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Four Suppliers Plan To Build Converter Boxes

3/26/2007 02:00:00 AM Eastern

Soon after adoption of the final rule for a digital-to-analog converter box coupon program, four manufacturers — LG Electronics, Thomson, Samsung and Jasco announced their intentions to build set-top boxes to participate.

Some said they intend to include onscreen program guide features to help users easily find and tune regular and multicast DTV channels. Manufacturers have not issued final pricing for the equipment; however, John Taylor, LG government affairs VP, estimated that his company's box could retail for about $60 by the time it is ready for market. That would require consumers to spend $20 out of pocket plus the coupon.

Dave Arland, Thomson marketing VP, said his company expects to have a qualifying box ready for market in January, but there are still too many variables to be determined before setting a price, including how many retailers would participate and how many converters participating accounts would carry.

In addition, the number of boxes that will actually be sold is still uncertain. Some industry observers said many consumers will simply add basic cable, satellite or telco TV services and others will opt for new digital TVs.

Observers said they expect retailers will encourage set-top box buyers to use their coupons to trade up at the point of sale to new digital televisions. The prediction is that savvy dealers will apply their own discounts to the products and simply tear up the coupons, since TV purchases wouldn't be eligible for reimbursement by the government.

The NTIA said interested retailers, online and brick-and-mortar, need to apply by contacting NTIA after June 1. Eligible retailers must have been engaged in the CE business for at least one year and be registered in the Central Contractor Registration database.

Retailers will need to train employees on the coupon program with materials provided by NTIA.

The program also includes an educational component, through which the NTIA plans to work in tandem with manufacturers, broadcasters, retailers and consumer and industry associations to alert consumers to digital television transition and the options they will have to prevent losing their programming.

"We welcome partners and ask that interested parties contact our office at (202)482-6260 to learn how they can help inform the public about the coupon program," stated John Kneuer, Assistant Secretary for Communication and Information.

The final rule reflects "the major consensus agreement of the CEA, the NAB and the MSTV," according to a joint statement from the associations.

Last fall, broadcasters and manufacturers "agreed to and recommended minimum performance requirements for eligible digital converter boxes in this unique instance of a government-funded consumer coupon program. The NTIA's rules are consistent with the industries' joint recommendations, including assurances that coupon-eligible converters will be verified by the Federal Communications Commission upon NTIA's request."

The NTIA also complied with the wishes of both sides by not initially limiting eligibility for converter box coupons to analog-broadcast-only households. This way, secondary TV sets in cable and satellite households that are connected to an antenna for over-the-air reception will be eligible.

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