United States Government Accountability Office

GAO Testimony 

Before the Senate Committee on 

Commerce, Science, and Transportation

DIGITAL TELEVISION 

TRANSITION 

Information on the 

Implementation of the 

Converter Box Subsidy 

Program and Consumer 

Participation in the Program

Statement of Mark L. Goldstein, Director 

Physical Infrastructure 

For Release on Delivery

Expected at 2:30 p.m. EDT

Tuesday, September 23, 2008

 

GAO-08-1181T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

September 23, 2008

DIGITAL TELEVISION TRANSITION 

Information on the Implementation of the Converter 

Box Subsidy Program and Consumer Participation in 

Highlights of GAO-08-1181T, a testimony the Program 

before the Senate Committee on 

Commerce, Science, and Transportation 

The Digital Television Transition 

and Public Safety Act of 2005 

requires all full-power television 

stations in the United States to 

cease analog broadcasting after 

February 17, 2009, known as the 

digital television (DTV) transition. 

The National Telecommunications

and Information Administration

(NTIA) is responsible for 

implementing a subsidy program to

provide households with up to two 

$40 coupons toward the purchase 

of converter boxes. In this 

testimony, which is principally

based on a recently issued report, 

GAO examines (1) what consumer

education efforts have been

undertaken by private and federal 

stakeholders and (2) how effective 

NTIA has been in implementing the 

converter box subsidy program, 

and to what extent consumers are

participating in the program. To 

address these issues, GAO analyzed 

data from NTIA and reviewed legal, 

agency, and industry documents. 

Also, GAO interviewed a variety of 

stakeholders involved with the DTV 

transition. 

What GAO Recommends

In the report issued on September

16, 2008, GAO recommended that

the Secretary of Commerce direct

NTIA to develop a plan to manage

coupon requests in the lead up to 

the transition. In commenting on a 

draft of the report, the Department 

of Commerce did not state whether 

it agreed or disagreed with GAO’s 

recommendation, but stated its 

concern about an increase in

coupon demand as the transition 

nears. FCC noted consumer 

outreach efforts it has taken. 

Private sector and federal stakeholders have undertaken various consumer 

education efforts to raise awareness about the DTV transition. For example, 

the National Association of Broadcasters and the National Cable and 

Telecommunications Association have committed over $1.4 billion to educate 

consumers about the transition. This funding has supported the development 

of public service announcements, education programs for broadcast, Web 

sites, and other activities. The Federal Communications Commission (FCC) 

and NTIA have consumer education plans that target those populations most 

likely to be affected by the DTV transition. Specifically, they identified 45

areas of the country as high risk that included areas with at least 1 of the 

following population groups: (1) more than 150,000 over-the-air households, 

(2) more than 20 percent of all households relying on over-the-air broadcasts, 

or (3) a top 10 city of residence for the largest target demographic groups. The 

target demographic groups include seniors, low-income, minority and nonEnglish speaking, rural households, and persons with disabilities. In addition 

to targeting these 45 areas of the country, FCC and NTIA developed 

partnerships with organizations that serve these hard-to-reach populations. 

NTIA is effectively implementing the converter box subsidy program, but its 

plans to address the likely increase in coupon demand as the transition nears 

remain unclear. As of August 31, 2008, NTIA had issued almost 24 million 

coupons and as of that date approximately 13 percent of U.S. households had 

requested coupons. As found in GAO’s recent consumer survey, up to 35 

percent of U.S. households could be affected by the transition because they 

have at least one television not connected to a subscription service, such as 

cable or satellite. In U.S. households relying solely on over-the-air broadcasts 

(approximately 15 percent), of those who intend to purchase a converter box, 

100 percent of survey respondents said they were likely to request a coupon. 

