So how is the DTV transition going?


It depends on who has the floor, based on watching the Subcommittee on Telecommunications and the Internet look into the progress made toward the 2/17/09 digital deadline date. The most alarming commentary came from committee member Bart Stupak (D-MI), who noted that in his district digital-to-analog converter boxes were not readily available and the coupons were beginning to expire.

All of yesterday’s witnesses save one have a specific role in the transition, and perhaps not surprisingly, all of the witnesses save one thought things were going pretty smoothly, at least on their end. The lone watchdog, Mark Lloyd, of the Leadership Conference on Civil Rights had numerous specific concerns, among them the low level of funding allocated to consumer education. He complained that his organization represents and can reach at risk constituencies, but is not receiving any financial backing from the FCC or NTIA to do so.

The testiest portion of the hearing involved Stupak and NTIA’s Bernadette McGuire-Rivera. Stupak said he tried to get answers about coupon deadlines and retail converter box stocks answered back in February, and here it is June, he’s asking the same questions and the answers aren’t much better. McGuire-Rivera said 7/1/08 will be time for a close assessment of coupons issued vs. coupons redeemed, and that decisions going forward will be based on those results. But those decisions may not be ready until August. Many suggested reissuing coupons, but that turns out to have a simple impediment attached – you run into a heavy bill for postage stamps when the mailing runs into the millions.

FCC Chairman Kevin Martin, a last minute addition to the government panel, was questioned about the “digital cliff,” the tendency for a digital signal to drop abruptly and completely if not fully received, as opposed to the gradual degradation of an analog signal. He said that the FCC disagrees with studies suggesting as many are at risk as is being suggested by research group Centris, saying FCC engineers believe only 5% of TV households are in borderline coverage areas, and that 85% of that 5% is fine because they subscribe to cable or satellite TV. He said the Wilmington test case will be watched closely for that and other problems, including LPTV/translator issues.

Paul McTear of Raycom and Kim Cannon of the Wilmington TW cable system both said they are working hard with all concerned to make sure the Wilmington test is successful. McTear praised efforts of both the FCC and the NAB to that end.

Subcommittee Chairman Ed Markey (D-MA) reminded all the witness that the level of antsiness among politicians is rising and will continue to do so: “Congress is a stimulus-response institution,” and there’s nothing more stimulating than a voter revolt, he said.

RBR/TVBR observation: The chief criticism of the coupon program – that the coupons were released too soon, before converter boxes were on retail shelves, is serious, but it’s over and done. A problem is that it could get even worse in the next few months when lulls in retail supply chain are expected. Congress should force whatever is necessary to make sure that those who need the boxes can get them – whether that means extending coupon expiration dates or mailing new ones. Most appear to favor just such a move. And one thing is for sure – the US will owe Wilmington a huge debt of gratitude for taking on the guinea pig role. We should learn a lot on 9/8/08.
Testimony summaries:

Panel One:

* Kevin Martin, Chairman, FCC: Most necessary rules and regs in place, retail outlets being inspected, awareness campaigns in progress, and actual consumer awareness is growing. Surveys are finding consumer misconceptions, which are being addressed. Targeting at risk groups in particular – seniors, minorities, particularly Spanish-speaking groups, rural viewer. Test market Wilmington NC getting set for early DTV start 9/8/08. Confident combined efforts of government, industry and advocacy groups will propel DTV transition forward.

* Bernadette McGuire-Rivera, Associate Administrator, Office of Telecommunications and Information Applications, NTIA: Coupon program was off to a strong start, and interest remains high. 8.5M requests for 16M coupons. Turnaround from date of request is 10-15 days. Expect that by 7/1/08, 3.5M coupons will have been redeemed. Encouraging people to buy the box now to avoid year-end rush.

* Mark L. Goldstein, Director, Physical Infrastructure Issues, GAO: Broadcasters have made significant progress toward implementing necessary DTV upgrades. A few stations with issues remain, most expect to be ready. 69 stations face financial constraints, others have issues with Mexico or Canada. Questions remain for LPTV stations – since not all will go to DTV right away, converter box with analog pass-through is necessary. Available on line and in retail, but many consumers do not understand this issue. 84% of citizens have heard of the transition, but a smaller number understand it. General awareness high, but so is the level of confusion. Many who need coupon don’t know how to get it, many plan to apply for one but don’t require the box.

Panel Two

* Tom Romeo, Director, Federal Services, Global Business Service, IBM: Implementing converter box program. Consumers are showing high level of interesting coupons, 3M per month being requested. Looking like mid-August will be decision time, depending on request/redemption rates. Education partner Ketchum is focusing on high over-air-reliant markets. Looking ahead to demand spike in early 2009 and demand beyond the deadline.

* Kim Cannon, VP/GM Fayetteville NC/Wilmington NC Markets, Time Warner Cable: Largest operator in the Wilmington area with 96K subs. Advising subs of necessity of dealing with secondary off-cable analog TV sets, and of the early Wilmington deadline. Targeting elderly and minority communities. Coordinating with local broadcasters, getting ready for possible new subscribers who opt for cable rather than continuing to rely on over-air.

* Mark Lloyd, VP/Strategic Initiatives, Leadership Conference on Civil Rights: Concerned that DTV transition will exacerbate digital divide. Notes great confusion over coupon program, status of LPTV/translators, processes/remedies once deadline has passed. Problem with putting out coupons well in advance of converter box availability. Boxes are still unavailable or in short supply in many locations. Coupons should be eligible for pre-order so coupons don’t expire on them. Funds allocated to DTV education are inadequate, far below that spent in other nations undergoing switch to DTV. We could be helping with outreach, but no funds have been provided by FCC or NTIA. Must set up DTV-problem rapid response plan.

* Paul McTear, President/CEO, Raycom Media Inc.: 38 full-power TVs, including WECT-TV Wilmington. Cornerstone is strong local content and public service. Will be helping the rest of the US assess risks and challenges of the transition. Problem pulling off 9/8/08 analog cut-off while adjacent markets still focusing on 2/17/09 deadline. Working with all other local stakeholders. FCC is providing exceptional support. NAB is providing leadership. Running both PSAs and news items on the transition. Congress: Fix SHVERA to extend broadcast exclusivity protection to digital signals.

* John Ripperton, SVP Supply Chain Management, RadioShack: Among first national retailers to get converter boxes with analog pass-through into stores. Retailers are doing all they can to get the boxes out there, help NTIA assess redemption rates. When store is out of stock, company is sending a box along with no extra charge for shipping. Working had to redress store-by-store inventory problems. Asking for a certain tariff to be eliminated that increases shipping costs. Making sure staff is completely up to speed on facts of the transition.

* Eric Rossi, Senior Product Manager, Media Product Leadership, The Nielsen Company: Working to assure accurate audience analysis will continue after transition. Nielsen is providing accurate stats on readiness for 56 electronically-measured markets. 9.4% of all households are completely unready for transition. 12.6% are partly unready. 78% are completely ready. Large gaps in readiness from one market to another. Younger demos, Hispanic, African American households are more at risk than general population.