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[Senate Hearing 110-760]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 110-760
 
                    OVERSIGHT OF THE DTV TRANSITION

=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 8, 2008

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation

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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                   DANIEL K. INOUYE, Hawaii, Chairman
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska, Vice Chairman
    Virginia                         JOHN McCAIN, Arizona
JOHN F. KERRY, Massachusetts         KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
BARBARA BOXER, California            GORDON H. SMITH, Oregon
BILL NELSON, Florida                 JOHN ENSIGN, Nevada
MARIA CANTWELL, Washington           JOHN E. SUNUNU, New Hampshire
FRANK R. LAUTENBERG, New Jersey      JIM DeMINT, South Carolina
MARK PRYOR, Arkansas                 DAVID VITTER, Louisiana
THOMAS R. CARPER, Delaware           JOHN THUNE, South Dakota
CLAIRE McCASKILL, Missouri           ROGER F. WICKER, Mississippi
AMY KLOBUCHAR, Minnesota
   Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
Lila Harper Helms, Democratic Deputy Staff Director and Policy Director
   Christine D. Kurth, Republican Staff Director and General Counsel
                  Paul Nagle, Republican Chief Counsel

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 8, 2008....................................     1
Statement of Senator Carper......................................    37
Statement of Senator Hutchison...................................     3
Statement of Senator Inouye......................................     1
Statement of Senator Klobuchar...................................     6
Statement of Senator McCaskill...................................    33
Statement of Senator Pryor.......................................    29
Statement of Senator Smith.......................................     5
Statement of Senator Stevens.....................................     2
Statement of Senator Sununu......................................     4
Statement of Senator Thune.......................................    42
Statement of Senator Wicker......................................    36

                               Witnesses

Baker, Meredith Attwell, Acting Assistant Secretary for 
  Communications and Information, National Telecommunications and 
  Information Administration, Department of Commerce.............    19
    Prepared statement...........................................    21
Martin, Hon. Kevin J., Chairman, Federal Communications 
  Commission.....................................................     7
    Prepared statement...........................................    11

                                Appendix

Cantwell, Hon. Maria, U.S. Senator from Washington, prepared 
  statement......................................................    48
Kerry, Hon. John F., U.S. Senator from Massachusetts, prepared 
  statement......................................................    47
Nelson, Hon. Bill, U.S. Senator from Florida, prepared statement.    47
Response to written questions submitted to Meredith Attwell Baker 
  by:
    Hon. Maria Cantwell..........................................    59
    Hon. Kay Bailey Hutchison....................................    61
    Hon. Daniel K. Inouye........................................    56
    Hon. Bill Nelson.............................................    57
Response to written questions submitted to Hon. Kevin J. Martin 
  by:
    Hon. Maria Cantwell..........................................    53
    Hon. Kay Bailey Hutchison....................................    56
    Hon. Daniel K. Inouye........................................    49
    Hon. John F. Kerry...........................................    50
    Hon. Bill Nelson.............................................    52

                    OVERSIGHT OF THE DTV TRANSITION

                              ----------                              

                         TUESDAY, APRIL 8, 2008

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:30 p.m. in room 
SR-253, Russell Senate Office Building, Hon. Daniel K. Inouye, 
Chairman of the Committee, presiding.

          OPENING STATEMENT OF HON. DANIEL K. INOUYE, 
                    U.S. SENATOR FROM HAWAII

    The Chairman. Our nation relies on television for news, 
information, and entertainment. With February 17, 2009 only 10 
months away, too many Americans remain in the dark about what 
the digital television transition means. A recent Consumer 
Union survey found that 74 percent of consumers who know about 
DTV transition have major misconceptions about what it means. 
The same survey found that a staggering 73 percent were unaware 
of the government program created to offset the cost of 
purchasing converter boxes. And the members of this Committee 
find these numbers to be very troubling.
    The FCC and the NTIA have been charged with ensuring that 
the DTV transition proceeds smoothly. I think all of us agree 
that the stakes are very high, and it is imperative that these 
two agencies make a success of this transition, as their number 
one priority. I realize there are a number of important 
challenges facing the FCC, including the question on how to 
proceed with the auction of the D Block. We have deep 
reservations about the FCC spending its limited time and 
resources in media areas unrelated to the transition. 
Meanwhile, the NTIA is challenged by the Administration's push 
for a third leadership change in the agency within the past 
year.
    And so I urge both agencies to keep an eye on what is most 
pressing, and to proceed cautiously when you choose to spend 
time on what is not. To ensure that you focus on the task at 
hand, I ask that both the FCC and the NTIA provide the members 
of this Committee with a monthly status report regarding the 
status of this transition, as well as your continuing 
challenges. I request that you work with our staff to 
coordinate the details.
    A few moments ago, I was chatting with a young lady about 
this transition, and she was telling me about her grandmother. 
And I can imagine grandmothers waking up the morning of the 
17th, turning on their TV set, and all of a sudden nothing 
appears. It would be a sad day for all of us. So I think we 
should try our very best, very best.
    May I ask my Vice Chairman.

                STATEMENT OF HON. TED STEVENS, 
                    U.S. SENATOR FROM ALASKA

    Senator Stevens. Thank you very much, Mr. Chairman. Thank 
you for holding the hearing. It's nice to see Chairman Martin 
and Secretary Baker appear here today. Our nation faces an 
historic change in less than 1 year, and Americans will reap 
the benefits of this transition, in my judgment. First, public 
safety will receive an additional 24 megahertz. Second, public 
safety will also receive critical funding from the proceeds of 
the digital transition. And third, the viewers will enjoy DVD-
quality signals and increased programming through multi-
casting.
    It's crucial that government officials, industry, and 
consumer advocacy groups maintain a continuous drumbeat 
throughout this next year in outreach efforts. I am 
particularly concerned that elderly viewers and rural and 
remote residents are adequately informed. Our Alaska residents 
in villages are the most remote people in this country, and 
they have the same right to receive information about the 
transition as Americans who live in large cities.
    In that view, my office has been trying to help out by 
working with local groups such as our broadcasters, AARP 
representatives, Native groups, senior centers, and the Postal 
Service to ensure that the message about this converter box 
program gets out to all Alaskans. We have also made the 
converter box applications available through my website and 
through my district offices in Alaska.
    But, there are particular issues that need the attention, I 
think, of our witnesses. I'm pleased that they would come and 
be with us today. I hope to learn about several problems. 
First, it's my understanding that the current coupon program 
does not allow applicants to use a post office box address on 
their converter box application. That's a particular concern to 
residents of our state because, in many instances, a post 
office box is the only address that they have.
    Second, many are concerned that there are only a limited 
number of converter box models. Seven I am told of the 66 
certified converter boxes have an ``analog'' pass-through 
capability, which is a capability that's important in areas 
that receive broadcasting from low-power stations and 
translator stations, that's what I've been informed. That 
situation is just--in many places in rural America.
    Finally, let me say Mr. Chairman, I am pleased to hear the 
FCC has listened to concerns that have been raised previously 
regarding the undue burden that small cable operators could 
face if they are required by the FCC to carry both an analog 
and digital signal. The capacity of their systems is--is small 
and such a requirement could threaten to put them out of 
business, resulting in the loss of local jobs and local cable 
for many viewers in rural parts of the country. And I commend 
and thank the FCC for responding to that issue and taking a 
look at it.
    And I look forward to learning how your agencies are 
addressing other issues. And, I encourage both of you to 
consider the digital transition as the number one priority 
issue during this whole year, rather than take on new 
burdensome issues that don't have the same critical aspects and 
are not subject to the critical countdown that is involved in 
the digital issues. I don't want to get offensive but there are 
other issues that are just not time sensitive, a la carte for 
instance and net neutrality. In my judgment they are solutions 
looking for a problem. But we have a major problem; the major 
problem is digital transition, and I hope we all keep our eye 
on that problem. If we work hard together, I think we can get 
the job done. We here have brought about this problem and we 
know the solution can only be achieved through hard work of 
everybody concerned. So we look forward to working with you and 
thank you very much for being here.
    The Chairman. Thank you very much.
    Senator Hutchison?

            STATEMENT OF HON. KAY BAILEY HUTCHISON, 
                    U.S. SENATOR FROM TEXAS

    Senator Hutchison. Thank you, Mr. Chairman. I do appreciate 
your holding this hearing, because I share your concerns, and 
Senator Stevens', about the awareness of the public about this 
important transition that is going to occur 315 days from now.
    My staff--because of our proximity with Mexico--my staff 
recently went down to South Texas and had about a dozen forums, 
all in the Texas cities along the border, to discuss the 
transition and try to raise the awareness at the local level 
about what can be done now. And, what they encountered was very 
different from what I have heard in other parts of the State. 
There is confusion about which households are affected, how to 
obtain and redeem the converter box coupons, and which 
retailers are carrying the converter boxes.
    We do have public service announcements, and that is 
important, but I think that it's not nearly enough. So, I 
certainly look forward to hearing ideas on other outreach 
activities that we can conduct as we move into this critical 
period leading up to the transition.
    I recently distributed educational pamphlets throughout 
Texas to raise awareness and encourage leaders to engage in 
outreach at the grassroots level. I'm also working with aging 
agencies, health and human services professionals, and other 
organizations throughout my State, and we have begun to help 
them with aggressive outreach and volunteer activities, 
including coupon registration drives.
    The outreach there, though, has revealed some unique 
challenges in the border region. The Rio Grande Valley has more 
than 300,000 households, more than one-third of these rely on 
antennas for reception. Yet, according to the most recent 
Commerce Department data, less than 10,000 coupons have been 
ordered for this area, so it's a major concern.
    Also, we have the situation where television stations on 
the Mexican side of the border, which are played in--in Texas, 
on our side of the border, will continue analog broadcasting. 
So they may be reaching households in South Texas, whereas 
American broadcasters would not. I introduced a bill with 
Barbara Boxer in late December that establishes a process for 
broadcasters in the border regions to apply to the FCC for 
permission to continue both analog and digital broadcasting 
after the transition, for a limited time.
    Mexican stations are not required to carry AMBER Alert and 
Emergency Alert System messages, so I am concerned that a 
significant number of households along the border are going to 
be denied access to important public safety information, 
because they may be just watching Mexican stations after the 
transition.
    I will continue to push for a limited process that grants 
the FCC the flexibility to review applications by border 
broadcasters only, to continue simulcasting if doing so serves 
the public interest.
    I understand, on the converter boxes, that there is another 
issue that has been raised during these forums. And that is 
that some of the low-power stations, including some university 
stations and religious broadcasters believe that many models of 
the converter box lack the capability to pass through the 
analog signals that they will continue using after the 
transition. This is obviously a great concern to residents that 
rely on these stations, as well as the stations, to make sure 
that the converter boxes will work for every type of 
transmission.
    So, I thank you for holding the hearing. We are trying to 
address these issues. We're doing everything we know, right 
now, to increase public awareness of the upcoming deadline. And 
so, I hope that we can pursue some of these things. I do have 
questions that I would like to submit for the record. I can't 
stay--sorry--I have a 3 o'clock meeting, but I will get the 
testimony that you have given us and I will also submit 
questions for the record.
    Mr. Chairman, thank you very much.
    The Chairman. Thank you very much.
    Senator Sununu?

               STATEMENT OF HON. JOHN E. SUNUNU, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Sununu. Thank you very much, Mr. Chairman.
    And appreciate both of our panelists being here today. I 
think you hear, perhaps, one important message coming from all 
of the members of the committee, and that is first and foremost 
that this is an important transition and it's going to require 
a great deal of attention by the Commission and by NTIA, and 
people at the Department of Commerce to make sure that it goes 
smoothly.
    That means we need to focus on information sharing, because 
I think getting information into consumers' hands is going to 
be the key to it working as smoothly as possible. If the 
consumer has a good experience, from their perspective, in 
installing a converter box and upgrading their television, it 
should be seamless. And I think it's going to be a very 
positive process. If they have problems, if they get the wrong 
equipment, if the issue of boxes that don't have pass-through 
capability is problematic, we're going to hear about it, you're 
going to hear about it. No one's going to be happy about the 
process. So, we need to remain focused on sharing that 
information.
    I do think there are a few other important issues that the 
Commission needs to stay focused on. On the heels of a modestly 
successful auction, I think there is an opportunity to go back 
and address the big problems that we had in one area of the 
spectrum auction, and that's the D Block. It was extremely 
disappointing not to yield the price that even met the reserve 
level. I don't think we can just go back and drop the reserve 
level. That would be a disservice to taxpayers. I think we've 
got a much better opportunity to re-auction the D Block, yield 
and realize a much higher return, get rid of some of the 
encumbrances that resulted in such a low--a low price limited 
offers, maybe even structure the auction in a way that benefits 
some of the smaller providers, smaller wireless carriers that 
didn't participate as fully as some would have liked in the 
auction process.
    So, there is an opportunity there, but I think it's 
something that needs to be addressed quickly and in an 
expeditious way, and I hope that the Commission will do that. 
We've also talked before about the importance of addressing the 
technological issues associated with white spaces. Again, this 
represents an opportunity for the Commission to enact rules 
that allow more spectrum to be available for broadband access, 
for Internet access in rural parts of the country, underserved 
parts of the country. And I think both of those are proceedings 
and areas of rulemaking that are well developed and well 
underway. I think there is a lot of opportunity there.
    Conversely, some of the more controversial issues, must-
carry rules, Internet regulation, price controls, such as a la 
carte. In most cases, these are issues that have already been 
dealt with by the Committee. I know the last time that we dealt 
with price controls and a la carte pricing, I think the vote 
was 20 to 2 against such price controls. And I would hope that 
something like that doesn't occupy a lot of the Commission's 
time, because in all likelihood we're going to end up right 
where we are today, with the Committee having fairly strong 
views on the subject.
    So, I think we need to remain--we need to remain focused, 
in effect, pick the targets and the opportunities carefully, 
both at Commerce and at the Commission. And if we do so, I 
think through the remainder of this year, we can see success, 
not just in the digital transition, but success in making more 
spectrum, more opportunities available for innovators, for 
investors, and of course, for consumers.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Senator Smith?

              STATEMENT OF HON. GORDON H. SMITH, 
                    U.S. SENATOR FROM OREGON

    Senator Smith. Thank you, Mr. Chairman.
    I want to echo what I've heard my colleagues say and 
Senator Stevens in particular, there isn't a more important 
issue you have at the FCC this year than this issue. And we're 
counting on you to get it right, and if you don't, we're going 
to hear a lot about it in a year. Right now, millions of 
Oregonians are tuning in to broadcast TV to cheer on fellow 
Oregonian Kristy Lee Cook on American Idol--Go Kristy Lee! But 
these same Oregonians, in the fall, may want to watch the 
Oregon Ducks play the Oregon State Beavers, and all they're 
going to find is fuzz. And, I don't want that to be the case.
    I remain concerned that public awareness of DTV transition 
is extremely low. And, a high percentage of households that 
will be impacted by the transition are two I want you to focus 
on--elderly and rural.
    According to AARP, of the roughly 21 million households 
that are going to be impacted, nearly half of those will 
include somebody over the age of 50. Now, I'm over the age of 
50 and I hope I've figured it out, but there are a lot of folks 
in nursing homes that are not getting the information or where 
they get their TV. Nursing homes are not being given these 
transition boxes, and they need to be. I fear there will be an 
immense amount of confusion among rural Americans, rural 
Oregonians, who currently do not get their television over the 
air from the signal normally, but through repeaters or 
translators, and not from a full-power television station.
    I'm troubled about the fact that many of those repeaters 
will not be transitioning to digital until well after the 
deadline, and the adverse effects and possible confusion may 
result over this issue among rural households.
    I'll be interested in hearing, today, what you all are 
doing to raise public awareness. And again, there just isn't a 
more important issue before you this year.
    Thanks, Mr. Chairman.
    The Chairman. Thank you.
    Senator Pryor?
    Senator Pryor. I don't have any statement. Thank you, Mr. 
Chairman.
    The Chairman. Thank you.
    Senator Klobuchar?

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Thank you, Mr. Chairman.
    Chairman Martin, thank you for coming today. We've been 
focused on this a lot in my State over the last few months. 
Best Buy is one of the companies that's taken a lead on this, 
in terms of trying to get the information out. Target's also 
working on it. But I still continue to be concerned because we 
are just 10 months from the February 17, 2009 transition date, 
and recent surveys have shown--and I know there are conflicting 
surveys--but they've shown that consumer awareness, while it 
has grown, many people do not know that the transition is 
coming.
    And I know, just talking to them, there is some confusion 
about, you know, the converter box, if they're supposed to buy 
that, or if they have to get cable, which of course, we tell 
them that they don't have to get, but that continues to be a 
problem.
    As you know, we have 430,000 households that rely 
exclusively on over-the-air television in Minnesota. That's 
more than 20 percent of the households in my State. So the 
education of consumers continues to be a very important issue 
for me, and then I'm also curious--and we'll talk about this, 
on some of these more detailed issues about falling over the 
digital cliff in areas where, maybe it is more problematic 
because they're different, in terms of the signal and what will 
happen.
    Thank you very much. I look forward to hearing your 
testimony.
    The Chairman. Thank you very much.
    We are pleased to have, this afternoon, two very 
knowledgeable witnesses. First, the Chairman of the Federal 
Communications Commission, the Honorable Kevin Martin. And 
second, the Acting Assisting Secretary of Commerce for 
Communications and Information, National Telecommunications 
Information Administration, Meredith Attwell Baker.
    May I call upon Chairman Martin?

         STATEMENT OF HON. KEVIN J. MARTIN, CHAIRMAN, 
               FEDERAL COMMUNICATIONS COMMISSION

    Mr. Martin. Good afternoon, Chairman Inouye, Vice Chairman 
Stevens, and Members of the Committee. Thank you for inviting 
me to be here today to update you on the status of the digital 
transition.
    On February 17, 2009, all full-power television stations in 
the country will stop broadcasting analog and begin 
broadcasting exclusively in digital. The DTV transition will be 
a historic moment in the evolution of television. Television 
viewers will be able to enjoy movie-quality pictures and sound 
and potentially new programming choices.
    It will also allow us to significantly improve public 
safety communications and will usher in a new era of advanced 
wireless services, including the wide-spread deployment of 
wireless broadband.
    A successful digital transition will depend upon minimizing 
the burdens on consumers and maximizing their ability to 
benefit from it.
    Now according to recent polling data, consumer awareness of 
the transition has grown. Last month the Association of Public 
Television Stations released a survey finding consumer 
awareness of the transition increased from 51 percent to 76 
percent in just 3 months. In addition, they found that roughly 
62 percent of over-the-air consuming households, who are aware 
of the transition, indicated they would buy a converter box or 
digital TV, between now and when the transition takes effect. 
This is dramatically up since November of 2006, when only 28 
percent of the over-the-air households said they would take one 
of these options.
    That more and more viewers are aware of the transition is a 
step in the right direction; however, we still have more work 
to do. For example, that same Association found that 17.5 
percent of over-the-air consumers who are aware of the 
transition, don't know what they will do, and roughly 10 
percent said they would do nothing.
    Taken together, these recent surveys indicate that too many 
Americans remain confused about what they need to do to prepare 
for the digital transition. This recently released data also 
demonstrates that facilitating a successful DTV transition is 
an enormous undertaking, and it is one which no single entity, 
public or private, can achieve alone, rather it requires the 
commitment and cooperation of government, industry, and 
consumer groups. And we have made that commitment and are 
actively working with these important stakeholders.
    Today's hearing is a welcome opportunity to discuss our 
work with all of our DTV partners in the public and private 
sectors, both in terms of outreach and education, and necessary 
regulatory steps to ensure that Americans can share the 
benefits of this historic transition.
    The Commission has been working to put in place the rules 
and policies to enable broadcasters to complete the conversion 
from analog to digital. Last August, the Commission adopted the 
final DTV Table of Allotments, based upon the channel elections 
made by full-power stations. This order provided virtually all, 
over 99 percent of the TV stations across the country, with 
their final digital television channel assignments.
    In December of 2007, we also concluded our third DTV 
Periodic Review. This order adopted the procedures and rules to 
guide broadcasters through the end of the transition. It's 
particularly important that broadcasters' progress be carefully 
monitored. Accordingly, we required each station to file a 
report on the status of the construction of their post-
transition facilities. All stations have now submitted their 
first such report, and over 1,000 have indicated they were 
completely finished with their DTV transition and are already 
providing full service to their viewers.
    Much of the focus of our consumer education efforts has 
been on the approximately 15 million homes that rely on over-
the-air broadcast signals. These efforts have presumed that 
subscribers to cable and satellite will continue to be able to 
receive digital broadcast signals, just as they receive analog 
broadcast signals today.
    It is critical to note, however, that our rules needed to 
be modified to clarify that after the transition, cable and 
satellite companies are required to carry digital broadcast 
signals to their customers, just as they do analog signals 
today. Our goal of both of these orders was not to expand 
carriage, but to ensure that broadcasters' switch from analog 
to digital was not used as an excuse by cable operators to stop 
carrying broadcasters' signals in a format that could be viewed 
by all subscribers.
    Last fall the Commission adopted an order that guarantees 
the 35 million analog subscribers will not be left in the dark 
once the broadcasters ceased broadcasting in analog. I do 
understand the small cable systems are capacity constrained. In 
order to address this problem, I am circulating today, a 
proposal to my colleagues that would give cable systems with 
552 megahertz or smaller capacity an exemption from carrying HD 
signals, as the Commission required back in 2001. A system of 
this size does not need to file a waiver request, they would 
automatically be relieved of this 2001 obligation to carry the 
HD signal.
    In addition, swift enforcement of our DTV-related rules is 
critical to protecting consumers and reducing potential 
confusion. The Commission's DTV-related enforcement efforts 
have focused on protecting consumers from unknowingly buying 
televisions that won't receive broadcast stations following the 
transition.
    With respect to the Commission's labeling requirement, the 
Commission has, as of April 7, 2008, inspected 2,176 retail 
stores, 36 websites, and issued 347 citations notifying 
retailers of violations for failing to comply with our 
requirements.
    Additionally, we have 14 Notices of Apparent Liability, 
containing fines totaling nearly $5 million, which are 
currently scheduled to be considered by the Commission at our 
next open meeting later this week. In addition to those NAL's, 
the Enforcement Bureau has also issued another 7 NAL's worth, 
about $104,000.
    In addition to our labeling investigations, we are 
continuing to ensure that no manufacturers are importing and 
shipping analog-only televisions. NAL's for apparent violations 
of our rules in this area are also scheduled to be considered 
at this week's meeting.
    And third, we are ensuring that our digital tuners comply 
with the V-Chip regulations, and we have 9 NAL's with fines 
totaling $6.5 million, which are scheduled to be considered at 
the Commission's meeting, again, later this week.
    In order to educate consumers properly, all parties 
involved in the transmission--the FCC, NTIA, broadcasters, the 
cable industry, satellite, manufacturers, retailers and 
consumer groups--need to work together to educate consumers.
    In February, the Commission adopted an order that, among 
other initiatives, requires broadcasters to provide on-air 
information to their viewers about the DTV transition, and 
requires MVPDs to provide monthly inserts about the DTV 
transition in their customers' bills.
    In addition to our DTV education item, the Commission is 
actively, and directly, promoting consumer awareness in the 
upcoming transition, through its own education and outreach 
efforts. The FCC's outreach efforts place an emphasis on 
consumers who receive their television signals over the air, 
and on those who are hard to reach and may be unaware of the 
upcoming transition, including senior citizens, non-English 
speaking and minority communities, people with disabilities, 
low-income individuals, and those living in rural and tribal 
areas.
    For example, beginning in July, DTV education posters will 
be displayed in all 34,000 post offices around the country. The 
United States Postal Service estimates that an average of 9 
million people pass through their post office lobbies each day. 
We have also secured commitments from 25 States to display DTV 
materials in 1,100 Department of Motor Vehicle locations. For 
example, we have secured commitments from Alaska, Hawaii, 
Missouri, New Hampshire, North Dakota, Puerto Rico, Washington 
and West Virginia.
    In addition, we have identified and contacted 150 mayors' 
offices in the areas of the country with high concentrations of 
over-the-air households, to seek their help to educate 
consumers in their communities. For example, the mayor's office 
in Great Falls, Montana, has requested 21,000 DTV flyers to 
send to their utility customers in all of their utility bills.
    We've also reached out to the country's major professional 
sports leagues, and have received offers to help promote the 
transition--the NFL, the NBA, the NHL, Major League Baseball, 
and NASCAR--have all agreed to help raise awareness among their 
fans. For example, the NHL has agreed to run ten 30-second PSAs 
per day until the transition date on their cable channel, the 
NHL Network.
    Since the last time I appeared before you, Congress has 
also allocated additional money to the Commission to spend on 
consumer education efforts, and we intend to put these 
resources to good use, as these additional funds will allow the 
Commission to expand upon its current consumer outreach and 
education plans.
    In February, we awarded a contract to Ketchum, to support a 
broad range of consumer education services, including media 
services, publications and distribution. To spread the word 
about the transition, Ketchum arranged a satellite media tour 
in February for local television news stations around the 
country, including those in Hawaii, Missouri, Texas and 
Florida, and Ketchum will be arranging similar satellite 
interviews throughout the transition.
    Other efforts with them include billboards in targeted 
markets, grocery store marketing and outreach, and production 
of television and radio public service announcements.
    As I mentioned, we also know that some consumers will be 
disproportionately impacted by the transition, and are harder 
to reach than the population at large. And therefore, we've 
been taking specific steps to reach particular groups. For 
example, starting last year, FCC field agents have held DTV 
awareness sessions, and distributed information to senior 
centers, and other venues frequented by senior Americans.
    Through the work of our field agents, we have been able to 
reach these consumers in a total of 44 States. We have 
distributed information to over 3,000 senior centers, and 985 
community centers, which include large numbers of seniors, and 
given nearly 589 presentations, and 113 more scheduled in the 
just the days ahead.
    Last September, we presented two DTV education sessions at 
the national AARP convention, and we have plans to make similar 
presentations at this year's convention and 8 road shows that 
AARP is holding around the country.
    We also know the Hispanic community disproportionately 
relies on over-the-air television. Of the approximately 14.3 
million broadcast-only homes, about 16.5 percent are headed by 
persons of Hispanic origin. The Hispanic Chamber of Commerce 
has agreed to join the Commission in conducting DTV awareness 
sessions, and member chambers in the 15 U.S. cities with the 
largest number of Hispanic television in homes.
    In addition, we've partnered with Univision to hold DTV 
awareness sessions at town hall meetings. Through these 
partnerships, we will reach cities that are home to over 80 
percent of the Hispanic community.
    The Commission is continuing a multi-faceted approach and 
informing people with disabilities about the DTV transition. On 
February 28th of this year, we held a workshop dedicated to DTV 
issues facing people with disabilities. And in response to two 
suggestions by panelists, we have drafted a step-by-step guide 
on how to install a digital-to-analog converter box, and posted 
it on the Commission's website.
    The Commission is also taking specific steps to help inform 
low-income consumers about the transition. We have formed a 
partnership with the Department of Health and Human Services to 
assist the FCC in disseminating DTV to targeted populations. 
For example, the Administration for Children and Families is 
distributing information through their 1,600 Head Start 
grantees, covering more than 18,000 centers around the country.
    The Commission is also taking specific steps to inform 
people living in rural areas, and on tribal lands. For example, 
we recently established a partnership with the United States 
Department of Agriculture's 4-H Office. The FCC, NTIA, and USDA 
participate in the annual 4-H Youth Leadership Conference, and 
presented seminars to youth members of 4-H chapters from 
various states. FCC staff provided information with these youth 
representatives and their colleagues, so they could take it 
back home to increase awareness.
    Another important component of that plan is the placement 
of DTV education materials at state and county fairs throughout 
the country in cooperation with all the sponsoring 4-H 
chapters.
    We've also forged an important partnership with the Bureau 
of Indian Affairs. This collaboration has resulted in the 
distribution of DTV materials throughout Indian Country, 
utilizing all 50 of their nationwide offices.
    The Commission is devoting significant resources to 
facilitating a smooth transition. Nearly every Bureau and 
Office at the Commission has been involved in the effort, 
including all of our field offices throughout the country.
    The next 10 months will undoubtedly be challenging, 
nevertheless it's our hope that through the combined effort of 
the government, industry and advocacy groups, American 
consumers will reap the rewards that digital transition has to 
offer.
    Thank you very much, and I look forward to answering your 
questions.
    [The prepared statement of Mr. Martin follows:]