With a spike in demand likely as the transition date nears, NTIA has no 

specific plans to address an increase in demand; therefore, consumers might 

incur significant wait time to receive their coupons and might lose television 

service if their wait time lasts beyond February 17, 2009. In terms of 

participation in the converter box subsidy program, GAO analyzed coupon 

data in areas of the country comprising predominantly minority and senior 

populations and found that households in both predominantly black and 

Hispanic or Latino areas were less likely to redeem their coupons compared 

with households outside these areas. Additionally, GAO analyzed participation 

in the converter box subsidy program in the 45 areas of the country on which 

NTIA and FCC focused their consumer education efforts and found coupon 

requests to be roughly the same for zip codes within the 45 targeted areas 

compared with areas that were not targeted. Retailers play an integral role in 

the converter box subsidy program by selling the converter boxes and helping 

to inform their customers about the DTV transition. GAO visited 132 randomly 

selected retail stores in 12 cities. Store representatives at a majority of the 

retailers GAO visited were able to correctly state that the DTV transition 

would occur in February 2009 and how to apply for a converter box coupon. 

To view the full product, including the scope 

and methodology, click on GAO-08-1181T. 

For more information, contact Mark L. 

Goldstein at (202) 512-2834 or 

goldsteinm@gao.gov. 
Digital Television Transition

Mr. Chairman and Members of the Committee: 

I am pleased to be here today to discuss our recently issued report on the

National Telecommunications and Information Administration’s (NTIA) 

implementation of the mandated converter box subsidy program.1

Federal law requires all full power television stations in the United States 

to cease analog broadcasting and broadcast digital-only transmissions 

after February 17, 2009—often referred to as the digital television (DTV) 

transition. Currently, most television broadcasters transmit over-the-air 

signals in both an analog and digital format to television households. After 

the transition, consumers who rely exclusively on over-the-air television 

signals viewed on analog sets will not be able to view broadcast 

programming, which could include important news information or 

emergency alerts, unless they take action. In particular, these consumers 

could (1) purchase a television capable of processing digital signals, (2) 

purchase a digital-to-analog converter box that converts the digital signals 

to analog signals and enables their display on an analog set, or (3) 

subscribe to cable, satellite, or other service. 

The federal government and the private sector have taken several steps to

prepare for the DTV transition. NTIA, a bureau within the U.S. Department 

of Commerce, created and implemented a digital-to-analog converter box 

subsidy program to provide households with up to two $40 coupons 

toward the purchase of converter boxes that allow consumers to continue

viewing over-the-air signals on analog television sets.2

 Additionally, the 

government, television broadcast industry, cable and satellite providers, 

and other carriers of broadcast signals have established several 

educational efforts informing consumers about the DTV transition and the 

subsidy program. However, the success of the DTV transition and the 

subsidy program requires consumers’ understanding about the transition 

and the steps needed to continue receiving a television signal. In addition,

consumers will rely on retailers to provide information, as well as supply 

eligible converter boxes, for the subsidy program. 

 1

GAO, Digital Television Transition: Implementation of the Converter Box Subsidy 

Program Is Under Way, but Preparedness to Manage an Increase in Subsidy Demand Is

Unclear. GAO-08-1040 (Washington, D.C.: September 16, 2008). 

2

Eligible converter boxes range in price from $40 to over $90. 

Page 1 GAO-08-1181T 
Digital Television Transition

In my testimony today, I will discuss (1) what consumer education efforts 

have been undertaken by private and federal stakeholders and (2) how 

effective NTIA has been in implementing the converter box subsidy 

program and to what extent consumers are participating in the program. 

To meet these objectives, we interviewed agency officials from the Federal 

Communications Commission (FCC) and NTIA and reviewed their 

consumer education documents, orders, rules and proposed rules. We also 

interviewed private sector stakeholders representing the broadcasting, 

retailer, manufacturing, and cable industries and reviewed publicly 

available information on their consumer education planning. Further, we 

discussed the effectiveness of consumer education efforts with various 

advocacy groups identified as NTIA partners that represent hard-to-reach

populations. We also analyzed date-specific data from NTIA on coupon 

requests, issuance, redemptions, and expirations, and examined NTIA 

timeliness in issuing coupons from the beginning of the converter box 

subsidy program in January through August 2008. Due to report processing 

constraints the report this testimony is primarily based on only analyzed 

data from January through June 2008. We conducted data reliability testing 

and determined that the data used in this report were sufficiently reliable 

for our purposes. We conducted a “mystery shopper” study—i.e., 

discussing the transition with randomly selected retailers without 

identifying ourselves as government employees—to determine retailer 

preparedness for the converter box subsidy program including the level of

retailer knowledge about the program and availability of converter boxes.

