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62–593 PDF 2008

STATUS OF THE DTV TRANSITION: 154 DAYS 

AND COUNTING 

HEARING 

BEFORE THE

SUBCOMMITTEE ON TELECOMMUNICATIONS AND 

THE INTERNET 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 16, 2008 

Serial No. 110–148 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

JOHN D. DINGELL, Michigan, Chairman 

HENRY A. WAXMAN, California 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

Vice Chairman 

LOIS CAPPS, California 

MIKE DOYLE, Pennsylvania 

JANE HARMAN, California 

TOM ALLEN, Maine 

JAN SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

DARLENE HOOLEY, Oregon 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

JOE BARTON, Texas 

Ranking Member 

RALPH M. HALL, Texas 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

BARBARA CUBIN, Wyoming 

JOHN SHIMKUS, Illinois 

HEATHER WILSON, New Mexico 

JOHN SHADEGG, Arizona 

CHARLES W. ‘‘CHIP’’ PICKERING, 

Mississippi 

VITO FOSSELLA, New York 

ROY BLUNT, Missouri 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE FERGUSON, New Jersey 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

PROFESSIONAL STAFF

DENNIS B. FITZGIBBONS, Chief of Staff 

GREGG A. ROTHSCHILD, Chief Counsel 

SHARON E. DAVIS, Chief Clerk 

DAVID L. CAVICKE, Minority Staff Director 

(II)

(III) 

SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET

EDWARD J. MARKEY, Massachusetts, Chairman 

MIKE DOYLE, Pennsylvania 

Vice Chairman 

JANE HARMAN, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

BARON P. HILL, Indiana 

RICK BOUCHER, Virginia 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

LOIS CAPPS, California 

HILDA L. SOLIS, California 

JOHN D. DINGELL, Michigan (ex officio) 

CLIFF STEARNS, Florida 

Ranking Member 

FRED UPTON, Michigan 

NATHAN DEAL, Georgia 

BARBARA CUBIN, Wyoming 

JOHN SHIMKUS, Illinois 

HEATHER WILSON, New Mexico 

CHARLES W. ‘‘CHIP’’ PICKERING, 

Mississippi 

VITO FOSELLA, New York 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE FERGUSON, New Jersey 

JOE BARTON, Texas (ex officio) 

(V) 

C O N T E N T S 

Page 

Hon. Edward J. Markey, a Representative in Congress from the Commonwealth of Massachusetts, opening statement .................................................... 1 

Hon. Lee Terry, a Representative in Congress from the State of Nebraska, 

opening statement ................................................................................................ 2 

Hon. Baron P. Hill, a Representative in Congress from the State of Indiana, 

opening statement ................................................................................................ 3 

Hon. Anna G. Eshoo, a Representative in Congress from the State of California, opening statement .................................................................................... 5 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, opening statement ....................................................................................... 6 

Hon. Greg Walden, a Representative in Congress from the State of Oregon, 

opening statement ................................................................................................ 8 

Hon. Jay Inslee, a Representative in Congress from the State of Washington, 

opening statement ................................................................................................ 9 

Hon. Heather Wilson, a Representative in Congress from the State of New 

Mexico, opening statement .................................................................................. 10 

Hon. Hilda L. Solis, a Representative in Congress from the State of California, opening statement .................................................................................... 11 

Hon. Lois Capps, a Representative in Congress from the State of California, 

opening statement ................................................................................................ 12 

Hon. Gene Green, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 12 

Hon. John Shimkus, a Representative in Congress from the State of Illinois, 

opening statement ................................................................................................ 14 

Hon. Edolphus Towns, a Representative in Congress from the State of New 

York, opening statement ...................................................................................... 211 

WITNESSES

Kevin J. Martin, Chairman, Federal Communications Commission ................... 15 

Prepared statement .......................................................................................... 18 

Meredith Baker, Acting Assistant Secretary for Communications and Information, Department of Commerce ........................................................................... 46 

Prepared statement .......................................................................................... 48 

Mark L. Goldstein, Director, Physical Infrastructure Issues, U.S. Government 

Accountability Office ............................................................................................ 67 

Prepared statement .......................................................................................... 69 

Tom Romeo, Director, Federal Services, Global Business Service, IBM Corporation ................................................................................................................. 102 

Prepared statement .......................................................................................... 104 

Christopher A. McLean, Executive Director, Consumer Electronics Retailers 

Coalition ................................................................................................................ 106 

Prepared statement .......................................................................................... 108 

David K. Rehr, President and CEO, National Association of Broadcasters ....... 124 

Prepared statement .......................................................................................... 126 

Kyle McSlarrow, President and CEO, National Cable and Telecommunications Association ............................................................................................... 149 

Prepared statement .......................................................................................... 151 

David Candelaria, Vice President and General Manager, Entravision Communications Corporation ........................................................................................... 159 

Prepared statement .......................................................................................... 161 

John Kittleman, General Manager, KRGV-TV Newschannel 5, KRGV-DT 5.2 

LATV ..................................................................................................................... 168 

Prepared statement .......................................................................................... 170 

Andrew G. Setos, President, Engineering, Fox Group ......................................... 181 

Page

VI 

Andrew G. Setos, President, Engineering, Fox Group—Continued 

Prepared statement .......................................................................................... 183 

Chris Murray, Senior Counsel, Consumers Union ................................................ 188 

Prepared statement .......................................................................................... 190 

Connie Ledoux Book, Ph.D., Associate Dean, Associate Professor, Elon University ................................................................................................................... 194 

Prepared statement .......................................................................................... 196 

SUBMITTED MATERIAL

‘‘What Consumers Need To Know About the ‘DTV Transition’ and the NTIA 

‘TV Convertor Box Coupon Program,’’ press release, Consumer Electronics 

Retailers Coalition ............................................................................................... 213 

Letter of September 15, 2008, from Federal Communications Commission 

to Consumer Electronics Retailers Coalition ..................................................... 219 

Letter of September 12, 2008, from Michael J. Copps to Federal Communications Commission ................................................................................................. 221 

‘‘Congressional Insiders’ Explanation of the Retransmission Consent/MustCarry Negotiation Between Broadcasters and Cable/Satellite Operators,’’ 

brochure, National Association of Broadcasters ................................................ 228 

Letter of September 10, 2008, from the American Association of Retired 

Persons to Ms. Solis ............................................................................................. 231 

Letter of July 11, 2008, from the League of United Latin American Citizens 

to the Committee .................................................................................................. 233 

Letter of July 9, 2008, from the Mexican American Legal Defense and Educational Fund to the Committee ......................................................................... 235 

Letter of July 9, 2008, from the National Association of Latino Elected and 

Appointed Officials to Ms. Pelosi and Senator Byrd ......................................... 236 

Letter of August 17, 2008, from the National Council of La Raza to Ms. 

Pelosi ..................................................................................................................... 238

(1) 

STATUS OF THE DTV TRANSITION: 154 DAYS 

AND COUNTING 

TUESDAY, SEPTEMBER 16, 2008 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON TELECOMMUNICATIONS

AND THE INTERNET, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The subcommittee met, pursuant to call, at 9:33 a.m., in room 

2123 of the Rayburn House Office Building, Hon. Edward J. Markey (chairman) presiding. 

Members present: Representatives Markey, Doyle, Harman, Gonzalez, Inslee, Hill, Eshoo, Green, Capps, Solis, Dingell (ex officio), 

Stearns, Deal, Shimkus, Wilson, Walden, Terry, and Barton (ex 

officio). 