         Prepared Statement of Hon. Kevin J. Martin, Chairman, 
                   Federal Communications Commission

    Good morning Chairman Inouye, Vice Chairman Stevens, and Members of 
the Committee. Thank you for inviting me here today to update you on 
the status of the digital transition.
    On February 17, 2009, all full-power television stations in this 
country will stop broadcasting in analog, and broadcast exclusively in 
digital, as mandated by Congress in the Digital Television and Public 
Safety Act of 2005. A successful digital transition will depend upon 
minimizing the burdens placed on consumers and maximizing their ability 
to benefit from it.
    The DTV transition will be a historic moment in the evolution of 
TV. Television viewers will be able to enjoy movie quality picture and 
sound and potentially new programming choices. It also will allow us to 
significantly improve public safety communications and will usher in a 
new era of advanced wireless services such as the widespread deployment 
of wireless broadband.
    According to recent data from the Consumer Electronics Association 
and the National Association of Broadcasters, consumer awareness of the 
transition has grown. It is up 80 percent from 41 percent consumer 
awareness in August 2006 to 74 percent consumer awareness in January 
2008, according to CEA, and NAB reports it has more than doubled since 
2007. And recent surveys published by NAB and Consumers Union found 79 
percent and 64 percent of consumers were aware of the transition 
respectively. More recently (in March), the Association of Public 
Television Stations (APTS) issued the findings to a survey it conducted 
in February indicating that consumer awareness of the transition 
increased from 51 percent to 76 percent in just 3 months (November 2007 
to February 2008). In addition APTS finds that: ``Roughly 62 percent of 
. . . over-the-air consuming households who are aware of the transition 
indicated that they would buy a converter box or digital TV set between 
now and when the transition takes effect . . .'' which is up 
dramatically since November 2006, when only ``28 percent of over-the-
air households said they would take those options.''
    That more and more viewers are aware of the transition is a step in 
the right direction. However, we still have more work to do. 
Specifically, the Consumers Union also found that 74 percent of 
consumers have ``major misconceptions'' about the impact of the 
transition on them. In other words, too many Americans remain confused 
about what they need to do to prepare for it. And APTS finds that 
``17.5 percent of over-the-air consumers who are aware of the 
transition `don't know' what they will do and roughly 10 percent said 
they would `do nothing.' '' Taken together, these surveys are valuable 
research tools to better guide our education and outreach efforts over 
the next 10 months.
    This recently released data also demonstrates that facilitating a 
successful DTV transition is an enormous undertaking. And it is one 
which no single entity, public or private, can achieve alone. Rather it 
requires the commitment and cooperation of government, industry and 
consumer groups. We have made that commitment and are actively working 
with these important stakeholders.
    In February, I participated in an event marking 1 year before the 
transition at a local Best Buy store which sells digital televisions 
and is currently selling digital-to-analog converter boxes. Commerce 
Secretary Gutierrez, Meredith Baker and I were joined there by top 
representatives of the Nation's broadcasters, cable operators, and the 
consumer electronics industry. We are working together, along with 
others inside and outside of government, in an unprecedented public-
private partnership to educate consumers throughout the country. 
Today's hearing is a welcome opportunity to discuss our work with all 
of our DTV partners both in terms of outreach and education and 
necessary regulatory steps to ensure all Americans can share the 
benefits of this historic digital transition.
Update on Broadcasters Transition to Digital
    Last August, the Commission adopted the final DTV Table of 
Allotments based on the channel elections made by the full-power 
broadcast stations. This order provided virtually all (over 99 percent) 
of the television stations across the country with their final channel 
assignments for broadcasting in digital following the DTV transition. 
By finalizing broadcasters' channel allotments, the Commission helped 
ensure that broadcasters could begin making final preparations for 
their own conversion.
    Nearly two-thirds of full power stations (1,180) will remain on the 
same channel they are currently using for digital service. Most of 
these stations, over 1,030, have completed construction and are already 
providing full service to their viewers. The remainder, roughly 150, 
are working on completing construction of their full service 
facilities. One-third of full power stations, (roughly 635), are 
changing channels for their operation after the transition and are 
currently filing construction permit applications, ordering equipment, 
and scheduling tower crews.
    In December of 2007, we also concluded the Third DTV Periodic 
Review. This Order adopted the procedures and rules to guide 
broadcasters through the end of the transition. Among other important 
decisions, this order adopted the interference standard for post-
transition applications and forecast the date, later this year, when 
the Commission will consider requests from broadcasters to expand their 
service area.
    In the Third DTV Periodic Review, the Commission recognized that 
stations will need flexibility to complete the transition. Consequently 
we adopted procedures that will allow broadcasters to adjust their 
buildout according to their needs and the needs of their viewers. For 
example, we will consider requests from broadcasters that find it 
necessary to reduce analog service before the transition date, but they 
will be required to inform their viewers well in advance of any 
reductions.
    In addition to getting the proper rules in place, it is important 
that broadcasters' progress be carefully monitored. Accordingly, to 
enable the Commission to closely track broadcasters' progress toward 
completing their transition, we required each station to file a report 
on the status of the construction of its post-transition facility. All 
stations have submitted the first such report, and over 1,000 indicated 
that they were completely finished with their DTV transition. 
Broadcasters are required to update the Commission with any changes to 
their status as events warrant. In the Third Periodic, the Commission 
committed to send Congress a full report on broadcasters' DTV build-out 
in August. Broadcasters that have not completed their transition must 
report again by October 20, 2008.
Carriage of Digital Signals
    Much of the focus of our consumer education efforts has been on the 
approximately 15 percent of the homes who rely on over-the-air 
broadcast signals. These efforts have presumed that subscribers to 
cable and satellite will continue to be able to receive digital 
broadcast signals just as they do analog broadcast signals today. It is 
critical to note, however, that our rules needed to be modified to 
clarify that cable and satellite companies were required to carry 
digital broadcast signals to their customers just as they do the analog 
broadcast signals today. Our goal with both of these Orders was not to 
expand carriage but rather to ensure that the broadcasters' switch from 
analog to digital was not used as an excuse to stop carrying the 
broadcasters' signal in a format that could be viewed by all 
subscribers, including analog cable subscribers.
    Last fall, the Commission adopted an order that guarantees that 
analog cable subscribers will not be left in the cold once broadcasters 
ceased broadcasting in analog. Specifically, the Commission took action 
to ensure that after the transition, cable operators will continue to 
make every broadcast station's signal viewable, as the statute 
requires. As a result, we significantly reduced 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 will be able to continue to watch broadcast television 
after the transition as they did before allows us to focus our energies 
on assisting the nearly 15 million households that rely exclusively on 
over-the-air signals.
    The Commission recently adopted an order that will enable satellite 
subscribers to receive digital broadcast signals, as well. The law had 
required that when a satellite operator chooses to carry any local 
broadcast signals, it must carry all full power local broadcast signals 
in that market. The item recently adopted clarifies that, in such a 
``local-into-local'' market, where a full-power television station is 
broadcasting only in digital, the satellite operator must carry that 
digital signal upon request. This clarification is critical to ensuring 
that satellite customers, like cable customers, will continue to 
receive the same broadcast stations they saw the day before the 
transition on the day after the transition.
Enforcement
    The Commission's DTV-related enforcement efforts have focused on 
protecting consumers from unknowingly buying televisions that won't 
receive broadcast stations following the transition. 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 April 7, 2008, inspected 2,176 retail stores and 
36 websites and issued 347 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). In July 2007, we circulated to the 
Commissioners' offices NALs against seven of the largest retailers. In 
October 2007, we circulated another seven NALs against retailers. All 
14 of these NALs, which contain fines totaling nearly $5 million in the 
aggregate, are currently scheduled to be considered at our April open 
meeting later this week. In addition to these 14 NALs, the Enforcement 
Bureau has issued another seven NALs worth an additional $104,000. 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. We have 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 a forfeiture order 
with respect to the other company is scheduled to be considered at the 
Commission's April agenda meeting. In March, we circulated an NAL 
against an additional manufacturer and this item is also on the agenda 
for the April meeting.
    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. We began investigating allegations that some 
manufacturers were not complying with our rules. As a result of these 
investigations we released an NAL against Funai Corporation. In October 
2007, we circulated NALs against an additional seven manufacturers. 
Nine NALs, which contain fines totaling over $6.5 million, are 
scheduled to be considered at the Commission's April agenda meeting 
later this week.
    In addition, FCC field agents soon will begin to visit retailer 
stores to assess their employee training and consumer education efforts 
regarding the DTV transition.
    Swift enforcement of all our DTV-related rules is critical to 
protecting consumers and reducing potential confusion. Our activities 
in this area will continue to be a priority during the next 10 months.
Consumer Education and Outreach
    In order to educate consumers properly, all parties involved in the 
transition--the FCC, NTIA, the broadcasters, the cable industry, 
satellite, manufacturers, retailers, consumer groups--need to work 
together to educate consumers.
    I commend the industry for the consumer education campaigns that 
they have initiated. Specifically, the National Association of 
Broadcasters (NAB) launched a $700 million campaign that includes, 
among other things, television spots, 30 minute education programs 
about DTV and a 100-day countdown to the February 17, 2009 deadline. In 
addition, the National Cable and Telecommunications Association (NCTA) 
launched a $200 million campaign that includes, among other things, 
sending customer communication ``tool kits'' to all their cable systems 
nationwide, and distributing brochures about the transition at 
community and public events.
    In February, the Commission adopted an Order that requires 
commercial and noncommercial full power broadcasters to provide on-air 
information to their viewers about the DTV transition by compliance 
with one of three alternative sets of rules. Although the sets of 
requirements are distinct, all require PSAs and the Commission found 
that they each entail a similar level of commitment and engagement on 
the part of broadcasters. For example, where the first option calls for 
more frequent PSAs, the second calls for longer ones, and the third for 
the same total amount of education but more flexibility regarding PSA 
length. All plans require quarterly reporting of both mandatory and 
voluntary outreach and education efforts. This will allow the 
Commission not only to monitor compliance, but also to stay informed of 
the creative approaches being taken by disparate broadcasters all over 
the country, and continue to coordinate transition education efforts.
    The item also requires MVPDs to provide monthly inserts about the 
DTV transition in their customer billing statements. Phone companies 
participating in the Low Income Federal Universal Service Program also 
must provide notice of the transition to their low income customers and 
potential customers. 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 dtv.gov website such as NAB, NCTA, 
CEA and CERC, as well as the winners of the 700 MHZ auction, 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.
    In addition to our DTV Consumer Education item, the Commission is 
actively and directly promoting consumer awareness of the upcoming 
transition through its own education and outreach efforts.
    The FCC's consumer outreach effort places an emphasis on consumers 
who receive their television signals ``over-the-air'' and on those who 
are hard to reach and may be unaware of the upcoming transition, 
including senior citizens; non-English speaking and minority 
communities; people with disabilities; low-income individuals; and 
people living in rural and tribal areas.
    We have been forging partnerships, participating in media events, 
and attending conferences, to get the word out.
    For example, in the beginning of July, DTV education posters will 
be displayed in all 34,000 post offices across the Nation. The United 
States Postal Service estimates that an average of 9 million people 
pass through their post office lobbies each day.
    We have also secured commitments from 25 states, the District of 
Columbia and Puerto Rico to display DTV materials in 1,100 Department 
of Motor Vehicle locations. Specifically, we have secured commitments 
with Alaska, Arizona, Colorado, the District of Columbia, Hawaii, 
Idaho, Louisiana, Maine, Massachusetts, Missouri, Montana, Nebraska, 
Nevada, New Hampshire, North Dakota, Ohio, Oklahoma, Puerto Rico, Rhode 
Island, South Carolina, South Dakota, Tennessee, Texas, Washington, 
West Virginia, Wisconsin and Wyoming.
    The FCC also distributed DTV transition awareness information that 
is being provided to all Federal Government employees. We estimate that 
this message will reach over 2.5 million Federal employees throughout 
the country.
    In addition, we have identified and contacted 150 mayoral offices 
in areas of the country with high concentrations of over-the-air 
households, to help them educate consumers in their communities. These 
efforts have thus far resulted in 29 cities making specific commitments 
ranging from posting and distributing DTV information in public 
locations and at events and conferences, to including information in 
newsletters and other publications, and establishing links to our 
dtv.gov website, and other efforts unique to their communities. For 
example, the Mayor's Office in Great Falls, Montana has requested 
21,000 DTV flyers from us to send to their utility customers along with 
their utility bills.
    We also reached out to the country's major professional sports 
leagues and have received offers to help promote the transition. The 
National Football League (NFL), the National Basketball Association 
(NBA), the National Hockey League (NHL), Major League Baseball (MLB) 
and NASCAR all agreed to help raise awareness of the transition among 
their fans. For example, the NHL has agreed to run 30 second PSAs per 
day until the transition date on their cable channel the NHL Network.
    Since the last time I appeared before you, Congress has allocated 
additional money to the Commission to spend on our consumer education 
efforts. We intend to put these resources to good use as these 
additional funds will allow the Commission to expand upon its current 
consumer outreach and education plan.
    In February, a contract was awarded to Ketchum to support a broad 
range of consumer education services, including media services, 
publications, and distribution, that will assist and complement the 
FCC's ongoing work on educating all American consumers about the 
digital television transition. Ketchum has provided design 
recommendations to make our DTV messaging, including DTV.gov, more 
consumer-friendly. Other efforts through Ketchum will include 
billboards in targeted markets, grocery store outreach, and production 
of television and radio public service announcements. Ketchum arranged 
a Satellite Media Tour in February on local television news around the 
country in states such as Hawaii, Missouri, Texas and Florida to spread 
the message about the transition. From those seventeen interviews, 
which were aired between February 22 and March 2, Ketchum reported more 
than one million audience impressions. Ketchum will be arranging 
similar interviews throughout the transition to continue our consumer 
education efforts.
    As I mentioned, we also know that some consumers will be 
disproportionately impacted by the transition or are harder to reach 
than the population at large. Therefore we have been taking specific 
steps to reach these groups. I would like to take a few minutes to 
describe our efforts targeted at each of these five communities.
Senior Citizens
    Senior citizens are more likely to have analog television sets and 
rely exclusively on over-the-air broadcasting. We have partnered with 
organizations that specifically serve this harder to reach population. 
Last September, we presented two DTV education sessions at the national 
AARP convention in Boston, and we have plans to make similar 
presentations at this year's convention in Washington, D.C. In 
addition, late last fall, I was interviewed about the transition on 
AARP radio which is broadcast on 170 outlets nationwide reaching more 
than 1,000,000 people. I was also interviewed for, and quoted in the 
January/February issue of AARP's widely circulated AARP Magazine, which 
has a circulation of 23.5 million. AARP is also regularly including 
stories on the DTV Transition in their Monthly Bulletins. Further, AARP 
will be distributing DTV information at a series of eight ``road show'' 
events they will hold around the country from June to September of this 
year.
    In addition to working with AARP, we have also been working with 
other senior organizations as well. For example, I taped a PSA for 
Retirement Living TV which reaches nearly 30 million homes nationwide. 
Also I participated in a story about the transition for the Erickson 
Tribune, which is distributed to residents in their retirement 
communities and is read by more than 6 million people. We are also 
pleased to be partnering with The National Association of Area Agencies 
on Aging (N4A) to cosponsor DTV awareness sessions during the coming 
year in conjunction with their 655 area offices throughout the Nation. 
This is a useful opportunity to educate caregivers, social workers and 
others who care for the elderly in their communities.
    In addition to working with these organizations, we have and 
continue to set up partnerships with many State aging offices. As a 
result of our efforts, 26 states, the District of Columbia, and Puerto 
Rico have agreed to conduct DTV outreach with the FCC in varying 
capacities, including distributing DTV information at conferences and 
events.
    Commission staff located in field offices throughout the country 
are also working on DTV transition education and outreach. Starting 
last year, FCC field agents have held DTV Awareness Sessions and 
distributed information to senior centers, libraries and other local 
venues frequented by older Americans. Through the work of our field 
agents, we have been able to reach these consumers in a total of 44 
states--ranging from Alaska to Florida. We have already distributed 
information to over 3,033 senior centers, and 985 community centers, 
which frequently include large numbers of seniors, and given nearly 589 
presentations with 113 more scheduled in the days ahead.
    The FCC also held a DTV Workshop focusing on seniors at FCC 
Headquarters on November 8, 2007. It consisted of two panels discussing 
the transition's effect on seniors plus exhibits hosted by other 
government and industry organizations. Based on the discussions and the 
relationships formed at that Workshop, we reached out to faith-based 
organizations, provided them with consumer education materials on the 
transition, and continue to follow up with them to answer questions on 
the transition.
    And I'm pleased to announce that on May 28, 2008, along with 
Congresswoman Eleanor Holmes Norton, we will be hosting a DTV Town Hall 
Meeting for seniors in D.C. We are working in conjunction with AARP, 
the DC Office of Aging, the NAB, and the National Caucus and Center for 
the Black Aged. The expected turnout is over 300 seniors from the 
District's Aging community.
Non-English Speakers and Minorities
    We also know that the Hispanic community disproportionately relies 
on over-the-air television. Of the approximately 14.3 million 
broadcast-only homes, about 16.5 percent are headed by persons of 
Hispanic origin.
    The Hispanic Chamber of Commerce has agreed to join the Commission 
in conducting DTV awareness sessions at member chambers in the 15 U.S. 
cities with the largest number of Hispanic TV homes. In addition, we 
have partnered with Univision to hold DTV awareness sessions at Town 
Hall meetings designed to educate members of its Spanish speaking 
audience. Through these partnerships, we will reach cities that are 
home to over 80 percent of Hispanic communities.
    Additionally, we have taped several on-air interviews regarding the 
digital transition for Univision's news and public affairs programs 
airing both in local markets and nationally. These interviews were done 
by Keyla Hernandez-Ulloa the Commission staffer hired to spearhead 
outreach to the Hispanic community. We have been discussing the switch 
to digital on other Hispanic media outlets as well. For example, I did 
an interview with the Hispanic Communications Network, which produces 
material for radio, television, print and Internet, that will be 
distributed to its 230 member radio network in the United States and 
Puerto Rico.
    We have also been working with other foreign language media outlets 
as well. To that end we have partnered with KTSF, a major Asian TV 
station in San Francisco. They have distributed 5,000 English and 
Chinese DTV one-page flyers at their booth during the Chinese New Year 
celebration events in late February. Approximately 100,000 people 
attended this festival. Also in conjunction with the California Public 
Utilities Commission, on May 22, 2008, we are participating with KTSF 
on a DTV educational panel for over 100 community leaders in San 
Francisco.
    The FCC held a DTV Workshop focusing on non-English speakers and 
minorities on December 4, 2007. As a result of that Workshop, we will 
be working with the American Libraries Association to conduct a 
nationally available Internet seminar or ``webinar'' about the DTV 
transition today for librarians in the Webjunction Spanish Outreach 
Program. These librarians provide library services to Spanish speakers. 
Also, as a result of input received at the workshop, we translated our 
DTV one-page flyer into Hmong and Arabic (in addition to English, 
Spanish, Vietnamese, Chinese, Japanese, Korean, Tagalog, French and 
Russian).
    In addition, we plan to participate in a number of national 
conventions representing non-English speaking and minority consumers in 
2008. They include the 78th Annual Conference for League of United 
Latin American Citizens, the Annual National Hispanic Leadership 
Conference and the National Council of La Raza Conference, the NAACP 
Convention, the National Urban League Conference and the Organization 
of Chinese Americans National Conference.
People With Disabilities
    The Commission is continuing a multi-faceted approach in informing 
people with disabilities about the DTV transition. On February 28, 
2008, we hosted a DTV Workshop dedicated to issues facing people with 
disabilities. The program featured panelists from numerous 
organizations whose missions are to work directly with, and advocate on 
behalf of, individuals with hearing, vision, speech, physical, and 
intellectual disabilities. It elicited several concrete suggestions 
that we have implemented.
    For instance, in response to the panelists' suggestion that we 
develop ``how to'' information related to the transition, we have 
drafted a step-by-step guide on how to install a digital-to-analog 
converter box, and posted it on the Commission's DTV Website, 
www.DTV.gov. Similarly, in response to general questions at the 
Workshop concerning the availability of video description (descriptions 
for people who are blind or have other vision disabilities about the 
setting and/or action in a program when information about these visual 
elements is not contained in the audio portion of the program), we are 
in the process of drafting a consumer advisory specifically addressing 
that issue.
    Another suggestion from panelists was that we utilize national 
service organizations to inform consumers about the transition. Indeed, 
we have initiated a partnership with the Corporation for National and 
Community Service, and with the United States Department of 
Agriculture's 4-H office. Finally, we will build upon our workshop by 
speaking directly to organizations that work with and on behalf of 
people with disabilities, at their meetings and conferences. For 
example, we are planning to attend the Summer Quarterly Meeting in 
Seattle of the National Council on Disabilities, which was represented 
at the February 28 Workshop.
    I am also pleased to report that www.DTV.gov now features a DTV 
educational video in American Sign Language for the deaf and hard of 
hearing community. Our most commonly utilized publications are 
available in Braille and audio format and all of our fact sheets and 
advisories are available in large print. In addition, we have two 
specific publications addressing DTV and closed captioning, ``Closed 
Captioning for Digital Television,'' and Closed Captioning and Digital-
to-Analog Converter Boxes for Viewing Free Over-the-Air Programming on 
Analog Televisions.'' The Commission also has a dedicated e-mail box 
for closed captioning questions at [email protected].
    Commission staff continues to attend conferences to distribute DTV 
educational materials to people with disabilities. For example, the FCC 
has attended and provided DTV materials at the National Black Deaf 
Advocates Conference, the Vocational and Educational Services for 
Individuals with Disabilities Conference and the Emergency Planning and 
Response for Special Needs and Disabilities Conference.
    In all, we are collaborating broadly with disability advocacy 
groups and outreach organizations. For instance, the Hearing Loss 
Association of America (``HLAA'') is already linking to our DTV 
informational materials on its website, which receives approximately 
one million hits per month. In addition, HLAA has committed to publish 
later this spring an article on DTV and closed captioning in Hearing 
Loss Magazine, which is estimated to reach a readership of 200,000 
people. Likewise, later this spring the article will be published in 
the ``Blue Book'' Resource Guide of Telecommunications for the Deaf, 
Inc. (``TDI''), with a readership of up to an estimated 100,000 people, 
and eventually posted online at TDI's website, which receives 
approximately 88,000 hits per month.
    Furthermore, HLAA has 200 local and regional chapters around the 
country, and we plan to conduct DTV Awareness Sessions at their monthly 
meetings throughout the course of the year. We recently conducted one 
in Yuma, Arizona on March 11, one in New Orleans on March 15, and we 
have another 16 scheduled through the fall. We also plan to utilize our 
Enforcement Bureau's Field Office staff and CGB staff to distribute DTV 
informational and educational materials at HLAA's ``Walk4Hearing'' 
events across the country taking place this spring through the fall.
Low-Income Consumers
    The Commission is also taking specific steps to inform low-income 
consumers about the transition to all-digital broadcasting. We have 
forged a partnership with the Department of Health and Human Services 
to assist the FCC in disseminating DTV material to target populations, 
including low-income consumers. HRSA (Health Resources and Services 
Administration) has forwarded FCC DTV information to approximately 
4,000 grantee organizations, and the message also went out to groups 
like the state Primary Care Offices and Primary Care Associations and 
the National Association for Community Health Centers--organizations 
which represent many more non-federally funded health centers and 
clinics nationwide. HRSA asked these organizations to post and 
distribute our DTV flyer in their clinics and to distribute information 
to patients. ACF (Administration for Children and Families) is 
distributing information through their 1,600 Head Start grantees, 
covering more than 18,000 centers around the country. The Substance 
Abuse and Mental Health Services Administration (SAMHSA) is 
distributing DTV flyers to approximately 50,000 individuals each month 
who call requesting information. Other HHS agencies are also 
distributing our flyers, displaying our posters and linking to our 
dtv.gov web page.
    We have contacted social worker associations in each of the 50 
states, plus the District of Columbia and Puerto Rico, and thus far 
have received commitments from over 20 of them to assist us in getting 
the word out about the DTV transition. These include publishing DTV 
information in their monthly newsletters, distributing DTV materials at 
events and conferences, and establishing conspicuous links to our 
website, www.dtv.gov, so that visitors to their web pages can obtain 
more detailed information about the DTV transition and the steps they 
may need to take to prepare for it. We have also reached out to 
representatives of the state health departments in each of the 50 
states and U.S. territories, and thus far have received commitments 
from 8 of them to assist in distributing DTV awareness materials to the 
consumers they interact with on a regular basis. These include, for 
example, posting DTV materials in their service and waiting areas, 
distributing our fact sheets and other publications at events attended 
by consumers, inserting DTV information in mailings to consumers, and 
establishing conspicuous links to our website, www.dtv.gov so that 
visitors to their web pages can obtain more detailed information about 
the DTV transition and the steps they may need to take to prepare for 
it.
    In late February, we posted a simplified DTV one-page flyer on our 
website, and have offered it for distribution to all our partners. This 
was developed in response to requests for a more streamlined, non-
technical, and easy to read DTV informational flyer.
    In addition, on April 1, 2008, the FCC sponsored a DTV Consumer 
Education Workshop focusing on reaching low-income consumers. As a 
result of our panel discussions, we received several positive 
suggestions and offers of assistance from our panelists on how best to 
reach members of their constituencies with information on the DTV 
transition. We will be providing the organizations represented with DTV 
informational materials such as our posters, flyers, and fact sheets 
that can be displayed at their events and facilities throughout the 
country. The National Energy Assistance Directors Association offered 
to provide DTV information to low-income consumers who sign up for 
their program. We also received a suggestion to submit translated DTV 
articles to local foreign language publications in cities that have 
high concentrations of foreign language speakers. Often, these 
publications are the primary source of news and public interest 
information for these consumers. In addition, as noted earlier, all 
eligible telecommunications carriers (``ETCs'') that receive Federal 
Universal Service funds are now required to provide DTV transition 
information in the monthly bills of their Lifeline/Link-Up customers.
Rural and Tribal Consumers
    The Commission is also taking specific steps to inform people 
living in rural areas and on tribal lands about the transition to all 
digital broadcasting. For example, the Commission recently established 
a partnership with the United States Department of Agriculture's 4-H 
office. On April 1, 2008, the FCC, with NTIA and USDA, participated in 
the annual 4-H Youth leadership conference and presented two ``Train 
the Trainer'' seminars to approximately 100 youth members of 4-H 
chapters from the various states. FCC staff provided information which 
these youth representatives and their colleagues back home can use to 
conduct awareness sessions in their communities. In addition, each 
participating representative will receive a ``DTV Outreach Tool Kit'' 
containing more extensive materials for conducting their outreach 
sessions. We understand that the DTV outreach that will be performed by 
these young community leaders will assist them in meeting the community 
service requirements of their 4-H membership. Another important 
component of our partnership with USDA is the placement of DTV 
transition educational materials at state and county fairs throughout 
the country via sponsoring 4-H chapters and local extension service 
professionals.
    We also have forged a partnership with the Bureau of Indian 
Affairs. This collaboration has resulted in the distribution of DTV 
materials throughout Indian Country, utilizing all 50 of their 
nationwide area offices. Commission staff has attended and provided DTV 
materials at the National Conference of American Indians, and the Rural 
TeleCon Conference, with many additional events planned for this year 
such as participation in the National Association of Development 
Organizations in Alaska Conference and the Affiliated Tribes of 
Northwest Indians Annual Conference.
    So far this year, we have presented at the United South and Eastern 
Tribes (USET) Annual Impact Week, in Arlington, VA and have distributed 
DTV materials at NCAI's Executive Council Meeting, in Washington, D.C. 
We are also planning to sponsor an Indian Telecommunications Initiative 
(ITI) in Salt Lake City later this year.
    Finally, on January 31, 2008, we held a workshop at Commission 
headquarters focused on reaching rural consumers and consumers living 
on tribal lands. We received many useful suggestions at this workshop 
on how to better reach these communities. For instance, our DTV one 
page informational flyer is being translated into Navajo, one of the 
most-spoken Native American languages in the United States.
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 throughout the 
country.
    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 next 10 months will 
undoubtedly be challenging. Nevertheless, it is my hope that through 
the combined efforts of government, industry and advocacy groups 
American consumers will reap the rewards that the digital transition 
has to offer.

