**Before the**

**DEPARTMENT OF COMMERCE**

**National Telecommunications and Information Administration**

**Washington, D.C. 20230**

*In the Matter of* )

Request for Comment and Notice )

Of Proposed Rules to Implement and ) Docket No. 060512129-6129-01

Administer a Coupon Program )

For Digital-to-Analog Converter Boxes )

> )

Notice of Proposed Rulemaking )

**COMMENTS OF THE GARDEN CITY GROUP, INC.**

> Richard Cohen
>
> Senior Vice President and Managing Director
>
> Legal Services
>
> The Garden City Group, Inc.
>
> 1792 Bell Tower Lane, Suite 101
>
> Weston, Florida 33326
>
> \(954\) 315-3698

September 25, 2006

**Before the**

**UNITED STATES DEPARTMENT OF COMMERCE**

**Washington, DC 20230**

*In the Matter of* )

Request for Comment and Notice )

Of Proposed Rules to Implement and ) Docket No. 060512129-6129-01

Administer a Coupon Program )

For Digital-to-Analog Converter Boxes )

> )

Notice of Proposed Rulemaking )

**COMMENTS OF THE GARDEN CITY GROUP, INC.**

The Garden City Group, Inc. ("GCG"), which is the premier administrator
of complex and high profile financial reimbursement matters,
respectfully submits comments in response to the National
Telecommunications and Information Administration's ("NTIA's") Notice of
Proposed Rulemaking ("NPRM") and Request for Comment regarding proposals
to implement and administer the Congressionally-mandated Coupon Program
for Digital-to-Analog ("DTA") Converter Boxes. GCG lauds NTIA for
examining key public policy issues that underpin this program, which
will help ensure that consumers with analog television sets will be able
to continue viewing TV broadcasts after the transition to digital
television ("DTV") ends by February 18, 2009. The magnitude and scope of
public benefits associated with this transition makes consideration of
these proposed rules particularly timely.

Implementation of the Coupon Program will be a centerpiece of the
transition to DTV in the United States, as authorized under the Deficit
Reduction Act of 2005 ("the Act").[^1] The spectrum at 700 MHz that will
be vacated by analog broadcasters as part of the transition will free
valuable airwaves for advanced wireless uses, promoting technology
development and more competitive broadband options for consumers,
including those in rural and underserved areas. Another critical
component is the additional spectrum -- 24 MHz at 700 MHz -- to be made
available to first responders. Other important public benefits include
the ability of consumers, through more efficient digital signal
technology, to receive DVD-quality pictures and numerous channels from a
single broadcaster.

GCG has extensive expertise and unique qualifications in designing legal
notices and administering class actions, which entail many of the same
capabilities needed to ensure an efficient, accountable, timely and fair
administration of the Coupon Program. GCG's role as the leading
administrator of such complex and critical matters requires the company
to continuously analyze ways to keep fraud, waste and abuse to a minimum
and to conduct effective outreach with a broad range of stakeholders.

GCG focuses these comments on two key policy areas raised in the NPRM
that are crucial to the administration of a successful program: (1)
Consumer education requirements; (2) Proposed rules for the coupon
program.

I.  **Consumer education**

An Office of Management and Budget ("OMB") cost-benefit analysis of
NTIA's proposed rules for the DTA converter box program acknowledges
that "limited funds for program administration dictate the need for good
management -- criteria such as efficiency, effective tracking and
accountability, ease of customer understanding and administration, and
fairness."[^2] These criteria are critical for the execution of the
program within the timeframes and budgetary parameters stipulated by
Congress, including the administration of related consumer
education.[^3] The NPRM seeks comments on the most effective means to
address consumer education as part of the program, particularly in light
of the Act's directive that NTIA spend no more than \$5 million on
education about the DTV transition and the Coupon Program. As the NPRM
suggests, the limited scope of funding will require careful leveraging
by NTIA, given the costs of media production and paid advertising, and
will necessitate coordination with the planned consumer outreach of
broadcasters, equipment-makers, retailers, consumer groups and others as
part of an overall effort to ensure a timely DTV transition.