Staff present: Amy Levine, Tim Powderly, Mark Seifert, Colin 

Crowell, Philip Murphy, Neil Fried, Courtney Reinhard, Ian 

Pillner, and Garrett Golding. 

OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH 

OF MASSACHUSETTS 

Mr. MARKEY. Good morning. Today we hold yet another oversight 

hearing on the status of the digital television transition. The goal 

of today’s hearing is to extract lessons from the recent test in Wilmington, North Carolina to assess ongoing governmental efforts towards a successful transition, to examine consumer education initiatives and ways to improve them, as well as to raise other policy 

issues affecting the future of digital television. This subcommittee 

has held several hearings, this Congress, on the transition to focus 

attention on the preparations and policies necessary to ensure success. 

In addition, I tasked the Government Accountability Office over 

2 years ago with the job of examining this transition and all of it 

has been done in a very, very excellent way by the GAO, and this 

top notch job has delved into the governance, technical, and consumer education aspects of the transition. This morning we received a fresh report from the GAO on the status of transition efforts. With 154 days left until the shut off, we need to gauge current consumer and industry preparedness for this transition. We 

are also eager to provide and receive suggestions for additional outreach or policy improvements to minimize consumer disruption, 

particularly for the elderly, individuals with disabilities, minority 

households and Latino households along the border with Mexico. 

2 

Since our last hearing on this important subject, we have had the 

pilot test in Wilmington. This isolated test was a valuable experience. It demonstrated that with focused efforts, general awareness 

of the transition in a relatively small market can be raised to fairly 

high levels. However, just below the general awareness detailed 

consumer knowledge about how to properly hook up converter 

boxes, put up antennas or take other similar steps necessary to receive the new digital channels was apparently deficit. In addition, 

other North Carolina households suffered from loss in the coverage 

areas of particular broadcast stations where the digital signal 

failed to reach historically served households. 

These in-home implementation issues and for many consumers 

unexpected signal loss caused understandable confusion and frustration. Chairman Martin, in my view, correctly stated after the 

test that the measure of success isn’t Wilmington per se, but rather 

how we learn from Wilmington to ensure success next February. I 

want to commend the Commission, the NTIA, and non-governmental stakeholders for their efforts in Wilmington. To address the 

specific problems identified in the Wilmington test, however, will 

undoubtedly prove challenging on a national scale. To extrapolate 

what might happen nationally from this test may be difficult but 

it is clear that a fairly significant number of consumers in Wilmington called stations or the FCC with implementation problems 

at home. 

Moreover, if coverage areas of broadcasters purposely shrink or 

are otherwise diminished in more densely populated markets than 

Wilmington consumer ire from both of these issues could come from 

hundreds of thousands or millions of consumers nationally next 

February. We must also be cognizant of the fact that Wilmington 

received extraordinary attention and resources for this test. Such 

a focused effort will be difficult to replicate on a national scale. The 

good news is that we have 154 days left prior to the national analog shut off. The bad news is that we have only 154 days left prior 

to the shut off. That leaves us precious little time for the FCC, the 

NTIA and the industry to make final preparations and contingency 

plans for several key aspects of the transition. 

I look forward to hearing from our witnesses, and I thank them 

for joining us this morning. The ranking member of the committee 

will be here momentarily. He has been delayed with an important 

matter, but perhaps at this point I could recognize the gentleman 

from Nebraska, Mr. Terry, for his opening statement. 

OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEBRASKA 

Mr. TERRY. I appreciate that, Mr. Chairman, and thank you for 

your due diligence in tracking the roll-out and the preparedness, 

and frankly I have been very pleased in our community, the 

Omaha area. All of our over-the-air TV stations including the 

NETV station, Nebraska Educational Television stations, as well as 

all the networks, it seems like you can’t go an hour or two without 

them running a PSA. Our community has been very involved. We 

have United Way advertising their 211 number if anyone has any 

questions. Also, the teleservices in our community, some of our 

teleservices corporations have been contracted by NTIA to be able 

3 

to accept the telephone calls from the consumers, the same entities 

that work with other government agencies when we are going to 

receive volumes of calls. 

So I think we are getting the message out. We are becoming prepared, and most people understand. There are some issues that 

arise. First of all, we want to make sure that our teleservices that 

are going to be the first line of communication between the government and the consumers are adequately funded and the contracts 

are in place. Secondly, with some of our NETV already switching 

over to digital only, we are learning some of the same lessons of 

Wilmington in that the distance of the signal seems to be different 

than the analog where the cliff where they would receive some picture, before they were receiving no digital picture. And we are receiving calls, and of course we are working with them to try and 

get the power booster antennas up. Again, that is just an additional cost to the consumer. 

The other issue that we seem to have, and I would like to hear 

this from Secretary Baker, is the coupons. We are getting calls 

from people that have lost or misplaced or even had purses stolen 

with their coupons in it, and they are finding it difficult. They are 

being told, no, once we send them to you, you don’t get a replacement. And I think those are rare, but I think we need to be flexible 

in our responsibility to make sure that the people who need a coupon if it has been lost or stolen can be replaced. With that, one last 

part in reaching out to our Hispanic community, I am pleased that 

the FCC and TIA have been sending people around to see how the 

roll-out is going. 

You came to Omaha and we walked the Mercado handing out flyers and posters to make sure that we got the penetration within 

our Spanish-speaking Hispanic community so I do think that we 

understand what the issues are and are doing an adequate job of 

addressing those. I yield back. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Texas, Mr. Gonzalez. 

Mr. GONZALEZ. Waive opening statement. 

Mr. MARKEY. The chair recognizes the gentleman from Indiana, 

Mr. Hill. 

OPENING STATEMENT OF HON. BARON P. HILL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF INDIANA 

Mr. HILL. Thank you, Mr. Chairman, and thank you for holding 

this hearing and also to the panel of witnesses for the opportunity 

to discuss the progress of digital television. First I would like to 

congratulate both Wilmington, North Carolina and community 

leaders and Chairman Martin for the successful transition to digital television. There were concerted efforts by broadcasters, Federal agencies, grassroots organizations, service providers, community leaders, and retailers to educate Wilmington residents about 

the early transition date. While these efforts, as we all know, were 

basically successful, the FCC, you did receive over 800 calls about 

the transition. Calls ranged from consumers who had no prior 

knowledge of the transition, consumers who had issues with the 

converter box coupon program, as Representative Terry was speakVerDate Nov 24 2008 10:45 Dec 29, 2010 Jkt 037690 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS\110-148 CHRIS
4 

ing about and consumers who had technical issues with either the 

converter box or reception. 

Using the Wilmington cause as a basis, the national DTV transition could spur millions of calls. The FCC call center should be prepared for a large influx of calls after February 17. I hope that all 

resources can be harnessed nationally to provide the same level of 

consumer saturation for the DTV national transition as we saw in 

Wilmington to reduce or prevent confusion and calls on the day of 

transition. All entities, including Congress, must continue to provide consumer education, and I encourage new organizations to get 

involved so we can reach all populations. Thank you again, Mr. 

Chairman, for holding this hearing. I yield back the remainder of 

my time. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the ranking member of the subcommittee, the gentleman 

from Florida, Mr. Stearns. 

