Coupon Woes Are Only Part of Digital TV Concerns

By: AP
By: AP

WASHINGTON - In less than six weeks, the nation's television broadcasters are due to shut off their analog signals and begin transmitting in digital — potentially blacking out as many as 8 million U.S. households that rely on analog TV sets to pick up over-the-air channels.

That reality hit lawmakers and the incoming Obama administration this week after the Commerce Department ran out of money for coupons to subsidize digital converter boxes. Viewers who don't have cable or satellite service or a TV with a digital tuner will need the boxes to keep older analog sets working.

The coupon program funding shortfall was a key reason behind the Obama transition team's call for Congress to delay the Feb. 17 analog shutoff. Yet the problem with the subsidy program is just one of several hurdles that appear to be in the way of a smooth digital transition.

One big potential pitfall is that many people who think they are prepared for the analog shutoff could lose some channels — or possibly even lose reception entirely — unless they purchase a new antenna.

That's because many stations will shift their broadcast footprints with the switch to digital by changing transmitter locations, antenna patterns or power levels.

The Federal Communications Commission has said 18 percent of the nation's full-power television stations will have a digital signal that reaches at least 2 percent fewer viewers than their current analog broadcasts.

Some viewers could lose signals because of the so-called digital "cliff effect." Unlike analog signals, digital broadcasts come in clear or don't come in at all, meaning that people on the fringes of analog coverage areas who currently get fuzzy reception will lose that reception entirely.

These viewers will likely need more powerful indoor or outdoor antennas — in addition to converter boxes — to maintain their existing reception. Yet critics say the government has done too little to educate consumers about this issue and is not subsidizing the cost of an antenna, which can be between $75 and $150.

What's more, consumers figure to discover they need this equipment after the transition actually happens, noted Barclays Capital analyst Alan Miles. And that will be in the dead of winter for much of the country.

"Winter in Vermont is not when you want to be installing a rooftop antenna," said Sen. Bernie Sanders, I-Vt., who is sponsoring a bill that would, among other things, expand the coupon program to help subsidize antenna purchases and installations. "Television is a connection to the outside world for many people. But if you're 80 years old and living on Social Security, you may not be able to buy an antenna or hire someone to install it."

Another thing that consumers may not realize until the transition is upon them is that broadcast station channel assignments will move around. Viewers will have to make their converter boxes re-scan for the new assignments after the changeover.

This issue, too, has received little attention and could lead many consumers to incorrectly assume their converter boxes don't work after the transition.

That has led to questions about whether there will be adequate call center resources to handle what could be an avalanche of requests for help.

The FCC is investing roughly $10 million in in-house and outsourced call center operations and has said it expects to be able to handle 2.15 million calls during the week of Feb. 15. But the agency acknowledged that it won't be able to handle all the expected calls on its own and will rely on broadcasters, cable companies, state and local governments and community organizations to run their own call centers.

The FCC also has awarded $8.4 million to 12 outside groups, including AARP, to staff call centers and help consumers buy and install converter boxes.

Still, skeptics such as FCC Commissioner Michael Copps worry that the government remains unprepared should the transition go ahead next month. What has been lacking all along, Copps insists, is urgency throughout the government and industry — along the lines of the nation's Y2K preparations — to ensure that the transition leaves no one behind.

In 2005, Congress required the digital shift to free up valuable chunks of wireless spectrum to be used for emergency-response networks and commercial services. The government has raised roughly $19 billion by auctioning off this spectrum.

Even with the years of warning, however, analysts at Nielsen Co. estimate that as of December, 6.8 percent of the 114 million U.S. households with TVs remained completely unready for the digital transition. Another 10 percent still had at least one TV that was not yet ready.

A key sign that something was amiss came this week when the National Telecommunications and Information Administration, an arm of the Commerce Department, said it had hit a $1.34 billion funding limit set by Congress to pay for converter box coupons.

The coupon program — targeted largely at poor and minority viewers — lets consumers request up to two $40 vouchers per household to help pay for the boxes, which generally cost between $40 and $80 each. The NTIA started a waiting list for coupon requests as of Jan. 4, meaning that consumers who have applied since then are unlikely to receive their vouchers before Feb. 17. The NTIA now needs Congress to step in with more money or new accounting rules to get the program on track.

But even if lawmakers move quickly to resolve the funding issues, the coupon program itself is still not user-friendly, said Gene Kimmelman, vice president for federal policy at Consumers Union, which has called for the transition date to be postponed.

The program was not designed to handle a surge in last-minute requests, he said, which is exactly what the NTIA is now seeing as the government and industry have ramped up efforts to educate people about the transition.

It can take anywhere from four to six weeks to request a coupon, receive it in the mail, purchase a converter box and troubleshoot any technical issues. Now many consumers have run out of time.

"They didn't anticipate the level or the last-minute nature of the demand," said AARP lobbyist Dean Sagar.

Kimmelman added that the coupon program is inflexible in other ways as well. It places a 90-day expiration date on all coupons and prohibits consumers from reapplying if they let their coupons expire without redeeming them.

Added up, many fear, all these issues could amount to a train wreck on Feb. 17.

"We need to try to minimize the dislocation and chaos," Copps said. "But there will be people left behind."


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