    The Chairman. Thank you very much, Mr. Chairman.
    I now call upon Secretary Baker.

              STATEMENT OF MEREDITH ATTWELL BAKER,

         ACTING ASSISTANT SECRETARY FOR COMMUNICATIONS

          AND INFORMATION, NATIONAL TELECOMMUNICATIONS

                AND INFORMATION ADMINISTRATION,

                  U.S. DEPARTMENT OF COMMERCE

    Ms. Baker. Chairman Inouye, Vice Chairman Stevens, and 
members of the Committee, I appreciate the opportunity to 
appear before you today to discuss the progress being made by 
NTIA in implementing the TV Converter Box Coupon Program, and 
ensuring that all Americans--especially those who are reliant 
on over-the-air television, are informed about--and prepared 
for--February 17, 2009. I am very pleased to report that, since 
the program's launch on January 1, 2008, substantial progress 
has been made.
    NTIA is focused on consumer education. In order to reach 
our most vulnerable populations, NTIA is collaborating with 
more than 200 partner organizations with direct communications 
to the senior citizen, rural, low-income, non-English speaking, 
and disabled communities. This includes social service and 
community organizations, as well as a variety of Federal 
agencies.
    Trusted institutions, such as the NAACP, AARP, Spanish-
language broadcasters, Goodwill, and the Native American 
Journalists Association, are just a few examples of entities 
whose involvement in consumer education is key to reaching 
these communities.
    The DTV Coalition is also making great strides in educating 
the American public about their options for making the 
transition. I want to especially commend NAB, CEA, and NCTA for 
their leadership in reaching out to their viewers and 
customers, and for the substantial resources they are devoting 
to consumer education about the transition.
    We here at NTIA have done over 100 interviews since the 
beginning of the year. Secretary Gutierrez himself has done 
over 25 interviews, in English and in Spanish. Ketchum--our 
consumer education contractor--reports that there have been 
over 200 million print and broadcast impressions, and more than 
1.8 billion online impressions.
    Mr. Chairman, you have rightly emphasized the importance of 
a coordinated Federal effort to ensure a smooth DTV transition. 
NTIA supports this, and is working with the FCC to ensure we 
take full advantage of the potential Federal mechanisms to 
educate and inform the public. We have to have something more 
formal to announce soon.
    NTIA is also working closely with the Members of Congress 
and their staffs, including several members of this committee, 
in preparing for town hall meetings, franked mailings, and 
other constituent outreach. Our customizable partner toolkit, a 
copy of which you have in front of you at the dais, has become 
a valuable resource for many of these offices. We encourage 
every Congressional office to take advantage of this resource, 
and offer any assistance we can provide.
    We are strongly encouraged by the large numbers of 
consumers who are acting on the information they've received. 
The program launched on January 1, 2008, and as of today, 
NTIA--working with our contractor IBM--has accepted requests 
for over 10,024,000 coupons from over 5.2 million households. 
Forty-eight percent of the applications identify themselves as 
reliant on over-the-air television. 59.9 percent of these 
applications are coming from the web, 38.4 percent are from the 
phone, 1.4 percent by mail, and .2 percent by fax.
    Working with manufacturers and retailers, we began to mail 
out coupons when we were confident that there were boxes on the 
shelves. We began a nationwide mailing of coupons, the week of 
February 17. We mailed out 350,000 coupons for the first few 
weeks, to ensure operational success.
    To date, we have mailed out 3.8 million coupons, and at the 
current mailing rate of over a million coupons per week, we 
expect that anyone who orders a coupon by today will receive it 
the first week in May. After we catch up with the backlog, we 
expect coupon requests to take 2 to 3 weeks to process.
    As of today, 260,000 coupons have been redeemed. As the 
members of this committee are well aware, the rate at which 
coupons are redeemed is a crucial metric for program 
management, and we're monitoring that data very closely. The 
first 90-day expiration period will occur on May 27, 2008.
    As of today, NTIA has certified 67 converter boxes, some of 
which are being made available for as little as $45. The 
response from America's retailers has been outstanding. As of 
today, the program includes more than 1,100 participating 
retailers, with 11,448 outlets nationwide, including locations 
in all 50 States, Puerto Rico and the U.S. Virgin Islands. Four 
of the largest national consumer electronics chains--Best Buy, 
Circuit City, RadioShack, and Wal-Mart--are accepting coupons, 
and carrying coupon-eligible converter boxes, as are 10 online 
and 4 phone retailers, and hundreds of smaller local retailers. 
Kmart, Sam's Club, Sears and Target also are expected to be 
actively participating shortly.
    While we are very pleased with the progress of the coupon 
program to date, as with any program as large and complex as 
this, there are bound to be challenges that arise. One 
challenge we are addressing is how to best meet the needs of 
viewers of Class A, low-power television and translator 
stations. NTIA has just certified the 8th box with an analog 
pass-through capability, and several more are in an expedited 
process of being certified. All of the major retailers plan to 
carry at least one model of converter box with pass-through 
capability.
    To assist low-power stations to convert digital broadcasts, 
Congress set aside $65 million for equipment upgrades to 
stations. I want to thank Senator Snowe for her leadership in 
introducing 
S. 2607, which makes a critical, technical correction to the 
program. NTIA urges the passage of the Snowe bill.
    NTIA also has under review proposed changes to address 
eligibility concerns regarding residents of nursing homes, and 
those who receive mail to a post office box. A draft Notice of 
Proposed Rulemaking is in the final stages of clearance, and we 
expect to put it out for comment soon.
    In closing I'd like to thank the NTIA staff for the 
continuous hard work that they have put forward in ensuring the 
success of both this program and the Nation's historic and 
important transition to DTV. I'd similarly like to commend the 
members of this committee and their staff, who are working with 
us cooperatively and constructively in support of these shared 
goals.
    Thank you, again, for the opportunity to testify before you 
today, and I'd be happy to answer your questions.
    [The prepared statement of Ms. Baker follows:]

          Prepared Statement of Meredith Attwell Baker, Acting
        Assistant Secretary for Communications and Information,
      National Telecommunications and Information Administration,
                      U.S. Department of Commerce

    Chairman Inouye, Vice Chairman Stevens and Members of the 
Committee, thank you for the opportunity to appear before you today to 
discuss the progress being made by the National Telecommunications and 
Information Administration (NTIA), Department of Commerce, in assisting 
Americans to prepare for the digital television (DTV) transition. In 
particular, I am pleased to report to you on NTIA's successful launch 3 
months ago of the Television Converter Box Coupon Program (Coupon 
Program). Although the Program is off to a very good start, we are 
still in the early phases of this important undertaking. In this 
statement, I will share with you the additional steps NTIA is taking to 
implement the Coupon Program, the agency's ongoing efforts to expand 
public education and outreach on the DTV transition and the Coupon 
Program, and challenges that we are addressing.
Coupon Program Data
    As I indicated, NTIA successfully launched the Coupon Program on 
January 1, 2008. Since then, across the Nation, consumers have been 
ordering their coupons through one of four convenient methods: via a 
toll-free number (1-888-DTV-2009), online at www.DTV2009.gov, by mail 
or by fax. The phone line is available to consumers 24 hours a day, 7 
days a week, with live agents available at all times, and an 
Interactive Voice Response system is available for English and Spanish-
speaking callers. The phone line can accommodate requests in more than 
150 different languages. A special assistance line also is available 
for the hearing impaired in English and Spanish. Braille application 
forms are available for the visually impaired. As of April 4, 2008, 
approximately 60 percent of the requests have been received through our 
website, 38 percent by telephone, and 1.6 percent by mail and fax. 
Approximately 89 percent of the household requests seek the maximum 
number of two coupons.
    On January 1, NTIA with its partner IBM took requests from over 
249,000 applicants requesting 475,000 coupons. Consumers from every 
state applied on that first day. By the end of the first week, NTIA had 
received over one million requests for two million coupons. As of April 
7, 2008, NTIA has accepted more than 5.2 million household requests for 
almost 9.9 million coupons, which represents approximately 46 percent 
of the program's base funding. Approximately 48 percent of these 
households identified themselves as fully reliant on over-the-air 
television. Consumers have begun to purchase converters with the 
coupons.
    As of April 4, 2008, consumers have redeemed more than 280,128 
coupons. Because consumers have only had coupons for a few weeks, it is 
too early to draw conclusions about redemption rates, which will be the 
key factor determining program spending. NTIA will continue to monitor 
redemption rates carefully as a critical factor in the financial 
management of the program. Our expectation is that redemptions will be 
the greatest as consumers reach the end of the first 90-day expiration 
period.
Consumer Education and Outreach
    NTIA's daily efforts working with the media have helped generate 
awareness of the DTV transition and Coupon Program. During these first 
3 months, the Coupon Program obtained more than 200 million print and 
broadcast media impressions, as well as over 1.8 million online 
impressions. The high level of interest in the Program and the 
correspondingly high application rate indicate that consumers are 
becoming increasingly aware of the DTV transition and are ready to take 
action.
    Multiple consumer surveys bear this out: a recent survey released 
by the Association of Public Television Stations shows a 50 percent 
jump in consumer awareness about the transition in just the last 4 
months--from 51 percent in November 2007 to more than 76 percent in 
March 2008. Surveys conducted by Consumers Union (64 percent) and the 
Consumer Electronics Association (74 percent) reveal similarly high 
levels of consumer awareness. In other words, our combined efforts to 
get the word out are succeeding.
    One of the keys to the success of this program is its voluntary 
nature, which has fostered strong public-private partnerships. As I 
have discussed this issue with other Federal officials, non-profit 
leaders, and private sector organizations with which NTIA is 
collaborating, I have witnessed their willingness to work together to 
make the transition a success. The industries most directly affected by 
the transition have initiated significant educational efforts with real 
financial commitments to ensure that no household is caught unprepared 
on February 18, 2009. The DTV Coalition is also making great strides in 
educating the American public about their options for making the 
transition.
    As a complement to these efforts, NTIA has instituted a proactive 
campaign to educate consumers about the role of the Coupon Program in 
the DTV transition, leveraging relationships with consumer groups, 
community organizations, Federal agencies, and industry to inform 
consumers of their options. NTIA is collaborating with more than 200 
partner organizations, including social service and community 
organizations with ties to the senior citizens, rural, minority, and 
disabled communities, as well as a variety of Federal agencies with 
direct communications with other constituent groups. NTIA is reaching 
out to trusted institutions, such as the NAACP, AARP, Spanish-language 
broadcasters, and the Native American Journalists Association to reach 
populations most likely to be affected by the transition.
    These groups are responding with thoughtful and creative ways to 
spread the word to their constituencies about the transition. A good 
example is the 4-H arm of the U.S. Department of Agriculture's (USDA) 
Cooperative State Research Education and Extension Service (CSREES). 
Collegiate 4-H--the college student 4-H organization--selected the DTV 
transition as its 2008 National Service Project topic. During the year, 
each chapter must carry out at least one DTV project based on lesson-
plan material developed by NTIA. A project might include helping 
vulnerable individuals fill out an application or installing their 
converter boxes.
    NTIA is keenly aware of the need to reach out to non-English-
speaking communities, some of which rely heavily on over-the-air 
broadcasts. Information about the Coupon Program is being made 
available in numerous foreign languages--Spanish, French, Chinese, 
Vietnamese, Korean, Filipino, and Tagalog. On December 1, 2007, 
Secretary of Commerce Carlos M. Gutierrez was featured in the first of 
a series of public service programs entitled, ``TV Digital . . . :Que 
Tal?'' aired throughout the United States and Puerto Rico by the 
Spanish-language Univision Television Network. The program discussed 
the benefits of digital television broadcasting and provided detailed 
information about the need for viewers that rely on over-the-air 
broadcasting to obtain digital-to-analog converter boxes to continue to 
use their analog television sets, and how to access the Coupon Program 
to obtain coupons for the purchase of boxes.
    Just last week, NTIA kicked off ``Digital Television: Experience 
the Benefits,'' a consumer education campaign we are coordinating with 
local organizations across the country to educate consumers about the 
benefits of DTV and the TV Converter Box Coupon Program. Our initial 
event on March 31st gave consumers an opportunity to ``Ask the 
Experts'' at RadioShack's flagship store in Fort Worth, Texas. 
Tomorrow, Secretary Gutierrez will discuss the digital television 
transition in Fort Worth, Texas, and later in the week will travel to 
McAllen, Texas--one of the Nation's highest over-the-air television 
markets--for a similar event. NTIA will continue to work with an ever-
increasing number of interested industry and community groups to ensure 
that information about the DTV transition reaches these non-English-
speaking communities as broadly and often as possible.
    While relevant industry segments are taking the initiative to 
ensure their consumers have the information to navigate the transition, 
the Federal Government has a role in ensuring that all population 
groups, particularly those that are least likely to receive industry-
produced information, and those more likely to rely on over-the-air 
television, receive a consistent and accurate message. Recognizing the 
importance of such a holistic approach from the start, NTIA hosted a 
meeting on January 24, 2008, with more than 15 other Federal agencies, 
including the Federal Communications Commission; the Departments of 
Veterans Affairs and Agriculture, the Department of Health and Human 
Services' Administration on Aging; and the Department of Homeland 
Security's Federal Emergency Management Agency, to further coordinate 
Federal efforts to educate the Nation about the February 17, 2009, 
deadline to transition to digital television. During the meeting, NTIA 
outlined its current and upcoming consumer education efforts, and the 
agencies discussed their strategies and existing communications efforts 
to raise consumer awareness of the DTV transition and the Coupon 
Program. The response from agencies has been positive. For example, the 
Department of Veterans Affairs (VA) has made a concerted effort to 
educate its employees, veterans, and their families about the DTV 
transition and Coupon Program. Among other things, the VA has 
publicized the Program through Vanguard magazine, VA News, the American 
Veterans, and the Pentagon channel. It has distributed Coupon Program 
information to National Veteran Services Organizations such as the 
American Legion, VFW, Disabled American Veterans, Paralyzed Veterans 
Associations, AMVETS, and the Vietnam Veterans Association.
    NTIA has worked with IBM and Ketchum, the subcontractor with 
expertise in public outreach efforts related to the Program, to develop 
a comprehensive toolkit of information to help organizations that are 
playing a critical role in educating their members, constituents and 
customers about the Coupon Program. Available for use since January 1, 
2008, the Toolkit attempts to offer simple tips and recommendations to 
help each organization reach its members with information about the 
Coupon Program in a way that will resonate best with them. The Toolkit 
consists of a set of materials, including fact sheets, a poster, a 
mailer, sample presentations and other materials that can be co-branded 
for use by partners. The Toolkit also contains specific tools and 
strategies that can be used to reach the media to effectively deliver 
the Coupon Program message, and ideas and resources for informing 
consumers through community and in-store events or other activities.
    The Toolkit includes four sections, each of which can be used on 
its own, or in conjunction with other parts of the Toolkit:

   Program Background. This section includes background 
        information on the DTV transition and the TV Converter Box 
        Coupon Program. Partners are strongly encouraged to familiarize 
        themselves with the Coupon Program and with what consumers told 
        us they want to know.