Mr. STEARNS. Good morning and thank you, Mr. Chairman. I am 

glad to be here for this hearing. I don’t know what number this is 

for the DTV transition, but obviously the more the merrier especially after our demonstration in Wilmington, and I thought it was 

a great success. I notice in the hearing, Mr. Chairman, that you 

have nine witnesses on the second panel, so I hope we all can stay 

for those nine witnesses. It is 154 days away from the transition, 

and I believe consumers are well prepared for this transition. As 

of early August, 91 percent of households had one or more televisions with a digital tuner or connected to a pay service or converter box according to Nielsen. Almost 80 percent of households, 

every television had a digital tuner or was connected to a pay service or a converter box, thus, with more than 6 months still to go 

only about 8.9 percent of households were relying exclusively on 

analog over-the-air television and still needed to take action to continue watching television for the transition. 

As of early September, 10 million coupons had been redeemed 

and another 71⁄2 million coupons were still in circulation. One hundred fifty-six converter box models, different models, had been approved for purchase with the coupons, 82 of which can pass 

through the analog signal for low power stations. While a converter 

box cannot display digital programming and high definition on an 

analog television, it will improve the video and audio and will also 

enable the analog television to receive digital, multicast programming over the air for free. Advance non-coupon eligible converter 

boxes are also available such as the ones that include digital recording features. While the NTIA sends coupons, it includes a list 

of participating stores that are near and close to the customer. So 

far the NTIA has certified 2,300 retailers with a total of 29,000 

store locations to participate in the program. 

Consumers can also redeem coupons with 35 online retailers and 

13 phone retailers. It is also worth noting that consumer satisfaction with a converter box is off the charts. Retailers say they have 

never seen electronic devices with such low return rates. Another 

positive aspect of the transition was the apparent success of the 

September 8 test transition in Wilmington, North Carolina. By all 

early indications the test went well. Less than half of 1 percent of 

the 180,000 television households in the Wilmington area called 

5 

the FCC with questions that day indicating that most consumers 

were ready and able for the transition. Of the 797 calls, most were 

from viewers who were aware of the transition and who had obtained the converter boxes but did not know how to scan channels 

or perhaps did not have the right antenna to use with the converter box. 

Another positive development from the Wilmington test was that 

churches, firefighters, and other local groups were helpful in getting the word out and helping consumers to install the converter 

boxes. A number of students from nearby Elon University also 

helped local broadcasters and cable operators take phone calls and 

answer questions. In light of this information, government and industry should now focus their consumer education efforts on exclusively over-the-air. Households should encourage consumers to try 

the converters boxes early, sort of a simulated test, and should educate them on how to set up the boxes and their antennas. 

Local broadcasters should also work with churches, firefighters, 

schools, and other grassroots groups to help prepare consumers and 

answer the phone to answer their questions. So, Mr. Chairman, as 

you can see we are on the right track. This does not mean that we 

can rest completely at ease. There will always be some people that 

have trouble. As we get closer to February 17, 2009, we need to remain extra vigilant to insure that the transition goes just as 

smoothly as possible. These are important issues. So thank you, 

Mr. Chairman, for holding the hearing, and I look forward to hearing from the witnesses. Thank you. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentlelady from California, Ms. Eshoo. 

OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Ms. ESHOO. Good morning, Mr. Chairman, and thank you for 

your consistent attention to the DTV transition. I think that the 

ranking member expressed it well when he said I don’t know what 

number of this hearing represents but there have been a lot of 

them. I think for all the years that I have been on this committee 

we have been dealing with moving up to this moment, so the time 

is just about at hand. 

Last week Wilmington, North Carolina transitioned early as a 

part of the FCC’s test market. The FCC provided local viewers with 

a 1-800 helpline, which is good, and based on the analysis of those 

calls, 19 percent of all callers said that they had some difficulty 

with the converter box. Based on these numbers, I think that we 

might not be adequately explaining how to install the converter 

boxes. I think that is what it points to. So I am eager to hear from 

our witnesses today how these numbers are being analyzed and if 

there will be changes to the outreach programs based on the data 

that was secured from this. 

I also want to call attention to the number of calls. The FCC estimates that 14,000 households in Wilmington only receive free overthe-air broadcasts. In 5 days there were 1,828 calls. So I think it 

is fairly safe to assume that the vast majority of those callers are 

free over-the-air households. I don’t know if that is a correct asVerDate Nov 24 2008 10:45 Dec 29, 2010 Jkt 037690 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS\110-148 CHRIS
6 

sumption but I am assuming that. That means that about 13 percent of those households had an issue. If those numbers translate 

nationally the help line is going to be flooded with more than a million calls in a few days after the transition so my question that I 

hope you will address is, is the transition in place to adequately respond to all of these calls? 

It has also come to my attention that on December 31st of this 

year a substantial number of retransmission consent agreements 

are going to expire. If recent history is any guide there is a significant risk that more than a few of the stations covered by these 

agreements could go dark on cable networks in January, just ahead 

of the transition date. I support a ‘‘quiet period’’ beginning before 

the end of this year and extending for a reasonable period of time 

after the transition date to insure that consumers are not subjected 

to additional confusion and disruption. I hope and I urge both the 

broadcasters and the cable operators to quickly negotiate these consent agreements well before or after the transition date. I am 

afraid that there will be some confusion and we don’t need any 

added confusion of a retransmission consent dispute that would, I 

think, really hurt consumers preceding the transition. 

So, Mr. Chairman, I think these hearings have been enormously 

helpful both to us and to the agency that has to implement the 

change, and I look forward to asking questions and thank all the 

witnesses for being here. 

Mr. MARKEY. The gentlelady’s time has expired. The chair recognizes the gentleman from Texas, Mr. Barton. 

Mr. BARTON. Thank you, Mr. Chairman. I am going to put my 

written statement into the record and I commend you for holding 

the series of hearings on digital transition. It appears to be going 

well. I appreciate our panelists being here especially the chairman 

of the FCC, Chairman Martin, and with that I yield back. 

[The prepared statement of Mr. Barton was unavailable at the 

time of printing.] 

Mr. MARKEY. The chair recognizes the gentleman from Michigan, 

the chairman of the committee, Mr. Dingell. 

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. DINGELL. First of all, I commend you for the hearing and for 

your longstanding and continuing interest in the subject matter of 

this hearing. It is going under your leadership to be, I am satisfied, 

a most helpful event. 

I welcome the witnesses to the committee’s sixth hearing on this 

matter of digital television and the transition. As I have said before, DTV transition is a critical consumer issue facing the committee this year, and it is essential that we continue to address 

outstanding issues as February 17, 2009, draws closer. 

Just a week ago, stations in Wilmington, North Carolina 

transitioned to digital. These stations deserve accommodations as 

do cable, satellite providers, and the DTV transition coalition, 

NTIA, and the Federal Communications Commission for their efforts. The DTV transition test evaluated and revealed many problems, including consumers who could not connect their converter 

7 

boxes to the televisions and did not know they needed to rescan 

their boxes to search for new channels and did not know they needed to obtain or adjust antennas to receive digital signals. These are 

warnings to us that must be heeded. 