The study, in which we visited 132 store locations in 12 cities, was 

conducted from April to early May 2008. We performed our review from 

February to September 2008 in accordance with generally accepted 

government auditing standards. Those standards require that we plan and

perform the audit to obtain sufficient, appropriate evidence to provide a 

reasonable basis for our findings and conclusions based on our review 

objectives. We believe that the evidence obtained provides a reasonable

basis for our findings and conclusions based on our audit objectives. 

• Private sector and federal stakeholders have undertaken various 

consumer education efforts to raise awareness about the DTV transition. 

For example, the National Association of Broadcasters (NAB) and the 

National Cable and Telecommunications Association have committed over 

$1.4 billion to educate consumers about the transition. This funding has 

supported the development of public service announcements, education 

programs for broadcast, Web sites, and other activities. In addition, most 

national retailers participating in the converter box subsidy program have 

Summary 

Page 2 GAO-08-1181T 
Digital Television Transition

developed consumer education campaigns to raise awareness of the DTV 

transition and the subsidy program. Federal stakeholders (FCC and NTIA) 

have developed consumer education plans that target those populations 

most likely to be affected by the DTV transition. In particular, they focused 

their outreach efforts on certain demographic groups, including seniors, 

low-income, minority and non-English speaking, rural households, and 

persons with disabilities. 

• NTIA is effectively implementing the converter box subsidy program, but 

plans to address the likely increase in coupon demand as the transition 

nears remain unclear. As of August 31, 2008, NTIA had issued 

approximately 24 million coupons and as of that date approximately 13 

percent of U.S. households had requested coupons. As found in our 

consumer survey, up to 35 percent of U.S. households could be affected by 

the transition because they have at least one television not connected to a

subscription service, such as cable or satellite.3

 In U.S. households relying 

solely on over-the-air broadcasts (approximately 15 percent), of those who 

intend to purchase a converter box, 100 percent of survey respondents 

said they were likely to request a coupon. Therefore, a spike in demand for 

converter box coupons is likely as the transition date nears. According to

NTIA, an increase in requests around the transition date may cause a delay 

in issuing coupons. However, we found NTIA has no specific plans to 

address an increase in demand and that it has encountered challenges in 

issuing coupons within its requirement of 10 to 15 days from the date the 

coupon application was approved. Given the challenges to meet this 

requirement and its lack of a clear plan to address a potential spike in 

demand, consumers might incur significant wait time to receive their 

coupons and might lose television service if their wait time lasts beyond 

February 17, 2009. In terms of participation in the converter box subsidy 

program, we analyzed coupon data in areas of the country comprised of 

predominantly minority and senior populations and found that 

participation varies. For example, we found that zip codes with a high 

concentration of Latino or Hispanic households had noticeably higher 

coupon request rates (28 percent) when compared to areas with 

predominantly non-Latino or non-Hispanic households (12 percent). We 

also found households in both predominantly black and Hispanic or Latino

areas were less likely, compared to households outside these areas, to 

redeem their coupons once they received them. Additionally, we analyzed 

participation in the converter box subsidy program in the 45 areas of the 

 3

GAO, Digital Television Transition: Broadcasters’ Transition Status, Low-Power 

Station Issues, and Information on Consumer Awareness of the DTV Transition, 

GAO-08-881T (Washington, D.C.: June 10, 2008). 

Page 3 GAO-08-1181T 
Digital Television Transition

country on which NTIA and FCC focused their consumer education efforts 

and found coupon requests to be roughly the same for zip codes within the 

45 targeted areas compared with areas that were not targeted.

The DTV transition will require citizens to understand the transition and 

the actions that some might have to take to maintain television service. 