   Development and Dissemination of Messages and Materials. 
        This section includes a series of tailored messages about the 
        Coupon Program that partners can incorporate into their own 
        materials to explain how to apply for and redeem coupons. The 
        messages have been tested in consumer focus groups to ensure 
        that they are easily understood and have been reviewed by NTIA 
        for accuracy and consistency. This section also outlines the 
        ready-made materials available for downloading, co-branding and 
        use by all partners.

   Communicating Through the Media. This section provides 
        guidance and ideas for generating ``earned media'' coverage 
        through television, radio, print or online information sources. 
        The information in this section ranges from ideas for 
        conducting proactive media outreach, to placing public service 
        announcements and tips on conducting a solid media interview.

   Conducting Outreach Activities. The Toolkit includes 
        creative ideas for communicating about the Coupon Program 
        through existing organizational resources, as well as 
        developing events and activities that focus specifically on the 
        TV Converter Box Coupon Program.

    The Toolkit also is an extremely useful resource for Members of 
Congress seeking to communicate to their constituents about the Coupon 
Program. NTIA has worked closely with many offices to help prepare 
materials for town hall meetings, franked mailings, and other outreach, 
including to senior centers and other critical-to-reach groups.
Manufacturer and Retailer Participation
    NTIA has been very pleased with the high level of participation in 
the Coupon Program, both by converter box manufacturers and consumer 
electronics retailers. As of today, NTIA has certified 66 converter 
boxes, each designed for the exclusive statutory purpose of enabling a 
consumer to view digital broadcast signals on an analog television.
    NTIA's rules also permit certain other features, including the 
ability to pass-through analog broadcast signals. These boxes can be 
found at leading retailers for as little as $45. We are continuing to 
review and certify boxes as manufacturers come into this Program. A 
complete list of converter boxes certified to date is available on 
NTIA's website, and is attached to my testimony.
    The response from America's retailers has been similarly 
outstanding. As of April 1, 2008, the Program includes more than 1,100 
participating retailers. These retailers represent 11,448 participating 
outlets nationwide, including locations in all 50 states, Puerto Rico 
and the U.S. Virgin Islands. Participating retailers include four of 
the largest consumer electronics retailers--Best Buy, Circuit City, 
RadioShack, and Wal-Mart--as well as hundreds of smaller retailers. 
NTIA expects four other large retailers--Kmart, Sam's Club, Sears and 
Target--to participate shortly. Additionally, consumers can choose from 
among seven online retailers and three phone retailers. In short, 
consumers--even those in areas where the closest consumer electronics 
retailer is fifty or one hundred miles away--will have ready access to 
coupon-eligible converter boxes.
    At the request of many of these retailers, NTIA has made 
information available about the number of coupons requested not only on 
a per state basis but now based on 5-digit zip code. NTIA and IBM have 
made employee training materials available to all participating 
retailers so that they will be ready to answer consumers' questions 
about certified boxes and the use of the coupon for payment. 
Participating stores have completed certification in the Coupon Program 
and indicated that their employees are trained, they have converter box 
inventory in their stores, and their systems are prepared to redeem 
coupons. Participating retailers can be found on www.DTV2009.gov under 
``Locate a Retailer Near You.''
    We are pleased with the progress that has been made in these first 
few months of the Coupon Program's operational phase and we are 
confident our continued, combined and cooperative efforts will only add 
to this success to the benefit of all Americans, as well as other 
stakeholders such as public safety entities.
Addressing Challenges That Arise
    That said, as with any program as large and complex as this, there 
are bound to be bumps in the road and challenges that arise. NTIA 
currently faces several such challenges and is working diligently to 
resolve them as quickly as possible and in a manner that serves the 
best interests of the American people.
    NTIA is concerned about how to best meet the needs of viewers of 
Class A, low-power television and television translator stations. As 
this Committee is well aware, these stations are not subject to the 
February 17, 2009, analog broadcasting cutoff deadline, and viewers of 
these stations who wish to continue receiving these analog broadcasts 
as well as the new digital signals after the February 17, 2009 deadline 
may choose to get a converter box that includes an analog signal pass-
through feature. When the Coupon Program regulations were issued, NTIA 
asked manufacturers to take this into consideration in the development 
of certified converter boxes. At the same time, NTIA asked 
manufacturers interested in including this feature to investigate 
options that would provide an acceptable analog signal pass-through 
with minimal signal loss. On February 5, 2008, I sent a letter to each 
of the prospective converter box manufacturers involved in the 
certification process to once again encourage them to consider the 
needs of all viewers, including the viewers of Class A, low-power 
television, and television translator stations, in the development of 
converter boxes for the Coupon Program. Currently, NTIA has certified 
seven boxes with an analog pass-through capability, and several more 
are in the testing process of becoming certified. NTIA highlights boxes 
with this feature on the Program's website and in consumer mailings 
with the coupons. In addition, NTIA has sent helpful information to 
operators of Class A, low-power television and television translator 
stations so that they can inform their viewers of the options they have 
regarding the digital transition.
    Congress set aside a total of $75 million in auction proceeds to 
fund two grant programs that will assist eligible Class A, low-power 
television, and television translator stations to make the transition 
as quickly and smoothly as possible. The Low-Power Television and 
Translator Digital-to-Analog Conversion Program will provide $1,000 to 
eligible low-power stations that must purchase a digital-to-analog 
conversion device to convert the incoming digital signal of a full-
power television station to analog for transmission on the low-power 
station's analog channel. To date, 213 grants have been awarded under 
this program. Applications will be accepted until February 17, 2009.
    Of course, stations that operate at less than full power will 
eventually convert to digital broadcasts. The Low-Power Television and 
Television Translator Upgrade Program established by Congress directs 
NTIA to assist this effort through a program that provides $65 million 
for equipment upgrades to stations in eligible rural communities. To 
implement this program in a timely manner, a technical correction to 
the program authorization is required to permit the agency to begin 
making funds available during Fiscal Year 2009. S. 2607, which Senator 
Snowe has introduced, would make this correction. NTIA will continue to 
work with the FCC, industry and the broadcast community to assist low-
power television stations and their viewers during the transition to 
digital broadcasting.
    As the Coupon Program moves forward, NTIA will continue to address 
challenges and work diligently to resolve issues that arise. For 
example, NTIA is currently looking at concerns about program 
eligibility, including for residents of nursing homes and applicants 
who use a post office box. NTIA is finalizing proposed rule changes and 
expects to release a Notice of Proposed Rulemaking in near future. 
Changes to the rule, at this stage, will pose challenges for the 
Program, but we will meet those challenges.
    Thank you again for this opportunity to testify before you today. I 
will be happy to answer your questions.
                               Attachment

                Coupon Eligible Converter Boxes 04/07/08

AccessHD DTA1010D                     Kingbox K8V1
AccessHD DTA1010U                     Kingbox K8V8
AccessHD DTA1020D                     Lasonic LTA-260
AccessHD DTA1020U                     Lasonic LTR-260
AMTC AT-2016                          MAG CCB7707
Apex DT1001                           Magnavox TB-100MG9 *
Apex DT1002                           Magnavox TB100MW9
Artec T3A                             MaxMedia MMDTVB03
Artec T3APro                          MicroGem MG2000
CASTi CAX-01                          Microprose MPI-500
Channel Master CM-7000                Mustek MAT-K50
Coship N9900T                         Olevia DTA100
Denca DAC-100                         Philco TB100HH9 *
Denca NL8118                          Philco TB150HH9 *
Denca NL8119                          RCA DTA 800A
Denca TBX1005A                        RCA DTA 800B
Digital Stream D2A1D10                RCA DTA800B1 *
Digital Stream D2A1D20                Sansonic FT300A
Digital Stream DSP6500R               Sansonic FT300RT
Digital Stream DSP7500T               Skardin DTR-0727
Digital Stream DSP7700T*              SVA DAC100
Digital Stream DTX9900                Synergy Global Supply SYN2009
Digital Stream DX8700*                Tatung TDB3000
Echostar TR-40*                       Tivax STB-T9
Fuyai ATSC 630                        Tunbow Electronics E60010
GE 22729                              Venturer STB7766G
GE 22730                              Winegard RC-DT09
Goodmind DTA1000                      Zenith DTT900
Goodmind DTA900                       Zentech DF2000
Goodmind DTA980                       Zinwell ZAT-756A
Gridlink GLT-200                      Zinwell ZAT-856
Gridlink GLT-300                      Zinwell ZAT-857
Insignia NS-DXA1                      Zinwell ZAT-970

* Analog pass-through capable converter.

    [The document entitled TV Converter Box Coupon Program--A 
Guide for Partnership Activities has been retained in Committee 
files.]
    The Chairman. Madam Secretary, thank you very much.
    Senator Stevens?
    Senator Stevens. Well, thank you very much.
    And Mr. Martin, Chairman, we have looked through your full 
statement, I commend you for the depth of your report to the 
Committee, as far as what you're trying to do to make sure that 
everyone has heard about this process.
    Have you given any thought to what the fallback is for 
those people who don't get the word, and suddenly find that 
they've got--they're cut off?
    Mr. Martin. Well, I think our first and primary goal is to 
make sure that everyone is aware of it, as much as possible. 
Obviously the transition is going to occur, by law, next 
February, so they'll all be impacted at that time. But, I think 
our most important thing that we can do is continue to try to 
get the word out in more and diverse forms.
    We have given some thought to some of the suggestions by 
one of my colleagues, Commissioner Copps, of trying to identify 
a test market, to try to go through a test kind of a transition 
at some point between now and then, so that we could see just 
how many consumers are unaware, or we have not been able to 
reach, so we can figure out how to better tailor our message. 
But, I think that's the extent of what we've given, as far as 
thoughts as far as a fallback.
    Senator Stevens. Well, I had in mind something like what we 
see every once in a while on the screen or hear over the radio, 
``This is a test, this is a test, this is a test, in the event 
there was an emergency, this is where you would get your 
information, et cetera,'' have you thought at all about the 
power of the Commission to ask all broadcasters, all--everyone 
in the industry to start a process sometime this fall saying, 
in effect, ``do you know, do you know, do you know? On the date 
below this system is going to change, and you must be ready for 
it.''? Is there any real reason to pursue that kind of 
approach?
    Mr. Martin. We did adopt a requirement that all the 
broadcasters were either required to go through a series of 
public service announcements with very specific language about 
what's coming up on the DTV transition, or to follow--as a safe 
harbor--the NAB's proposal of a series of both over-the-air 
public service announcements and screen crawls, or other ways 
to identify to their consumers.
    We haven't explicitly, thought about utilizing the 
Emergency Broadcast Warning message, that kind of, ``This is a 
test,'' so to speak. But we have required the broadcasters to 
either follow our plan or the NAB's plan, one of the two.
    So, they will all be having to undergo increasing numbers 
of public service announcements and screen crawls, like the 
Emergency Warning System, but we don't actually use that kind 
of wording, and we can certainly consider whether or not that 
should be incorporated--I would be concerned that we don't want 
to confuse people that an emergency has actually occurred.
    Senator Stevens. No, I don't mean call it an emergency, but 
a warning that something has to be done. Too many people on 
these--answering these polls indicate they don't know that this 
process is coming at all.
    Mr. Martin. Well, certainly, one of the things we're most 
concerned is that, while there is an increasing number of 
people that know the DTV transition is occurring, they don't 
know what they're going to do about it or what to do. And I 
think that's as much of a concern, as well--not only making 
sure everyone knows about it, but that they know what they need 
to do about it.
    So like I said, I think you are going to see an increasing 
frequency by broadcasters and by all the different people that 
the Commission regulates, and all the people involved in the 
transition with providing increasing consumer information.
    You know, we're requiring bill inserts, not only in the 
cable operators' bills, but in all of those telecommunications 
providers who receive Universal Service support. We are, 
requiring a whole host of ways, trying to get an additional 
message out.
    But, certainly broadcasters are a critical--and the most 
critical--component of getting that message out.
    Senator Stevens. Ms. Baker, do you think your agency has 
any burden to follow through to make certain that people have 
learned of this transition?
    Ms. Baker. Absolutely. And I think that the consumer 
education campaign is beginning to work. We have devoted the 
first third of our consumer education money in developing the 
materials--some of which you see in front of you--and the 
second two-thirds will be in outreach to the media markets.
    I think it's important to note that the coupon program 
actually runs through March 31st--Congress was very smart when 
they did that--so that, for those people who actually don't 
turn on their television that often, but they turn it on, on 
February 20-somethingth or March 15th--that they can still get 
a coupon, and they can still get a converter box--they're 
valid, obviously, for 90 days. So, the last coupon mail outs 
will go out on March 31st, and be valid for 90 days.
    Senator Stevens. Well, I think we all just pray that it 
works. I do wonder about those people that are in the rural 
areas that really rely on the system, but don't pay any 
attention to it, in effect. I think we've got to find some way 
to make certain that these people are contacted, and it's going 
to be a problem for us--particularly those of us who live in 
the rural areas.
    Mr. Chairman, I'm told that in my second-largest city, 
Fairbanks, about 40 percent of the people still depend upon 
over-the-air broadcast. They're the most involved in this 
transition, aren't they? They're the most affected by it, I 
would say, do you agree with that?
    Mr. Martin. Oh, absolutely.
    Senator Stevens. Well, is there any particular requirement 
that the broadcasters report to you that they have contacted 
the people they serve, in their area?
    Mr. Martin. Oh, yes. Not only is there a requirement for 
how many public service announcements, screen crawls and other 
things they're supposed to be doing, but there is a requirement 
they provide on a quarterly basis, between now and the 
transition, an update on exactly what they've been doing, 
provide it to us, and put it in their public file, in terms of 
what they've been doing to educate their consumers, in the 
content of what they, of the message they've been putting it 
in.
    Senator Stevens. They're not easy to contact, they don't 
get a bill for services, they just turn on their set, and 
listen. And I'm most worried about those, or elderly who live 
in the rural areas at finding ways to connect with them. So, if 
you have any ideas of what we might do, those in public office 
would appreciate it.
    Mr. Martin. OK.
    Senator Stevens. Thank you very much.
    Mr. Martin. Thank you.
    The Chairman. Thank you.
    Senator Smith?
    Senator Smith. Thank you, Mr. Chairman.
    Ms. Baker, you heard, perhaps, in my opening statement 
concern expressed for those living in assisted-living 
facilities and nursing homes--do you have an estimate of how 
many folks we're talking about who will be impacted by the DTV 
transition?
    Ms. Baker. Well, you know, when the rule was developed, we 
were at the Department of Commerce and the statute said for us 
to give a coupon--up to two coupons to each U.S. household. So, 
we looked down the hall to the Census, and we used the Census 
definition of household. Unfortunately, of course, that 
excludes group housing, which is, in fact, nursing homes and 
assisted living----
    Senator Smith. Do I understand you're changing a rule on 
that, so that they can get them?
    Ms. Baker. We are.
    Senator Smith. OK.
    Ms. Baker. We are. That NPRM should be out shortly. But 
what we wanted to make sure is that for those who are in 
nursing homes, we could actually provide them the assistance 
they need. Sometimes those in nursing homes can't actually call 
up, get a coupon, go get a box. So, we wanted to make sure 
guardians could also effectuate this transition for them, as 
well as possibly the administrators of the nursing homes.
    Senator Smith. Well, you're going to go a long way toward 
solving the problem for many elderly Americans, if you get over 
the assisted living and nursing home issues. And so I simply 
draw your attention to that and encourage that.
    Several have commented on the repeater relay of these 
signals--translators, as we call them in my area. They're not 
converting until 2010, or 2012. I've got 400 translators in my 
State, serving rural Oregonians. Do they have to get TV 
converter boxes to continue to receive their programming after 
February 2009?
    Ms. Baker. What they'll need is an analog pass-through box, 
or a splitter for a regular box.
    Senator Smith. And I understand there is a shortage of 
those?
    Ms. Baker. There should be enough of these boxes in major 
stores nationwide by the beginning of May. Currently, there is 
only one that's being sold, online and by phone.
    Senator Smith. OK, but that's happening?
    Ms. Baker. Indeed.
    Senator Smith. OK.
    Commissioner Martin, a recent Nielson Report ranked 
Portland, Oregon dead last in terms of preparedness for DTV 
transition. The report cited a high number of viewers who 
receive their television over-the-air only, and a lack of 
understanding of how the transition will affect them, as 
contributing factors.
    Further adding to the confusion, 15 stations in Oregon--
three of which serve Portland--will have transition, will be 
transitioning to a different channel post. These channel 
changes will require the stations to power down their 
broadcasts, I understand, sometime in October--so what is this, 
this is even ahead of February 2009. Can you assure me that 
viewer disruption will be minimized by those served by stations 
in my State that are changing, literally, their posting, their 
channel site?
    Mr. Martin. I can't assure you that they are going to be 
minimizing the amount of consumer disruption. Indeed, we've 
tried to make sure that they're making those kind of changes as 
late in this process as possible, to ensure that we're 
minimizing that consumer disruption.
    They're also required to notify the consumers, starting 30 
days before they make any of those changes, that they will be 
having to begin powering down, to make some of the technical 
changes they will need to turn on their final digital system.
    So, we're not only trying to minimize that, but we're also 
trying to make sure they inform consumers ahead of time.
    Senator Smith. That's the reason, Mr. Chairman, why I 
raised the Ducks and the Beavers football game, because this is 
going to hit during football season, not just in February. And 
so I'm highly focused on that.
    And I thank you both for all you're doing, and I just 
encourage more of it.
    And, thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Senator Pryor?

                 STATEMENT OF HON. MARK PRYOR, 
                   U.S. SENATOR FROM ARKANSAS

    Senator Pryor. Thank you, Mr. Chairman. And again, thank 
you for keeping the focus on this issue, because it's a very 
important issue.
    Chairman Martin, thank you for coming in last week to talk 
about a variety of issues. I appreciate your time and your 
consideration on those issues.
    But let me start, if I may, with Secretary Baker. As I 
understand it, Secretary Baker, you considered making analog 
pass-through a converter box requirement, but chose not to. Why 
did you choose to not do that?
    Ms. Baker. We did it for a couple of reasons. The first 
being that not all viewers are going to need it. And when we 
had our Notice of Proposed Rulemaking out there, we received 
comments that it actually degraded the signal by 3 DBs, which 
is roughly 50 percent. So, for those who didn't need this pass-
through function, it would degrade the digital viewing. And we 
also heard--from manufacturers--that it was going to cost more.
    So, what we did, was we made it a permitted, not required, 
feature, as we did with other features, such as Smart Antennas, 
Enhanced Programming Guides, the ENERGY STAR certification.
    Senator Pryor. And--but if I understand your response to 
Senator Smith's questions a few moments ago, if you want to get 
a low-power signal, then probably since those are not required 
to transition for another, what, year or so after this, if you 
want to receive that, you will need that pass-through box?
    Ms. Baker. That's right. We're working with the low-power 
community to help educate their viewers that to continue to 
receive the channels that they're watching, they will need to 
buy an analog pass-through box.
    Senator Pryor. And I was jotting something down when you 
said this, but there is a Senate bill that you have encouraged 
us to look at, is it S.--what did you say, S. 2657? Two six----
    Ms. Baker. Twenty-six oh seven.
    Senator Pryor.--oh seven.
    Ms. Baker. Right. It's the technical correction for the $65 
million, for the upgrade for the low-powers.
    Senator Pryor. OK. And if, in your view, if the Congress 
were to pass that, and the President were to sign it, would it 
take care of some of the concerns that the low-powers have 
right now?
    Ms. Baker. Yes, because it's the digital transition, and it 
would help the low-power stations to actually upgrade to 
digital.
    Senator Pryor. Chairman Martin, since we're talking about 
low-power, you know, for example in my State, I heard what 
Senator Smith said about his, I think I have a total of--I'd 
have to think--12 or maybe 13 traditional, over-the-air 
broadcast stations that people think of, but I think I have a 
total of 83 low-power stations in my State, and obviously, a 
lot of them are very small and very localized.
    But, when you have gone through this transition, this 
digital television transition, did the FCC make any special 
accommodations, or give any special attention to low-power? Or 
was that, sort of a second-tier issue?
    Mr. Martin. Well, I think we have tried to work to give 
some special attention to low-power, in large part, the 
Commission and Congress didn't require that low-power stations 
make the transition during the same time-frame, because of 
concerns that low-power stations had raised about the financial 
implications for that--that they didn't have enough money to be 
able to buy all that equipment. That was part of the reason why 
Congress allocated them some additional funding, to make that 
transition.
    So, we do allow the low-power stations to make that 
transition today, if they want to, they're just not required 
to, the same way the full-power stations are.
    Senator Pryor. Yes, I do think that resources are a big 
issue for most low-power stations.
    Last, Secretary Baker, let me point something out that was 
in this weekend's Washington Post by Rob Pegoraro--I'm not 
quite sure how to pronounce his name. He may be here--if you're 
here, I'm sorry for mispronouncing your name.
    [Laughter.]
    Senator Pryor. But, it's about someone trying to get on 
DTV2009.gov and not being able to--did you see this little 
blurb in the Washington Post?
    Ms. Baker. I didn't see this one.
    Senator Pryor. Apparently, there is just a, sort of a 
technical problem that if you don't type in the exact right 
website address, or something like that, then you start to get 
errors or something. So, I'll give this to you before you 
leave, and I think it would just be good for John Q. Public out 
there if we made sure that our websites, that we're up and 
running, we're running correctly--even with a little margin of 
error, they still would be running correctly.
    Mr. Chairman, thank you.
    The Chairman. Thank you very much.
    Senator Klobuchar?
    Senator Klobuchar. Thank you, Mr. Chairman.
    You know, we always talk about the digital revolution, and 
then the digital divide, so now we're going to talk about the 
digital cliff. And what I'm concerned about is that if 
everything goes well, and consumers, say, get their converter 
boxes, and they get coupons, if they want to get those coupons, 
and they redeem them and they bring the converter boxes home 
and they figure out how to attach them properly to their set, 
for some of them there will still be a problem. And if those 
viewers are in rural areas where they already have kind of a 
snowy signal for their analog TV, as I understand it, and that 
means their signal is weak, it may be necessary for that group 
of consumers--even though we're saying, ``Get this converter 
box, and you're OK,'' to also get a new antenna, in addition to 
getting a converter box. And I'm just wondering if you know 
what percentage of consumers will need a new antenna, in 
addition to a converter box, so as to be prepared for the 
transition.
    And what I understand, the reason they call this going down 
the digital cliff is that if they don't have this antenna, 
their picture will be completely blank, even if they have the 
converter box.
    Mr. Martin. One of the benefits of a digital, over an 
analog signal, is that if you're able to get a signal, it's 
better. So, for the people that have a snowy picture, and are 
able to get reception----
    Senator Klobuchar. Correct.
    Mr. Martin.--it's going to be increased--it's going to be 
better.
    Senator Klobuchar. I agree.
    Mr. Martin. But they're----
    Senator Klobuchar. But I think they might be a little 
surprised if they get no picture.
    Mr. Martin. That's right--but for the ones on the other 
side of that cliff, so to speak, the ones that are fuzzy enough 
that they won't be able to, you're right, they'll need to get 
an antenna.
    Our engineers estimate that--that could affect 
approximately 5 percent of those viewers.
    Senator Klobuchar. So, that's how many--how many people do 
we think have analog right now, in the Nation?
    Mr. Martin. Well, there is----
    Senator Klobuchar. I'm just thinking in Minnesota, 430,000 
if you roughly say 10 percent--that's, you know, 40,000 people. 
So, it's a lot.
    Mr. Martin. There's about----
    Senator Klobuchar. Or, 40,000 households.
    Mr. Martin. It'll affect 5 percent--it could affect 5 
percent of the households, but there is no guarantee that that 
5 percent of the households would be ones that are over-the-air 
viewers. In other words, 5 percent of the households on the 
edge could be impacted by this, but that doesn't mean that some 
of them may not be subscribing to cable or satellite.
    Senator Klobuchar. OK.
    Mr. Martin. So, if you assume that 5 percent of those homes 
on the edge could be adversely impacted, then it's only 15 
percent of those, on average, that are over-the-air viewers, it 
could be slightly higher in those rural areas----
    Senator Klobuchar. So----
    Mr. Martin.--than 15 percent. So, it's more like 15, 20, 25 
percent of the 5 percent of homes.
    Senator Klobuchar. I see.
    Mr. Martin. But I do think that it will have that impact. 
That's our engineers' best estimates. The only place where 
there has been a similar transition is in the U.K., where 
they've attempted to do this in several different markets, they 
estimate that it's turned out to be about 5 to 10 percent, 
again, of those people on the edges of the community that would 
need to get a new one.
    Senator Klobuchar. And so, are these antennas that need to 
go on their TV, or go on their roof? How expensive are they?
    Mr. Martin. It would probably impact you, depending on 
wherever your antenna is today, so it could be the ones on top 
of your TV, or on top of your roof wherever you need to place 
the antenna to be able to get that signal today.
    Senator Klobuchar. So, do we know how much it's going to 
cost to put a new antenna in?
    Mr. Martin. There are a variety--again, it could vary 
dramatically, there are a variety of antennas that are 
available, and that are already being marketed by the consumer 
electronics industry, and they vary quite dramatically in 
price.
    Senator Klobuchar. OK.
    Mr. Martin. I would have to get back to you to get you the 
exact----
    Senator Klobuchar. But it could be around a hundred bucks, 
or something like that, or----
    Mr. Martin. I will have to get back to you for the 
estimates of it.
    Senator Klobuchar. OK.
    What are you doing to educate people about this? Do you 
have special ads for people with fuzzy signals? I'm just trying 
to--I mean, these are people that are going to think they did 
everything right, because they got their converter box, and 
then suddenly they're going to have no signal at all. So, what 
are we going to do for those--and I'm sure they're hard to 
ferret out, but I'm----
    Mr. Martin. As I say, part of the challenge is that it will 
be very difficult to figure out exactly which of those 
consumers they are until we actually try to begin the process 
of the transition.
    So, it'll be very difficult to end up figuring out who 
those consumers are, until they actually get the converter box 
and try to plug it in and get a signal.
    Senator Klobuchar. OK. Has the government published any 
detailed information on this? I know it's on the FCC website, I 
just haven't heard us talking as much about this. And I think 
it will involve, you know, percentage-wise it may be small, but 
a lot of people when you look across the country, who are in 
very remote areas, so----
    Mr. Martin. We do have enough--having some information, so 
do some of the industry groups, particularly consumer 
electronics industries. There's actually a website that they 
have that you can go in and type in your address, and they try 
to indicate what kind of antenna you might need, if you need 
another antenna.
    So there is a method for people that want to go to 
determine whether they would need a new antenna, there is a 
best estimate, again, that's no guarantee, that's just some of 
their models, to determine what kind of antenna----
    Senator Klobuchar.--and I know to make messages simple, and 
you know, I've been doing the same thing, you want to make it 
simple, so you say, ``You need a converter box, you need 
this,'' but I think there are going to be a lot of people 
that'll be surprised if we don't get the message out there.
    Just one last question, retailers, I know, have been 
interested in getting geographic breakdowns of your coupon 
demand and redemption data, so that they can track the demand 
for converter boxes and figure out what they should be doing, 
where they should be doing it. If this information is 
available, have you been sharing it with retailers, or will you 
share it with them, if asked?
    Ms. Baker. That one's for me.
    Yes, as a matter of fact, we have been--we've been trying--
we have a very accommodating relationship with the retailers, 
it's a voluntary program, and we're thrilled with their 
participation. And so, to the extent that we can provide them 
five-digit zip code data on coupon redemption rates, we're 
happy to do so. It's also on our website.
    The Chairman. Senator McCaskill?