In Wilmington, the FCC paid the fire department to make house 

calls to help connect the converter boxes, a very forward-looking 

step. I look forward to hearing from Chairman Martin as to whether the FCC will have the resources to provide such assistance nationwide and whether it will be desirable. We will also need to 

know what it is that he and the Commission learned from this part 

of the experience and all the rest. If not, we will have to call on 

FCC, NTIA, the DTV transition coalition, state and local governments, community organizations, consumer groups, retailers, manufacturers, broadcasters, cable and satellite providers, and others 

with a stake in this transition, to work together to insure that appropriate information and, when needed, in-home assistance are 

available to those who need help in setting up converter boxes and 

acquiring or adjusting antennas. I will also be expecting that the 

broadcasters will inform viewers as they have been doing if they 

will not be maximizing their digital signals until after the transition. We cannot have a repeat of the problems from Wilmington 

when the Nation transitions on February 17, 2009.I am pleased 

that the hearing today will address issues raised by Ms. Solis’s 

DTV Border Fix Act. This is a matter that needs scrutiny of this 

committee and there are problems there that do have to be addressed. Both the culture of the border region and the fact that the 

households there can often receive both U.S. and Mexican over-theair signals are unique and they are different than the problems 

that exist with regard to the Canadian border regions where I come 

from. These are also some of the poorest regions in our Nation, 

making the coupon subsidy even more important to them. We must 

ask the FCC and NTIA to pay special attention to this region and 

their consumer education efforts. I look forward to working with 

Ms. Solis to insure that we meet the needs of these communities, 

which amongst everything else are largely bilingual. 

I am also interested in looking forward to hearing from Assistant 

Secretary Baker about NTIA’s proposed legislation for additional 

administrator funds for the converter box coupon programs. I 

would like to hear why, if NTIA was prepared to recycle expired 

coupons, it did not budget sufficient administrative funds for that 

purpose. 

I am also curious to know whether or not the contract that was 

let between NTIA and the contractor will be able to accommodate 

the circumstances here. I also reiterate at this time what I have 

written NTIA before—that we cannot balance this planning error 

on the backs of consumers. I must confess myself much disappointed that NTIA’s proposal is drafted so that each dollar spent 

to make up for NTIA’s administrative shortfall is a dollar taken 

away from the funds set aside to provide coupons to the households 

that need them. That is a matter that will have to be addressed 

and I will be difficult to satisfy on this matter, for just 154 days 

remain until—154, 164, 10 days less, remain until February 17, 

2009. We are then entering the home stretch. It is critical that we 

prepare for, understand, and be able to predict the problems and 

8 

outstanding issues that are related to the transition so that no 

household is left behind and so that we are fully prepared to handle the matter efficiently and expeditiously and well. 

Mr. Chairman, again thank you for your leadership and for holding today’s hearing. I yield back the balance of my time. 

Mr. MARKEY. The gentleman yields back the balance of his time. 

We now turn and recognize the gentleman from Georgia, Mr. Deal. 

Mr. DEAL. Mr. Chairman, I would pass and reserve my time for 

questioning. 

Mr. MARKEY. The gentleman reserves his time. The gentleman 

from Oregon, Mr. Walden. 

OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON 

Mr. WALDEN. Thank you very much, Mr. Chairman. I appreciate 

your having this hearing as we keep track of the DTV transition. 

I want to commend the broadcasters and the cable casters for aggressively educating the American consumer about what is ahead. 

I think they have done a terrific job in getting the word out. I can’t 

turn on my own TV without seeing at least one message about the 

transition or it appears from all the data that we have before us 

that indeed we are seeing a high success rate in conversions already and we still have 6 months or 5 months to go. And so I am 

real pleased with that. I do want to hear more about the Wilmington transition situation. 

I am going to take the testimony. Unfortunately, I have an energy subcommittee hearing that starts in about 3 minutes and a 

classified briefing on the energy grid I am going to have to step out 

for. And speaking of energy, Mr. Chairman, I guess I have to just 

express this. I know this is a DTV hearing. I am just really disappointed the speaker doesn’t have as much respect for this committee as those of us who are on it have and that we have a 299- 

page energy bill that was filed with the Rules Committee last night 

at 10:45 that I doubt anybody on this committee has seen or read 

that I understand is going to be on the floor today with no hearing 

and no markup, and it is really unfortunate that the speaker has 

decided to run the House over the top of our distinguished committee chairs and the committee process and bring a 299-page bill 

to the floor today. 

And I just want to say that it is really frustrating being on the 

Energy and Commerce Committee to have that happen. I yield 

back the balance of my time. 

Mr. MARKEY. The gentleman’s time has expired. 

Mr. STEARNS. Would the gentleman yield just for a moment? 

Mr. WALDEN. I would yield to my colleague from Florida. 

Mr. STEARNS. I would just follow up on that point. It is not only 

that, but the Rules Committee met and made sure that there are 

no amendments allowed so in addition to closing down everything 

and preventing amendments, it would just be an up or down vote 

on a bill that we haven’t seen. In fact, the bill is going to be offered, 

I understand, a little bit different than the summaries that have 

been circulated from both sides so people on the Democrat side as 

well as Republican side have actually no idea what is in this bill. 

This is crucial to the long-term future of our country so I think the 

9 

gentleman makes an excellent point that in this kind of environment to see an energy bill come on the floor, closed rule, with no 

opportunity for anyone to know what is in it is just a very sad situation. I thank the gentleman. 

Mr. WALDEN. And reclaiming my time, not only is it sad, it so 

degrades the legislative process in my opinion. If you can’t do 

amendments, if you can’t see the bill, and you are required to vote 

on the biggest issue facing this country is energy. It is undermining 

our entire economy right now. Energy is the issue, and it is one we 

need to deal with thoughtfully, carefully, deliberately through the 

legislative process. That is what the 700,000 or thereabouts people 

I represent, and each one of us represents, expects out of us, not 

something written in secret, filed in the dark of night at 10:45 with 

the Rules Committee, up at 10:00 today on the House floor, 299 

pages. And I doubt anybody on either side of the aisle has read 

this. 

And so, Mr. Chairman, I understand we have a DTV video clip 

that we have agreed to show and so if that is possible. 

Mr. MARKEY. The gentleman’s time has expired. 

Mr. WALDEN. All right. Thank you, Mr. Chairman. 

Mr. MARKEY. Why don’t we just finish, and we will come back 

over to this side. The chair recognizes the gentleman from Washington State, Mr. Inslee. 

OPENING STATEMENT OF HON. JAY INSLEE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON 

Mr. INSLEE. Well, I feel badly that my Republican colleagues are 

sad, depressed, anxiety-ridden. I don’t have any medication for 

that, but I can understand their depression. They have been voting 

on energy against every single way we have to break our addiction 

to foreign oil for the last several years and today and tomorrow 

they will be, and here is the joy, I will try to spread some joy here, 

today our Republican colleagues will be given another opportunity, 

their last opportunity of this Congress to vote for solar energy instead of against it, to vote wind energy instead of against it, to vote 

for enhanced geo-thermal energy instead of against it, to vote for 

plug-in hybrid cars instead of against it, to vote for American ingenuity and innovation to develop a new clean energy non-carbonized 

system of against it. 

They will get to vote for a 15 percent renewable portfolio standard instead of against it. They will get to vote for giving Americans 

a break when they buy plug-in hybrid cars instead of the oil companies a break when they put all their money offshore. They will 

get to vote for increased efficiency standards instead of against it. 

So they have some anxiety now, but I hope they will take the opportunity to join us today to really adopt a high tech energy future 

for this country, and I am sincere in that hope, and I think many 

of them will. I think it will be a good day to move forward. 

Addressing the subject of this hearing, I do hope that we will 

hear today about how to help Americans understand how to actually apply this technology. The experiments that we have had have 

suggested there are some problems about that. I still think that we 

need to respond to this like we did to Gustav and the hurricane 

and not Katrina, and we are not done yet. And I hope we will keep 

10 

the eye on the ball to figure out a way to help Americans actually 

get these things installed correctly. The test case demonstrates the 

weaknesses of that, and I will look forward to a discussion of 

whether we need that $7 million for flexibility to actually get the 

word out as well. Thank you. 

