**Written Statement**

**Of**

**The Honorable Kevin J. Martin**

**Chairman**

**Federal Communications Commission**

**Before the**

**Committee on Energy and Commerce,**

**Subcommittee on Telecommunications and the Internet**

**U.S. House of Representatives**

**October 17, 2007**

Good morning Chairman Dingell, Chairman Markey, Ranking Member Barton,
Ranking Member Upton, and Members of the Committee. Thank you for
inviting me here today to talk to you about the digital transition. I am
mindful, as are you, that February 17, 2009 is only 16 months away. I
appreciate having the opportunity to tell you what the Commission has
been doing in preparation for this unprecedented event. I have a brief
opening statement and then I look forward to hearing your thoughts and
answering any questions you may have.

Facilitating a smooth transition is not an easy task. As all major
changes tend to be, the coming transition to digital television
transmission is an exciting---but complicated---revolution.

While the benefits offered by digital technology are undeniable -- such
as movie quality picture and sound - so are the challenges.

When I last appeared before you, I explained that a successful
completion of the digital transition depends upon minimizing the burdens
placed on consumers and maximizing their ability to benefit from it.
After all, our highest priority is protecting the American consumer. The
Commission has already taken some important steps but there is still
more we need to do.

We have been working both on our own and in coordination with industry,
other governmental agencies, and consumer groups to advance the
transition and promote consumer awareness. Our efforts have been
three-fold. First, we have been focused on getting the right policies in
place to facilitate a smooth transition. Second, we have been actively
enforcing our rules to protect consumers. And, third, we have been
promoting awareness of the transition through our consumer education and
outreach efforts.

Through all of our activities, the Commission is committed to ensuring
that no American is left in the dark.

***Policy Proceedings to Minimize the Burdens on Consumers***

A successful completion of the digital transition depends upon ensuring
that appropriate policies are in place to minimize the burden and cost
borne by consumers and maximizing their opportunity to benefit from it.
I would like to draw your attention to several important policy issues.
First, the Commission acted to dramatically reduce the number of
consumers who would need a converter box to view broadcast signals
post-transition. Second, we are addressing technical issues related to
the transition. Third, we are employing our authority and industry's
resources to conduct a far-reaching effort to inform consumers. And,
finally, it is my hope that the Commission acts to encourage and
facilitate broadcasters' ability to offer additional free channels so
that the DTV transition is a benefit rather than a burden to consumers.

*Ensuring the Viewability of DTV by Cable Subscribers.* The Commission
recently adopted an order that guarantees that all cable customers will
be able to watch all broadcast stations after the digital transition.
Specifically, the Commission took action to ensure cable operators
continue to make signals of all must-carry broadcast stations viewable
after the transition, as the must carry statute requires. This action
was important to ensure that cable subscribers are able to watch the
same broadcast stations the day after the digital transition that they
were watching the day before the transition.

With this action, we were able to significantly reduce the number of
Americans potentially needing a converter box to watch broadcast
stations post-transition. Making sure the almost 35 million households
that subscribe to analog cable are taken care of allows us to focus all
of our energies on assisting the nearly 15 million households that rely
exclusively on over-the-air signals.

*Resolving Technical DTV Issues*. In August 2007, the Commission adopted
the final DTV table of allotments. This order provided virtually all
(over 99%) of full power television stations across the country with
their final channel assignments for broadcasting in digital following
the DTV transition. By resolving the remaining questions regarding
broadcasters' allotments, the Commission helped ensure that the analog
spectrum the broadcasters are vacating will be available as planned by
2009. This finality is important to ensuring a successful auction of
this spectrum next year and the timely use of this spectrum for public
safety and expanded wireless competition and innovation. Notably, 95% of
all television stations are now broadcasting in digital.

*DTV Consumer Education*. In April 2007, the Commission adopted a
*Labeling Order* that requires retailers to fully inform consumers about
the DTV transition date at the point of sale. The Commission found that,
at the point of sale, many consumers were not aware that analog-only TVs
would not be able to receive over-the-air-television signals without the
use of a digital-to-analog converter box after February 17, 2009.
Accordingly, the Commission required sellers of television receiving
equipment that does not include a digital tuner to disclose at the
point-of-sale that such devices include only an analog tuner and
therefore will require a converter box to receive over-the-air broadcast
television after the transition date.

