Testimony of John M. R. Kneuer
Deputy Secretary for Communications and Information
National Telecommunications and Information Administration
Committee on Commerce, Science and Transport
The transition to digital television
17. October 2007
Mr. Chairman and members of the Committee, thank you for this opportunity to testify before you today. I am pleased to report that the National Telecommunications and Information Administration (NTIA) is making good progress in fulfilling the responsibilities set out by Congress in the Digital Television Transition and Public Safety Act of 2005 (“DTV Act” or “Act”) . The Digital-to-Analog Converter Box Coupon Program has been established, consumer education efforts are increasing daily, and our collaboration with public and private sector organizations is expanding to ensure all Americans are prepared for the digital transition.
NTIA continues to make significant strides in meeting the requirements of the DTV Act
As you know, the DTV Act required NTIA to establish and implement a program that would allow eligible US households to receive up to two coupons of $40 each to use toward the purchase of digital-to-analog converter boxes that convert digital broadcast signals for display on analog televisions. NTIA is on track to meet its obligations under the law. From January 1, 2008 through March 31, 2009, consumers can request up to two $40 coupons per household to purchase an approved DTV converter box.
The application process is simple and straightforward, and respects individual privacy. The voucher request only asks for the information needed to fulfill the request.d.h., name, address and number of coupons requested of the requester. The only other question NTIA will ask is whether the household is receiving an over-the-air signal or subscribing to a paid service. Applications will be widely available. Consumers can request them online, by telephone, by fax or by post. In addition, participating libraries will store applications and library staff will help users fill them out.
While much remains to be done, NTIA has made great strides to ensure the success of the coupon program and, in turn, the success of the DTV transition. As described in more detail below, we have awarded and are in the process of implementing a major operational support contract for the coupon program. We've also built the infrastructure to ensure consumers have technically reliable, coupon-eligible converter boxes available when coupon issuance begins. NTIA is also working with our partners in the public and private sectors and we have made great progress in planning and beginning implementation of the campaign to educate consumers about the DTV transition and coupon program.
A strong foundation for program support has been established
To provide the technical support needed to manage the various operational elements related to the requirements of the law, on August 15, NTIA awarded IBM a contract to manage three broad functional aspects of the voucher program: (1) Systems processing (z.B.,determining consumer eligibility, distributing and activating coupons, certifying retailers, and providing educational materials); (2) Financial processing (z.B.,managing the processes for authorizing coupons for redemption and ensuring payment to retailers and conducting independent audits); and (3) consumer education and communication. Under the agreement, IBM leads a team of partners including corporate lodging consultants responsible for retail management, voucher redemption and payment; Epiq Systems, which handles coupon distribution and customer support; and Ketchum, Inc., a global public relations firm that directs the consumer education program. Each of these companies has extensive experience in their functional areas and have successfully implemented large and complex national programs.
The contract is performance-based. NTIA has established the program requirements, leaving it to IBM to determine how best to achieve these results. Payments are tied to IBM's satisfactory achievement of certain milestones. NTIA works closely with the IBM team to ensure program objectives are met in a timely manner and to agreed quality standards. The total contract amount is $119,986,468, including $84,990,343 for the initial phase and $34,978,125 for a contingent phase provided for in the DTV Act.
NTIA and IBM are working diligently to ensure the program is operational and ready to accept customer applications for coupons on January 1st, 2008. Additionally, as described below, we also work closely with broadcasters, consumer electronics manufacturers, retailers and the Federal Communications Commission ("FCC" or "Commission") to ensure consumers have access to reliable converter boxes when coupons are available will.
The framework for ensuring the availability of converter boxes is in place
testing and certification
NTIA has adopted rules to provide guidance to converter box manufacturers on how to submit test results and sample devices for evaluation and certification. These rules require manufacturers to announce their intention to provide converter boxes for testing and certification. Upon receipt of such notification, NTIA will accept test results from each manufacturer to assess whether the manufacturer's tests meet NTIA's specifications.
Under an interagency memorandum of understanding, the FCC is offering testing services to evaluate the converter boxes prior to their certification by NTIA. Once NTIA has determined that a manufacturer's own tests meet our specifications, the manufacturer submits a sample converter unit for independent testing by the FCC laboratory, which evaluates the device against all twenty-four specifications in NTIA's Final Rule. This process follows the recommendations of consumer electronics manufacturers and broadcasters who want to use converters to ensure viewers have reliable television service.
NTIA last month certified two models of digital-to-analog converter boxes to be manufactured by Digital Stream Technology, Inc., and other vendors' devices are currently being evaluated. I'm pleased with the number of manufacturers that have submitted letters of intent and test submissions, and I expect more boxes to be certified in the weeks leading up to the transition. NTIA maintains a list of certified converter boxes, including manufacturer and model numbers, and distributes it to participating retailers and makes it available to consumers.