Mr. MARKEY. Thank the gentleman. This reminds me, my favorite twin bill of all time was at the Harvard Square theater about 

30 years ago. It was Dr. No and Dr. Strangelove, two really great 

movies on a twin bill, $3.00 plus your popcorn. Great. And you 

don’t often get the DTV and energy issues all in one hearing, so 

all of you, it is all for the price of one admission to the same hearing. Let me turn and recognize now the gentlelady from New Mexico for her opening statement. 

OPENING STATEMENT OF HON. HEATHER WILSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW MEXICO 

Ms. WILSON. Thank you, Mr. Chairman. I also share the concerns of my colleague from Oregon. This used to be the premier 

committee in the House of Representatives. We worked on important issues. I remember markups here where we were here until 

2:00 or 3:00 in the morning and there was a series of hearts games 

going on in the back because we were working through legislation. 

We were debating things important to the country. And now we are 

going to take up an energy bill on the floor of the House that no 

one on this committee has even read. What are we here for? And 

I just am appalled at how the system has broken down in the Congress, the fact that the Congress is no longer functioning as a body 

that deliberates and passes legislation. 

So we just bring things to the floor that aren’t going to become 

law, nobody ever considers them, nobody reads them. This is a 

joke, and it has made this committee a joke. And what I am most 

disappointed in is that the leadership, the Democratic leadership of 

the Energy and Commerce Committee, is allowing this to happen, 

is going along with this way of doing business. We had Energy 

markups in 2001, 2005, 2007 that went on for days in this committee, but we worked it through, we considered amendments, and 

we legislated. That is what people sent us here to do. We are abdicating our responsibility, and we might as well close down this 

committee if that is the way we are going to run things. 

So today we are going to talk about DTV. I am not sure this committee would ever do anything if the Democratic leadership decided 

they wanted to change something about the DTV bill, particularly 

as I think that it is going to be a real mess when it actually gets 

rolled out in the real world. I don’t know about you, but my TV 

doesn’t hook up to anything. We don’t have cable. We don’t have 

satellite. We don’t have any of that stuff. I live in a neighborhood 

that is a pretty mixed neighborhood, and I can guarantee you that 

when we go through this conversion, I am going to hear about this 

at the post box at the end of my dirt road because government can 

do a whole lot of things but you mess up people’s televisions and 

they are going to get really upset. 

And I am very concerned that this roll-out, the information that 

is being given to consumers is inadequate and that there are going 

11 

to be a lot of people who come home on the day after this conversion takes place and they are wondering what in the heck happened to their television because the information has been inadequate, and you are putting the burden on consumers who bought 

a device that worked, a television, and then saying, oh, well, you 

have to buy a new one. It is not an expense that families in my 

neighborhood want to pay right now with the price of gas through 

the roof and concern about jobs and housing and everything else. 

So I think it is about time that we got our act together, and I think 

it is about time that this committee started acting like a real committee of a real Congress because today we abdicated that responsibility. I yield. 

Mr. MARKEY. The gentlelady’s time has expired. The chair recognizes the gentlelady from California, Ms. Solis. 

OPENING STATEMENT OF HON. HILDA L. SOLIS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Ms. SOLIS. Thank you, Mr. Chairman, for having this hearing, 

and Ranking Member Stearns, for this important oversight hearing 

on digital television transition. I do believe that this committee is 

doing the right thing by focusing in on this issue, and I would like 

to thank our chairman of the overall Energy and Commerce Committee, Mr. Dingell, for his strong support for the issues affecting 

communities that will be affected by the digital transition along the 

border. We have an enormous responsibility here and, quite frankly, one of the reasons why I introduced H.R. 5335 was to help provide a fix for many, hundreds of thousands of individuals who will 

be affected if we don’t do something immediately as well. The legislation that I have introduced would create a process at the FCC for 

broadcasters within 50 miles of the border to apply to keep running 

an analog signal for a minimum of 5 years after the transition. 

The Senate version of the bill, you may know, authored by Senator Kay Bailey Hutchinson, passed the full Senate unanimously in 

August. It does have bipartisan support. I want to urge my colleagues on this committee to support the legislation because I do 

think it is crucial and to the success of the DTV transition in the 

border region. And while I represent a community in southern California, I know what it means to live in those mixed communities 

where the predominant language is not English. We have to keep 

in mind what those viewers there are also being able to obtain in 

those border communities, many which have many economic, particularly right now with the hurricane that just left Galveston in 

Texas, the kind of information that they need at hand readily 

available whenever there are problems that crop up. 

Hurricanes are one, earthquakes are another, but other disasters 

where people will be cut off from their main source of communication. This bill is important for many of the border communities. 

And I am happy to report that members of the Hispanic caucus 

have gone on record in full support of this legislation, as well as 

several of our national Hispanic organizations. And, Mr. Chairman, 

I would like to submit those letters for the record as well, if I could 

ask unanimous consent to have that provided for us. 

12 

Mr. MARKEY. The gentlelady’s time has expired, and the chair 

recognizes the—I am sorry. Without objection, the unanimous consent request of the gentlelady from California is agreed to. We now 

turn and recognize the gentlelady from California, Ms. Capps. 

OPENING STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Ms. CAPPS. Thank you, Mr. Chairman, and thank you for holding 

this very timely hearing. I appreciate your efforts to bring us up 

to date, and I appreciate our witnesses being here to talk to us 

about the state of affairs with DTV, particularly in light of the test 

that was done recently in Wilmington. I also want to thank our 

leader, the chairman of the full committee, for recognizing early on 

that this switch over presents an enormous challenge to our country that we can handle but we need to make sure we do it in the 

most effective way. This is also Hispanic Heritage Month, and in 

light of that I look forward to hearing within this setting about 

how we can better insure that our vulnerable border populations 

are not left behind. 

We have a lot of ground to cover so I am going to just highlight 

the areas of most concern to me and my district. First, as my district, my congressional district, is 42 percent Latino, I am concerned by the latest GAO report, which states that households in 

predominantly Latino areas are less likely to redeem their coupons. 

It is my hope that broadcasters, retailers, and everyone refocus 

their education efforts to reflect this reality and to do something 

about it. Second, the results from Wilmington fall short of where 

we should be in terms of consumer understanding of converter 

boxes and lost signals. Once again, it is good to have this test to 

see what the challenges are. We have a few weeks left in which to 

redouble our efforts. 

This needs to happen to educate consumers about how to use 

converter boxes and whether other equipment like antennas might 

be necessary. Lastly, the GAO reports that NTIA has no specific 

plans to address the expected spike in demand for coupons as the 

transition date nears. I think we should all expect that that is 

going to happen. I want to hear from NTIA how it would handle 

such a spike and what administrative costs might be associated 

with that. So again, thank you, Chairman Markey. To our witnesses, I look forward to hearing from you how we can use the remaining time before the switch-over to insure that this transition 

goes as smoothly as it should. And I yield back. 

Mr. MARKEY. The gentlelady’s time has expired. The chair recognizes the gentleman from Texas, Mr. Green. 

OPENING STATEMENT OF HON. GENE GREEN, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. GREEN. Thank you, Mr. Chairman, and I apologize for being 

late. I want to thank you for calling this follow-up hearing, and I 

know we have had a number of hearings on it. And I have a district in Houston so we have a lot of problems going on, and I want 

to thank you again for holding this digital television transition. I 

look forward to hearing from our witnesses about the test in Wilmington, the first city to switch to digital, and other issues that 

13 

need to be addressed between now and next February. We have little time to address these issues until the beginning of the next 

Congress. This will be the last thorough discussion we have until 

next January, about 1 month out from the analog cut off. 