In addition to the *Labeling Order*, and at the suggestion of Chairmen
Dingell and Markey, we recently initiated a DTV Education Notice of
Proposed Rulemaking (NPRM). This NPRM sought comment on whether to
require the industry to use bill inserts, public service announcements,
and other techniques to educate consumers about the transition. I
commend the industry for the recent consumer education campaigns that
they have initiated. I believe that more can be done. I have circulated
a proposal to my colleagues that requires broadcasters to use PSAs and
screen crawls throughout the day to inform viewers about the transition
and to publicly report on these education efforts on a quarterly basis.
The item also requires MVPDs to provide monthly inserts about the DTV
transition in their customer billing statements. The item also requires
manufacturers of television receivers and related devices to provide
notice to consumers of the transition's impact on that equipment. In
addition, we require the partners listed on the Commission's www.dtv.gov
website to provide the Commission with quarterly updates on their
consumer education efforts. Finally, the item states that we will work
with the National Telecommunications and Information Agency (NTIA) to
ensure that the retailers participating in the converter box program are
appropriately training their employees and informing consumers. I hope
and expect that the Commission will be able to adopt this *DTV Education
Order* quickly.

*Facilitating Multicast Broadcast Opportunities.* Finally, I believe
that one policy action in particular could fundamentally change for the
better the course of the digital transition. The idea is simple:
broadcasters should be able to, and be encouraged to, use the digital
spectrum they already have to send multiple television signals to
consumers for free.

Let me give you an example of what I am talking about. Right now, a
broadcaster using analog technology transmits one programming stream,
which we think of as a television channel. But with digital spectrum,
technology enables broadcasters to put out not just one programming
stream, but several. So, a broadcaster could broadcast 2 or 3 channels
of programming all at the same time (i.e., a movie channel, a 24-hour
news channel and a sports programming channel) with no additional cost
to the consumer or need for additional spectrum. In short, multicasting
enables broadcasters to provide more free television programming to
consumers.

I believe that the ability to view new broadcast channels would
facilitate the transition by providing people with an incentive to get a
converter box. As things stand today, over-the-air consumers must
purchase a converter box (or buy a digital TV) just to maintain the
status quo. They have the burden of purchasing new equipment just to
ensure that their televisions will not go dark the day after the
transition. Consumers will only gain in terms of new and improved
services if they buy new expensive HDTV's. This burden that the digital
transition places on consumers is probably why a majority of those aware
of the transition think that the government is on the "wrong track"
according to a recent APTS survey. The message that we have been sending
is simply not appealing \-- you need to buy a new box, or you'll lose TV
altogether.

But what if instead the message to consumers was, "If you get a new
digital television or a converter box, you will be able to watch a wide
array of new free programming?" Then what was a burden for consumers
becomes a meaningful benefit. The opportunity to enjoy more programming
choices would give consumers an actual incentive to be excited about
adopting digital technology. And, the faster that this technology is in
consumers' homes, the less chance there is that Americans will be left
in the dark after the digital transition.

This proposal is how it worked in Germany. In Berlin, the opportunity to
receive more free channels drove people to proactively purchase
converter boxes instead of viewing the need to do so as a burden imposed
by their government. Before the transition, over the air viewers in
Berlin received only 12 channels. After the transition, they received
27, more than twice as many. A German government report analyzing the
transition concluded, "the switchover resulted in less protest than had
been anticipated," in part because of "\[t\]he added value of receiving
more services." (Berlin Goes Digital,
[http://www.mabb.de/bilder/Projektbericht_engl.pdf]{.underline}.) I
believe that what worked in Germany could work here as well.

The only way we can make this a reality, however, is if the cable
companies are required to carry these additional channels. And, as is
the case today, cable operators should be required to carry this free
programming. In regulatory lingo this is called "multicast must carry."
To date, the FCC has not required them to carry anything beyond a
broadcaster's main signal. But as the courts have recognized, cable
carriage is necessary for broadcast channels to survive. Today, there
simply is not an economic model by which a broadcaster can support a
free programming stream that reaches only over-the-air households. As a
result, without the guarantee of cable carriage, broadcasters are not
able to invest in creating a second or third free programming stream.