Per NTIA regulations, certified converter boxes have performance characteristics based on industry-recognized DTV standards as well as some of the FCC requirements for television products. For example, the regulations require that NTIA-certified converters meet the FCC's parental controls or V-chip rules, the emergency alert system rule, and closed captioning requirements for converters. NTIA's rules for the program also permit (but do not have to) converter boxes to contain certain features that could improve converter performance under certain conditions or for certain segments of the audience (z.B., a "smart antenna" connector that allows consumers to connect an electronically tuned antenna for better reception; "pass-through" of the analogue signals that television translation stations will continue to broadcast in rural areas; and inclusion of a patented BTSC audio feature that enhances audio and supports new services such as video description). Software downloads and compliance with ENERGY STAR standards are also recommended as eligible features.
NTIA has also worked diligently with retailers to ensure consumers can easily obtain converter boxes during the transition period. At our public meeting and expo on September 25th, RadioShack - with 4,400 company-owned stores and 1,600 franchisees - announced that it intends to participate in the coupon program and expects to be ready to serve consumers by January 1st. In addition to stocking the converter boxes, RadioShack will train its sales force on the transition and the coupon program, and engage in consumer education both in stores and on its websites. As with manufacturers, I expect other retailers to follow RadioShack's example and sign up to participate in the coupon program.
NTIA is actively working to make the program accessible and attractive to a wide range of retailers, attracting not only large chains but also regional outlets and small, independent local shops to participate. The coupon program will offer a choice of six different coupon redemption alternatives, allowing even the smallest retailers to participate. Options allow for authorization and redemption through existing credit card schemes, online or over the phone. While some retailers have indicated they won't be able to change their sales systems or inventory levels until after the holiday season is over in mid-January, following RadioShack's announcement I'm confident that other retailers will also find it in their interest to join the program now, inventory to order and be ready to serve customers in early 2008.
Retailer certification is an important step in preventing waste, fraud and abuse in the program. Accordingly, NTIA's contract with IBM requires IBM to monitor retailer involvement to minimize waste, fraud and abuse. IBM will provide NTIA with timely information about merchant coupon distribution, redemption and payment activity to identify anomalous consumer or merchant behavior and other operational red flags.
Consumer education initiatives are well under way with strong support from public and private sector partners
General educational efforts
As I have said, the success of the transition will be measured by how smoothly and efficiently it is carried out, which will depend crucially on effective outreach to consumers. NTIA began its efforts to educate consumers about the transition well before January 1, 2008, the program's start date.
To maximize the value of the $5 million consumer education budget earmarked for in the Act, NTIA has partnered to leverage support from a wide range of stakeholders. In this regard, I would like to acknowledge the support NTIA has received from its many nonprofit, industry and government partners who have worked to educate consumers about the digital transition.
In particular, the industries most directly affected by the transition—broadcast, cable, and consumer electronics—are actively educating their viewers, subscribers, and customers about February 17, 2009, the transition date, and the variety of choices consumers have on it. Last month, the National Cable and Telecommunications Association (NCTA) announced a $200 million consumer awareness campaign. On Monday, the National Association of Broadcasters (NAB) launched its marketing campaign. The Consumer Electronics Association (CEA) also ran radio spots and developed consumer-friendly tools, including a video, to help consumers understand their transition options.
As reflected in the following discussion of our partnerships, many other organizations are also contributing staff time and other resources to transition training efforts. As such, this combined NCTA and NAB investment represents only a portion of the total private sector contribution used to support the DTV transition.
These industry leaders, along with the Association of Public Television Stations (APTS), AARP, and the Leadership Conference on Civil Rights, among others, came together in February to form the DTV Transition Coalition. NTIA has worked actively with the Coalition since its inception. The coalition, now numbering over 160, is working to ensure that no consumer is left without television due to a lack of information about the transition. The Coalition website (www.dtvtransition.org) hosts a DTV quiz designed to help consumers determine if they need to take action before February 17, 2009 and, if so, what options are available to them.
NTIA educational efforts
On September 25, NTIA held a public DTV meeting and expo to discuss progress in educating the public about the coupon program. The public meeting focused on NTIA's partnerships in the digital transition and included two CEO-level panels from affected industries and leading stakeholders of the transition. The Technology Expo featured exhibits and demonstrations from over a dozen companies and organizations showcasing products and services to help consumers make a smooth digital transition. Attendees had the opportunity to see first-hand how the sharper picture, multicasting and ease of channeling available with digital television can offer over-the-air consumers a more immersive viewing experience than they currently enjoy obtained from analog services.