Most importantly, today as my home town of Houston struggles 

to stabilize the situation and begin to rebuild, there is discussion 

of emergency communication after the digital transition. I would 

like to thank our local broadcasters for their work, local coverage 

to keep the viewers informed. I want to thank particularly Direct 

TV, who carried KHOU, Channel 11, Houston CBS affiliate nationwide on their satellite service so displaced evacuees could get the 

local coverage. What I am still concerned about is a issue I raised 

at the last DTV hearing on whether there were battery-operated 

digital television converter boxes available or even in production. 

When I raised the issue the last time both the FCC and the 

NTIA acknowledged it was a problem. They are looking at how to 

resolve it. I hope to hear that progress has been made. The electricity outage that darkened the upper Texas Gulf Coast at the 

height of Hurricane Ike is the largest power outage in the State’s 

history according to the Public Utility Commission. Nearly 2 million people are still without power in Houston and about 90 percent 

average in my own district. We don’t have power now at my house 

or at either of our offices. If I didn’t have my battery-operated TV, 

I wouldn’t be able to get the news. I would have to depend on 

radio. 

And after February 17, we will not have those battery-operated 

TVs that are analog so it is not only something we need to consider, it is an emergency, and I would hope the FCC and NTIA and 

the industry, if you are here, the retailers and the manufacturers, 

that is something that is needed. And if it takes a federal mandate, 

we will work on it. The test market in Wilmington was almost 

postponed out of concern that Hurricane Hanna was going to hit 

North Carolina just as full power stations in the Wilmington market prepared to shut off their analog signals and complete the transition. Tropical Storm Eduard, Tropical Storm Fay, Hurricane Gustav, Hurricane Hanna, and Hurricane Ike all made landfall during 

2008 hurricane season. The west has earthquakes and forest fires. 

The Midwest has tornados. The Gulf and East Coast have hurricanes. Whatever disaster, we need to make certain information is 

available over the television and people are able to view the information, whether there is power running in their home or not. 

And again, like I said, over 90 percent of my households in a blue 

collar, poor area of Houston in East Harris County do not have 

power. Now we also have the Petrol Chemical complex. We are trying to get it back up operating but without power you can’t keep 

up with the information through your television. Again, I want to 

thank all the witnesses for being here today and look forward to 

the discussion of topics. I hope we can look at the need for emergency communication prior to, during and after a national disaster 

and how these communications affect our digital transition. Again, 

thank you, Mr. Chairman. 

Mr. MARKEY. Thank you, Mr. Green, and all of our prayers and 

thoughts are with you, your family, all of the citizens of Houston, 

Galveston. I know you have family in Galveston, and the entire afVerDate Nov 24 2008 10:45 Dec 29, 2010 Jkt 037690 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS\110-148 CHRIS
14 

fected area. It is just a complete tragedy down there. Again, it 

makes this hearing so much more important that you were able to 

come here today to remind us. The chair recognizes the gentleman 

from Illinois, Mr. Shimkus. 

OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. SHIMKUS. Thank you, Mr. Chairman. I was coming to attend 

the DTV hearing and I heard an energy debate broke out so I ran. 

No, not really. But it does highlight the frustration on this side of 

regular order and the fact that here we have a major energy bill 

to the floor. We are the Energy and Commerce Committee, the 

most powerful committee in the House of Representatives, having 

a major debate on energy, and it doesn’t go through the subcommittee, doesn’t come through the full committee. And when we 

passed the 2005 energy bill, it went through five committees. We 

know because we spent till 4:00 in the morning marking it up just 

in this committee alone. 

And of course because of the time of year it is and the closeness 

to the proximity of elections this things gets thrown on the floor, 

and if there are people who are frustrated and disappointed, I 

think everybody can understand why and hopefully in the next 

cycle when we get to a new Congress, we will get back to regular 

order. I think that is all the point being. We do more harm to this 

institution when we don’t use regular order and we don’t do regular process because then we have people here to talk about DTV 

and a fight on energy breaks out, and we are better than that. 

And this committee, as you know, and my colleagues on the other 

side know, this committee is much, much better than that. To the 

DTV, I just tell you I was pleased with the test. I took the August 

break to go to my constituents to talk about coupons, to talk about 

the digital receivers, to help people learn to hook them up. I have 

constituents in rural areas that, I know the direct satellite folks 

aren’t going to want to hear this, but they have decided to disconnect their direct satellite to just receive the great signal free 

over-the-air digital TV, more channels, and that is what we would 

hope through a great transition and also the other benefits of the 

first line responders and using new technologies. 

So I want to thank the folks, and I want to thank Chairman 

Martin because we did have a phone call and a discussion of the 

Wilmington issue that was helpful, and I am pretty excited. I 

would just encourage members to really get proactive just like on 

the Medicare D debate, whether you were for it or against it, if you 

lean forward in the fox hole and you really took the offensive action 

to help educate your constituents, I think the problems that will 

occur, and there will be problems, but if you take pre-emptive action you can limit that and that is the best thing for all our constituents. Thank you, Mr. Chairman. I yield back. 

Mr. MARKEY. The gentleman’s time has expired. All time for 

opening statements by the members of the subcommittee has expired. We will now turn to our panel. And we will begin with Kevin 

Martin, who is the Chairman of the Federal Communications Commission, a post he has held since 2005. The Federal Communications Commission is responsible for DTV consumer education, and 

15 

he is here today to talk about Wilmington, North Carolina, and its 

DTV test market. We welcome you, sir. Whenever you are ready, 

please begin. 

STATEMENT OF KEVIN J. MARTIN, CHAIRMAN, FEDERAL 

COMMUNICATIONS COMMISSION 

Mr. MARTIN. Thank you and good morning, Chairman Markey 

and Ranking Member Stearns, and all the members of the committee. Thank you for inviting me to be here today and to continue 

to update you on the status of the digital transition. With the national transition about 5 months away much remains to be done. 

At the same time, since I last appeared before you, we have continued to make progress educating viewers and helping them prepare 

for the upcoming transition. In particular, in addition to our ongoing consumer education and outreach efforts, we have gained realworld experience with the challenges facing viewers and broadcasters as we approach February, 2009. 

Last week, on September 8, Wilmington, North Carolina became 

the first market in the country to transition from analog to digital 

television. Before I go into the details of the Wilmington transition, 

I would like to start by crediting Commissioner Copps of the FCC 

for challenging me and the industry to find a community that 

would be willing to help the rest of the country lead this transition. 

Commissioner Copps deserves the credit for urging the Commission 

to engage in a real-world test that would help ready the broadcasters, viewers and all of us at the Commission for this upcoming 

transition. 

For its part, the Commission worked hard to educate, inform, 

and prepare those in Wilmington for the transition, but it was our 

partnership, particularly those at the grassroots level, that was 

critical in enabling us to contact at risk groups that we were focused on reaching, senior citizens, non-English speakers and minorities, people with disabilities, low income consumers, and those 

living in rural or tribal areas. The Wilmington switchover was critically important because it enabled us to learn what was effective 

in informing and preparing viewers and broadcasters for the transition, and it helped us identify what outreach and technical challenges still need to be addressed in the months ahead. 