              STATEMENT OF HON. CLAIRE McCASKILL, 
                   U.S. SENATOR FROM MISSOURI

    Senator McCaskill. Thank you, Mr. Chairman.
    First, let me thank both of you, both of your organizations 
have been incredibly cooperative and helpful. In Missouri, NTIA 
hand-delivered a number of pamphlets to my office in St. Louis, 
in order for us to get them out to an event we were having. The 
FCC staff has been accompanying my staff all over the State. We 
have been in contact with every senior center in Missouri, and 
have done a great number of presentations, and both of you have 
just been terrific, in terms of your organizations being 
helpful.
    We have one in five Missourians that are going to be 
impacted by this conversion. And as you all may be aware, we 
just went through some rough, dangerous times in our State. We 
had severe ice storms that isolated a lot of people in rural 
communities without the ability to get the basic essentials of 
life, and then we've now had a number of very serious flooding 
situations, many of them in areas where we have a high number 
of people that are on analog television. So, I'm very worried 
about what happens if we get to the date and there are still 
people out there, as Senator Stevens referenced, that maybe 
have not taken advantage of the information that we are now 
doing a much better job of getting out to them, I think.
    And one of the things I wanted to talk about was the number 
of coupons. I look at the assumptions that you have made, Ms. 
Baker, about whether or not we're going to have enough coupons, 
and I've got to tell you, I'm very skeptical of the 
assumptions. The assumption that the rate of demand for these 
coupons remains constant, doesn't make sense to me.
    It appears--I mean, I think common sense would dictate 
that, as the date gets closer, and as more information gets out 
there, the demand is going to go up for the coupons, not stay 
constant.
    And then your assumptions said that if--assuming the demand 
remains constant--which I don't think it will, and 100 percent 
are redeemed, we're going to run out 3 months before the date. 
Well, that's a really bad time to run out.
    The second was, that demand would remain constant, and only 
50 percent would be redeemed. And then we'd have enough to go 
until the date of transition, but it's not clear to me by what 
I've read, whether or not that goes beyond the date of 
transition, to those people who realize, that day, when they 
turn on their TV sets and it doesn't work, they've got to do 
something.
    Where do these assumptions come from? Did we pull them out 
of thin air? Or is there some kind of methodical basis that was 
done to decide that demand wasn't going to go up for these 
coupons?
    Ms. Baker. Well, we don't have any information that the 
economic analysis that we did last summer when we were doing 
our rulemaking does not stand solid, as it is. In that economic 
analysis, we took the numbers, as you know, the numbers are 
kind of all over the map, but we took CEA's numbers, GAO 
numbers, NAB numbers, and the Consumers Union numbers.
    And so, what we ended up with some people using the 
transition was between Consumers Union's 80 million and 74.2 
million, or CEA's 32.7 and 29.1 million.
    When you take a demand of, say, 70 percent--which is 
somewhat out of the air, although it does follow different 
surveys that we've had--as well as the demand for coupons, and 
we came up to a range of 20.4 million sets, to 51.9 million 
sets.
    So, I think our economic analysis stands--we don't have any 
further redemption data that is more accurate or the actual 
number of sets that are out there.
    I think you're very right, as you will see in your own 
State, that as you've conducted events, which we're grateful to 
you for doing, then the demand on the coupon spikes. Currently, 
you have had 140,886 coupon applications, and you've had 10,784 
that have been redeemed.
    It's, you know, I think we will continue to see these 
spikes, we've seen them spike at the very beginning of the 
program, we had a huge spike the first week in coupon 
applications, we also had a very large spike around the 
February 17th year-out event. As we move forward, we're now 
doing Experience the Benefits weeks, we're seeing spikes if we 
go to communities. We're going to do application round-ups in 
the fall, and certainly as we do the 100 Days Out, I think 
we'll continue to see spikes.
    So, at this point we think that the numbers that we have 
are the best that we have at this point, until we start getting 
more accurate redemption data, as to whether these people are 
just applying for the coupons and don't need them, because they 
have cable or satellite or some other pay television, or 
whether they are actually redeeming them.
    And, as I mentioned in my testimony, May 27th is the first 
redemption data we'll see. It becomes a little bit difficult to 
gauge because of the 60-day certification, because of the 
second tranche of money, and the 90-day exemption data. So, I 
would think that you would see me asking for as far as proper 
program management goes, the second tranche of money, sooner 
rather than later.
    Senator McCaskill. Well, I know that you will help us stay 
on top of the redemption, and I do think, particularly with the 
elderly, there is going to be a tendency to ask for the coupon, 
because they just want to be sure, just in case they might need 
it.
    And so, I do think if we have any way of assessing what 
percentage of these requests are elderly as opposed to others, 
I think that you probably will have a less than 100 percent 
redemption, perhaps, with some of the elderly population than 
you might with some of the others.
    Now, let me ask about--this is a little awkward, but, you 
know, I think you're doing a very good job right now, Ms. 
Baker, and I would ask Chairman Martin--don't you think Ms. 
Baker is doing a good job?
    Mr. Martin. Oh, absolutely.
    [Laughter.]
    Senator McCaskill. OK, well, then I don't get this--what we 
need right now is continuity. What we need right now is to not 
have, you know, I mean, I've laughingly and cynically and, 
maybe unfairly talked about the deck chairs on the ship of the 
Titanic, in terms of the movement that we have had in terms of 
personnel surrounding this issue. I mean, it seems to me the 
last thing in the world we need right now is to confirm someone 
new to take your job as this date is quickly approaching, and 
what we need most desperately is continuity.
    I don't understand why the White House is interested in 
replacing you, Ms. Baker, and I don't want to put you on the 
spot, here, but I want to say for the record, I think you 
should stay. I think you should stay through the date of the 
transition. I think this is a really bad time to play politics 
with this position, because there are real consequences in 
terms of the program, and I just feel very strongly that the 
last thing in the world we need right now is to put a new 
person in because of some political consideration when we have 
a program necessity, in terms of making this thing work for the 
American people. So, I wanted to get that on the record.
    And then, finally, the last thing I wanted to talk about is 
the labeling of the boxes as ``coupon eligible.'' One well-
known online retailer does not have its coupon-eligible boxes 
labeled as such, and there is also another retailer online that 
says consumers must redeem their coupons in the store--are you 
all taking steps to address those two problems that I see, in 
terms of the online community?
    Ms. Baker. Yes. As far as the labeling goes, at first we 
were worried about the fraud, that people would use our label 
and say that this is coupon eligible when it wasn't. We've 
since changed--there has been a course correction in this 
program, and we are encouraging people to use both our label, 
as well as say ``coupon eligible'' on the boxes. Any further 
instances that we see as we come along, we'll do continual 
course corrections.
    Senator McCaskill. And what about the retailer that's 
saying that you can't redeem online, you have to come in the 
store. Have you all made any attempt to contact them and talk 
to them about that problem?
    Ms. Baker. We've had a number of retailer issues that we've 
been working through.
    Senator McCaskill. OK. If you'd keep us advised of those, 
we'd appreciate it.
    Thank you both very much.
    The Chairman. Thank you very much.
    Senator Wicker?

              STATEMENT OF HON. ROGER F. WICKER, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Wicker. Thank you, Mr. Chairman.
    I'll also ask an awkward question--Chairman Martin and 
Secretary Baker--don't you think Senator McCaskill is doing a 
really good job?
    [Laughter.]
    Senator Wicker. I have a particular concern about my home 
State of Mississippi, because there is so much new construction 
going on because of Hurricane Katrina, I don't know if either 
one of you are aware of it, but two and a half years after 
Katrina, there are still homes where we haven't even poured a 
new foundation because we just can't get there yet, because of 
Federal bureaucracy, or the magnitude of the storm.
    Now, the coupon program is going to be based on valid 
street addresses provided by the Postal Service. I'm told that 
that process has been viewed as unsatisfactorily slow in some 
areas, and so--how do you get a new address registered in the 
system, and could you help us give particular attention to a 
place like South Mississippi, where so many people will be 
moving into new residences?
    Ms. Baker. We're certainly willing to work with you, as I 
think we have thus far. I think what's happening is that those 
folks--we're using the Coding Accuracy Support System or CASS 
system, which is the Post Office system, that they recognize 
whether it's a residential or a business. It depends on exactly 
where your consumer's applying--if it's on the web, they'll 
actually pull up a--an exemption application, they can apply 
immediately for an exemption. And they can self-certify that 
they are a residential address, and they will get their 
coupons. And I think we're making that easy for folks just 
like----
    Senator Wicker. They self-certify and their word is taken 
for that?
    Ms. Baker. Yes.
    Senator Wicker. OK.
    Ms. Baker. So, we're working--it's easiest when they apply 
on the web--it's a little bit slower on the phone because the 
folks that are answering the phone aren't allowed to grant 
exemptions, so it will take up to 5 days, and if it's via mail, 
it takes two to 3 weeks.
    Senator Wicker. OK, well, I would just appreciate it if you 
could continue to be aware of our particular circumstance, 
there. And give us some sort of comfort level that the eligible 
household database will be updated as often as possible.
    And it also strikes me that there are so many people on 
this committee who are from rural States, or States with a lot 
of rural areas, where people actually do rely on over-the-air 
signals for their primary service. There are a number of people 
like that in my State. There's also a sub-set of individuals 
who have satellite, but they rely, also, on over-the-air 
signals for emergency weather information, for local weather 
and things like that.
    So, if there is currently no digital service in these 
areas, I'm told that these residents have no ability to test 
their existing antennas. And so my question to both of you is, 
is this a matter where the FCC and NTIA are providing guidance 
to individuals, and how are you providing this guidance?
    Mr. Martin. Well, let me first focus on the broadcasters 
side, you're right, they have to have their final digital 
signal up and going to be able to see how it will fully reach. 
Many of the broadcasters will begin, many broadcasters already 
have that up and going, but many of them will also continue to 
be doing that throughout the year, so that's going to be an 
ongoing process. The ones that will require some changes do 
have to notify consumers, as I mentioned in my testimony 
earlier, but they will end up being able to go through and 
trying to get that digital signal up and going, so consumers 
can actually see what they would be able to end up doing.
    But as far as educating on the consumer side, we've been 
focused on educating on the transition and taking the first 
steps, which involve getting the boxes and trying to get them 
home and plug them in, but you're right--it is going to be a 
two-way street, in that sense, we're going to have to get the 
broadcasters to the point where they're getting that digital 
signal up, so it can be fully tested.
    Senator Wicker. Madam Secretary?
    Ms. Baker. I think the antenna issue, as the Chairman's 
outlined, is you know, there are certain areas of the country 
that have this antenna issue--I think we'd be surprised if 
most--when you put antennas and you put the box on the 
television, you switch to a digital signal, if you don't have 
to go like this, in very simplistic terms, you're going to have 
to probably adjust the antenna. Some of our boxes, actually, 
have a permissible feature, which is a Smart Antenna, which 
will adjust your antenna for you, but I think it's just part of 
the educational program that we're going to have to reach out 
toward consumers. As well as, you know, the Consumer 
Electronics Association has done a great website, which is 
antennaweb.org that all of us have linked to, that provides 
more information for this.
    Senator Wicker. Well, thank you.
    And I want to thank you, Mr. Chairman for holding this 
hearing. It strikes me that we're going to be able to get 
through this all right, but I do think that someday, some very 
intellectual person may end up doing a doctoral thesis or 
dissertation on this transition, and the law of unintended 
consequences and how it played out. So, it's going to be 
interesting to watch.
    Thank you, Mr. Chairman.
    The Chairman. I thank you, sir.
    Senator Carper?

              STATEMENT OF HON. THOMAS R. CARPER, 
                   U.S. SENATOR FROM DELAWARE

    Senator Carper. Thanks, Mr. Chairman.
    To our witnesses, welcome. Thank you for joining us today.
    In the last, I guess, the last couple of months I've had a 
chance to hold, really, forums around the State of Delaware. It 
reminded me a little bit of what we did when the Medicare 
prescription program was passed, and we just wanted to reach 
out to people and make sure that they knew what benefit was 
going to be offered so they could understand that benefit and 
make the best choices for themselves.
    So, what we're endeavoring to do in Delaware is just to use 
my own office and position to--not to be Paul Revere, but to 
let people know that a change is coming, and that could affect 
some of the people in our State, and to make sure that they're 
in the position to make the right decisions for themselves, 
understand the options.
    And I found there is a whole lot of--believe it or not--a 
whole lot of confusion. And it reminded me, again, of Medicare 
Part D plan, which is, as you may recall, very confusing, 
particularly for people that are in their 70s, 80s, 90s. And a 
lot of the people, I think, inordinately, some of the people 
who use analog TV over-the-air reception, are folks who tend to 
be older--not all--but a number of them do.
    And I guess one of my first questions is--in terms of 
developing an outreach program to folks, to educate them, to 
bring them along, so they can make, really, the best informed 
decision for themselves--do we take that into account? I know, 
I used to say, when we were working on Medicare Part D, and 
trying to put together the outline of the program and, in being 
able to explain it to people, I always used my mom as an 
example--is there any way my mom would understand Medicare Part 
D? And I finally said, ``Probably not.'' She's going to have to 
get some other people to help explain it to her.
    And I just hope at the end of the day we're not nearly as 
complicated here with the digital transition. So, let me just 
start with that, are we considering, at all, the particular age 
cohort of some of the folks that we need to outreach to?
    Mr. Martin. We do try to end up focusing on the consumers 
that we think--and that we know--are disproportionately over-
the-air viewers, like the elderly and like seniors. And I think 
that that is a prominent part of our outreach plan. So, for 
example, we've sent the Commission staff throughout the country 
located in our field offices to over 3,000 different senior 
centers throughout the country, and then about almost another 
1,000 community centers that are frequented by the elderly to 
try to provide information and do seminars and outreach events 
to try to explain in very simplistic terms what the transition 
is going to mean to them, and what steps they'll need to take.
    We do reach out to other targeted groups, as well, but we 
do try to take that into account.
    Senator Carper. All right, thank you.
    Ms. Baker?
    Ms. Baker. Luckily for us, we have each hired Ketchum, 
which has experience in Medicare Part D, so they have a track 
record of understanding how to reach out to these groups.
    We conducted 17 different focus groups across the country 
including seniors, trying to get our language right, trying to 
get our materials right. It's how we ended up with, I think, 
the coupons being handed around. It's red--consumers liked red. 
It has the Department of Commerce logo on it, because that gave 
seniors, in particular, some validation that it was from the 
government. It's how we started using, ``It's a one-time buy-
in,'' type of language, it's a discount----
    Mr. Martin. If she gives it back, I'll let her show it to 
you.
    Ms. Baker.--it's a discount, not a rebate. And government-
run--they like to make sure it's government-run. The expiration 
in 90 days--all of this language comes from these focus groups, 
and particularly the seniors. I think outreach is critical. We 
often hear about the United Kingdom, and how they've gone to 
every household for over 75, they've gone to hook up the box 
for the senior citizens, and that's really, you know, a nice 
program, the way that they're running it there, but that's not 
the way we're running it here.
    Every time I speak to a senior's group, we go through the 
different ways that you can make the transition, and inevitably 
they all put their hands up and say, ``I have cable, do I need 
the box?'' So, I do think it's something that we all need to 
reach out to our neighbors and reach out to our church groups, 
really try and get as many people to understand this as we can, 
particular the vulnerable groups.
    Senator Carper. All right, thank you.
    I'm going to ask each of you, and this question may have 
already been asked, and I apologize if it has been.
    But my sons are both--one's in college, one's in high 
school, and my youngest son is going to be graduating in May 
and we talk about grades a lot, and how things are going, turns 
out they're going pretty well.
    But, I just want to talk to you about assigning grades, and 
ask each of you to maybe help me in assigning grades, maybe a 
letter grade, in looking with respect to how well we're doing 
in educating consumers. And I'm encouraged by what you just 
shared with us, but--when you say, if you're assigning a grade 
for how well your own agencies are doing in the education 
process, you know, A, B, C, D--what kind of grade would you 
assign at this point in time, incomplete? I don't know.
    [Laughter.]
    Mr. Martin. Well, certainly I think it is incomplete until 
we know where we are at the end of the day--until we get 
further along in the transition. I think that you do have to 
look at the dramatic changes that have occurred over the last 3 
or 4 months. As one of the recent surveys was done by the 
Association of Public Television Stations, they said that in 
the last 3 months, consumer awareness of the DTV transition has 
increased from about 50 percent to over 76 percent.
    Senator Carper. From about what, to----
    Mr. Martin. From about 50 percent to over 76 percent. So, 
you've seen a dramatic increase in DTV awareness over the last 
few months. So, in the context--over the last few months, I 
think that both agencies have been doing a very good job of 
trying to get out a message through both the resources that we 
have and the additional resources that Congress has recently 
provided to us.
    But, I do think that most of the education efforts by both 
of our agencies and by the industry have all just started, but 
I think that there is a reason for that, I don't think people 
thought it was appropriate to begin that education process 
until we got closer to that year-out time-frame for the 
transition.
    Ms. Baker. I'd have to get an incomplete thus far, as well, 
but you know, for the roughly third--beginning third that we've 
done, which is focus groups, and generating materials and doing 
the market research--we have 10 million coupon requests. So, I 
think the numbers speak for themselves, so we're doing a pretty 
good job so far. We have a lot of work to be done, and I think, 
you know, as soon as we see the redemption rates, and in which 
DMAs these redemption rates are--what those numbers are, in 
which area, then we'll know where to spend the rest of our time 
and our education.
    I think the numbers speak for themselves, that we've done a 
good job so far.
    Senator Carper. About 10 million? Ten million?
    Ms. Baker. Ten million, yes.
    Senator Carper. OK, would you say most of those are from 
Delaware?
    [Laughter.]
    Ms. Baker. I can tell you what's in Delaware, as a matter 
of fact. In Delaware we have had 11,409 coupon applications. 
We've only had 740 redeemed, so far, though.
    Senator Carper. All right, well we have our----
    Ms. Baker. But we'll keep you updated.
    Senator Carper.--we have our work cut out for us, OK.
    Let me ask, a similar kind of question if you could, maybe, 
think of a letter grade you might assign to the work being done 
by--the education work being done--by the broadcast industry 
itself--how are they doing?
    Mr. Martin. Oh, by the broadcast industry themselves?
    Senator Carper. Yes, on this front.
    Mr. Martin. Well, I think that they are obviously the most 
critical in this. And so, in the end they need to get an A, 
because they're the ones who are going to be making sure that 
their viewers are making that transition. I think that they 
just announced at the end of February their most recent plan 
for how they're going to be doing that, they began a $700 
million campaign last fall, they changed it, and modified it, 
and increased what they were going to be doing.
    And again, I don't think we can give them a grade, as of 
yet, because we've got to get further along in the process, and 
closer to the transition to understand.
    Senator Carper. Ms. Baker?
    Ms. Baker. I'm not quite as shy in giving them a good 
grade, because I think they really have done a terrific job. 
They've pledged a billion dollars, they realize that it's their 
customers, that it's their business that's at stake, and 
really, they're the experts on how to get the word out on a 
program like this, and I think they've really stepped up, and 
are doing it.
    Senator Carper. Good.
    My youngest son's in high school, he's just started--they 
started yesterday, the fourth marking period out of four. And 
so maybe we're in the--are we in the first marking period, 
here? Do you want an A in the first marking period? OK, fair 
enough.
    How about the cable industry itself? What kind of grade 
would you give our friends in the cable industry?
    Mr. Martin. Well, again, I think that they've provided not 
as many resources as the broadcasters, but this is not as much 
their challenge. So, I think that their willingness to 
participate has been very good. Because, as I said, this isn't 
really their responsibility.
    Senator Carper. All right.
    Ms. Baker?
    Ms. Baker. I also am very grateful to them for all of the 
efforts that they've done to educate their consumers, and also 
to see these groups working together on an issue that's as 
historic, and as important as this, is really valuable.
    Senator Carper. And, last but not least, the retailers?
    Mr. Martin. I think, again, the retailers haven't made as 
many public commitments in terms of education as early as the 
other two industries did, but they also have done a very good 
job in starting to stock the stores with the converter boxes, 
and they've become much more active, recently, in just a very 
practical part of how we're going to make the transition occur.
    I don't know if you have a better sense, having worked with 
them directly on the converter box program, what would you say?
    Ms. Baker. Again, it's a voluntary program for them, and we 
are very grateful for their participation. We have over 1,000 
retailers with 11,000 outlets across the Nation, online, you 
know, telephone operators--it's a big investment for them to be 
certified. They had to actually put point-of-sale software into 
their stores, they had to train their people, they had to agree 
to be audited, they have to provide NTIA with electronic 
redemption information, they had to agree to accept the coupon, 
and have the automatic payment system from the Treasury. For 
them to voluntarily step up and participate in this program, we 
are very grateful.
    Senator Carper. Although I'd say if I were a retailer, 
maybe, a retailer with a national network of stores, I would 
love to be the only retailer handling these coupons. Just think 
of all of the millions of households, shoppers, that you can 
get into your store. And they get them to come in and redeem 
their coupon, but maybe in the hopes that when they're in your 
store, they could buy some other stuff, too.
    In fact, if I were a retailer, I would put the coupon 
redemption operation all the way in the back of the store----
    [Laughter.]
    Senator Carper. And kind of hide it so people really had to 
look around for it. But hopefully, they won't be quite that 
thorough.
    Just to follow up on this one, Secretary Baker--have 
retailers contacted your agency about getting geographic 
breakdowns of your coupon demand and redemption data in order 
to be able to track the local demand for converter boxes?
    Ms. Baker. We're providing that to them by zip code, and 
it's also available on our website, so anybody can look at it.
    Senator Carper. All right, good. Fair enough.
    And the last question, Mr. Chairman, I'd have for our 
witnesses, this is a question to Mr. Martin, if I could. I 
think you probably know better than anyone else that there is a 
lot going on in terms of telecommunications policy these days. 
At the same time, however, the FCC has been charged with a 
great deal of the responsibility for overseeing this digital TV 
transition--we have a hard date, as we know, of about, oh gosh, 
a little less than 11 months away.
    Given the daunting task that's before us, let me just ask 
if you believe that the digital TV transition should be the top 
focus of the FCC, one of the top focuses of the FCC--I realize 
that the National Telecommunications and Information 
Administration also has a significant role and part in the 
transition, but I'm concerned about the FCC role of being an 
effective proponent of the transition, even as your agency has 
to be focused on a lot of other unrelated issues?
    Mr. Martin. I certainly think it's one of the most 
important issues that we're facing. I think certainly another 
issue that's very critical was related to that, it was the 
auction that we just completed of the spectrum that we're going 
to be getting back as a result of the transition. I think that 
was critical for us to complete to get the spectrum back into 
use, both for the economic benefits for the country, when 
you've got spectrum being fully utilized, and also in terms of 
increasing wireless broadband deployment.
    We have one piece of the auction that we need to end up 
completing, we've got to go back and re-evaluate what to end up 
doing with the D Block, which not only serves the potential for 
wireless broadband, but also has the potential to dramatically 
increase, for example, public safety's ability to solve their 
interoperability problems.
    So, while I think this is certainly right at the top, and 
the most important thing in the media area, I do think that 
making sure we're focusing on, for example, solving public 
safety's interoperability problems, I think I have to always 
say is a top challenge for us, as well.
    Senator Carper. All right.
    My thanks to both of you.
    Thanks, Mr. Chairman.
    The Chairman. Thank you very much.
    Senator Thune?

