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NTIA Issues DTV Coupon Rule

3/12/2007 01:20:00 PM Eastern

The U.S. Department of Commerce's National Telecommunications and Information Administration (NTIA) issued its final rule for a digital-to-analog converter box coupon program that will subsidize the cost of special equipment that some consumers may need to continue receiving television broadcasts, once full-power analog TV broadcasts cease on Feb. 17, 2009.

The final rule establishes the framework for the converter box coupon program and provides guidance for consumers, television converter box manufacturers and retailers regarding eligibility, responsibilities and certifications.

Households using analog televisions will not be able to receive digital broadcasts after Feb. 17, 2009, unless the analog television is connected to a box that converts the digital signal to an analog format, or the analog television is connected to cable or satellite service. While converters may be important to connect some TVs, other viewers may not need or want converters, such as those who have digital televisions or pay TV service.

Under the NTIA plan, starting Jan. 1, 2008, all U.S. households will be eligible to request up to two $40 coupons to be used toward the purchase of up to two digital-to-analog convert boxes. Coupons will be issued to qualified applicants until $990 million in initial funding has been exhausted.

Once the initial fund is used up, Congress can authorize spending an additional $510 million to fulfill coupon requests.

However, if the additional funds are needed, eligibility for those coupons will be limited exclusively to over-the- air-only television households, according to NTIA rules. Consumers requesting coupons from these contingent funds must self-certify to NTIA that they do not subscribe to cable, satellite or other pay television services.

“This program is structured to monitor demand to help ensure that over-the-air reliant households will not lose total access to television broadcasts after the Feb. 17, 2009, transition date,” an NTIA statement reads.

“With the coupon program and a successful analog-to-digital transition involving the public, industry and government, the switch from analog to digital television will be completed as planned,” said John Kneuer, Assistant Secretary for Communication and Information.

Under the final rule, eligible households will be able to request coupons from NTIA through “a Web site, over the phone or by mail between Jan. 1, 2008, and March 31, 2009.”

Coupons will be able to be tracked electronically and uniquely numbered so that each transaction will be verified at the retailer's point of sale terminal through NTIA's coupon distribution database, the NTIA said.

“Similar to gift cards, this type of coupon will be consumer-friendly and minimize the opportunity for waste, fraud and abuse,” according to a statement on the program.

Manufacturers of converter boxes that can be purchased with coupons must build devices that include specific features and meet certain performance specifications identified in the Technical Appendix to the final rule.

Features are either “required” or “permitted” and examples of “disqualifying features” also are provided.

Eligible devices may not provide for “more than simply converting a digital over- the-air television signal (ATSC) for display on an analog television receiver (NTSC). Examples of ineligible devices include integrated video displays, or devices that provide video or audio recording or playback capability such as VCR, DVD, HD DVD, Blu-ray Disc players, and others.

Eligible set-top boxes may have an S-video output, but may not have any of the following outputs: DVI, HDMI, component video (YPbPr); computer video (VGA); USB IEEE-1394 (iLink or Firewire)_ Ethernet (IEEE-802.3) or Wireless (IEEE-802.11).

Manufacturers may include a programmable universal remote control to operate the equipment and other existing video and audio equipment.

Other permitted features include battery power operation, as well as external AC/DC power; additional cables such as a cable with 3 female RCA connectors for composite video (yellow connector) and stereo left and right audio (white and red connectors), the display of additional signal quality information as determined by the manufacturer, and compliance with energy standards such as the EPA Energy Star program or state regulatory authorities.

Through the joint encouragement of the Consumer Electronics Association, NAB, and Association for Maximum Service Televisions (MSTV), manufacturers of eligible converter devices will not be precluded from including optional functions that aid in the reception or navigation of over-the-air programs, such as electronic program guides and “smart antenna” interfaces.

Manufacturers seeking to have their converter boxes certified by NTIA as eligible for purchase with the coupon will follow a technical approval process described in the final rule. Manufacturers will submit production models and certified testing results for review and possible testing by the FCC.

NTIA will identify certified eligible converter boxes and add the product information to the electronic systems database to tie into retailers' point of sale terminals.

Retailers, both online and brick-and-mortar, are encouraged to participate in the program and need to apply by contacting NTIA after June 1, 2007.

Retailers must have been engaged in the consumer electronics business for at least one year and be registered in the Central Contractor Registration database (http://www.ccr.gov/).

Retailers with interest in participating in the program but who don't meet the requirements should contact NTIA.

Retailers will need to train employees on the purpose and operation of the coupon program with materials provided by NTIA. Retailers may use commercially reasonable methods to order and manage inventory to meet customer demand for certified eligible converter boxes.

The NTIA intends that retailers will be paid for valid coupon redemptions on a commercially reasonable basis.

“The transition from analog to digital television is a historic change and brings with it considerable benefits for the American consumer,” stated Commerce Secretary Carlos Gutierrez. “The coupon program is designed to help ease the transition to digital TV. Not only will the transition help expand consumer choices, but more importantly, the digital transition will enable more efficient use of the nation's airwaves providing new advanced wireless services and increased public safety services for all Americans.”

“Besides our own consumer education efforts, NTIA is working with partners such as broadcasters, consumer electronics retailers, manufacturers, and consumer organizations to reach out to those most in need of the coupon program,” said Assistant Secretary Kneuer. “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.”

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 the broadcast and manufacturing associations 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.

As emphasized by CEA and the broadcasters, energy efficiency was also a key ingredient of the NTIA program, tied to new energy efficiency requirements for coupon-eligible converter boxes.

“The nation's move to digital television is proceeding apace, and today's NTIA action is a vital step in this successful transition. Regulatory certainty is important to manufacturers and retailers that are assisting consumers in preparing for the DTV transition, including providing consumers the option of using digital-to-analog converters. CEA and its members are proud of our role in introducing digital TV, and especially HDTV, to the American public,” said CEA president and CEO Gary Shapiro.

“The NTIA's final DTV rules reflect the appreciation Americans place on having access to free, local television. Both government and industry have an obligation to complete the DTV transition with as little disruption to consumers as possible. The NTIA's digital converter box coupon program, supported by a broad-based consumer education and marketing campaign, will bring tens of millions of viewers into the digital age,” said David K. Rehr, NAP president and CEO.

MSTV president David Donovan stated: “The NTIA's rulemaking helps to assure that all Americans will continue to enjoy the full benefits of over-the-air television, consistent with our program launched in late 2005 to work with manufacturers to develop high-quality, low-cost digital-to-analog converter boxes. It is particularly gratifying that the NTIA followed our recommendations regarding converter-box reception specifications and features, including smart antennas and electronic program guides.”

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