The NPRM solicits information on ways to target households that will be
eligible for the Coupon Program. GCG recommends that NTIA consider the
following elements for inclusion in any public information campaign it
undertakes, as well as in guidance for complementary efforts that will
be conducted by other stakeholders, including the administrator of an
outsourced Coupon Program. The multi-disciplinary approach required for
legal notice programs, in which GCG has more than 20 years of
experience, provides a useful model for NTIA to examine in implementing
consumer education and participating in awareness efforts in which other
stakeholders will engage. These legal notice programs utilize the
multi-disciplinary approach called for by the Coupon Program's education
requirements, bringing together diverse expertise in: direct marketing,
targeting of public policy objectives, media outreach, advertising,
direct mail, demographic analysis, video and audio production and
coordination with affiliated stakeholders. Successful legal notice
programs, such as those administered by GCG, require drafting language
and outreach materials that are: (1) easily understood by targeted
audiences, (2) provide usable information that compels necessary action.

Given the varied demographics of analog TV households, this approach,
which relies on state-of-the-art media research tools, provides a useful
template for NTIA to examine. GCG's approach takes into account
historical context; public policy considerations; the demographics,
geographic location and media habits of targeted audiences; size and
validity of mailing lists; time constraints, and budgetary parameters.
In addition, GCG has fulfilled such requirements in multiple languages
and in highly complex cases. Another overriding consideration of notice
programs, which parallels that of the Coupon Program, is that notice be
fair and adequate.

As the OMB Analysis stated, the structure and conduct of the Coupon
Program are fundamental to achieving the intent of Congress. The
analysis noted that NTIA's decision to limit the scope of the program to
analog-only households "will target support in such a way as to help the
needy, save program money and institute a measure of fairness."[^4]

To advance important public policy goals, and based on its
industry-leading expertise in effectively administering complex and high
profile matters, GCG recommends that any consumer education program that
NTIA undertakes regarding the DTV Coupon Program incorporate the
following elements:

**[Wide dissemination]{.underline}**: Educational materials must be
distributed widely, and in multiple languages, to ensure that eligible
households receive practical information about how to participate in the
program. Education efforts must eliminate confusion as to who is
eligible to participate. The Government Accountability Office ("GAO")
has cited the example of the DTV transition in Berlin, Germany, in which
analog-only subscribers were informed of the DTV transition through a
rolling on-screen scroll via TV signals received by terrestrial
television.[^5] Information sessions were also held with retailers to
inform them of the transition and a consumer hotline was established,
along with ads on buses and subways.

Regarding the ongoing U.S. transition, as part of the ecosystem of
stakeholders who will be vital to the success of this awareness
campaign, cable and satellite providers could be enlisted to inform
their subscribers that they are [not]{.underline} eligible for the
program. They must be informed that they will continue to receive
digitally broadcast programming after the transition concludes.

The GAO has noted that "non-white and Hispanic households are more
likely to rely on over-the-air television than are white and
non-Hispanic households." Further, GAO noted that "on average,
over-the-air households are more likely to have lower incomes compared
to cable or DBS households." For example, while 48 percent of analog TV
households have incomes under \$30,000, 29 percent of cable and DBS
households have incomes below that level.[^6]

The continued leadership of public TV stations is also an important
resource for NTIA to utilize as part of consumer education. Public TV
stations, which have taken a leadership role in rolling out digital
programming, are likely to be an important part of the equation for
reaching eligible households. The Association of Public Television
Stations has also indicated that "other over-the-air viewers are
disproportionately low-income, rural, Spanish-speaking and/or elderly
viewers, all of whom are reached with public television programming, in
some cases more than any other medium."[^7]

**[Accessibility]{.underline}**: Consumer educational material must be
available in Spanish-language format, as is now the case with some
material that is available on the government's DTV awareness Web site:
www.dtv.gov. Individuals with special needs, including hearing
disabilities, also must have access to meaningful and timely information
to find out whether they qualify for the coupon program and, if they do,
how to participate.