                 STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    Senator Thune. Thank you, Mr. Chairman, and thank you for 
holding the hearing. I want to thank our witnesses for 
providing valuable information today on the road ahead for this 
transition. There's a lot of benefit that we gain from, I 
think, transforming the way that we enjoy television by this 
transition to digital, and I recollect my days growing up in 
South Dakota--I grew up in a rural area of the State in a town 
that now has about 600 people in it, and we had one TV station 
until, I think, I was about in 8th grade, we got the CBS 
network affiliate. And as much time as people in the Dakotas 
spend in their houses during the winter months, and you only 
had one--I don't know how we survived on one--but I remember 
when the NBC network affiliate came when I was in the 8th 
grade, it was like winning the lottery, you know, we had double 
the television.
    But, that's just kind of put into context, though, things 
have changed a lot in rural areas--we have satellite, we have 
cable, there are lots of opportunities for accessing 
information in rural areas that didn't exist before.
    And as this transition occurs, however, there are still a 
lot of people out there who derive their TV through the--
through an analog signal, and I think are probably likely to be 
more proportionately impacted by this change than perhaps our 
folks in other areas of the country.
    And so, as I have in the past at some of these hearings, 
focused primarily on the impact on rural areas of the country, 
and I guess one of the things I would like to ask with respect 
to rural areas, is also tribal lands, because we have a lot of 
tribal lands in South Dakota--we don't have data on how many 
people we--television users out there that derive their 
services through an analog signal.
    We do have, however, in comparing the statistics with 
Delaware, as Senator Carper was pointing out--14,000 households 
have applied for over 21,000 coupons--and so I think we've got 
a significant number of people out there who are going to have 
to make this transition.
    But what efforts has the FCC made with respect to tribal 
areas and tribal lands? I know that you had some kind of an 
outreach workshop that was conducted here in Washington, can 
you tell me a little bit about that? And what other things 
might be done to reach out into those areas of, more rural 
areas of the country?
    Mr. Martin. Well, we have done a workshop where we even 
focused specifically on how we can reach out to viewers who are 
living in rural areas, and in tribal lands, in particular. 
We've been working closely with several of the organizations 
that are representing the Indian community, on how we can reach 
out to that community, to make sure we are getting that message 
out effectively--both in terms of providing them information 
about the upcoming transition, and what they'll need to end up 
doing.
    We've also been working with the Bureau of Indian Affairs 
to make sure that we work with all of their regional offices, 
in getting them the kind of information that they need in terms 
of flyers and outreach material, to help them get that message 
out.
    I also would point out that both telephone companies in 
rural areas, and particularly those serving tribal areas, also 
receive Universal Service funding, and they will be some of the 
ones who would be required under our recent orders to also be 
getting the message out in terms of billing inserts for their 
consumers, if they were receiving Universal Service funds, for 
example, for our Lifeline and Link-Up Program--it would provide 
service to many tribal areas, then those telephone companies 
would have to be putting inserts into their bills that will be 
identifying this upcoming transition.
    So, we both had workshops here, we've been trying to get 
the message out in working with the advocacy groups, and going 
out into the field with the advocacy groups when they're having 
conventions, and also trying to work with the Bureau of Indian 
Affairs to specifically try to adjust the tribal areas.
    Ms. Baker. I would say, we've worked with the Native 
American groups from the very beginning. I think when we were 
developing our rule, we heard from Council Tree, so we included 
a specific exemption in our rule to permit those that were 
living on Indian reservations and Alaskan Native communities to 
apply for the coupon, even though they use a P.O. box. We 
thought we had solved it, but obviously we didn't. So we are, 
as you might have heard, we have a draft NPRM to change that 
rule so people who use a post office box can certify that they 
have a household, and we'll be able to give them coupons, as 
well.
    I think we have an October event with the National Congress 
of American Indians scheduled, but we are certainly happy to 
reach out in any other ways that we can, and look forward to 
any suggestions you might have as to what else we can do to 
reach out to these important groups.
    Senator Thune. My State of South Dakota, of course, too 
we've got particular concern with seniors. And I guess my 
question has to do with what the FCC, Mr. Chairman, may be 
doing to coordinate with community social service, grassroots 
organizations, Meals-On-Wheels--points of access that seniors 
use on a regular basis to get information?
    Mr. Martin. Well, first, we've actually asked our field 
offices to go out into every State and try to provide 
information to every senior center and every community center 
which is frequented by seniors about this--offering to do 
presentations both about the upcoming transition and what 
they'll need to do, and actually how they'll need to utilize a 
set-top, a converter box, to make sure they can still watch 
television.
    That program, in and of itself has reached out to over 
3,000 senior centers, and almost another 1,000 community 
centers. And I think that's been instrumental in trying to get 
that message out at the grassroots level.
    But we have also been trying to work with some of the local 
community service, or senior service areas--both through HHS, 
and also through some of the corresponding State agencies. And 
I can get you some more of the specifics about what we've done 
in South Dakota. I don't know off the top of my head, but I can 
get that for you.
    Senator Thune. Secretary Baker, you talked about the coupon 
program for converter boxes, and those coupons being good for 3 
months. I think it's been--has it been about 3 months or so, or 
a little over, since the first wave of those, since the 
applications for coupons were submitted, is that----
    Ms. Baker. May 27th is when we're going to see our first 
expiration date.
    Senator Thune. And that's when you'll have the first good 
data on the redemption rates for those?
    Ms. Baker. It's going to be our first data. You know, our 
first week we mailed out 350,000, our first few weeks we only 
mailed out 350,000. We're now mailing out over a million a 
week. So, our first data is going to be a little bit less 
conclusive. I would say, by the end of June, beginning of July, 
we'll probably have pretty good data on redemption rates.
    Senator Thune. Do you have any anticipation, expectation 
about what those redemption rates might be? I mean, do you have 
anything so far that would give you an insight into----
    Ms. Baker. You know, it's really too early. We've had 
260,000 coupons redeemed. We've had data that we've had 
surveys, we've had data that we've, you know, gleaned from our 
own interaction with groups. We've had--we have general data on 
how many people use a coupon, but I'm not sure--this is a 
unique program, and so I don't think I should give a guess as 
to what the redemption rate is really going to be.
    Senator Thune. Well, we won't ask you to extrapolate, but I 
didn't know if you had any preliminary data that might tell you 
something about that.
    Well, I appreciate your attention to this, and you've got a 
big challenge ahead of you, both of you. I know it's--up to the 
FCC and NTIA to get this job done, and up to, what, 20 million 
or thereabouts, folks around the country that are going to 
need--be educated and understand how to make this transition? 
So, we wish you well, and I hope that you will--if there are 
things that we can be doing to be helpful, in that regard, that 
you'll make sure that we're aware of those, as well.
    Thank you for your testimony.
    Mr. Martin. Thank you.
    Senator Thune. Thank you, Mr. Chairman.
    The Chairman. All right.
    Thank you very much.
    I noted in your testimony that about 6 weeks ago, the 
National Association of Broadcasters and the Consumers Union 
issued a report on their findings of the polls. The National 
Association of Broadcasters suggested that awareness has grown 
to about 79 percent.
    However, at the same time, the Consumers Union poll 
indicated that 74 percent of those polled were really not aware 
of what was happening, they had major misconceptions; and these 
numbers trouble me. So, I hope that both agencies will be able 
to advise this committee on a monthly basis as to progress 
you're making in, you know, management of this transition. I 
think it would be very helpful to us.
    Mr. Martin. Of course. We'd be happy to.
    The Chairman. And I'm pleased to advise you that, Madam 
Secretary, S. 2607, the low-power bill, will be considered on 
April 24, and at that time it will pass unanimously.
    Ms. Baker. Thank you very much.
    [Laughter.]
    The Chairman. And, I'd like to thank both of you on behalf 
of the Committee for your testimony, it's been very helpful. 
I've just got my fingers crossed. I hope everything turns out 
well.
    Mr. Martin. Thank you.
    Ms. Baker. Thank you.
    The Chairman. Thank you.
    [Whereupon, at 4:21 p.m., the hearing was adjourned.]

                            A P P E N D I X

               Prepared Statement of Hon. John F. Kerry, 
                    U.S. Senator from Massachusetts

    In less than a year, on February 17, 2009, two-and-a-half million 
televisions in Massachusetts will go dark unless their owners take 
action when major broadcast stations are required to switch from analog 
broadcast of television signals to digital transmission.
    For the most part, the switch to digital is a good thing. Digital 
transmission will provide TV watchers with a clearer picture and 
provides an opportunity for an increase in the amount of local 
programming available. It will also free up some ``beachfront real 
estate'' on our public airwaves, which will be used to improve the way 
our public safety officials communicate during an emergency and for 
other innovative purposes.
    But in order to get to that point, we need to make sure that the 
millions of Americans who are in jeopardy of losing TV service on 2/17/
09 are aware of the steps they need to take.
    There needs to be a real concerted effort at the FCC and at the 
NTIA to educate those who will be affected. Congress needs to provide 
sufficient funding so that government can partner with industry to get 
the word out effectively, and I am confident we will do that.
    But equally important to funding is the emphasis placed on this 
effort by the Administration. The DTV transition represents an historic 
moment for this country, and is the most significant development in 
television technology in half a century. It deserves the full attention 
of this Administration, lest it result in mass confusion and 
frustration on behalf of the millions of affected American households.
    I urge Chairman Martin and Acting Assistant Secretary Baker to 
expend every effort on smoothing the transition for the elderly and 
low-income populations that studies show will be adversely impacted. 
And I urge you also to leave less critical, more politically charged 
issues to be dealt with in due time. On behalf of Americans across the 
country still reliant on over-the-air television, we must get this 
right on February 17, 2009.
                                 ______
                                 
   Prepared Statement of Hon. Bill Nelson, U.S. Senator from Florida

    On February 17, 2009, American consumers will see one of the 
biggest changes in broadcast media since color television was 
introduced in the late 1950s.
    On that day, all full-power television stations broadcasting in the 
United States will discontinue their analog signals, and switch to all-
digital broadcasts.
    Digital television broadcasting will allow consumers to receive 
multiple video channels from a single broadcaster, superior picture 
resolution, and CD-quality sound.
    This transition, however, will only be a success if all Americans 
learn about how the transition will impact them.
    So far, the record is mixed.
    A January 30, 2008, study by Consumers Union found that 74 percent 
of consumers who knew about the digital television transition had major 
misconceptions.
    Perhaps most troubling, the study also found that one-third of 
consumers living in households with only analog, over-the-air reception 
televisions still had no idea that the transition was happening.
    On February 19, 2008, the Federal Communications Commission (FCC) 
adopted an Order requiring broadcasters to provide on-air information 
about the digital television transition to their viewers.
    This is a good start.
    However, it is critical that the FCC follow-up on this outreach to 
ensure that it is being received by populations that may be 
disproportionately impacted by the transition, such as rural viewers 
and senior citizens.
    This could be accomplished by conducting studies in certain 
targeted areas to ensure that the message is getting through to key 
impacted groups. The Commission could then use this data to ensure that 
public outreach programs are effectively targeted for maximum impact.
    The FCC has recently focused on a number of other non-urgent 
issues--such as relaxation of the media ownership rules. With little 
over 10 months remaining until the transition deadline, it is 
imperative that the Commission make the success of the digital 
television transition one of its top concerns.
    I also have some concerns about the National Telecommunications and 
Information Administration's (NTIA) ``digital-to-analog'' converter box 
coupon subsidy program.
    These converter boxes allow consumers with older, ``analog-only'' 
televisions sets to convert digital broadcasts into analog signals that 
their television sets can use. Currently, the base component of this 
program provides up to two $40 converter box subsidy coupons to every 
American household that requests them.
    As of April 7, 2008, almost 10 million converter box coupons had 
been ordered from NTIA.
    This level of demand is positive. Unfortunately, NTIA's rules 
governing the program may leave some Americans behind.
    For example, NTIA's current rules define ``household'' as all 
persons living at a ``U.S. Postal Service address.'' However, this 
definition appears to exclude many people living in multiple tenant 
dwelling units at a single address. Therefore, an assisted living 
center--with 50 individual rooms at a single U.S. Postal Service 
mailing address--would only be eligible for two converter box coupons.
    Furthermore, even when consumers get the coupons, they may not be 
able to use them. The coupons currently have a 90-day expiration date--
with no provision to replace them if they expire. While NTIA has signed 
up a number of retailers to participate in the converter box program, 
no one is monitoring retailers to ensure that they actually have 
converter boxes available for purchase.
    Finally, NTIA needs to do a better job of ensuring that viewers of 
low-power and Class A television stations know that some of these 
stations will not transition to digital broadcasts next February--and 
that affected consumers will need a converter box with an ``analog 
pass-through'' feature to continue receiving these channels.
    The digital television transition holds great promise for America--
but also substantial perils. I hope both the FCC and NTIA take this 
opportunity to address these concerns, before it's too late.
                                 ______
                                 
Prepared Statement of Hon. Maria Cantwell, U.S. Senator from Washington

    I want to thank Chairman Inouye and Vice Chairman Stevens for 
holding this important hearing. Last summer, when the Committee held 
its last oversight hearing on the digital television transition, I 
expressed concerns that this is a train wreck for American consumers 
waiting to happen.
    A half year later, I still don't have a warm feeling about it. 
Surveys indicate a high level of consumer awareness of the transition. 
But while the level of awareness may be high, the level of confusion 
seems even higher. And unlike the approach the Clinton Administration 
took with Y2K, there is no one person or organization accountable for 
ensuring a smooth DTV transition for all involved. Even at this late 
stage, there remains a need for a White House level interagency working 
group to coordinate DTV activities government-wide.
    The effort to make Americans aware of the transition and to educate 
them on how to be prepared remains, by and large, decentralized and 
voluntary. I do want to thank broadcasters, cable system operators, 
consumer electronics companies, and too many not-for-profit 
organizations to name for their voluntary efforts to educate consumers 
about the coming transition. These contributions are significant. The 
recently-released, long-awaited DTV education order will continue to 
build awareness, but awareness is only the first of many steps, 
particularly for disadvantaged populations.
    Over the course of the past year, I have met with a number of not-
for-profit organizations that work daily with seniors, the disabled, 
low-income, non-English speakers, and Native Americans. It is clear 
that these organizations will need additional resources to take on any 
additional responsibilities helping these underserved groups prepare 
for the DTV transition.
    For example, I thought the Corporation for National and Community 
Service did a great job in explaining Medicare Part D to seniors. I ran 
into their volunteers wherever I went in my state. I could see the 
organization taking on a similar effort with respect to the DTV 
transition, including providing technical assistance, but they clearly 
will need some additional resources. The challenge is clear: there is 
virtually no time to get a funding increase enacted, and out the door 
of a Federal agency quickly enough to have an impact.
    Finally, I want to touch on Senator Snowe's DTV technical 
corrections bill that I have co-sponsored. Washington State has a 
combined total of 196 low-power TV, translator, and Class A television 
stations. While some of these low-power stations fill in gaps in 
coverage in the Seattle market due to the terrain, the majority of 
these stations provide over-the-air television programming to consumers 
in small communities throughout central, eastern, and coastal 
Washington.
    Many of the rural translator stations are financed through a 
mechanism called a Translator Investment District, where residents 
literally pass the hat around the community to pay for operating 
expenses. The Act makes a simple technical correction to current law 
regarding two grant programs authorized at the Department of Commerce 
to allow these low-power stations to upgrade their equipment a little 
sooner.
    Thank you and I look forward to hearing from the panel.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                          Hon. Kevin J. Martin

    Question 1. On March 15, The Garden Island, the newspaper on Kauai, 
printed an article entitled ``Kauai Not Affected by `09 Analog TV 
Deadline.'' According to the newspaper, Kauai residents are served 
exclusively by low-power broadcasting facilities. What is the FCC doing 
to prevent residents on Kauai from being confused by national messages 
about the transition telling consumers to make changes to their 
televisions to prepare for digital reception?
    Answer. On February 19, 2008, the Commission adopted a DTV Consumer 
Education Initiative Report and Order requiring television 
broadcasters, multichannel video programming distributors (MVPDs), 
telecommunications carriers, retailers, and manufacturers to promote 
awareness of the Nation's transition to digital television. The 
educational efforts of these industry groups are intended to provide 
consumers, including those in rural and small communities, with clear 
and accurate information about the DTV transition.
    The Report and Order, among other things, encourages all LPTV 
broadcasters, particularly those that plan to continue analog-only 
broadcasting, to begin educating their viewers immediately about the 
effect of the DTV transition on LPTV service. For instance, LPTV 
stations should notify their viewers that: (1) they are watching a low-
power broadcast station that, unlike full-power stations, may continue 
to offer analog service after February 17, 2009, and (2) viewers who 
plan to purchase a converter box in order to view digital signals 
should select a model with analog pass-through capability in order to 
continue watching that station.
    In addition, we have developed a list of those communities that 
appear to be served exclusively by low-power, Class A, and/or 
translators, and shared this list as well with the interested parties. 
We have been coordinating with these groups to see how they are using 
this information, particularly with respect to consumer education and 
outreach. The list is available on the Commission's website (http://
www.dtv.gov/consumercorner.html#faq22).