For those households with subscription video service on all televisions or 

with all televisions capable of processing a digital signal, no action is 

required. However, households with analog televisions that rely solely on 

over-the-air television signals received through rooftop or indoor antennas 

must take action to be able to view digital broadcast signals after analog 

broadcasting ceases. The Digital Television Transition and Public Safety

Act of 2005 addresses the responsibilities of two federal agencies—FCC 

and NTIA—related to the DTV transition. The act directs FCC to require 

full-power television stations to cease analog broadcasting after February 

17, 2009. The act also directed NTIA to establish a $1.5 billion subsidy 

program through which households can obtain coupons towards the 

purchase of digital-to-analog converter boxes. In August 2007, NTIA 

selected International Business Machines Corporation (IBM) as the 

contractor to provide certain services for the program. On January 1, 2008, 

NTIA, in conjunction with IBM and in accordance with the act, began 

accepting applications for up to two $40 coupons per household that can 

apply toward the purchase of eligible digital-to-analog converter boxes 

and, in mid-February 2008, began mailing the coupons. Initially, during the 

first phase of the program any household is eligible to request and receive 

the coupons, but once $890 million worth of coupons has been redeemed,

and issued but not expired, NTIA must certify to Congress that the 

program’s initial allocation of funds is insufficient to fulfill coupon 

requests. NTIA will then receive $510 million in additional program funds, 

but households requesting coupons during this second phase must certify 

that they do not receive cable, satellite, or any other pay television service. 

As of June 24, 2008, in response to NTIA’s statement certifying that the 

initial allocation of funds would be insufficient, all appropriated coupon 

funds were made available to the program.4

 Consumers can request 

coupons up to March 31, 2009, and coupons can be redeemed through July 

9, 2009. As required by law, all coupons expire 90 days after issuance. As 

Background 

 4

With the additional $510 million, total program funding is $1.5 billion, which includes up to

$1.34 billion in coupon funds and up to $160 million in administrative funds. 

Page 4 GAO-08-1181T 
Digital Television Transition

unredeemed coupons expire, the funds obligated for those coupons are 

returned to the converter box subsidy program. 

Retailer participation in the converter box subsidy program is voluntary, 

but participating retailers are required to follow specific program rules to 

ensure the proper use and processing of converter box coupons. Retailers 

are obligated to, among other things, establish systems capable of 

electronically processing coupons for redemption and payment and 

tracking transactions. Retailers must also train their employees on the 

purpose and operation of the subsidy program. According to NTIA 

officials, NTIA initially explored the idea of setting requirements for 

training content, but decided to allow retailers the flexibility of developing 

their own training programs and provided retailers with sample training 

materials. Certification requires retailers to have completed an application 

form by March 31, 2008, and to attest that they have been engaged in the 

consumer electronics retail business for at least 1 year. Retailers must also 

register in the government’s Central Contractor Registration database,

have systems or procedures that can be easily audited and that can 

provide adequate data to minimize fraud and abuse, agree to be audited at 

any time, and provide data tracking each coupon with a corresponding 

converter box purchase. NTIA may revoke retailers’ certification if they 

fail to comply with these regulations or if any of their actions are deemed 

inconsistent with the subsidy program. Converter boxes can also be 

purchased by telephone or online and be shipped directly to a customer’s 

home from participating retailers. At the time of our review, 29 online

retailers were participating in the converter box subsidy program. 

Additionally, 13 telephone retailers were listed as participating in the 

program, 2 of which are associated with national retailers. 

Private sector stakeholders, such as broadcasters and cable providers, 

have undertaken various education efforts to increase public awareness 

about the DTV transition. The NAB and the National Cable and 

Telecommunications Association initiated DTV transition consumer 

education campaigns in late 2007 at an estimated value of $1.4 billion 

combined. NAB has produced six versions of a public service 

announcement, including 15-second and 30-second versions in both 

English and Spanish and close-captioned versions. Private sector 

stakeholders have also produced DTV transition educational programs for 

broadcast and distribution, developed Web sites that provide information 

on the transition, and engaged in various other forms of outreach to raise 

awareness. Additionally, most of the national retailers participating in the 

NTIA converter box subsidy program are providing materials to help 

Private and Federal 

Stakeholders Have 

Undertaken a Myriad 

of Activities Aimed at 

Increasing the 

Public’s Awareness of 

the Transition 

Page 5 GAO-08-1181T 
Digital Television Transition

inform their customers of the DTV transition and the subsidy program. 

Examples of these materials include informational brochures in English 

and Spanish, educational videos and in-store displays in English and 

Spanish, informational content on retailer Web sites, and information 

provided in retailer advertising in Sunday circulars. 