For example, the GAO has noted that as part of preparation for the DTV
transition, the United Kingdom has formed strategic groups to raise
public awareness and knowledge of the transition, with participation
from government and consumer groups, broadcasters, manufacturers, and
industry experts who were tasked to raise awareness and train
stakeholders.[^8] In the case of the U.K., the focus has been on the
most "vulnerable" populations who need assistance. Meaningful consumer
education in the United States must recognize that different delivery
methods will have to target specific populations. For example, a program
that relied almost exclusively on Internet-based tools may potentially
miss important groups of older or less economically advantaged consumers
who do not rely on or have available to them computer access.

**[Broad education]{.underline}**: GAO has noted that there is no master
list of analog-only TV households in the United States.[^9] This makes
it even more important that TV viewers be broadly educated about the
impending DTV transition, to help effectively reach analog-only
households. GAO has pointed out that to ensure eligible recipients
understand how a subsidy program will work, there is a need to "first
require that information about the broader DTV transition is effectively
communicated to the public."[^10] Past research by GAO has indicated
that many Americans still were not aware of the transition, although the
Consumer Electronics Association (CEA) has since reported that awareness
is increasing.[^11]

As part of a coordinated effort with other stakeholders, NTIA itself
could play an important leadership role by providing information for the
general public on its own Web site on how the DTV transition and the
Coupon Program will function. In essence, a "branding" campaign for DTV,
supported by all stakeholders in the transition, is needed in the United
States to ensure a baseline of knowledge about how the transition is
working. The digital "tick" logo used in the United Kingdom provides one
example of how such a broad awareness campaign can be deployed. The logo
shows customers the products and services designed to facilitate the
digital switchover.[^12]

To promote such cooperative efforts, NTIA must ensure effective,
coordinated consumer outreach at all phases of the Coupon Program,
including information to eliminate consumer confusion on how to find out
if a household qualifies, where to buy qualifying boxes, how to install
DTA converter boxes in the first place, and how to handle DTV converter
boxes that do not work. NTIA, in coordination with the Coupon Program
administrator, must help to bring together all key stakeholders in this
process, including retailers, manufacturers, broadcasters, consumer
groups, advocates for the elderly, representatives of consumers with
disabilities, experts on coupon program administration, technology
developers and others. By law the coupon program must begin by January
2008 and NTIA plans to award the contract for administering the Coupon
Program by July 2007. In the lead-up to and in the execution of the
Coupon Program, NTIA could provide leadership and support to stakeholder
efforts to inform as broad a range as possible of eligible U.S.
households about the DTV transition and the DTA converter box program. A
"road show" approach would be useful to consider, in which multiple
stakeholders (i.e., broadcasters, technology developers, retailers, the
Coupon Program administrator and others) could hold "town meetings" that
would demonstrate DTV technology, show how the converter boxes work and
explain how the Coupon Program will be administered. The point would be
to involve key local groups (i.e., local libraries, advocacy groups for
the elderly, Hispanic outreach organizations), which would in turn help
to further disseminate this information to their target demographics.

**[DTV benefits]{.underline}**: An important part of consumer education
about this landmark technology transition must include the benefits of
DTV, which will help to create incentives for participation in the
coupon program. Consumers also are likely to be motivated by fears
associated with the impending halt of analog TV programming. The ability
of digital TV to allow viewers to receive DVD-quality pictures and
multi-cast broadcast programming provides an important counterpoint to
concerns about the termination of analog TV transmissions.

**[Ease of use]{.underline}**: One-stop shopping must be available for
prospective participants who seek information about the program and how
it works, including a consolidated Web site with relevant resources and
a consumer hotline for further assistance, which could be run by a
private sector Coupon Program administrator. It will be essential to
have consistently worded program descriptions and instructions across
awareness campaigns that multiple stakeholders will run, including
broadcasters, retailers, consumer groups and equipment-makers.

