Paul Gluckman

A consumer who reports a DTV converter box coupon lost or stolen can get it replaced, said CLC Services, the member of the IBM contractor team handling retailer certification under NTIA’s coupon program, in reply to our query. But consumers will be out of luck if both their coupons expire after 90 days, CLC said. No “statutory prohibition” bars private sale of an active, lawfully acquired coupon on eBay or another means, CLC said. But “our system will allow us to detect fraud at a certain level,” CLC said.

NTIA’s DTV coupon program “faces challenges” that could affect its outcome, the Government Accountability Office told House Commerce Committee Chairman John Dingell, D-Mich., in a letter dated Nov. 19 but released Friday. Dingell had written the GAO Nov. 7 asking if the agency had concerns about the coupon program, based on GAO’s testimony at an Oct. 17 House Telecom Subcommittee on the DTV transition (CD Oct 18 p7). Since manufacturer and retailer participation in the program is voluntary, there’s much uncertainty about how many will take part, said Mark Goldstein, GAO director for physical infrastructure issues. “Some manufacturer, advocacy, and retailer representatives we contacted expressed concern about consumers’ ability to find participating retailers that are able to redeem coupons and have converter boxes in stock,” Goldstein said. “Furthermore, uncertain demand for the converter boxes, as well as uncertainty about the extent of retailers’ participation in the program, could affect the number of converter boxes that manufacturers produce and the corresponding availability of coupon-eligible converter boxes in stores.” GAO has not evaluated whether NTIA should prepare for “a potential shortfall in program funding,” as Dingell had asked, Goldstein said. NTIA’s contract with IBM requires the contractor to set up an electronic dashboard to monitor “the number of coupons pending, mailed, redeemed, expired and canceled,” Goldstein said. NTIA officials assured GAO “that they will monitor the coupon metrics on the electronic dashboard and use this information to inform the congressional committees if they would need the additional funds,” he said. “They added that this monitoring should help avoid any lapse in depletion of the initial $890 million and receiving the additional funding” that the law provides for if needed, he said. As to Dingell’s question whether the FCC has the statutory authority to convene an inter-agency DTV task force as Commissioner Jonathan Adelstein had called for but Chairman Kevin Martin opposes, Goldstein said the FCC does have that authority under the Federal Advisory Committee Act. “FCC has several federal advisory committees that provide advice and recommendations to the commission on numerous technical, operational and consumer telecommunications issues,” Goldstein said. “All of FCC’s federal advisory committees are discretionary, meaning the committees were not required to be established by law but rather were established by FCC.” The Commerce Department and its NTIA understand the risks of voluntary participation in the coupon program and the hurdles of educating the public about the DTV transition, Commerce Secretary Carlos Gutierrez told GAO Comptroller General David Walker in an Oct. 15 letter that NTIA released Friday. “But the solution is not the establishment of a digital transition czar or single government-mandated message,” Gutierrez said. CE retailers have begun “making important commitments” to the coupon program, he said, citing RadioShack’s announcement at NTIA’s Sept. 25 workshop that all its 4,400 stores will carry coupon-eligible boxes. Best Buy, Circuit City and Target since have also vowed to take part. “NTIA’s own efforts will largely be directed at educating the public about the availability of coupons to assist with the purchase of converter boxes, if needed,” Gutierrez said.

The CEA wasn’t able to persuade the U.S. Court of Appeals for the District of Columbia Circuit to reject Comcast’s request for speedy review of the FCC’s CableCARD order (CD Nov 21 p8), but the CEA “will continue to support the FCC’s decision to require Comcast to permit the development of a robustly competitive cable equipment marketplace,” a CEA spokesman said. The association will file an intervenor brief with the court Jan. 28 backing the FCC order, he said. Final briefs are due Feb. 29. Oral argument hasn’t been set.

Broadcasters told a Wednesday a House Telecom Subcommittee hearing that $700 million worth of voluntary DTV education measures more than compensate for FCC mandates they call needless and even counterproductive to the DTV shift. But subcommittee Democrats who had pushed FCC Chairman Kevin Martin to circulate an order setting those mandates seemed unconvinced that broadcasters will police their own.