FCC and NTIA also have ongoing DTV consumer education efforts, which 

target populations most likely to be affected by the DTV transition. 

Specifically, they focused their efforts on 45 areas of the country that have

at least 1 of the following population groups: (1) more than 150,000 overthe-air households, (2) more than 20 percent of all households relying on

over-the-air broadcasts, or (3) a top 10 city of residence for the largest 

target demographic groups. The target demographic groups include 

seniors, low-income, minority and non-English speaking, rural households, 

and persons with disabilities. According to NTIA, its consumer education 

efforts will specifically target these 45 areas by leveraging partnerships 

and earned media spots (such as news stories or opinion editorials) to 

better reach the targeted populations. FCC indicated that while its 

outreach efforts focus on the targeted hard-to-reach populations, the only 

effort specifically targeting the 45 locations has been to place billboards in 

these communities. According to FCC, contracts exist for billboards in 26

of the 45 markets, and it is working to place billboards in the other 19 

markets. Furthermore, FCC and NTIA have developed partnerships with 

some federal, state, and local organizations that serve the targeted hard-toreach populations. 

Page 6 GAO-08-1181T 
NTIA has processed and issued coupons to millions of consumers, but a 

sharp increase in demand might affect NTIA’s ability to respond to coupon 

requests in a timely manner. NTIA and its contractors have implemented 

systems (1) to process coupon applications, (2) to produce and distribute 

coupons to consumers, and (3) for retailers to process coupons and 

receive reimbursement for the coupons from the government. Millions of 

consumers have requested converter box coupons and most of the 

requested coupons have been issued. Through August 2008, households 

had requested approximately 26 million coupons. NTIA had issued over 94 

percent of all coupon requests, for more than 24million coupons. Of those 

coupons issued, about 9.5 million (39 percent) had been redeemed and 31 

percent had expired.5

 After an initial spike at the beginning of the program, 

coupon requests have remained steady and have averaged over 105,000 

requests per day. Coupon redemptions, since coupons were first issued in 

February 2008, have averaged over 48,000 per day. 

In our consumer survey, we found that 35 percent of U.S. households are 

at risk of losing some television service because they have at least one 

television not connected to a subscription service, such as cable or 

satellite. However, through August 2008, only 13 percent of U.S. 

households had requested converter box coupons, and less than 5 percent 

had redeemed these coupons. As the transition date nears, there is the 

potential that many affected households that have not taken action might 

begin requesting coupons. Our consumer survey found that of those at risk 

of losing some television service and intending to purchase a converter 

box, most will likely request a coupon. In fact, in households relying solely

on over-the-air broadcasts (approximately 15 percent), of those who 

intend to purchase a converter box, 100 percent of survey respondents 

said they were likely to request a coupon. 

Consumers have incurred significant wait times in the processing of their 

coupon requests, but the processing time from receiving requests to 

issuing coupons is improving. NTIA requires that 98 percent of all coupon

requests be issued within 10 days, and the remainder be issued within 15 

days. From February 17 through August 31, 2008, our analysis shows that 

the average duration between coupon request and issuance was over 16 

NTIA is Effectively 

Implementing the 

Converter Box 

Subsidy Program, But 

Concerns Exist about 

NTIA’s Ability to 

Manage a Potential 

Spike in Demand 

 5

Our redemption rate was calculated by dividing the number of redeemed coupons by the 

total number of issued coupons as of August 31, 2008. The total number of issued coupons

includes coupons which had been redeemed, had expired, and had not yet expired as of

that date. 

Page 7 GAO-08-1181T Digital Television Transition
Digital Television Transition

days.6 In aggregate, 53 percent of all coupon requests had been issued 

within 10 days, and 39 percent of all coupon requests had been issued 

more than 15 days after being requested. From May 1 through August 31, 

2008, the average processing time from coupon request to issuance was 9 

days. 

Given the processing time required in issuing coupons, NTIA’s 

preparedness to handle volatility in coupon demand is unclear. 