About 16 months ago, I circulated a proposal to my colleagues that would
facilitate multicasting and require cable companies to carry these
multiple streams of free programming to consumers. Unfortunately, this
item remains pending today. Nevertheless, I remain hopeful that a
majority of Commissioners will realize the potential this item has to
minimize the burden that the DTV transition places on consumers and
allow Americans to realize the full benefit of the digital transition.

***Enforcement Activities***

The Commission's DTV-related enforcement efforts have focused on
protecting consumers from the unknowing purchase of television equipment
without integrated digital tuners. Specifically, we are enforcing three
rules: 1) the requirement to label any remaining televisions with
analog-only tuners; 2) the prohibition on the importation and shipment
of television receivers without integrated digital tuners; and 3) the
requirement that the V-Chip functions with the digital technology.

With respect to the Commission's labeling requirement, the Commission
has, as of October 15, 2007, inspected nearly 1280 retail stores and
websites and issued nearly 280 citations notifying retailers of
violations for failing to comply with our requirements. Because
retailers are not licensees, we must give them a citation prior to
issuing a Notice of Apparent Liability (NAL). When I testified before
you in July, I mentioned that NALs were pending against seven large
retailers for apparently violating the Commission's labeling
requirements. These fines, in the aggregate, total over three million
dollars. Since that time, we have circulated NALs to an additional seven
retailers, totaling over \$500,000. In addition, the Enforcement Bureau
has issued another six NALs on delegated authority. It is my hope that
through our vigorous enforcement actions, retailers will take concrete
actions to avoid consumer confusion as the digital transition draws
near.

In addition to our labeling investigations, we are continuing to ensure
that no manufacturers are importing and shipping analog-only television
receivers and equipment. In May 2007 we issued NALs against two
companies - Syntax Brillian Corp. (approx. \$2.9 million) and Regent
USA, Inc. (\$63,650) - for apparent violation of our rules in this area.
One of these companies has already paid the fine and we are working on a
forfeiture order with respect to the other company. In addition, we are
in the process of investigating potential violations against another two
companies. I hope to quickly bring these matters to resolution. Although
we continue to monitor importation logs and otherwise look for potential
violations, we have not yet found any potential violations beyond these
four companies.

Finally, we are ensuring that the digital tuners comply with the V-Chip
regulations. As you know, the Commission's rules require digital
television manufacturers to include the V-Chip in their equipment and to
ensure that their devices can adjust to changes in the content advisory
system. This past July, thanks to the information referred to us by
Chairman Markey, we began investigating allegations that some
manufacturers were not complying with our rules. As a result of these
investigations, we have circulated NALs against three manufacturers,
totaling over \$11 million.

Swift enforcement of all our DTV-related rules is critical to protecting
consumers and our activities in this area will continue to be a priority
during the next 16 months.

***Consumer Education and Outreach***

In addition to our policymaking and enforcement activities, the
Commission has been actively promoting consumer awareness of the
upcoming transition through education and outreach efforts. Our
overarching goal in these activities is to reach consumers who are
likely to be unaware of the upcoming digital transition, including: 1)
senior citizens; 2) non-English speaking and minority communities; 3)
people with disabilities; 4) low-income individuals; and 5) people
living in rural and tribal areas.

We have been employing a variety of methods to reach these communities.
Specifically, we have been focusing our resources on three primary
activities: attending conferences and hosting events, disseminating
information via the news media, and partnering with industry, consumer,
and other groups.

*Conferences and Other Events.* With respect to conferences and events,
Commission staff has been attending as many conferences as possible to
distribute DTV educational materials. For example, in the last few
months we have attended and/or participated in 30 conferences including
AARP's national convention, National Council of La Raza's national
convention, Telecommunications for the Deaf and Hard of Hearing, Inc.'s
biennial conference, and the National Association of Black Owned
Broadcaster's convention. And, earlier this month, I spoke about the
digital transition at the Technology Summit on DTV that was part of the
Congressional Hispanic Caucus Institute Conference. We plan to attend
and participate in at least 30 more events and conferences to provide
information about the digital transition this year.

