Remarks of Acting Assistant Secretary Baker at the Maximum Service Television (MSTV) 22nd Annual Fall Television Conference

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September 22, 2008

Maximum Service Television (MSTV) 22nd Annual Fall Television Conference
Keynote Speech of NTIA Acting Assistant Secretary Meredith Attwell Baker

(As Prepared)

Monday, September 22, 2008

Introduction

Thank you, David, for that introduction.  It is an honor to be here today and participate in this exchange of views and insights on perhaps the most significant achievement in the evolution of television broadcasting technology.

This conference just happens to be sandwiched right between two congressional oversight hearings on the DTV transition.  Needless to say, we are very busy at NTIA getting the job done and giving proof to our efforts to assist Americans prepare for the transition.  So I would ask your indulgence; if at some point during my remarks I accidently refer to “Mr. Chairman” – it’s just force of habit.  Take it as an expression of my respect for the leadership MSTV has shown helping to make digital television a reality.

This is the 22nd annual MSTV fall television conference.  I could be wrong, but I suspect the first conference held back in 1986 was one of the few around with “advanced television” on the agenda.

I commend MSTV for working so tirelessly for more than two decades to help usher free television service into the digital era.  Through services to its members, to other private sector stakeholders, and to the Federal government in the development and adoption of digital television, MSTV has done much to fulfill its mission to provide Americans with the most technically advanced and highest quality over-the-air television system in the world.

I know you heard this morning from Anita Wallgren, the very knowledgeable and dedicated Director of NTIA’s TV Converter Box Coupon Program.  I’d like to pick up where Anita left off and share my thoughts on how we’re doing so far and on the hard work still to do before February 17, 2009.

Coupon Program Activities

Considering we had very little in the way of examples from other government programs, and no useful corollaries to speak of from other countries, creating the Coupon Program was a significant undertaking.  We highly valued the comments, suggestions, and confidence MSTV and other stakeholders provided in helping us develop the Program.

In fact, one of the most important comments we received in our rulemaking was the joint filing of MSTV, NAB, and CEA recommending several technical specifications for coupon-eligible converter boxes.  We also received constructive comments from several leading retailers which helped guide us in creating a voluntary program for retailer participation.

Following a year-and-a-half of extensive planning, NTIA launched the Coupon Program on January 1st, 2008, with a phenomenal level of consumer interest.  On the first day, over 249,000 households, with every state in the nation represented, requested 475,000 coupons.  By the end of the first week, we had already topped 1 million household requests for 2 million coupons.

Since that early surge, consumer interest has been consistent and strong.  Through September 17th, the Program has received a total of more than 14 million requests for over 27 million coupons.  This is equivalent to more than 105,000 average household requests for each of the 266 days the Program has been operational.  Over the past 30 days, we have received an average of 112,360 daily household requests.

We were pleased to learn that in a recent survey conducted by CEA, 90 percent of consumers who used the Coupon Program website to request coupons rated the experience “good” or “excellent.”  There are few in Washington who can boast such a high approval rating, and we are pleased that consumers find the Program so consumer-friendly.

The rate of coupon redemptions has likewise been strong:  over 11 million coupons have been redeemed through September 17th – a rate of 49 percent for all coupons that have reached the end of their 90-day expiration, and 55.4 percent for coupons used by over-the-air only households.

The cooperation of converter box manufacturers and retailers has contributed greatly to our aspirations for a consumer-friendly Program and we appreciate their partnership.  As of September 17th, we have certified 158 converter boxes, including 83 boxes with an analog pass-through capability, and at least one, Winegard, that works with a battery pack.  The Program also includes more than 2,300 participating retailers with over 29,000 outlets in all 50 states and territories, along with 35 online retailers – now including Amazon.com – and 13 telephone retailers.

Consumer Education

All told, I would say we’ve made important progress.  But with 148 days to go until the transition, we still have much to do to ensure that as many consumers as possible are aware and prepared for the transition, and we are able to maximize opportunities for households to participate in the Program.

NTIA maintains a strong commitment to educate consumers about the transition and the Coupon Program, focusing on households disproportionately reliant on over-the-air broadcasting – namely, seniors, minorities, the disabled, low-income, and rural households.
To develop and implement outreach for increased Coupon Program participation by over-the-air households, NTIA correlated current participation rates with the best available industry data on potential purchasers of converter boxes, and on the total number of over-the-air households in the U.S.

Based on our analysis, we estimate that 79 percent of over-the-air households that are potential purchasers of converter boxes have requested coupons as of September 1.  In other words, Coupon Program participation by over-the-air households is on track in 187 of the nation’s 210 television markets.  NTIA is working hard to implement specific outreach plans in the 23 markets where participation rates in the Coupon Program are lower than expected.

The September 8th test pilot DTV switch in Wilmington, North Carolina, provided NTIA with important insights.  We learned, for example, that strong and steady demand for coupons and boxes – which was the case in Wilmington – helps avoid a rush in the final days leading up to the transition.  We also learned that it is important for consumers to act early so they have ample time to address any technical issues associated with box installations.