While some viewers will purchase new digital televisions to take advantage of these features, NTIA recognizes that many other consumers may want or need to keep their existing analog televisions and continue receiving free over-the-air programming. For this group, the Expo was the first opportunity to see the converter boxes and the response was very positive. NTIA will continue to focus its consumer education efforts on wireless television dependent households to educate them about the government assistance available to cover the cost of digital-to-analog converter boxes.
Targeted educational activities
As we reported to the committee in July, NTIA has identified five target groups for special consumer education efforts: (1) seniors; (2) the economically disadvantaged; (3) country dwellers; (4) people with disabilities; and (5) minorities.These groups are more dependent on wireless television than the general population, and NTIA will carefully design and market test its consumer education materials to ensure that the materials are accessible and easy to understand for their target communities.
NTIA works in partnership with trusted intermediaries for these groups to disseminate information and provide assistance with procurement and installation of converter boxes. Additionally, as previously mentioned, global PR firm Ketchum will develop and implement the consumer education program to drive awareness of the coupon program. Ketchum's recent work educating vulnerable communities about important federal programs has given him extensive experience working with many of our audiences.
America's seniors make up a large percentage of consumers served by governmental, social, commercial, and nonprofit organizations. NTIA uses relationships with these organizations to reach the high-level constituencies they serve. For example, NTIA is in discussions with the U.S. Department of Health and Human Services (HHS) Administration on Aging (AoA) to capitalize on the agency's credibility and reputation for serving the needs of seniors and their caregivers through a variety of home and care services fulfill community-based services. These discussions focus on a variety of activities to ensure seniors, particularly those with language barriers or in remote or rural areas, are aware and understand the coupon program. They also include various outreach strategies, including working with the AoA National Network for Aging Services, reaching every state, tribe and community in the United States.
NTIA has also been working very closely with AARP for almost a year. Last month, NTIA attended the AARP Members Convention in Boston, and AARP highlights the coupon program in its publications and online newsletters, which reach millions of its members. NTIA also partners with Retirement Living TV, a cable channel dedicated to entertaining, educating and empowering seniors. Early next year, Retirement Living TV will launch its nationwide mobile "Retired & Wired: RLTV Digital Tour" to educate seniors about their digital television options, including the coupon program. In partnership with the American Library Association, NTIA distributes posters and coupon applications to participating libraries and trains librarians to help users, particularly seniors, complete coupon applications.
In addition to these groups, NTIA has also formed partnerships with other organizations, including SeniorNet, an organization that supports approximately 200 senior learning centers across the country; the National Caucus and Center of Black Aged, Inc.; and the National Indian Council on Aging. In late October, NTIA will participate in the National Hispanic Council on Aging Conference and distribute Spanish language materials about the transition. Finally, last month, Best Buy and Family, Career and Community Leaders of America (FCCLA) came together at our DTV Public Meeting and Expo to announce a partnership that will see students in 7,000 chapters across the country receive awards to develop creative ways Supporting elderly and rural populations to apply for coupons. These voluntary efforts are likely to increase as the transition date approaches.
The economically disadvantaged
NTIA works with the HHS Children and Families Administration to reach over 900 community organizations that support low-income families to raise awareness of the coupon program. Other nonprofits and social services, including Catholic charities, the Salvation Army, and Community Action Partners, are already working with the Internal Revenue Service (IRS) to educate their constituents about the IRS's Earned Income Tax Credit, and these organizations have agreed to To allow NTIA to use their existing communication channels to distribute information about the Coupon Program. Finally, NTIA is also in discussions with the United States Department of Agriculture's (USDA) Food and Nutrition Service (FNS) to include Coupon Program materials in communications sent to potential food stamp recipients.
NTIA will work with the Appalachian Regional Commission to distribute transition information packs to 70 government councils and local development counties, representing 23 million people in 410 counties (42 percent rural). This month, NTIA will attend the Rural Telecommunications Congress Conference in Springfield, Illinois and host a workshop for rural community leaders to promote the coupon program locally. NTIA has also reached out to the USDA's Cooperative State Research, Education, and Extension Service to distribute information to outreach offices nationwide, and we are in discussions with 4-H to attract young people to volunteer in rural communities, to help people who may need government assistance.
people with disabilities
NTIA has worked with organizations such as the American Association of People with Disabilities (AAPD), Easter Seals, and the Northern Virginia Resource Center for Deaf and Hard of Hearing Persons (NVRC) to ensure the program is accessible to Americans with disabilities. As noted above, NTIA's program rules require eligible converter boxes to support closed captioning services under FCC rules. NTIA program staff met with a handful of disability groups, the FCC, and several converter box manufacturers to describe these closed captioning features and how to access them (either via a "cc" button on the remote control or via a menu function). NTIA recently attended the Telecommunications for the Deaf and Hard of Hearing conference on August 24, 2007 in San Francisco.