We are also utilizing the agents in the Commission's field offices
around the country to expand the scope of our consumer education
efforts. Designated representatives in each our 24 field offices have
been targeting communities that risk getting left behind in the DTV
transition, such as senior citizens. Our field agents have been
distributing information materials to senior centers, libraries and
other venues. They then follow up these visits by giving DTV
presentations to further inform these communities.

Through the work of our field agents, we are able to reach consumers in
a total of 36 states -- ranging from Alaska to Florida. We have already
distributed information to over 1100 senior centers, senior
organizations, and community groups and given nearly 50 presentations.
We anticipate providing information to over 2000 organizations and
making more than 350 DTV presentations by the end of the year. In
addition to these "DTV Awareness Sessions" that the field agents are
conducting in 36 states, other members of Commission staff are holding
similar sessions in particular communities around the country. For
example, we recently held a DTV Awareness session in Harlem, NY in
partnership with the Harlem Consumer Education Council and we have over
10 more similar events planned this year in different states.

I also believe it is useful to coordinate with the groups representing
the communities we are targeting. For example, last July we hosted,
along with Native American Public Media, an Indian Telecommunications
Initiative Regional Workshop that focused on the digital transition.
And, more recently, we held a DTV Workshop at Commission headquarters
where we announced that we would host five additional events. Each of
our upcoming workshops will be focused on a specific consumer segment
that has been identified as being likely to be disproportionately
impacted by the transition and least aware of it. These communities
include the senior citizens, minorities and non-English speakers, people
with disabilities, low-income individuals, and those living in rural and
tribal areas. Through a series of workshops in the upcoming months, we
will specifically focus on how we can best reach and educate these
groups of consumers. We have already announced dates for the first two
of these workshops. On November 8, 2007, we will host a workshop
dedicated to reaching senior citizens, and on December 4, 2007, we will
host a workshop geared towards reaching non-English speaking and
minority communities.

We received several helpful suggestions from the workshop that we held
last month. For example, we were asked to coordinate our consumer
education materials with consumer groups before releasing them. We were
also asked to take into the account the needs of people with
disabilities in our outreach activities. We are already working to
implement these and the other ideas that came out of our workshop.
Receiving input such as this is important to facilitating a smooth
transition. I hope that these additional workshops will help provide
additional new ideas and enable us to strengthen existing partnerships
and forge new ones.

*News Media Activities.* We are also working with the news media to
highlight the upcoming transition in ongoing news coverage.
Specifically, we are coordinating with a variety of media outlets
including newspapers, broadcasters, and working with various members of
the industry on public service announcements (PSAs).

Our efforts focus primarily on media that target specific at-risk
populations. For example, senior citizens and Hispanic consumers, among
others, are most likely to be disproportionately impacted by the
transition. With respect to communicating with seniors, I was recently
interviewed about the transition on AARP radio which is heard on over
170 outlets nationwide and has a listenership of over 1,000,000 people.
Similarly, I gave an interview to the AARP Magazine which is running a
story on the digital transition for its early 2008 issue. And, I also
gave an interview to Erickson Tribune, a publication that reaches nearly
6 million seniors, for its story on the digital transition. I am also
scheduled to be doing a PSA with Retirement Living TV, which targets its
programming to senior citizens and reaches nearly 30 million homes
nationwide.

Commission staff has also given interviews about the digital transition
to various Hispanic media outlets. For example, the Hispanic
Communications Network, which produces media campaigns for radio,
television, print and Internet, taped an interview with Commission staff
that will be distributed to its 230 member radio network in the United
States and Puerto Rico. In the next few weeks, I will be doing an
interview about the transition with Hispanics Today, the television
network for the U.S. Hispanic Chamber of Commerce. This program is
broadcast nationally on the local NBC affiliate on 165 television
stations, covering 84% of the Hispanic market.

And, we will soon be doing an on-air interview on the digital transition
for Univision's national morning news program that will air nationally.
This interview will be done with a Commission staffer recently hired to
spearhead the Commission's digital television outreach to the Hispanic
community.