    Question 2. I believe the DTV transition requires that we have 
``block captains'' in communities across this country. We need troops 
on the ground to get the word out and assist consumers with preparing 
for the transition. What efforts have the NTIA made to coordinate and 
put DTV block captains and authorities in place through the Corporation 
for National and Community Service? Would it be possible to use 
organizations like Americorps and Seniorcorps to assist with the DTV 
transition in the communities where they serve?
    Answer. We cannot report what efforts the NTIA has made to 
coordinate and put DTV block captains and authorities in place through 
the Corporation for National and Community Service.
    The Commission has been coordinating with several grass roots 
organizations, including Americorps and Seniorcorps (which are part of 
the Corporation for National and Community service (``CNCS'')), 
regarding educating and assisting consumers about the DTV transition in 
local communities.
    As a result, the Director of Seniorcorps has notified all of their 
1,300 local grantees and asked them to start working on this issue in 
their local communities. Seniorcorps has indicated that it can assist 
the DTV transition effort through its three programs: ``RSVP Program'' 
which can help by getting the word out to communities, ``Senior 
Companion Program,'' which can use the information themselves and also 
inform and assist the clients they serve each year; and the ``Foster 
Grandparents Program,'' where volunteers will receive training about 
the analog-to-digital issue at one or more of the monthly in-service 
trainings that they attend. According to the staff at CNCS, it does not 
appear that there will be an opportunity to involve Americorps because 
of that organization's grant cycle.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. John F. Kerry to 
                          Hon. Kevin J. Martin

    Question 1. Mr. Chairman, the digital transition is helping to 
increase the sales of digital televisions. It is estimated that 45 
million sets will be sold in 2008-2009. It is important that the 
manufacturers of these sets know what IP they need, who owns it, and 
that the licensing terms are transparent. In order to ensure a free and 
open market, manufacturers need these facts. Therefore, please provide 
the Committee with information as to which patents are essential for 
manufacturers to make and sell ATSC televisions in the United States. 
Who owns the patents essential for manufacturers to make and sell ATSC 
televisions in the United States and what are the licensing terms for 
all manufacturers?
    Answer. The Commission does not maintain a list of patents on the 
numerous technologies used in the Advanced Television Systems Committee 
(ATSC) standard, nor is there a single private compendium that lists 
those patents or the holders of rights to those patents. Rather, 
manufacturers developing products for operation under the ATSC standard 
must identify relevant patents and those holding patent rights by 
conducting patent searches in the same manner as for any other 
technology. The Commission's staff has, however, obtained information 
from the ATSC, the Consumer Electronics Association (CEA), Commission 
decision documents, ex parte presentations by parties opposing royalty 
payments, Internet searches and LG Electronics Company, Inc. to respond 
to the specific questions raised on this matter, as described below. We 
do not have complete information on the amounts actually charged for 
patent licenses because those licenses are business arrangements that 
are negotiated on a case-by-case basis; we do have some information, 
however, which is provided below.
    There are at least 16 entities licensing patents that are essential 
to the manufacture of ATSC receivers. One of those entities, MPEG LA, 
provides a service that enables manufacturers to acquire essential 
patent rights from multiple patent holders in a single transaction, as 
an alternative to negotiating separate licenses. The MPEG LA ``MPEG-2 
portfolio'' includes essential patents owned by 25 entities: Alcatel 
Lucent; British Telecommunications plc; Canon, Inc.; CIF Licensing, 
LLC; Columbia University; France Telecom; Fujitsu; General Instrument 
Corp.; GE Technology Development, Inc.; Hitachi, Ltd. (Hitachi); KDDI 
Corporation (KDDI); Koninklijke Philips Electronics N.V. (Philips); LG 
Electronics Inc. (LG); Matsushita Electric Industrial Co., Ltd. 
(Panasonic); Mitsubishi Electric Corporation (Mitsubishi); Nippon 
Telegraph and Telephone Corporation (NTT); Robert Bosch GmbH; Samsung 
Electronics Co., Ltd. (Samsung); Sanyo Electric Co., Ltd. (Sanyo); 
Scientific-Atlanta, Inc. (Scientific-Atlanta); Sharp Corporation 
(Sharp); Sony Corporation (Sony); Thomson Licensing; Toshiba 
Corporation (Toshiba); and Victor Company of Japan, Limited (JVC). 
Royalties for the MPEG-2 portfolio of video encoding/decoding patents 
are $2.50/unit.
    MPEG LA also manages another portfolio of 32 patents specific to 
the ATSC standard for seven entities: LG, Panasonic, Mitsubishi, 
Philips, Samsung, Scientific-Atlanta, Inc., and Zenith Electronics LLC 
(parent company LG Electronics, Inc.). Zenith had previously licensed 
separately a number of its patents for the 8-VSB transmission system 
used in the ATSC system. It recently indicated to us that it now 
licenses those patents through MPEG LA ATSC also, so that all of its 
ATSC patents are licensed through that entity. The royalty on the MPEG 
LA ``ATSC portfolio'' is $5.00/unit (this is in addition to the royalty 
for the MPEG-2 portfolio). Information on the MPEG LA patent 
portfolios, patent holders, patent numbers, and licensing terms is 
available at http://www.mpegla.com (see http://www.mpegla.com/atsc/
atsc-agreement.cfm.
    Dolby Laboratories, Inc. (Dolby) holds the patent for the AC-3 
digital audio technology used in the ATSC standard. Information on the 
Dolby AC-3 patent, including the patent number and patent numbers of 
related technologies, is available at http://www.freepatentsonline.com/
7283965.html. We do not have confirmed information on the licensing 
terms or rates for the Dolby AC-3 patent. In addition, Tri-Vision 
Electronics Inc. (Tri-Vision) holds the rights to the patent for the 
ATSC V-chip parental control program blocking technology. General 
information on the Tri-Vision and the V-chip technology is available at 
http://www.tri-vision.ca. A document with the Tri-Vision V-chip patent 
number is attached; we do not have confirmed information on the 
licensing terms or rates for the Tri-Vision V-chip patent. Funai (brand 
names Emerson, Philco, Symphonic, and Magnavox) holds one ATSC patent 
(U. S. Patent No. 6924848) that it acquired from Thomson/RCA and 
licenses separately. Information on the Funai patent is available at 
http://www.freepatentsonline.com/6924848.html. We do not have confirmed 
information on the licensing terms or rates for the Funai patent.
    U.S. patent numbers and additional information for the above 
technologies are provided in materials that are attached separately. 
Copies of the information available on the websites discussed above and 
other materials also are attached (See Appendix A.) * There 
also may be additional patents for technologies used in the ATSC 
standard that are not included in the above sources.
---------------------------------------------------------------------------
    * This appendix is retained in the Committee files.
---------------------------------------------------------------------------
    At least one of the entities holding the original rights to an ATSC 
patent subsequently transferred its rights. AT&T sold U.S. Patent No. 
5,243,627 to Rembrandt Technologies, L.P. (Rembrandt), a patent holding 
company. We do not have specific information on Rembrandt's licensing 
terms or rates for this patent. However, the Harris Corporation 
(Harris) claims that Rembrandt is seeking very high rates.

    Question 2. Mr. Chairman, it is also critical to ensure the 
American consumer is not paying too much for their digital television 
sets. A way to ensure our consumers are paying the appropriate price is 
to compare what it costs for patent licenses in Europe and Japan versus 
here in the United States. What digital broadcast television standards 
have been adopted in Europe and Japan? What patent licenses are needed 
to build televisions using those standards? Who owns those patents and 
what are the terms of licensing? Is the total cost of patents needed to 
build digital televisions for U.S. citizens higher than the total cost 
of patents needed to build televisions for sale in Europe and Japan?
    Answer. Japan and Europe have adopted digital broadcast television 
standards that are different from the ATSC standard. Japan has adopted 
the ``Integrated Services Digital Broadcasting-Terrestrial'' (ISDB-T) 
standard for its broadcast DTV service. This standard was developed by 
the Association of Radio Industries and Businesses, a Japanese 
standards-making body. The Internet newsletter ``EE Times Asia'' 
(http://www.eetasia.com/ART_8800452486_480700_NT_d776b8f3.HTM) states 
that Mitsubishi, Panasonic, and Sony have established Uldage Inc. 
(Uldage) to provide a one-stop patent-licensing program for DTV 
receivers in Japan; however, we have not been able to obtain the 
specific Japanese patents covered by Uldage. Under this program, 
manufacturers and distributors of digital broadcasting devices can 
license major patents for ISDB-T DTV receivers at a relatively low 
cost. Thus far, the Uldage program includes patents owned by France 
Telecom, Hitachi, Japan Broadcasting Corporation, JVC, Mitsubishi, 
Panasonic, Sanyo, Sharp, Sony, Telediffusion de France, and Toshiba. 
Uldage has also indicated that its program does not yet include all of 
the relevant patents and that it will continue inviting participants to 
achieve full coverage.
    It is important to note that the Uldage program includes only a 
portion of the patents needed for operation of the ISDB-T standard; in 
particular it does not include patents for the MPEG-2 video and audio 
technologies that ISDB-T uses. As noted in the response to Question 1 
above, those patents are licensed by MPEG LA, with a $2.50 royalty for 
the MPEG-2 portfolio; however, we have not been able to determine 
whether this royalty is collected for products sold outside the United 
States. As indicated by EE Times Asia, there may also be essential 
patents for other technologies used in the ISDB-T standard that are not 
included in either the Uldage or MPEG LA portfolios.
    Europe has adopted the ``Digital Video Broadcasting--Terrestrial'' 
(DVB-T) standard for its broadcast digital television service. The 
patents for this standard are managed by MPEG LA and the royalty for 
this ``DVB-T portfolio'' is 0.75 Euros/unit (at current exchange rates, 
about $1.20/unit). The DVB-T portfolio includes essential patents owned 
by France Telecom, JVC, and Panasonic. However, licenses for the 
essential patents for the MPEG-2 technology used in the DVB-T standard, 
i.e., the MPEG-2 portfolio, are not included in the license for the 
DVB-T portfolio. The royalties for those patents are an additional 
$2.50 per unit (see e-mail message from Larry Horn of MPEG LA in 
Appendix A responding to an inquiry on this point). Information on the 
MPEG-2 and DVB-T patent portfolios, patent holders, patent numbers, and 
licensing terms is available at http://www.mpegla.com (see http://
www.mpegla.com/m2/m2-agreement.cfm for the DVB-T license agreement).

    Question 3. Mr. Chairman, when the ATSC standard was adopted in 
1996 the FCC said that the relevant patents must be made available free 
of charge or on a reasonable, nondiscriminatory basis. Manufacturers 
reportedly pay more than $20 per television set for ATSC patent 
royalties. By comparison, consumers in Japan pay 82 cents per set, and 
consumers in Europe pay less than $1 per set for comparable digital 
standards. Do ATSC royalties of more than $20 per set meet the FCC 
standard for reasonableness? What can the FCC do to address this 
disparity? What, if anything, has been done or is under consideration?
    Answer. The ATSC requires that participants with essential patent 
claims to technologies used in the standard make their technologies 
available on a ``reasonable and non-discriminatory'' (RAND) basis. The 
ATSC also requires participants holding patent rights to sign a patent 
statement affirming this commitment. More information is available in 
the ATSC Patent Policy available on the ATSC website (http://
www.atsc.org/policy_documents/). At least 17 ATSC participants assert 
ownership of essential patents which may amount to thousands of claims 
in hundreds of patents. The ATSC patent statements as signed by 
original patent holders are available at http://www.atsc.org/
patentstatements.html. A copy of the ATSC patent policy and the ATSC 
patent statements submitted by patent holders from that website is 
attached (See Appendix B).**
---------------------------------------------------------------------------
    ** This appendix is retained in the Committee files.
---------------------------------------------------------------------------
    It is also important to note that only participants in the ATSC 
standards development process are covered by the ATSC patent policy. 
The identities and actions of other entities that may hold essential 
claims are not known at this time. Many of the original ATSC patent 
holders have sold or assigned their patent rights to other entities 
(see, for example, the list of patent holders participating in the MPEG 
LA portfolio, several of which are not included in those signing the 
original ATSC statements) (See Appendix A), but the requirement to 
adhere to the RAND commitment in the ATSC patent statements continues 
to apply to subsequent rights holders. In its 1996 decision adopting 
the ATSC standard as the U.S. DTV standard, the Commission stated that 
the standard is premised on the reasonable and nondiscriminatory 
licensing of relevant patents. The Commission also concluded that 
greater regulatory involvement was not necessary at that time. The 
Commission indicated, however, that it remained committed to this 
principle and would take appropriate action if a future problem is 
brought to its attention. See, Fourth Report and Order in MM Docket No. 
87-268, 11 FCC Rcd 17771 (1996).
    No party has filed a formal complaint with the Commission regarding 
access to patents to produce digital televisions or digital-to-analog 
converter boxes. The Commission is aware of some issues regarding 
access to patent rights. Several parties have made presentations to the 
Commission concerning the acquisition of one of the ATSC patents (U.S. 
Patent No. 5,243,627) by Rembrandt Technologies, and the amount of the 
license fees that the company is requesting from TV networks and 
transmission equipment manufacturers. More recently, the ``Coalition 
United to Terminate Financial Abuse of the Television Transition'' has 
made informal presentations to the Commission asserting that high rates 
for ATSC patent royalties are increasing the price of DTV receivers. In 
addition, the Consumer Electronics Association has requested that the 
Commission clarify its rules with respect to DTV V-chip functionality 
based in part on concern that patent royalties demanded by Tri-Vision, 
a Canadian entity, would adversely affect the price of DTV receivers 
(see, Petition for Clarification and/or Reconsideration of the 
Commission's Report and Order in MB Docket No. 03-15).
                                 ______
                                 
     Response to Written Question Submitted by Hon. Bill Nelson to 
                          Hon. Kevin J. Martin

    Question. In February, the Government Accountability Office issued 
a report finding that the FCC closed 83 percent of complaints with no 
enforcement action. Do you think this is an acceptable record? Might it 
make more sense to split up the current Consumer and Government Affairs 
Bureau (CGB) into a separate Office of Consumer Affairs that is focused 
solely on dealing with consumer complaints?
    Answer. While the GAO states that 83 percent of the investigations 
were listed as closed with no action, Commission review of the 
databases and paper records indicate only 3 percent were closed with no 
action. In fact, 71 percent were closed with compliance found, 15 
percent closed after taking action and 11 percent closed due to 
insufficient information. GAO states that the Commission's existing 
enforcement databases do not contain information about the disposition 
of a complaint. This is incorrect. This information resides in the 
problem resolution or similar notation sections of the Commission's 
database systems. This section of the database was readily accessible 
to GAO during the course of their investigation. During the preparation 
of this report, the Commission informed the GAO of our concerns that 
the draft report contained factual flaws or errors in presenting 
certain data.
    The Commission is a proponent of strong enforcement action to 
protect consumers and to ensure the Communications Act of 1934 (the 
Act) is carried out in the manner intended by Congress. During my 
tenure, the Commission has undertaken more than 3,400 enforcement 
actions. These enforcement actions have resulted in assessing more than 
$65.7 million in fines, forfeitures, and consent decree payments--
including more than $43 million in 2007 alone, which the GAO 
acknowledges is the highest annual amount since the Enforcement Bureau 
was created in 1999. In addition, the Commission has devoted 
significant resources to reviewing and taking action on a backlog of 
more than 113,000 consumer complaints.
    Finally, the CGB responded to more than 128,000 consumer complaints 
on a variety of topics, including cable and satellite services, radio 
and television broadcasting, and wireline and wireless 
telecommunications during Fiscal Year 2007, as reported in the 
Performance and Accountability Report for Fiscal Year 2007. In 
addition, as a result of CGB's efforts, during calendar year 2007 
consumers were benefited by credits totaling over $3 million.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                          Hon. Kevin J. Martin

    Question 1. Looking ahead over the next 10 months till the DTV hard 
date, what do you consider to be the highest risk factor with respect 
to U.S. consumers getting through the DTV transition with minimal 
interruption?
    Answer. There have been some concerns raised that viewers will need 
to replace or upgrade their existing antennas to receive DTV service. 
Many of the difficulties viewers currently encounter in receiving DTV 
service result from the fact that some stations are not currently 
operating their DTV signals to serve the same geographic areas as the 
areas served by their analog signals. After the February 2009 
transition, these stations will generally provide DTV service within 
the same or larger service areas than their former analog service 
areas. Also, some consumers who do not have antennas that can provide 
good reception of UHF TV signals may need to upgrade or replace their 
antennas so that they can adequately receive the full range of TV 
channels. The Commission has drafted and disseminated an Antennas and 
Digital Television Fact Sheet which includes reception information and 
tips for consumers. This Fact Sheet is available at www.dtv.gov/
publications.html and via mail by calling 1-888-CALL-FCC (voice) or 1-
888-TELL-FCC (TTY).

    Question 2. A consumer receiving over-the-air television broadcasts 
records programs for their personal use on a VCR model that has a built 
in tuner, allowing the viewer to watch one channel while recording 
another. If this consumer purchases the set-top box for that 
television, will the consumer still be able to record programming from 
one channel while watching programming from a different channel with 
the provided equipment? If not, what options does that consumer have 
and how would they become aware of them?
    Answer. Consumers using a single set-top box will not be able to 
watch one channel while recording another channel on a VCR. In order to 
watch one channel and record another it is necessary to have two DTV 
tuners--one to tune the channel being watched and the other to tune the 
channel being recorded. Each set-top box can tune only a single channel 
and thus cannot support the provision of separate tuned channels to a 
TV and VCR.
    In order to watch one channel and record another, a consumer has 
two principle options. One option is to use two separate set-top boxes, 
with one connected to the VCR and the other to the TV set.
    The second option is for the consumer to use a set-top box 
connected to the analog VCR and a new TV receiver with a digital tuner. 
Information on use of VCRs with digital-to-analog set-top converter 
boxes is provided by the National Telecommunications and Information 
Administration, which manages the digital-to-analog set-top converter 
box program, in its frequently asked questions at https://
www.dtv2009.gov/FAQ.aspx. Information on how to connect set-top boxes, 
VCRs, TV receivers and other home entertainment devices is also on a 
website provided by the Consumer Electronics Association at http://
www.ceaconnectionsguide.com.

    Question 3a. What percentage of households in the country will need 
a new rooftop antenna in order to receive over-the-air digital 
broadcasts? What is the range of estimates? What is the basis of the 
estimates?
    Answer. Our engineers estimate that approximately 5 percent of 
households that are currently watching a poor or snowy analog picture 
may fall on the down side of the digital cliff-affect and will need to 
obtain a new antenna to obtain service. Approximately 85 percent of 
households are receiving their signals by cable or satellite and will 
not be affected. Therefore, it is only 5 percent of the remaining 15 
percent of households that are viewing signals over-the-air that may 
need a new antenna. We have published a consumer guide on TV antennas 
that explains to consumers they should first try their existing 
antenna, what to do if they have problems, and information on how to 
obtain a new antenna should they need one.

    Question 3b. What information is your agency providing to consumers 
on this issue?
    Answer. The Commission has posted a Fact Sheet with information on 
antennas, factors needed for good quality reception of digital 
broadcasts, and tips on how to get the best reception with an antenna 
on its website at http://www.dtv.gov/publications.html. We have also 
included information on use of antennas for reception of DTV service in 
the presentations and programs on DTV education that our staff provides 
to the public at events across the country.

    Question 3c. Are there any tools available to give consumers an 
idea if they may need a new outdoor antenna?
    Answer. The Consumer Electronics Association, in conjunction with 
the National Association of Broadcasters, has established a website 
that provides a software ``antenna tool'' for consumers to use to 
determine the appropriate antenna needed to receive digital television 
channels at their individual location. The AntennaWeb tool considers 
DTV signal strengths and geographical maps and makes a recommendation 
for appropriate outdoor antennas. This antenna tool is available at 
www.antennaweb.org.

    Question 3d. How sensitive are rooftop and rabbit ear antennas with 
respect to direction of the incoming digital signal when compared to 
incoming analog signals? Will some homeowners with rooftop antennas 
have to readjust the orientation of their antenna to receive a signal?
    Answer. The directionality of an antenna is determined by its 
physical characteristics and is not affected by the modulation of the 
radio signals that it may receive. That is, antennas perform the same 
with respect to directionality for both analog and digital signals.

    Question 4. Should there be a DTV hard date for all television 
broadcasts? If so, when should that be? What actions would the FCC have 
to take and complete in order for the DTV hard date for low-power 
stations to occur with minimal disruption to consumers?
    Answer. The February 17, 2009, DTV transition ``hard date'' for 
full-power TV stations does not apply to low-power television stations, 
television translator stations and Class A television stations 
(collectively ``LPTV stations'').
    I have circulated an item for the Commission's consideration which 
seeks comment on whether the analog transmissions of LPTV stations 
should be terminated in 2012. The proposed rulemaking also requests 
public comment concerning how best to minimize any consumer disruption 
related to the LPTV transition, including ensuring that all stations in 
the LPTV services have the channels necessary to convert to digital and 
that procedures are developed to ensure a smooth digital transition for 
these stations.
    In the interim, the Commission is taking steps to help inform and 
facilitate the dissemination of information to consumers in LPTV 
communities about the DTV transition and the effect of the transition 
on LPTV service. On February 19, 2008, the Commission adopted a DTV 
Consumer Education Initiative Report and Order which, among other 
things, encourages all LPTV broadcasters, particularly those that plan 
to continue analog-only broadcasting, to begin educating their viewers 
immediately about the effect of the DTV transition on LPTV service. For 
instance, LPTV stations should notify their viewers that: (1) they are 
watching a low-power broadcast station that, unlike full-power 
stations, may continue to offer analog service after February 17, 2009, 
and (2) viewers who plan to purchase a converter box in order to view 
digital signals should select a model with analog pass-through 
capability in order to continue watching that station. The LPTV station 
also could direct viewers to the NTIA converter box coupon program, and 
in particular the NTIA listing of certified converter boxes. Finally, 
the Order urges the industry and the Commission's private and public 
sector partners to do what they can to educate consumers generally 
about LPTV issues, and to assist in the effort to ensure that no 
American loses a signal due to the DTV transition.
    The Commission also has compiled lists of all low power, Class A, 
and translator stations which we have shared with the parties involved 
in the low-power issue, including the Community Broadcasters 
Association (CBA) and National Translator Association (NTA), as well as 
the Consumer Electronics Retailers Coalition (CERC), CEA, and NAB. In 
addition, we developed a list of those communities that appear to be 
served exclusively by low power, Class A, and/or translators, and 
shared this list as well with the interested parties. We have been 
coordinating with these groups to see how they are using this 
information, particularly with respect to consumer education and 
outreach. Additionally, the public can utilize a new web-based search 
tool to easily search for low-power stations in their area by simply 
inserting a zip code. The search tool is available at: http://
fjallfoss.fcc.gov/eb/zipsrch/.
    Last fall, the Commission also issued a Consumer Advisory on ``The 
DTV Transition and LPTV/Class A/Translator Stations.'' The Advisory 
explains the status of LPTV, Class A, and translator stations, and 
provides background information on the stations and on ways to 
determine whether a viewer is watching one of them. The Commission 
recently updated this Consumer Advisory to explain digital-to-analog 
converter boxes with analog pass-through capability and the 
availability of analog pass-through boxes that have been certified by 
NTIA's DTV Coupon Program. The Consumer Advisory is available on the 
Commission's website (http://www.fcc.gov/cgb/consumerfacts/
DTVandLPTV.html). This information also is posted in the Frequently 
Asked Questions section of our www.dtv.gov website (http://www.dtv.gov/
consumercorner.html#faq22).
    Finally, on February 12, 2008, I sent a letter to the National 
Association of Broadcasters, the National Cable & Telecommunications 
Association, the Satellite Industry Association, the Consumers 
Electronics Association, and the Consumer Electronics Retailers 
Coalition concerning the DTV transition and low-power television 
stations. In the letter, I requested that manufacturers of consumer 
electronic equipment incorporate analog pass-through capability in 
digital-to-analog converter boxes and requested that retailers make 
analog pass-through boxes available to the public. The letter also 
encouraged the carriage of low-power stations on cable and satellite 
television systems on a voluntarily basis, and asked full-power 
broadcasters to make a portion of their stations' digital capacity 
available for the use of low-power stations.

    Question 5. What do you see as the role of the Federal 
Communications Commission compared to that of the Federal Trade 
Commission with respect to consumer protection issues surrounding the 
DTV transition?
    Answer. As the independent agency with primary responsibility for 
the digital transition, the FCC has special responsibility to ensure a 
successful transition to digital television by February 17, 2009. As 
many consumers consider new equipment to realize the full technological 
benefits of the digital transition, the FCC's consumer protection 
efforts have focused on ensuring that those consumers do not 
unknowingly purchase equipment without elements important to the 
digital transition. For example, the FCC has taken numerous enforcement 
actions against manufacturers for the importation or interstate 
shipment of televisions without digital tuners or V-chip technology. 
The FCC also recently took action against retailers that failed to 
properly disclose that certain televisions receivers offered for sale 
lacked the ability to receive over-the-air digital television signals 
and adopted a consumer education order that requires broadcasters, 
manufacturers, and others to inform the public about the digital 
transition. Finally, the FCC has held numerous consumer awareness 
sessions across the country to make sure that consumers know about the 
transition and understand their options.
    The FCC and the FTC have often accommodated the missions of each 
other in areas of shared interest. The FTC has a part to play here in 
protecting consumers from fraudulent or deceptive practices related to 
the digital transition. For example, the FTC's broad jurisdiction may 
allow that agency to take appropriate action if any retailers 
participating in the NTIA's converter box coupon program engage in 
``bait and switch'' tactics, for example, by encouraging consumers to 
buy digital TVs instead of utilizing their coupons.

    Question 6. My constituents living in Bellingham, Washington and 
other border communities receive over-the-air broadcasts from Canada. 
Cable and satellite subscribers in Bellingham receive programming from 
the Seattle market. They hear the PSAs telling them what they need to 
do to prepare for the DTV hard date. There are a number of these 
subscribers that have a second television that receives over-the-air 
broadcasts from Canadian stations in Vancouver and Victoria, British 
Columbia. As you can imagine, this sometimes leads to confusion as the 
Canadian DTV transition is not slated until August 2011. Are all 
Canadian full-power stations within the border region broadcasting 
currently in both analog and digital formats? Are changes required to 
our existing treaty with Canada due to the DTV transition, and if so, 
what are they and what is the status of the treaty modifications?
    Answer. At this time, very few Canadian television broadcast 
stations transmit both an analog and a digital signal. It appears 
unlikely that any Canadian station will cease analog broadcasting prior 
to their August 31, 2011 required transition date. Consequently, 
viewers in the U.S.-Canada border areas should continue to have access 
to analog programming from Canadian stations during Canada's DTV 
transition period.
    The United States has bilateral mechanisms with Canada governing 
the deployment of DTV stations in the border areas. These procedures, 
however, will need to be revised to accommodate the final configuration 
of DTV stations in the United States after the completion of the DTV 
transition in February 2009. The United States and Canada have been 
engaged in discussions concerning the DTV transition for the past few 
years, and recently reached an agreement to develop a DTV plan and an 
associated agreement to facilitate changes to that plan on a going 
forward basis. It is anticipated that a DTV plan between the United 
States and Canada will be completed this summer. Once agreement is 
reached on the DTV plan, U.S. stations in the border areas will be 
entitled to operate in accordance with that plan and Commission rules. 
The associated formal DTV agreement will not be concluded until after 
Canada's DTV transition occurs.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Kay Bailey Hutchison to 

                          Hon. Kevin J. Martin
    Question 1. The rules for coupon eligible converter boxes require 
manufacturers to self certify compliance with NTIA's technical 
specifications and to submit the test results and samples of tested 
equipment to the FCC for verification. Does the FCC test each piece of 
equipment provided to it through this process across all channels, or 
are the tests limited to a small number of sample channels?
    Answer. The NTIA is responsible for all aspects of the coupon 
eligible converter box program, including establishment of the 
technical standards and process for ensuring compliance. The NTIA 
requires submittal of a written application and test results showing 
compliance with its standards. The NTIA and the FCC have a Memorandum 
of Understanding under which the FCC tests converter boxes upon request 
from NTIA. As the lead agency in this matter, the NTIA determines which 
boxes need to be tested and the scope of the tests. NTIA requires the 
boxes to comply with its standards on all TV channels but may ask the 
FCC to test only some channels. NTIA has not made public what channels 
may be tested by the FCC in order to mitigate the possibility that 
manufacturers would design for compliance only on the channels selected 
for the tests.