To reach the institutionalized and those with special needs, NTIA will continue to reach out to private and public organizations that provide home health care, meals on wheels, day care for the elderly and other elder care services. At last month's DTV Public Meeting and Expo, the United States Department of Veterans Affairs (VA) announced that it would work with NTIA to ensure digital transition information and coupon program applications are available at 155 VA hospitals and its 1,000 clinics . In addition, the VA will educate its 240,000 employees, 1 million volunteers and more than 1 million veterans not served by the VA about the transition and coupon program.
NTIA continues to expand efforts to reach out to minority communities. The NAACP and the Rainbow Push Coalition are jointly planning a comprehensive outreach strategy for the African American community, and last week NTIA participated in a panel at the Congressional Black Caucus Telecommunications Issues Forum entitled "Navigating the Digital Era."
As I mentioned, NTIA will be attending the National Hispanic Council on Aging Conference later this month and will be distributing materials in Spanish about the transition. Last month, NTIA attended the annual meeting of the US Hispanic Chamber of Commerce in San Juan, Puerto Rico, providing information to Hispanic retailers on how they could participate in the program and help NTIA raise awareness of their predominantly Hispanic customers. I applaud Univision for announcing their national campaign on October 1st to educate Hispanic viewers about the transition. Reaching 99 percent of Hispanic homes, Univision will use televised events as well as grassroots events and street fairs to educate Hispanics about the coupon program. Entravision Communications Corporation will also leverage its Spanish-language media resources, including television and radio stations and outdoor billboards, to educate nearly 70 percent of Hispanics about the digital transition in 51 major television broadcast markets across the United States.
NTIA offers printed brochures and other information in five languages in addition to English. Working with Panasonic and the Southeast Asia Resource Action Center, NTIA has translated coupon program information for distribution in Chinese, Korean, Vietnamese, and Filipino communities. The center is distributing information and encouraging the Cambodian-American, Lao-American, and Vietnamese-American communities to use the government's multilingual call center to apply for vouchers. NTIA is pursuing partnership opportunities with Koahnic Broadcast Corporation to distribute coupon information to Alaska Native villages and with Native Voice One to reach tribal reservations via radio communications.
Additionally, NTIA has expanded this multilingual approach beyond its consumer education activities to the core of program operations. Significantly, through an established partnership with Language Line, the call center that will support the coupon application process will be staffed by permanent staff fluent in 23 languages and more than 70 other languages.
NTIA has reached out to over 14 federal government departments and agencies and is committed to leveraging these groups' relationships with our audiences to maximize the value of the federal investment in this program. As described above, we are already actively working with or in discussions with the HHS, USDA, VA and IRS. Many of these contacts have resulted in clearly defined strategies for reaching the constituents served by these agencies. For example, NTIA works with other government departments and agencies to use existing publications and electronic newsletters to include coupon information in scheduled mailings, create links to the coupon application form from their websites, and submit coupon application forms to local welfare offices.
In addition to these partnerships, NTIA will also leverage our relationships with other government agencies to expand the reach of our message. In particular, we will work with agencies targeting the five audiences mentioned above. NTIA is currently in discussions with the Social Security Administration; the White House Office for Faith-Based and Community Initiatives; the General Services Administration; and several agencies within the Department of Commerce.
Finally, as noted above, NTIA is also working in conjunction with the FCC to implement significant public awareness activities related to the DTV transition and coupon program. Both the website www.DTV.gov and the website of NTIA,www.ntia.doc.gov/otiahome/dtv/index.html, provide important information on all aspects of the transition. To assist consumers who do not have Internet access, are hearing impaired, or simply prefer to receive information about the coupon program over the phone, NTIA has also established a toll-free number: 1-888-DTV-2009.
I encourage the members of this committee and the entire Congress to join us in this important work by linking your own websites to these consumer education materials. In addition, NTIA has also distributed copies of Coupon Program pamphlets—in English and Spanish—to all members of the House and Senate. We have distributed these materials to community organizations, constituency groups and industry advocacy groups. We hope they will help you keep your own constituents informed about the transition and the coupon program.
NTIA recognizes the risks and potential pitfalls associated with a consumer education campaign of this magnitude; However, the solution does not lie in establishing a single digital transition agency or a single government-mandated embassy. Broadcasters, cable and satellite service providers, consumer electronics manufacturers and retailers, and consumer advocates play as important a role in educating consumers as any government agency and provide just as strong an incentive to get involved. A variety of messages and sources of information is crucial for a well-informed consumer public. The actors involved in the transition are at the forefront of educational efforts through their individual commitment and through collaborations such as the Digital TV Transition Coalition.
In closing, I would like to thank the committee for the opportunity to testify before you again today. I am happy to answer your questions.