Gutierrez asks for $250M, House offers $650M

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Commerce Secretary Carlos Gutierrez has asked the two Commerce Committee chairs, Jay Rockefeller (D-WV) and Henry Waxman (D-CA) for $250M to bridge the current converter box coupon problem, noting that his request would keep the DTV transition on track for 2/17/09 and may not even go over the total $1.5B already budgeted. Meanwhile, according to Reuters, Democrats in the House are looking to throw $650M at the problem.


“I am writing to urge no delay in realizing the benefits of this important initiative, and to offer the Administration’s continued assistance in ensuring a successful digital transition,” wrote Gutierrez. He noted the high level of consumer awareness of the DTV deadline date, which he does not want to toss away. He also noted that there is unlikely to be a 100% coupon redemption rate, meaning that in fact there is still plenty of cash available to honor coupons, if the bookkeeping hurdle can be overcome.

So he’s merely asking for $250M in budget authority, which is not the same as asking for $250K cash. “As a result, NTIA could issue over 6 million coupons in the near-term, and up to another 3.5 million through the end of the program, as funds from expired coupons cycle back into the program, while maintaining costs within, or very close to, the $1.5 billion currently authorized for the Program.”

Research company Centris, which has long predicted troubles in fringe areas connected to the transition, says it expects 8.5M households are in areas that will experience difficulty maintaining broadcast television service with existing aerials or experience other technical difficulties. It claims that number is only slightly less than the 9.2M households it predicted to be in this group at the beginning of 2008.

Centris President Bill Beaumont said, "Centris has been studying this issue for several years. We believe there is a continuing marketing opportunity for service  providers, manufacturers and retailers that develop targeted, local marketing programs. We expect this opportunity will not end on February 17, 2009 but continue well into the year as consumers embrace new service providers and seek new TV reception solutions."

RBR/TVBR observation: Centris numbers have been in dispute all along. Are they right? Engineers at the FCC haven’t seemed to think so. As for the cash, we’d go with the $650M, and divert a healthy chunk of it to contracting telemarketing firms to man the phones on February 17 and for about a week thereafter.