Fluctuation in coupon requests, including the potential for a spike in 

requests as the transition date approaches, could adversely affect 

consumers. When NTIA faced a deluge of coupon requests in the early

days of the converter box subsidy program, it took weeks to bring down 

the deficit of coupons issued to coupons requested. According to NTIA, it 

expects a similar increase in requests around the transition date, and such 

an increase may cause a delay in issuing coupons. As a result, consumers 

might incur significant wait time before they receive their coupons and 

might lose television service during the time they are waiting for the 

coupons. While NTIA and its contractors have demonstrated the capacity 

to process and issue large numbers of coupon requests over short periods, 

they have yet to establish specific plans to manage a potential spike or a 

sustained increase in demand leading up to the transition. 

We analyzed data to compare areas of the country that comprise 

predominantly minority and elderly populations with the rest of the U.S. 

population and found some differences in the coupon request, redemption, 

and expiration rates for Hispanic, black, and senior households compared 

with the rest of the U.S. population. For example, zip codes with a high 

concentration of Latino or Hispanic households had noticeably higher 

request rates (28 percent) when compared with non-Latino or nonHispanic zip codes (12 percent). However, households in predominantly 

black and Latino or Hispanic zip codes were less likely, compared with 

households outside these areas, to redeem their coupons once they 

received them. As shown in table 1, the overall rate of redemption for the

converter box subsidy program is 39 percent. Approximately 37 percent of

coupons have been redeemed in predominantly Latino or Hispanic areas. 

In predominantly black areas, 32 percent of coupons have been redeemed.

We found that in areas of the country with a high concentration of seniors, 

 6

For the purposes of our analysis, we assumed that all coupons were issued in the order 

they were received. According to NTIA, coupon issuance was to begin 1 year from the

transition. Therefore the processing time between coupon requests and issuance was 

calculated beginning on February 17, 2008. 

Page 8 GAO-08-1181T 
Digital Television Transition

fewer coupons were requested (9 percent) compared with areas of the 

country that did not have a high concentration of seniors (13 percent). 

Redemption rates for the senior population were lower than the 

redemption rates in the rest of the country. Regarding coupon expirations,

we found that the areas comprising Latino or Hispanic households allowed 

27 percent of their coupons to expire, while areas with predominantly 

senior populations allowed 43 percent of their coupons to expire. 

Table 1: Request, Redemption, and Expiration Rates of Converter Box Coupons 

through August 2008

Request rate Redemption rate Expiration rate

U.S. population 12.5 39.0 30.5

Latino or Hispanic 27.5 36.6 26.8

Black 13.4 31.5 30.3

Seniors 8.7 34.0 43.2

Source: GAO analysis of NTIA data. 

To determine participation in the converter box subsidy program in the 45 

areas of the country receiving targeted outreach by NTIA and FCC, we 

analyzed NTIA coupon data (including requests, redemptions, and 

expirations) in the 45 areas compared to the rest of the country not 

targeted by NTIA and FCC. We found participation levels were about the 

same in the targeted areas when compared to the rest of the country. For 

example, we found in the 45 targeted areas, 12.2 percent of households 

have requested coupons compared with 12.8 percent for the rest of the 

country not targeted by NTIA and FCC. According to NTIA, similarities in 

request, redemption, and expiration rates between the 45 targeted areas 

and the rest of the country is viewed as a success.

As the sellers of the converter boxes, retailers play a crucial role in the 

converter box subsidy program and are counted on to inform consumers 

about it. At the time of our review, seven national retailers were certified 

to participate in the subsidy program. Participating retailers are obligated 

to, among other things, train employees on the purpose and operation of

the subsidy program. All of the retailers with whom we spoke told us they 

were training employees on the DTV transition and the subsidy program, 

although the retailers varied in which staff must complete training. 