To this end, the firm that oversees, on a contractual basis to the
federal government, the administration of the Coupon Program will play
an important coordinating role, including the provision of real-time
information about the progress of the coupon disbursement.[^13] A
multi-stakeholder process will be crucial to ensure that all challenges
related to reaching eligible households are addressed.

II. **Coupon Program Logistics**

To meet the underlying objectives of the Coupon Program to facilitate
the DTV transition, NTIA must ensure that the administration of the
program: (1) Prevents waste, fraud and abuse; (2) Entails outreach and
meaningful education to eligible recipients; (3) Adheres to
Congressionally mandated timelines; (4) Provides accountability to
federal decisionmakers to ensure that eligible consumers are using
coupons to purchase qualifying converter boxes; (5) Facilitates
real-time coordination among the numerous stakeholders who will need to
work together to ensure that the program is run cost-effectively,
including retailers, manufacturers, consumer groups, broadcasters and
others.

**[Serial numbers]{.underline}**: The NPRM indicates that NTIA intends
to place identifying serial numbers on the coupons. GCG believes that
such efforts would help to minimize fraud and abuse by helping to limit
the coupons to the two-household maximum that Congress intended.

**[Paper versus plastic]{.underline}**: The NPRM further asks about
other fraud prevention methods, including the potential consideration of
an electronic coupon card instead of a paper coupon. There are important
trade-offs from a public policy perspective that NTIA must consider when
weighing a paper-based coupon approach against the use of electronic
coupon cards. In general, a plastic coupon card would carry slightly
higher costs than a paper-based option, although GCG, based on its
experience, estimates that this cost differential would likely be,
percentage-wise, in the single digits above a paper coupon program. A
paper coupon would be likely to have a lower initial cost, but would
require handling an increased number of lost or destroyed coupons, as
well as coupon re-issues. Further, it would require more in-depth
measures for fraud control. GCG stipulates, however, that these
projected differentials represent rough order of magnitude estimates;
the precise trade-offs that NTIA will have to address in this area will
depend on the details of how this program is structured as a result of
both the final rules that emerge from this NPRM.[^14]

Among the advantages of a plastic card is that it can be customized with
information, including serial numbers that would decrease fraud and
abuse and increase consumer awareness about program requirements,
including the types of boxes that qualify for the Coupon Program. Such
identifying information is a vital element of the Coupon Program's
administration to facilitate maximum participation by retailers capable
of handling coupons and increasing the ease of consumer use of the
coupons in the first place. Section 3005(d) of the Act provides that the
term digital-to-analog converter box means ''a stand-alone device that
does not contain features or functions except those necessary to enable
a consumer to convert any channel broadcast in the digital television
service into a format that the consumer can display on television
receivers designed to receive and display signals only in the analog
television service, but may also include a remote control device.''

Besides the ability to enhance awareness for consumers and retailers
about issues such as qualifying converter boxes, manufacturers of
plastic coupons have estimated in general that consumers attach a
greater value to a plastic card instead of a paper coupon, which in turn
increases the redemption rate of coupon promotions.[^15] In 2004, the
federal government embraced the electronic card approach for its food
stamp program, pointing to some of these same benefits as the reason it
permanently moved away from paper coupons for the program. Retailers, in
this case grocers, expressed a preference for electronic cards based on
the increased speed at which they get paid and the extent to which
clerks did not have to sort and bundle paper coupons.[^16] Further, some
estimates have noted that the cost differential of manufacturing paper
coupons or cards that have stringent forgery prevention watermarks are
not substantially different than the cost of plastic cards.[^17]

However, challenges that Federal Emergency Management Agency encountered
in the recent administration of its Expedited Assistance program for
victims of Hurricanes Katrina and Rita underscore the importance of
fraud detection and prevention methods that are specific to the unique
requirements of electronic card programs, including the importance of
validating the identity of participants.[^18]