While we hope that the transition in Wilmington went relatively 

smoothly, the measure of success in Wilmington is not what occurred last week. The measures of success in Wilmington is what 

happens next February and whether we are able to learn from this 

experience and apply those lessons as we move this effort across 

the country. Based on our current information, it appears that the 

majority of Wilmington viewers were aware of and prepared for the 

transition. Importantly, the consumer education campaign that was 

conducted appears to have been effective. Consumer calls received 

by the Commission at its call center indicated that the majority of 

the 400,000 television viewers in the Wilmington area were aware 

of the transition and prepared for it. 

During the first day of the transition, the Commission’s help line 

received almost 800 calls representing less than half of 1 percent 

of the area homes. Notably, the volume of calls we received decreased by almost 50 percent in the 2 days after the switchover and 

16 

continues to decrease with each passing day. In total we received 

about 1,800 calls regarding the Wilmington test, representing 

about 1 percent of the Wilmington households. For the entire first 

week, only 91 callers said they were unaware of the transition and 

163 callers were aware but did not take any action to prepare for 

it. Several challenges, however, do also remain. Though consumer 

education efforts appear to have been effective, our focus now turns 

to resolving the technical challenges. Some of these challenges are 

easily resolved and others are not. 

With respect to the callers who are experiencing difficulty, I have 

directed our engineers and outreach staff to work directly with 

those viewers and assist them in resolving their individual questions and needs. For example, as of last Friday there were 329 calls 

to our help line about converter boxes. Thanks to the dedicated 

Commission staff, many of these difficulties have been easily resolved. Specifically, the Commission staff were able to resolve 262 

or almost 80 percent of those calls as they came in. The solutions 

were often relatively simple, consumers just needed to either rescan for channels on their television set or their converter box or 

properly hook up the converter box. On a going forward basis, consumer education efforts are going to need to instruct consumers 

about how to effectively hook up their box and the need to re-scan. 

Unfortunately, some viewers are experiencing problems that will 

not be as easy to resolve. For example, there are a number of consumers in the Wilmington area that have lost access to the Wilmington NBC affiliate. Prior to the digital switch, the Wilmington 

NBC affiliate signal was available to viewers outside that television market as far south as Myrtle Beach, South Carolina and as 

far north as Raleigh, North Carolina. The Wilmington NBC affiliate’s new coverage area, however, no longer includes these out-ofmarket communities. Some of these viewers will be able to watch 

their local NBC affiliate in Myrtle Beach and Raleigh. There are 

some, however, who will not have access to any NBC affiliate. 

Our goal is to ensure that all viewers in the Wilmington area 

and the country have access to the same television signals they did 

prior to the television transition. The Commission is currently exploring what steps can be taken to address this problem in Wilmington and to minimize this burden on viewers as we move 

throughout the rest of the country. Finally, relatively few consumers lost their broadcast channels as a result of the digital cliff 

effect. I have previously testified that our engineers estimate that 

about 5 percent of over-the-air viewers may need a new antenna 

to receive digital television signals due to the digital cliff effect. 

Only about 15 percent of viewers around the country receive their 

signals over the air so we estimate that this will impact less than 

1 percent of all viewers and that they would need a new antenna. 

The data from Wilmington suggests a similar outcome. 

Of the 960 calls we received about reception and technical problems, as I said, 553 related to the NBC affiliate. The reception 

problems for Channel 6 were caused by a significant reduction in 

the service contour, not by the digital cliff effect. If we assumed 

that all the remaining calls were caused by the cliff effect, this still 

represents less than approximately .25 percent of all viewers in the 

Wilmington area. Moreover, many of the calls we received, we were 

17 

able to resolve with relatively simple technical advice about 136 of 

them. In short, for stations whose DTV coverage was designed to 

replicate their analog coverage, complaints about the cliff effect 

were well below our estimate of 1 percent. 

The early switch in Wilmington has been instrumental in helping 

the Commission identify, understand, and hopefully prevent some 

future problems with the rest of the nation as we move to the transition of February of next year, but the measure of success in Wilmington is not what happened on September 8, September 15, or 

October 15. Rather, it is how we are going to take those lessons 

that we learned and apply that knowledge throughout the rest of 

the country. I would ask the rest of my statement be entered in the 

record, and I look forward to answering your questions. 

[The prepared statement of Mr. Martin follows:] 

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Mr. MARKEY. Without objection, it will be included in the record 

in its entirety. We now turn to Ms. Meredith Attwell Baker. She 

is the Acting Administrator of the National Telecommunications 

and Information Administration. She, therefore, has primary responsibility for the DTV converter box coupon program. Ms. Baker 

first joined NTIA as a senior advisor in January of 2004 and was 

named Deputy Assistant Secretary in February of 2007. We welcome you, Ms. Baker. Whenever you are ready, please begin. 

STATEMENT OF MEREDITH BAKER, ACTING ASSISTANT SECRETARY FOR COMMUNICATIONS AND INFORMATION, DEPARTMENT OF COMMERCE 

Ms. BAKER. Thank you, Mr. Chairman, and Ranking Member 

Stearns, and members of the subcommittee. I appreciate the opportunity to testify before you today. Educating Americans about the 

options for the digital transition has been administering an efficient and consumer friendly coupon program have been the top priority for NTIA over the past few years. With 154 days to go until 

the DTV switch occurs, we have made significant progress. Since 

the program’s launch on January 1 and through September 10, 

2008, the volume of coupon applications has been strong. Nearly 27 

million coupons have been requested from 14 million households. 

This is equivalent to more than 105,000 average household requests for each of the 260 days the program has been operational. 

Over the last 30 days average household requests are up to 

111,000 per day. The rate of coupon redemptions has likewise been 

strong. Over 10 million coupons have been redeemed through September 10, a rate of 49 percent for all coupons and 55.4 percent for 

coupons used by over-the-air only households. The cooperation of 

converter box manufacturers and retailers has greatly contributed 

to our consumer friendly program and we appreciate their partnership. As of September 10, we have certified 156 converter boxes, including 82 boxes with analog pass-through and at least one, 

Weingard, that works with a battery pack. The program also now 

includes more than 23,000 participating retailers with over 29,000 

outlets in all 50 states and territories along with 35 on line and 

13 telephone retailers. 

This list does include two notable recent additions: Amazon.com 

and Office Depot. To develop and implement outreach for the increased coupon participation by over-the-air households, NTIA correlated current participation rates with the best available industry 

data. We estimate that about 70 percent of over-the-air households 

that are potential purchasers of converter boxes have requested 

coupons as of September 1. In other words, the coupon program 

participation by over-the-air households is on track in 187 of the 

Nation’s 210 television markets. NTIA is working hard to implement specific outreach plans in the 23 markets where participation 

rates and the coupon program are lower than expected. 

This is a tool and it will continue to evolve and we will continue 

to share this with the members of this committee. We believe our 

consumer education efforts are working. Based on the Wilmington 

test pilot held on September 8, we learned that strong and steady 

demand for coupons and boxes can stem a rush in the final days 

leading up to the transition. We also learned that it is important 

47 

for consumers to act early so that they have ample time to address 

any technical issues that might arise in installing the converter 

box. NTIA has now adopted messaging to apply by and try converter boxes. Consumers should apply early, buy a converter box 

and try the box to insure that it works troubleshooting for any 

issue that they may experience well in advance of February 17. The 

success of the Wilmington pilot shows that when governments, industry, and non-profit groups coordinate closely the whole truly 

does become greater than the sum of its parts. 

Last Friday, 24 Federal agencies convened at the White House 

to discuss activities across the executive branch agencies to enhance consumer education and assistance to our target populations. 