    Question 2. If the answer to Question 1 is that the FCC tests only 
on a limited number of channels, why does the FCC not test across all 
channels to test for possible adjacent channel interference that could 
prevent reception of all digital channels?
    Answer. The boxes are tested on certain channels based on guidance 
from NTIA. The channels that are selected are designed to detect 
potential non-compliance and additional channels may be tested as 
appropriate.

    Question 3. Does the FCC do any post approval testing of production 
model boxes sold directly to consumers?
    Answer. The FCC does not independently conduct any post approval 
sampling and testing of NTIA approved converter boxes. The FCC will 
test any NTIA-approved model including post-approval, that NTIA asks us 
to examine. Indeed, the agreement between the agencies expressly allows 
the NTIA to request post-approval testing of any converter box for 
compliance with the NTIA rules.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                         Meredith Attwell Baker

    Question 1. It is now 10 months before the DTV transition. However, 
recent reports from the NTIA suggest that 46 percent of the base funds 
for converter box coupons have already been requested. At the current 
rate of request, when will the NTIA run out of coupons? Do you believe 
more coupons will be necessary to meet consumer demand?
    Answer. Coupons are being requested at a rate of approximately 
105,000 per day, on average. The availability of funds for coupons is 
determined by two main factors--demand for coupons and redemptions. 
NTIA does not have a view toward how many consumers might want to 
redeem coupons toward the purchase of converters, and therefore cannot 
predict the availability of funding for coupons at this time. Many 
consumers may choose to purchase digital televisions or subscribe to 
pay services in order to adjust to the digital transition. Assuming a 
100 percent redemption rate of the coupons requested, which we think is 
unlikely, and using current applications rates of approximately 105,000 
coupons per day, NTIA estimates it will reach the limit on issuance of 
coupons using initial funds on August 6, 2008. Assuming a 50 percent 
redemption rate, which we think is more likely, and using current 
application rates of approximately 105,000 per day, NTIA estimates it 
will reach the limit of coupons using the initial funds on March 26, 
2009. Under this scenario, most of the contingent funds would be 
returned to the Treasury. NTIA is tracking coupon request and 
redemption information closely and will update the Congress, retailers 
and manufacturers, and our consumer education partners regularly.
    Based on the information currently available and in order to avoid 
potential program delays, on April 25, 2008, NTIA submitted a 
statement, as required by Section 3005(c)(3) of the Act to release the 
remaining $510 million in appropriated funds, certifying our 
anticipation that the initial funds of $990 million will be 
insufficient to fulfill the requests for coupons from eligible 
households, specifically with respect to administrative resources. 
Program changes contemplated in the recently released NPRM would 
require the use of some of the administrative funds from the contingent 
pool.

    Question 2. On March 15, The Garden Island, the newspaper on Kauai, 
printed an article entitled ``Kauai Not Affected by `09 Analog TV 
Deadline.'' According to the newspaper, Kauai residents are served 
exclusively by low-power broadcasting facilities. What is the NTIA 
doing to prevent residents on Kauai from being confused by national 
messages about the transition telling consumers to make changes to 
their televisions to prepare for digital reception?
    Answer. The broadcast community is leading in educating their 
viewers about the digital television transition. Recently, the National 
Association of Broadcasters (NAB) announced an effort to target 
messages regarding low-power broadcasting in markets with at least ten 
translators, including Hawaii. The purpose of these campaigns is to 
ensure that consumers in these markets will hear messages more germane 
to their circumstances. In addition NTIA is working with the NAB and 
the Consumer Electronics Retailers Coalition (CERC) to share retailer 
data by market, so that our industry partners can increase the 
likelihood that analog ``pass through'' converter boxes will be 
available and will be advertised by broadcasters and retailers alike.

    Question 3. I believe the DTV transition requires that we have 
``block captains'' in communities across this country. We need troops 
on the ground to get the word out and assist consumers with preparing 
for the transition. What efforts have the NTIA made to coordinate and 
put DTV block captains and authorities in place through the Corporation 
for National and Community Service? Would it be possible to use 
organizations like Americorps and Seniorcorps to assist with the DTV 
transition in the communities where they serve?
    Answer. NTIA is coordinating with the Corporation for National and 
Community Service to provide Coupon Program information to its 
Corporation State Offices. State Office employees have oversight for 
SeniorCorps and AmeriCorps VISTA projects. CNS' Office of Human Capital 
is including an article on the Coupon Program in its monthly 
publication, update, which is sent to all CNS employees. NTIA has also 
sent information packets to all State Service Commissions of the 
Corporation for National and Community Service. We are coordinating 
with CNS' Office of Human Capital and will be happy to explore with 
them, at the next opportunity, your very interesting idea to mobilize 
block captains to prepare consumers for the digital transition.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Bill Nelson to 
                         Meredith Attwell Baker

    Question 1. On February 11, 2008, I sent you a letter expressing 
concern that some senior citizens may be excluded from the converter 
box program because NTIA's current rules appear to define nursing homes 
as a single ``household.'' Under that definition, an entire nursing 
home complex would be eligible for only two converter box coupons--even 
though there might be 50-60 residents with old analog televisions at 
that location. It is my understanding that NTIA staff is currently 
working on a ``fix'' for this problem--and I appreciate your efforts on 
this. However, we have also been told that it may take up to 6 months 
for the fix to be implemented through a rulemaking process. Is there 
any way you can speed the process up? Have you asked OMB for expedited 
approval of the rulemaking? In the alternative, have you considered an 
expedited waiver process for nursing home applications?
    Answer. NTIA published a Notice of Proposed Rulemaking in the 
Federal Register on April 24, 2008, proposing certain changes to the TV 
Converter Box Coupon Program (Program) rules, such as waiving the 
``eligible household'' application requirements for individuals 
residing in nursing homes or other senior care facilities. Comments 
must be submitted no later than June 9, 2008. Details are available at: 
http://www.ntia.doc.gov/ntiahome/frnotices/2008/DTV_NPRM_080424.pdf. 
NTIA provided a relatively short (45-day) comment period and will 
expedite the rulemaking to the extent it is able.

    Question 2. When a consumer calls the DTV coupon request number and 
says they need physical assistance to connect the DTV converter box, 
where do you refer them? Also, has any effort been made to coordinate a 
national assistance program with interested organizations--such as 
AARP?
    Answer. NTIA is working with its partners to mitigate difficulties 
some consumers may have in installing the converter boxes. NTIA has 
information on its website about installation and trusts that most 
consumers will be able to install the converter box using the 
instructions provided by the manufacturer. If consumers have specific 
questions, they should ask the retailer from which they purchased the 
converter box or call the manufacturer's technical support hotline. 
NTIA has also worked with the Consumer Electronics Association to 
produce a generic ``Quick Start Guide'' and installation video, both of 
which are available at www.DigitalTips.org.
    NTIA has also teamed up with Collegiate 4-H which selected the 
digital TV transition as its 2008 National Service Project topic. Each 
Collegiate 4-H chapter will do at least one DTV project in 2008, based 
on lesson-plan materials developed by NTIA. A project could include 
helping individuals most at risk of losing television reception fill 
out coupon applications or install their converter boxes. Additionally, 
NTIA is working with its partner, the Family, Career and Community 
Leaders of America (FCCLA), to educate local communities about the DTV 
transition through FCCLA's ``Keep Your TV On'' Award. This program, 
which began in January and continues through May 2008, recognizes and 
rewards FCCLA Chapters that have excelled in planning and implementing 
a local DTV public awareness campaign. We are also in constant dialogue 
with AARP and would be happy to assist them in any way appropriate to 
ensure their efforts to assist seniors are successful.

    Question 3. Your testimony noted that over 1,100 retailers signed 
up to participate in the converter box coupon program by NTIA's March 
31, 2008, deadline. In some areas, however, consumers have few retail 
choices--and may not be able to purchase a box by the end of the 
coupon's 90-day deadline if those retailers do not have stocks of 
converter boxes on hand. Does NTIA have a contingency plan if the 
number of retailers in an area is not sufficient to meet demand?
    Answer. NTIA is very pleased with the number of retailers that are 
voluntarily participating in the Program. There are over 1,600 retail 
organizations with over 16,000 stores, as well as 22 virtual retailers 
participating (7 by telephone, 15 with an online presence). We require 
retailers to stock and manage inventory according to commercially 
reasonable methods. NTIA is not aware of any geographic area where 
there is an insufficient number of retailers to meet demand.

    Question 4. In your testimony, you note that--as of April 7--5.2 
million households have requested DTV converter box coupons. Do you 
have any information on the demographic breakdown of these requests? 
Furthermore, is NTIA looking at demographic information to ensure that 
traditionally hard-to-reach populations are taking advantage of the 
converter box coupon program? It is now 10 months before the DTV 
transition. However, recent reports from the NTIA suggest that 46 
percent of the base funds for converter box coupons have already been 
requested. At the current rate of request, when will the NTIA run out 
of coupons? Do you believe more coupons will be necessary to meet 
consumer demand?
    Answer. Because NTIA does not collect consumer information beyond 
their home address, it is not feasible to ascertain detailed 
demographic breakdowns from the data on hand. We are monitoring the 
markets that are disproportionately over-the-air reliant to determine 
whether anomalies in coupon requests may require special consumer 
outreach.
    Coupons are being requested at a rate of approximately 105,000 per 
day, on average. The availability of funds for coupons is determined by 
two main factors--demand for coupons and redemptions. NTIA does not 
have a view toward how many consumers might want to redeem coupons 
toward the purchase of converters, and therefore cannot predict the 
availability of funding for coupons at this time. Many consumers may 
choose to purchase digital televisions or subscribe to pay services in 
order to adjust to the digital transition. Assuming a 100 percent 
redemption rate of the coupons requested, which we think is unlikely, 
and using current applications rates of approximately 105,000 coupons 
per day, NTIA estimates it will reach the limit on issuance of coupons 
using initial funds on August 6, 2008. Assuming a 50 percent redemption 
rate, which we think is more likely, and using current application 
rates of approximately 105,000 per day, NTIA estimates it will reach 
the limit of coupons using the initial funds on March 26, 2009. Under 
this scenario, most of the contingent funds would be returned to the 
Treasury. NTIA is tracking coupon request and redemption information 
closely and will update the Congress, retailers and manufacturers, and 
our consumer education partners regularly.
    Based on the information currently available and in order to avoid 
potential program delays, on April 25, 2008, NTIA submitted a 
statement, as required by Section 3005(c)(3) of the Deficit Reduction 
Act (the Act) to release the remaining $510 million in appropriated 
funds, certifying our anticipation that the initial funds of $990 
million will be insufficient to fulfill the requests for coupons from 
eligible households, specifically with respect to administrative 
resources. Program changes contemplated in the recently released NPRM 
would require the use of some of the administrative funds from the 
contingent pool.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                         Meredith Attwell Baker

    Question 1. Looking ahead over the next 10 months till the DTV hard 
date, what do you consider to be the highest risk factor with respect 
to U.S. consumers getting through the DTV transition with minimal 
interruption?
    Answer. NTIA clearly wants to reduce to the smallest number 
possible those households not taking action to keep their televisions 
working on or before February 17, 2009. Because television is a primary 
means of receiving information, it is critical we monitor data closely 
to make any program adjustments required to assist vulnerable 
Americans. For example, NTIA is monitoring consumer awareness surveys 
closely and is adjusting its consumer education strategy to maximize 
the opportunity that hard-to-serve consumers will be made aware of the 
digital transition and the TV Converter Box Coupon Program (Program). 
We are also analyzing request and redemption data at the DMA level to 
determine what markets may require special outreach due to low request 
and/or redemption numbers. We are also sharing this information with 
our retail and manufacturer partners so they can make supply chain 
adjustments possible to meet converter box demand. As the analog 
shutoff date approaches, we will be intensifying our messages, in 
partnership with the broadcast community, to alert over-the-air 
consumers to the need to take action so they do not lose their 
television service.

    Question 2. A consumer receiving over-the-air television broadcasts 
records programs for their personal use on a VCR model that has a built 
in tuner, allowing the viewer to watch one channel while recording 
another. If this consumer purchases the set-top box for that 
television, will the consumer still be able to record programming from 
one channel while watching programming from a different channel with 
the provided equipment? If not, what options does that consumer have 
and how would they become aware of them?
    Answer. The Consumer Electronics Association has an excellent 
website--DigitalTips.org--that shows consumers how to install a 
converter box, including adding a VCR or DVD recorder to the set up. 
This is shown visually, through a video, and on paper, through a 
``Quick Start Guide,'' that provides step-by-step instructions to 
consumers. NTIA provides a link to this installation information on our 
DTV2009.gov website. Unfortunately, a consumer cannot connect a VCR to 
a converter box and watch one channel while recording another. A 
consumer should consult with a consumer electronics retailer associate 
to find out what options are available to watch and record separate 
channels.

    Question 3. What percentage of households in the country will need 
a new rooftop antenna in order to receive over-the-air digital 
broadcasts? What is the range of estimates? What is the basis of the 
estimates? What information is your agency providing to consumers on 
this issue? Are there any tools available to give consumers an idea if 
they may need a new outdoor antenna? How sensitive are rooftop and 
rabbit ear antennas with respect to direction of the incoming digital 
signal when compared to incoming analog signals? Will some homeowners 
with rooftop antennas have to readjust the orientation of their antenna 
to receive a signal?
    Answer. Federal Communications Commission (FCC) Chairman Martin has 
stated that approximately 5 percent of viewers located at the outer 
reaches of a broadcast station's coverage area may need a new antenna. 
NTIA has no independent basis on which to base any estimates of antenna 
performance. We refer consumers to www.antennaweb.org, which is a very 
robust website provided by the Consumer Electronics Association and the 
National Association of Broadcasters to help consumers optimize their 
over-the-air broadcast reception.

    Question 4. My understanding is, as of April 1st, 9.5 million 
coupons have been requested and roughly 210,000 have been redeemed for 
set-top boxes. Does NTIA have a mechanism in place for collecting 
feedback from consumers that have purchased the set-top box?
    Answer. On a monthly basis, our Call Center handles hundreds of 
thousands of consumer calls. Mostly, these consumers are calling to 
order coupons--but we do handle consumer questions and complaints about 
the Coupon Program. Through this vehicle, NTIA is able to make 
appropriate adjustments to provide a better program experience for 
consumers.

    Question 5. Have you installed a DTV set-top converter box on an 
analog television? Do you think that a 70 or 80 year old person will 
find the operation of the navigation menu intuitively obvious and easy 
to read? Consumers have lots of experience tuning in a strong picture 
with analog rabbit ear antenna but virtually no experience with digital 
rabbit ear antennas. Rabbit ear antennas used for digital reception 
appear much more sensitive to direction and small movements than those 
used for analog reception. Additionally, while television viewers have 
vast experience tuning in an analog picture through a noisy background 
(`snow'), the pixilation associated with loss of a digital signal may 
be confusing. Have you conducted any focus groups with seniors on the 
installation and operation of the set-top boxes? If so, what was the 
feedback?
    Answer. In fact, I have installed multiple TV converter boxes, and 
NTIA has set-up TV-converter box displays both at the Department of 
Commerce headquarters and on Capitol Hill. NTIA is working with its 
partners to mitigate difficulties some consumers may have in installing 
the converter boxes. If consumers have specific questions, they should 
ask the retailer from whom they purchased the converter box or call the 
manufacturer's technical support hotline. As discussed above, NTIA has 
also worked with the Consumer Electronics Association to produce a 
generic ``Quick Start Guide'' and installation video, both of which are 
available at www.DigitalTips.org and linked to by DTV2009.gov. 
Additionally, NTIA worked with reporters from the Washington Post to 
tape an instructional video on converter box installation, which can be 
found on the Washingtonpost.com website.
    NTIA has also teamed up with Collegiate 4-H (one of the more than 
200 partners with whom we are working) which has selected the digital 
TV transition as its 2008 National Service Project topic. Each 
Collegiate 4-H chapter will do at least one DTV project in 2008, based 
on lesson-plan materials developed by NTIA. A project could include 
helping individuals most at risk of losing television reception, such 
as seniors, to fill out coupon applications or to install their 
converter boxes. Additionally, NTIA is working with its partner, the 
Family, Career and Community Leaders of America (FCCLA), to educate 
local communities about the DTV transition through FCCLA's ``Keep Your 
TV On'' Award. This program, which began in January and continues 
through May 2008, recognizes and rewards FCCLA Chapters that have 
excelled in planning and implementing a local DTV public awareness 
campaign. We are also in constant dialogue with a coalition of aging 
organizations, including AARP, the National Association of Area 
Agencies on Aging, and Meals on Wheels, who are exploring ways to 
assist our most vulnerable seniors with the Coupon Program.

    Question 6. Significant areas of central and eastern Washington are 
served exclusively by translator stations. These are places like 
Curlew, Coulee City, Omak, Oroville, Tonasket, Wenatchee, and Twisp to 
name a few. We have heard about the need for a set-top box that 
converts the digital signal back to an analog one and also allows the 
analog signal to pass through unblocked. When can I tell my 
constituents in these and similar communities that set-top boxes with 
analog pass through capability will be on their store shelves? As there 
are no inventory requirements, how do we ensure that there are 
sufficient numbers of these ``analog pass-through'' boxes in the 
communities that require them?
    Answer. NTIA has certified 16 coupon-eligible converter models with 
analog pass-through function including:

Alpha Digital AT2016
APEX DT 250
Digital Stream DSP7700T
Digital Stream DX8700
Digital Stream DTX9950
DISH Network DTVPal
EchoStar TR-40
Insignia NS-DXA1-APT
Jiuzhou DTT9001
Magnavox TB-100MG9
Philco TB150HH9
Philco TB100HH9
RCA DTA800B 1
Tatung TDB3001
Venturer STB7766G1
Zenith DTT901

    Many of the certified pass-through boxes are familiar brands sold 
at major retail chains. In addition, analog pass-through boxes are 
being made available through online and telephone participating 
retailers. It is not within the scope of the Program to track specific 
inventories at retail but more information would likely be available 
from these manufacturers.
    As I stated in testimony on April 8th, NTIA asked manufacturers 
early on to take into consideration the development of certified 
converter boxes with an analog pass-through capability, and to 
investigate options that would permit them to do so in a manner that 
minimizes signal loss. On February 5, 2008, I sent a letter to each of 
the prospective converter box manufacturers involved in the 
certification process to once again encourage them to consider the 
needs of all viewers, including the viewers of Class A, low-power 
television, and television translator stations, in the development of 
converter boxes for the Coupon Program. NTIA is working to ensure that 
a variety of analog pass-through boxes are available to consumers who 
need them as quickly as possible, including through an expedited 
recertification process for boxes re-designed to include this feature.

    Question 7. There is a 90-day expiration date on the coupons for 
the set-top boxes. I can imagine situations, particularly in rural 
parts of my state where consumers receive over-the-air television 
programming exclusively and require an analog pass-though converter 
box, that the coupon will expire before the unit is available in stock 
locally. This problem could be exacerbated given there are no retailer 
inventory requirements. If a consumer's coupon expires unused, can that 
consumer file again for a coupon? If not, what is the rationale for 
preventing a consumer from ordering and receiving another coupon?
    Answer. NTIA is sensitive to the concern that has been raised with 
regard to coupon reissuance, and plans to review its options once 
sufficient redemption data is available.

    Question 8. I understand consumers living in nursing homes, 
assisted living, mobile parks, group homes, and Federal housing are not 
considered to have valid addresses for purposes of the coupon program, 
and are not eligible for the coupon program. I commend you for trying 
to fix these shortcomings as you became aware of them. I would like to 
focus specifically on Native Americans, where yet additional changes 
may be required. As you are aware, many Native Americans live in 
Federal housing on reservations. I spoke with a representative from the 
National Congress of American Indians and there appears to be confusion 
as to whether Native Americans meet the program's address eligibility 
criteria, even with the exception included in the final rule.
    The rule states ``residents of Indian reservations, Alaskan Native 
Villages and other rural areas without home postal delivery may be 
requested to supply additional information to identify the physical 
location of the household, as required.'' What is the additional 
information required? What assurance can you give me that NTIA will 
ensure that individuals living on Indian reservations who need the 
converter box will be eligible to obtain the converter box?
    Answer. NTIA crafted its Final Rule partly in response to concerns 
from Native Americans on reservations, including especially Council 
Tree, who depend on post office boxes to receive their mail. Section 
301.3(a) expressly provides an opportunity for residents of Indian 
Reservations to use a post office box in the case where the U.S. Postal 
Service does not provide home mail delivery. As stated in the Final 
Rule, NTIA may ask these residents to supply additional information to 
identify the physical location of the household (this could include a 
recently-issued utility bill, an unexpired homeowner's or renter's 
insurance policy, or other proof of physical residence bearing the 
applicant's name and physical address.
    Additionally, on April 25, 2008, NTIA issued a Notice of Proposed 
Rulemaking to waive its eligibility requirements with respect to 
households using a post office box who otherwise do receive U.S. Postal 
Service mail delivery, so long as the applicant provides proof of 
physical residence (such as those listed above). One of the desirable 
effects of this rule change would be to reduce the number of 
applications being denied due to the use of post office boxes, 
including by those on Indian Reservations.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Kay Bailey Hutchison to 

                         Meredith Attwell Baker

    Question 1. Prior to certifying individual converter boxes for 
eligibility in the coupon program, does NTIA do any testing of the 
boxes for potential interference concerns?
    Answer. Yes. NTIA has entered into a Memorandum of Understanding 
with the Federal Communications Commission (FCC) under which the FCC 
Laboratory conducts tests on sample converters including tests for 
potential interference concerns. For example, tests relating to Co-
Channel Rejection, First Adjacent Channel Rejection, Taboo Channel 
Rejection, and Field Ensembles are conducted.

    Question 2. If the answer to Question 1 is no, does NTIA at least 
review test data and the FCC's verification information before 
certifying a box as eligible to participate in the coupon program?
    Answer. In addition to testing boxes for potential interference 
concerns, NTIA reviews test data supplied by manufacturers. For your 
information, instructions to manufacturers were issued by NTIA in May 
2007 and are available in the Public Notice (available at http://
www.ntia.doc.gov/ntiahome/frnotices/2007/DTVmanu
facturer_053007.htm.) Items #2 and #3 provide guidance to manufacturers 
on testing and how to report their test results.

    Question 3. Has NTIA done any post certification testing of 
converter boxes made available to consumers in retail locations as 47 
CFR 301 permits?
    Answer. Yes, NTIA plans to purchase converters at retail outlets to 
selectively test for continued compliance with NTIA's technical 
specifications.

                                  
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