*Government, Industry, and Consumer Group Partnerships.* The
partnerships we have formed, and will continue to form, are a critical
part of our consumer education and outreach efforts. We rely on these
partnerships -- which may be with government agencies, industry or
consumer groups -- to help us disseminate DTV education information and
to inform us of event and conferences that are taking place where we can
distribute materials and interact with consumers directly.

For example, we are working closely with NTIA on various
transition-related issues. The Commission's Laboratory is providing
technical review and testing services in support of NTIA\'s
digital-to-analog converter box coupon program. This cooperation led to
the recent approval of the first two DTV converter boxes.

We are also working with the U.S. Administration on Aging, which has a
network of over 650 state and area agencies on aging, tribal elder
organizations, and thousands of providers around the country who work
with seniors and their caregivers on a daily basis. We are not only
providing this network with DTV informational materials that can be
distributed nationwide, but we have also offered to partner with them to
conduct joint presentations on the DTV transition throughout the
country. Similarly, we are working with the Bureau of Indian Affairs
which has agreed to disseminate DTV information packets to their members
through their 50 offices nationwide.

Our government partnerships are not limited to the national level,
however. We have contacted nearly 125 local Chambers of Commerce
covering all 50 states and the District of Columbia as well as state and
local-level consumers affairs and elderly departments. We have asked
these organizations to help us distribute DTV information materials and
link to www.dtv.gov on their webpage. We intend to continue pursuing
such relationships to reach as many consumers as possible.

In addition to our government partnerships, we are partnering with the
industry and consumer groups in a variety of ways. For example, we are a
member of the DTV Transition Coalition. We have contacted nearly 250
organizations about the transition, asking how we can work with them to
get the word out, and forwarding DTV informational materials. These
include entities representing a host of communities ranging from
veterans, to minorities, to schools.

Similarly, we have provided DTV outreach materials to our database of
over 3,200 small business entities and other parties, including small,
minority, and women-owned businesses. We send DTV information to our
partners, explore opportunities for creating meaningful outreach
strategies, and have worked to establish over 100,000 links to our
www.dtv.gov website.

Another example of how we are coordinating with other entities is the
two advisory committees -- the Consumer Advisory Committee (CAC) and the
Intergovernmental Advisory Committee (IAC) -- that we recently chartered
and instructed to focus their current terms on the digital transition.
The CAC recently submitted recommendations to the Commission in our DTV
Education proceeding. Though the work of these committees, the
Commission will gain valuable insights that will further its goal of
ensuring that all consumers are aware of the transition.

We also continue to work on updating our consumer educational materials.
For example, we recently released a new consumer advisory geared to
provide information to persons with disabilities. This advisory explains
how closed captioning works with digital-to analog converter boxes. In
this regard, I would like to mention that the Commission recently
created a dedicated email box, [closedcaptioning@fcc.gov]{.underline},
for inquiries relating to closed captioning. I hope this will make it
easier for people with disabilities to get answers to the closed
captioning questions they may have as the DTV transition progresses.

And, of course, all of our DTV materials, including this one, are
readily available on our www.dtv.gov website or by calling our toll-free
consumer line: 1-888-CALL-FCC.

Finally, last June we sent a package of DTV education materials to each
of the 535 Congressional offices for members to distribute to their
constituents. We recently followed up on this communication by sending
over additional materials and offering to make Commission staff
available to participate and make DTV presentations at any local town
hall meeting or other outreach events that members have planned with
their constituents.

***Conclusion***

The Commission is devoting significant resources to facilitate a smooth
transition. Nearly every Bureau and Office at the Commission has been
involved in this effort including our field offices across the country.
We will continue our three-pronged approach -- policymaking,
enforcement, and consumer outreach -- during the next 16 months. We
intend to take whatever actions are necessary to minimize the potential
burden the digital transition could impose on consumers and maximize
their ability to benefit from it. The Commission has already taken some
important steps but there is still more that we need to do. The next 16
months will undoubtedly be challenging. Nevertheless, it is my hope
that, with the right policies in place, American consumers will reap the
rewards that the digital transition has to offer.