As part of our work, we conducted a “mystery shopper” study by visiting

132 randomly selected retail locations in 12 cities across the United States 

Page 9 GAO-08-1181T 
Digital Television Transition

that were listed as participating in the converter box subsidy program. We 

did not alert retailers that we were visiting their stores or identify 

ourselves as government employees. During our visits, we engaged the 

retailers in conversation about the DTV transition and the subsidy 

program to determine whether the information they were providing to 

customers was accurate and whether individual stores had coupon-eligible

converter boxes available. While not required to do so, some stores we 

visited had informational material available and others had signs 

describing the DTV transition and the subsidy program. We also 

determined whether the information that retailers were providing to 

customers was accurate and whether individual stores had coupon-eligible

converter boxes available. At most retailers (118) we visited, a 

representative was able to correctly identify that the DTV transition would 

occur in February 2009. Additionally, nearly all (126) retailers identified a 

coupon-eligible converter box as an option available to consumers to 

continue watching television after the transition. Besides coupon eligible

converter boxes, representatives identified other options to continue 

viewing television after the transition, including purchasing a digital 

television (67) or subscribing to cable or satellite service (77). However, in 

rare instances, we heard erroneous information from the retailers, 

including one representative who told us that an option for continuing to 

watch television after the transition was to obtain a “cable converter box” 

from a cable company and another representative who recommended 

buying an “HD tuner.” Since participating retailers are obligated to train 

their employees on the purpose and operation of the subsidy program, we 

observed whether the representative was able to explain various aspects 

about the subsidy program. A vast majority of the representatives were 

able to explain how to receive or apply for a coupon and the value of the 

coupon. 

Although we could obtain information from the majority of the stores that 

we visited and that were listed as participating in the subsidy program, in a 

few instances, we were not able to ask questions and observe whether the 

information provided was accurate. In two instances, there was no retailer 

at the store location listed as a participating retailer on NTIA’s Web site 

(https://www.dtv2009.gov/VendorSearch.aspx). In another instance, the 

location listed was under construction and had not yet opened. In two 

additional instances, the locations listed were private residences—one 

was an in-home electronics store, and the other was a satellite television 

installer working from a house. We asked NTIA how it ensured the 

accuracy of the list of participating retailers on its Web site, and according 

to NTIA, ensuring the accuracy of the list is the responsibility of the 

retailers. NTIA said it provides a list of locations to each retailer prior to 

Page 10 GAO-08-1181T 
Digital Television Transition

placing the list on the Web site, and retailers can update addresses or add 

new listings as warranted. 

NTIA estimates that it will see a large increase in the number of coupon 

requests in the first quarter of 2009 and our analysis confirms that, as the 

transition nears, a spike in coupon requests is likely. However, NTIA has 

not developed a plan for managing that potential spike or sustained 

increase in coupon demand. The time required for processing coupons has 

improved since consumers incurred significant wait times to receive their 

coupons at the beginning of the program, but until recently NTIA fell short 

of its requirement for processing coupons within 10 to 15 days. Given the 

relatively low participation rates to date and the amount of time it took to 

process the spike in coupon requests in the early days of the program, 

NTIA’s ability to handle volatility in coupon demand without a plan is 

uncertain. Consequently, consumers face potential risks that they might 

not receive their coupons before the transition and might lose their 

television service. 

To help NTIA prepare for a potential increase in demand for converter box 

coupons and so that consumers are not left waiting a lengthy amount of 

time for requested coupons, the report we issued September 16, 2008, 

recommended that the Secretary of Commerce direct the Administrator of 

the NTIA to develop a plan to manage volatility in coupon requests so that 

coupons will be processed and mailed within 10-15 days from the day the 

coupon applications are approved, per NTIA’s stated requirement. 

In reviewing a draft of the report, the Department of Commerce (which 

contains NTIA) did not state whether it agreed or disagreed with our 

recommendation, but did say the Department shares our concern about an 

increase in coupon demand as the transition nears. Further, its letter 

stated it is committed to doing all that it can within its statutory authority 

and existing resources to ensure that all Americans are ready for the DTV 

transition. In its letter, FCC noted consumer outreach efforts it has taken 

related to the DTV transition. 

Mr. Chairman, this concludes my prepared statement. I would be happy to

respond to any questions you or other Members of the Committee may 

have at this time. 

Conclusions and 

Recommendation 

Page 11 GAO-08-1181T 
For further information about this testimony, please contact Mark L. 

Goldstein at (202) 512-2834. Individuals making key contributions to this 

testimony included Colin Fallon, Simon Galed, Eric Hudson, Bert Japikse, 

Aaron Kaminsky, Sally Moino, Michael Pose, and Andrew Stavisky. 

Page 12 GAO-08-1181T Digital Television Transition

GAO Contact and 

Staff 

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