Heads turned in late July, when the FCC in a rulemaking notice asked whether retailers that take part in NTIA’s DTV coupon program should be required to show that they're properly educating the public and training employees on the DTV transition and whether FCC aides should do spot inspections to monitor their efforts.

Consumers will be able to start requesting DTV coupons Dec. 25, a week earlier than the law requires, IBM’s proposal to NTIA said. IBM and its partners will be ready to mail coupons beginning Jan. 1, three months earlier than the NTIA request for proposals demanded, they said. IBM landed the $120 million contract in August (CD Aug 16 p3). Documents filed in IBM’s contract bid shed new light on the coupon program’s possible form and function, as well as why NTIA picked the IBM team over two other finalists. The documents, released last week to our affiliate Consumer Electronics Daily under the Freedom of Information Act, also were posted Friday on the NTIA website under FOIA rules.

NTIA Administrator John Kneuer said Wednesday that consumer outreach will be a “critical element” of a successful DTV transition. In a conference call with reporters, he welcomed Best Buy’s announcement that it’s pledging $50,000 to the Washington nonprofit student community outreach group Family, Career and Community Leaders of America to promote the NTIA coupon program nationally. Kneuer said Best Buy’s announcement was timed to trumpet the start Saturday of the 500-day countdown to the Feb. 18, 2009, analog cutoff. But Best Buy again stopped short of committing to carry coupon-eligible DTV converter boxes chainwide. Under sharp questioning during a House hearing in March, Best Buy similarly avoided making a chainwide converter box commitment. Best Buy “intends to participate in the program and will announce specifics around our plans when we have fully evaluated the program and the coupon redemption requirements,” a spokeswoman told us. “Our goal would be to carry converter boxes when our retail channels are fully equipped to accept coupons from our customers,” she said. “In the interim, we recognize the important role of consumer education. Our investment in the students of FCCLA is one important way to help get the word out about the coupons.” Speaking with reporters, Kneuer seemed to reject calls by Sen. Herbert Kohl, D-Wis., to reverse eligibility for the two rounds of funding that would make the larger, first set of rebates available only to over-the-air TV consumers. Comments in NTIA’s rulemaking made it “clear” that the hard cutoff would have “a huge impact” across a broad swath of consumers, Kneuer said. Still, reserving a $500 million pool for exclusively over-the-air viewers will “maximize the likelihood” that no household will go dark, he said.

A relatively obscure Korean company is the first to be certified by NTIA to supply coupon-eligible DTV converter boxes. Original design maker Digital Stream Technology got NTIA approval to supply two box models, the D2A1D10 and the D2A1D20, the company said. NTIA confirmed the approval, saying Digital Stream Technology is the only company it has certified. Its models will list for about $70, the company said. Both have the same features, said Chris Lee, company vice president of business development. Neither has a smart antenna interface, a feature permitted but not required, under NTIA rules. Digital Stream Technology expects to ship boxes in early 2008, the company said. The company, a supplier of HDTV receiver components, has allied in the past with Daewoo and other Korean CE makers. Rivals we polled said they expect certification soon. LG will announce its NTIA certification “when it’s official,” said John Taylor, vice president of public affairs and communications. RCA Audio/Video is in the middle of the certification process for its DTA800 converter box, said Vice President Dave Arland. “We fully expect to be certified before retail availability in January,” he said. The company has a website, www.KeepMyTV.com, on the ins and outs of the DTA800, the DTV transition and how NTIA’s DTV coupon program works. RCA has contacted more than 100,000 consumers with information about the site, he said. Hundreds have signed up for updates, he said.

Like trial attorneys making their final summations to a jury, cable and CE opponents rehashed familiar positions in reply comments in the FCC rulemaking on two-way plug-and-play devices. The rulemaking is designed to end the long cable-CE stalemate on two-way plug-and-play and promote the retail availability of devices in time for the 2008 holiday selling season.

The cable and consumer electronics industries gave little new ground on two-way plug-and-play in comments filed in a new FCC rulemaking aimed at breaking their impasse. Talks aimed at a compromise have been deadlocked for years, sometimes bitterly, and now the DTV deadline is approaching.