Tuesday, July 22, 2008

Problems plague coupon program for digital TV

Key members of Congress say the $1.5-billion-dollar program to help familiarize people with the February 2009 transition to digital television "has been mismanaged and is running out of money, prompting concerns that millions of TV viewers could be left in the dark," Kim Hart reports for The Washington Post.

The National Telecommunications and Information Administration is overseeing a the program to distribute $40 coupons to help consumers pay for converter boxes needed to continue watching digital programming on analog TVs, those that receive signals by traditional antennas, not cable or satellite. The coupons expire 90 days after issue, and some consumers say that does not allow them adequate time to shop for converter boxes and that not all models are available in stores.

NTIA gave IBM a $120 million contract to handle 33.5 million coupons, but the contract does not account for costs associated with recycling unredeemed coupons. Nearly 20 million coupons have been issued but only 5.5 million have been redeemed. Coupon requests are expected to rise as the transition date approaches. "Until March 31, all households may request up to two coupons until the initial $990 million allocated for the program has been exhausted," Hart wrote. "The NTIA may then request an additional $510 million already authorized by Congress. Read more here.

The issue is especially important to Hispanic households, which comprise about a third of those relying on old-fashioned antennas, according to a survey by Knowledge Networks/SRI Home Technology Monitor. About 40 percent of Hispanic viewers use antennas and are among the nation's least prepared for the change, according to a May report by Nielsen. "Local Spanish-language broadcasters are trying to get the word out about the digital switch, but some are worried that their viewers will wait to take the necessary steps to keep watching TV, putting the station's ratings and advertising dollars at risk," Hart writes. Customers who do not speak English rely heavily on such television broadcasts to receive critical information such as news and weather warnings.

Digital technology allows broadcasters to air multiple channels simultaneously, which means Spanish-language stations could provide more free TV content to their audiences. However, some stations could lose their audiences if they operate low-powered stations and their viewers do not purchase a converter box with an analog-pass-through feature. Telemundo viewers who rely on antennas will no longer receive programming. "For minority broadcasters, this is a major issue," says Wendy Thompson, Telemundo's general manager. Read more here.

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