as one example of how the agency mismanaged the program. Legislation delaying the DTV switch to June 12 stipulates that any coupons sent through the U.S. Postal Service must be delivered at first-class rates. Between processing and mailing, it costs at least 90 cents more per coupon to send it first class, Baker said. “That was why we made the decision at the time to send them standard,” she said. “It was being sensitive to cost.”

Baker also stands by the decision not to allow households whose coupons expired to apply for replacements, though legislation delaying the transition now undoes that restriction. Baker recalled she told Congress in various hearings that “a strict interpretation of the legislation does not allow for re-issuance” of coupons. “Additionally, you have a fairness problem, because you want to be sure that everyone gets one first before someone gets seconds. Lastly, it really does throw all our estimates out the window as far as what numbers are going to come in.”

“Congress passed this bill and gave it to NTIA to implement it and NTIA implemented it very successfully,” Baker said. “Now that Congress is changing the date, that’s how policymakers are choosing to fix the accounting shortfall.” Delaying the cutoff “adds a little bit more confusion for consumers, but that’s what the policymakers have decided to do, so we'll all just have to work hard toward the June 12 switch.”

As a first priority, the NTIA “needs to get to work immediately with IBM to renegotiate that contract,” Baker said. “As you've seen from our previous negotiations with IBM, those can be difficult and take some time,” Baker said. “Obviously, expeditious implementation of additional coupons is the answer to making this transition work.” The FCC also has “a whole host of issues they need to address with antennas and the broadcast footprint,” Baker said. “Call centers are also a big concern. I think it’s really important that the June 12 switch sticks because it’s incredibly important for this country to get that spectrum for first responders. It’s also important for our country to get to the next generation of wireless broadband. That’s very important for our international competitiveness.”

Baker thinks it’s “likely” the Obama transition team would have pushed for a DTV delay even if the coupon program hadn’t reached its funding ceiling Jan. 4, she said. “There was no consensus among Republican policymakers at the time” the DTV transition law was enacted by a Republican Congress whether to put more money into the program for antennas or reissuing expired coupons, Baker said.

Democrats had sought more money for the program “from the very beginning,” but when they took control of Congress in 2006, “they didn’t change the law,” Baker said. “So I do think there probably would always have been discussion of changing the law toward a more broad-based assistance program” under President Barack Obama, she said. Now that there’s a delay, it behooves the FCC to finish work on the transition’s unresolved issues, she said: “The call centers and the broadcasting-footprint issues are real. The antenna issues are real, and those need to be addressed as well.”

The NTIA was “very transparent with all the numbers” surrounding the coupon program, Baker said. It long told Congress it “couldn’t be in the business of estimating” precisely how many TV sets would go dark in an analog cutoff, she said. “We're the United States. We're not England. So we don’t tax televisions, so we don’t know how many there were out there.” In earlier years, when Michael Powell was FCC chairman and Baker was a senior policy analyst in the Bush administration, “we spent a lot of time looking to see how we could develop this transition and how we could do it right,” Baker said. “From the very beginning, from our policy discussions, we might have means-tested any sort of assistance program and we probably would have sent the money through either through income tax refunds or a food stamps- type program.”

The Office of Management and Budget put the NTIA “in a very difficult position” when Congress picked the agency to run a coupon program that had none of the features the Bush administration had discussed internally, she said. Commerce Secretary Carlo Gutierrez “was very supportive, but we were reminded constantly by OMB that this was not a program that they ever liked,” she said. “That’s why we were so transparent. We really tried to make this a bipartisan effort for everyone to know what we were doing, exactly what the numbers were, because it was Congress’s program and Congress was going to have to make changes if changes were to be made.

Baker has suggested OMB blocked the NTIA from seeking an Anti-Deficiency Act exemption from Congress that would have allowed the agency to continue mailing out coupons without having to wait for money from expired coupons to be recycled back into the program. Lacking the ADA exemption, the NTIA on Jan. 4 began putting coupon orders on a waiting list that grew to 3.7 million coupons as of the close of business Tuesday, according to agency data.