Thus, while electronic cards confer security, monitoring, ease of
customer and retailer use, and other benefits, this approach is not
without challenges. NTIA must take into consideration the human
interface of such electronic transactions when defining the ultimate
parameters of the Coupon Program. To maximize fraud prevention, the
program, for example, should ensure that retailer training and
implementation entails that customers using an electronic coupon are
asked for identification before a card is used. (The card itself could
assist in this effort by featuring the recipient's name and address on
its face.) Similarly, to ensure that electronic cards are being used to
purchase eligible boxes, it would be extremely useful if manufacturers
are required to prominently label converter boxes that are eligible for
the coupon. This would help to ensure that retailers are only processing
coupons at the point-of-sale for converter boxes that are eligible for
the coupon in the first place.

III. **Other Issues**

The NPRM asks whether NTIA should consider economic need in the
eligibility requirements for coupons, which the Notice states is not
required by the Committee of Conference's Joint Explanatory Statement
did not require. GCG does not take a position at this time on whether
economic need, defined through a criterion such as a poverty threshold,
should be incorporated into the proposed rules under consideration. An
important consideration for NTIA to weigh, however, is the ratio of the
costs of administering the program versus the actual funds available to
be administered through the coupons themselves. In other words, NTIA
should not spend \$50 to give away \$40 in coupons.

IV. **Conclusion**

The DTV transition in the United States represents a remarkable
opportunity for Americans to experience the benefits of this technology
switchover on multiple levels, including enhanced television viewing,
more spectrum for first responders and improved options for wireless
voice and broadband services. The successful implementation of the DTA
Coupon Program will be a cornerstone of the conclusion of the DTV
transition in a manner that is timely and equitable for all
stakeholders.

GCG urges NTIA to encourage and support consumer education efforts that
reduce the risk of the overall DTV transition encountering challenges in
terms of lack of consumer awareness, timeliness of implementation or
effectiveness of the technology that is deployed. To this end, the
consumer education program must factor in the extent to which consumers
are likely to turn for information to local and state government and
community organizations that have not been directly engaged in DTV
transition planning up until this point. Thus, information about the
program and centralized resources for further assistance (i.e., a
consumer hotline) should be made available not only to end user
consumers, but to other stakeholders who will play a key role in
ensuring that the transition goes smoothly (i.e., local councils on
aging). Given the sensitivity of the timelines leading up to the final
switchover date in February 2009, testing will also be an essential
component of the Coupon Program to ensure that its ultimate
implementation can occur with retailers, manufacturers, consumer groups
and others already having trialed and demonstrated the program in key
markets.

While the Act only provides NTIA with \$5 million for consumer
education, the agency can leverage a far greater role in ensuring that
all of these stakeholders coordinate plans for awareness and education
efforts ahead of the implementation of the Coupon Program, so that the
latter could be deployed with the benefit of these joint plans already
under way.

We thank NTIA for initiating this proceeding to review and optimize the
implementation of key components of the Coupon Program, in a way that
maximizes its benefits for eligible U.S. consumers while minimizing the
risk of participation for consumers, retailers, manufacturers,
broadcasters and others to the largest degree that is feasible. GCG
looks forward to working with NTIA to this end.

[^1]: *See* Title III of the Deficit Reduction Act/Digital Television
    and Public Safety Act of 2005, Public Law 109-171, Section 3005.

[^2]: *See* "Analysis of Benefits and Costs of the Proposed Rule for the
    Digital-to-Analog Converter Box Program," Office of Management and
    Budget, ("OMB Analysis.")