Our messaging to date – encouraging over-the-air households to request and redeem coupons early – has served us well over the past nine months.   However, consistent with our experience generally, and in Wilmington in particular, we have tailored our consumer education with the message – “apply, buy, and try.”  Consumers should “apply” for coupons, “buy” a converter box, and “try” the box to ensure that it works, trouble-shooting for any problems they may encounter.  We’re also emphasizing the time to “apply, buy, and try” is now – not January or February next year, but this year, before the end of the year, so that all three essential steps are taken well in advance of February 17, 2009.
NTIA is also working with over 24 Federal departments and agencies with direct communications to vulnerable populations to expand the reach of our consumer education.  On September 12th, OMB, the Office of Science and Technology Policy, NTIA, and the FCC, spearheaded an inter-agency Federal DTV Awareness meeting to improve coordination activities across Executive branch agencies that will enhance consumer education and assistance to our target populations.

It was very encouraging to hear how USDA, the VA, HHS, and the IRS, among others, are helping millions of vulnerable Americans learn about the digital transition and their options.  We continue to explore how such effective practices can be duplicated by other agencies to reach a broader cross-section of Americans who rely on over-the-air television.
Just as we have examined and adjusted our messaging to respond to real challenges consumers are experiencing today in preparing for the transition, I encourage other stakeholders to do the same.

Television broadcasters have devoted significant resources to ensure that viewers are aware of the transition and their options, and I applaud their efforts.  Soft tests, for example, are a creative and useful means of alerting viewers of the transition.  In many markets where these tests have occurred, coupon requests have increased.  Perhaps creative minds in the industry can devise additional on-air techniques, for example tests of longer duration, to alert over-the-air viewers about the transition.

Another step I think broadcasters should take is to display their telephone number on their websites, on air, and on crawls, to provide viewers with a local resources to turn to with questions about the transition, their options, box connections, and reception issues.  There is no better local source of expertise and knowledge about preparing for the DTV transition than a nearby broadcast television station.

Broadcasters might even consider ordering a supply of converter boxes to donate to over-the-air households in the closing weeks of analog broadcasting as a stopgap measure to serve over-the-air viewers.  I’m confident that a donated converter box with a station logo on it will go a long way to securing viewer loyalty long after February 17, 2009.

Other stakeholders should likewise tailor their consumer education to respond to the issues and challenges consumers are experiencing.  For example, with the knowledge gained from the Wilmington test pilot, stakeholders can enhance their messaging on technical challenges associated with digital station reception, such as antenna needs, digital station service contours, and box scanning to receive digital channels.

Responding to Challenges

Let me briefly turn to a couple of actions NTIA has taken to respond to challenges and concerns we have faced administering the Coupon Program.

First, just this past Friday, NTIA published its final rule to enable Coupon Program participation by residents of licensed nursing homes, intermediate care facilities, and assisted living facilities, and households that use a post office box for residential mail delivery.  The rule takes effect on October 20, 2008.  NTIA is pleased to take this step in making the Coupon Program more inclusive.

Second, and in the same vein, the Department of Commerce submitted draft legislation to Congress last week to maximize the number of coupons NTIA can distribute to requesting eligible households while not exceeding the $1.5 billion in total funds authorized for the Program.  The legislation provides NTIA with statutory flexibility, if needed, to utilize funds from other programs authorized by the Digital Television Transition and Public Safety Act, and to spend up to $7 million to cover administrative expenses of the Coupon Program associated with high coupon demand; any additional sums for such purposes are authorized upon approval of OMB and 15-days notice to the House and Senate Committees of jurisdiction.

Assuming that consumer requests for coupons will increase as the February 17 transition date nears – as we do – NTIA wants to be as prepared as possible to maximize consumer participation in the Coupon Program.  Without the requested flexibility to increase administrative spending, if needed, NTIA will be able to distribute approximately 44.5 million coupons.

Such a statutory change is not without precedent.  In late July, Congress enacted legislation authorizing NTIA to use surplus funds from the Conversion Program for low power television and translator stations to support consumer education for the transition and the Coupon Program.

We believe this draft legislation is a responsible and prudent approach to maximize coupon distribution.

Conclusion

Let me close my remarks with a final observation from our experience in Wilmington.  The excellent work done in Wilmington is a testament to the historic private-public partnership formed to make the DTV transition as seamless as possible for American consumers.  As a founding member of the DTV Coalition and an active stakeholder with NTIA and the FCC, in our respective roles, MSTV is a trusted and valued partner, and I thank them – all of you – for those efforts.


This partnership bears witness to the claim that when government, industry, and nonprofit groups coordinate closely, as in the case of Wilmington, the whole truly does become greater than the sum of its parts.

Thank you.  I will be happy to answer any questions.