[^3]: The Act authorizes NTIA to spend up to \$990 million on the coupon
    program from a Digital Television Transition and Public Safety Fund
    , which will be financed from the receipts of the FCC's auction of
    the spectrum at 700 MHz that is being vacated by analog broadcasters
    as part of the DTV transition. This includes \$100 million for
    program administration. NTIA could spend up to \$1.5 billion,
    including \$160 million for administration, upon a 60-day notice and
    certification to the House Committee on Energy and Commerce and the
    Senate Committee on Commerce, Science and Transportation. NTIA would
    have to certify that the \$990 million is not sufficient to fulfill
    coupon requests for eligible U.S. households.

[^4]: *See* OMB Analysis, page 5.

[^5]: *See* Testimony Before the Subcommittee on Telecommunications and
    the Internet, Committee on Energy and Commerce, House of
    Representatives, GAO, July 21, 2004, "German DTV Transition Differs
    from U.S. Transition in Many Respects, but Certain Key Challenges
    Are Similar," Statement of Mark L. Goldstein, Director, Physical
    Infrastructure Issues.

[^6]: Id.

[^7]: *See* Public Digital Television, The Digital Transition,
    http://www.apts.org/PTVissues/digitalTV/digitaltransition.cfm.

[^8]: *See* "Digital Television Transition: Issues Related to an
    Information Campaign Regarding the Transition," GAO-05-940-R,
    September 6, 2005 ("GAO Campaign Report").

[^9]: *See* "Digital Broadcast Television Transition: Several Challenges
    Could Arise in Administering a Subsidy Program for DTV Equipment,"
    GAO-05-623T, May 26, 2005.

[^10]: *See* GAO Campaign Report, page 17.

[^11]: CEA and the National Cable and Telecommunications Association
    (NCTA) unveiled plans in April to coordinate DTV outreach, noting at
    the time that the efforts were expected to include public service
    announcements, enhanced retailer sales force education, outreach via
    on demand services, bilingual education, and comprehensive cable
    customer communication. See "CEA and NCTA Unite To Broaden Scope of
    DTV Education Efforts,"
    http://www.ncta.com/ContentView.aspx?hidenavlink=true&type=reltyp1&contentId=3022.

[^12]: *See* http://www.digitaluk.co.uk/. . Recent research from Ofcom
    and Digital UK found that 54% of adults recognized the logo,
    following Digital UK\'s \"look for the logo\" campaign.

[^13]: *See* Request for Information -- Market Research for
    Implementation of Digital to Analog Converter Box Coupon Program,
    Reference-Number-noaa73106, released July 31, 2006.

[^14]: *See* Request for Information: Market Research for Implementation
    of the Digital to Analog Converter Box Coupon Program, Question and
    Answers, http://www.ntia.doc.gov/otiahome/dtv/DTV_RFI_QA_081806.htm.
    NTIA has indicated its plans to use the information submitted in
    response to a Request for Information to develop a request for
    proposals from vendors interested in assisting the Department of
    Commerce with implementation of the Coupon Program.

[^15]: *See* "Do Plastic Coupons Improve Direct Response?", *Integrated
    Solutions for Retailers* newsletter, August 2004,
    http://www.storedvalue.com/ArthurBlankNews.pdf. "Like their gift
    card brethren, plastic coupon cards can also accommodate graphics
    and images that help retailers build brand awareness and make direct
    response mailings stand out in a crowd."

[^16]: See "Electronic Cards Replace Coupons for Food Stamps," The New
    York Times, June 23, 2004,
    http://www.nytimes.com/2004/06/23/politics/23FOOD.final.html?ei=5007&en=0245f8214ea9d25d&ex=1403323200&partner=USERLAND&pagewanted=print&position.
    "Electronic benefits have replaced food stamp coupons in all states,
    and more than half the states now issue electronic benefits in place
    of welfare checks as well."

[^17]: *See* "Pier 1 Prefers Plastic Gift Cards,"by Chad White, May 5,
    2001, www.storedvalue.com.

[^18]: *See* GAO Report, "Expedited Assistance for Victims of Hurricanes
    Katrina and Rita, FEMA's Control Weaknesses Exposed the Government
    to Significant Fraud and Abuse," February 2006, GAO-06-403T.