It was very encouraging to see how USDA, the VA, HHS, and the 

IRS, among others, are helping millions of the vulnerable Americans prepare for the digital transition. We continue to explore how 

these good practices can be applied to other federal agencies to 

reach a broader cross section of Americans who rely on over-theair television. I would like to now turn briefly to how NTIA is responding to a couple of key challenges that we have faced administering the coupon program. First, the final rule for the nursing 

homes and P.O. Box program changes is at the Federal Registrar 

and is awaiting publication. We are pleased to be taking this step 

to make the coupon program more inclusive. 

In the same vein, the Department of Commerce submitted draft 

legislation to Congress last week to be able to maximize the number of coupons NTIA could distribute while not exceeding the 1.5 

billion in total funds authorized for the program. The legislation 

provides NTIA with statutory flexibility, if needed, to utilize funds 

from other programs and to spend up to 7 million to cover administrative expenses of the coupon program association with the high 

demand. Any additional sums for such purposes would be authorized upon approval of O&B and a 15-day notice to the House Energy and Commerce Committee and Senate Commerce Committee. 

Assuming that consumer requests for coupons will increase as the 

February 17 transition date nears, as we all do, NTIA wants to be 

as prepared as it possibly can be to maximize consumer participation in the coupon program. 

Without the flexibility to increase administrative spending if 

needed, NTIA will be able to distribute 44.5 million coupons. We 

believe that the draft legislation is a responsible and prudent approach to address potential additional demand for coupons and 

urge its immediate consideration. Thank you again for the opportunity to testify today, and I will be happy to answer any questions. 

[The prepared statement of Ms. Baker follows:] 

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Mr. MARKEY. Thank you so much. The time has expired. Our 

final witness, Mr. Mark Goldstein, is the Director of Physical Infrastructure for the Government Accountability Office. He has also 

been a frequent visitor to this committee regarding the DTV transition and today he will discuss GAO’s latest report on the DTV converter box coupon program. Welcome back, Mr. Goldstein. Whenever you feel comfortable, please begin. 

STATEMENT OF MARK L. GOLDSTEIN, DIRECTOR, PHYSICAL 

INFRASTRUCTURE ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. GOLDSTEIN. Thank you, Mr. Chairman and members of the 

subcommittee. I am pleased to be here today to discuss the GAO 

report that we are issuing on NTIA’s implementation of the mandated converter box subsidy program. The federal government and 

the private sector have taken many steps to prepare for the DTV 

transition. NTIA created and implemented a digital to analog converter box subsidy program. Additionally, the government, television broadcast industry, cable and satellite providers, and other 

carriers of broadcast signals have established several educational 

efforts informing consumers about DTV and the subsidy program. 

However, the success of the DTV transition and the subsidy program requires consumer’ understanding about the transition and 

the steps needed to continue receiving a television signal. 

In addition, consumers will rely on retailers to provide information, as well as supply eligible converter boxes for the program. In 

my testimony today, I discuss what consumer education efforts 

have been undertaken by private and federal stakeholders and how 

effective NTIA has been in implementing the converter box subsidy 

program and to what extent consumers are participating in the 

program. First, private sector and federal stakeholders have undertaken various consumer education efforts to raise awareness about 

the transition. For example, the National Association of Broadcasters and the National Cable and Telecommunications Association have committed over 1.4 billion to educate consumers about 

the transition. This funding has supported the developed of public 

service announcements, education programs for web broadcasts, 

Web sites, and other activities. 

In addition, most national retailers participating in the converter 

box program have developed consumer education campaigns to 

raise awareness of the transition in the program. Federal stakeholders, the FCC, and NTIA have developed consumer education 

plans that target those populations most likely to be affected by the 

transition. In particular, they have focused their outreach efforts 

on certain demographic groups including seniors, low income, minority and non-English speaking and rural households and persons 

with disabilities. Second, NTIA is effectively implementing the converter box subsidy program but plans to address a likely increase 

in coupon demand as the transition nears remain unclear. 

As of August 31, 2008, NTIA had issued approximately 24 million coupons and as of that date approximately 13 percent of U.S. 

households had requested coupons. As found in our recent survey, 

up to 35 percent of U.S. households could be affected by the transition because they have at least 1 television not connected to a subVerDate Nov 24 2008 10:45 Dec 29, 2010 Jkt 037690 PO 00000 Frm 00073 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS\110-148 CHRIS
68 

scription service such as satellite or cable. In U.S. households relying solely on over-the-air broadcasts, approximately 15 percent. Of 

those who intend to purchase a converter box, 100 percent of survey respondents told us they were likely to request a coupon. 

Therefore, a spike in demand for converter box coupons is likely as 

the transition date nears. According to NTIA, an increase in requests around the transition date may cause a delay in issuing coupons. 

However, we found that NTIA has no specific plans to address 

an increase in demand and that it hasn’t encountered challenges 

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

date the coupon application was approved. Given the challenges to 

meet this requirement and its lack of a clear plan to address a potential spike in demand, consumers might incur a significant wait 

time to receive their coupons and might lose television service if 

their wait time lasts beyond February 17, 2009. In terms of participation in the converter box subsidy program, we analyzed coupon 

data in areas of the country comprised of predominantly minority 

and senior populations and found that participation varies. For example, we found that zip codes with high concentrations of Latino 

or Hispanic households had noticeably higher coupon request rates, 

28 percent, when compared to areas with predominantly nonLatino or non-Hispanic households of about 12 percent. 

We also found households in both predominantly black and Hispanic or Latino areas were less likely compared to households outside these areas to redeem their coupons once they receive them. 

Additionally, we analyzed participation in the converter box subsidy program in the 45 areas of the country on which NTIA and 

FCC focus their consumer education efforts, and we found coupon 

requests to be roughly the same for zip codes within the 45 targeted areas as compared with areas that were not targeted. NTIA 

estimates it will see a large increase in the number of coupon requests in the first quarter of 2009 and our analysis confirms that, 

and as the transition nears a spike in coupons is likely. However, 

NTIA has not developed a plan for managing that potential spike 

or sustained increase in coupon demand. The time required for 

processing coupons has improved since consumers incurred significant wait times to receive their coupons at the beginning of the 

program but until recently NTIA fell short of its requirement for 

processing coupons within 10 to 15 days. 

Given the relatively low participation rates to date and the 

amount of time it took to process the spike in coupon requests early 

in the program NTIA’s ability to handle volatility in the program 

remains uncertain and consequently consumers do face potential 

risks that they may not receive their coupons before the transition 

might lose their television service. That is why we have mentioned 

in our report, we have recommended that NTIA take actions to improve a plan that they might be able to put in place. Mr. Chairman, this concludes my prepared remarks. I would be happy to respond to any questions you or members have. 

[The prepared statement of Mr. Goldstein follows:] 

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Mr. MARKEY. Thank you, Mr. Goldstein, very much. The chair 

recognizes himself for a round of questions. Chairman Martin, 

given the problems that many Wilmington consumers had at home 

in hooking up their converter boxes, would you support more socalled soft tests in which they replace programming on their analog 

signal with information on the transition? 

Mr. MARTIN. Oh, sure. I think that trying to implement soft tests 

throughout the country is a good idea. Recently I announced that 

the Commission was going to undertake an effort to try to target 

our resources on educating consumers and those at-risk markets, 

some 81 markets in which you have a high percentage of over-theair population. One of the things we are trying to do is coordinate 

with the broadcasters to encourage them to have a soft test during 

our visits to those markets. 

Mr. MARKEY. For every broadcast to have that kind of—— 

Mr. MARTIN. Yes, we are trying to actually encourage them to, 

absolutely. 

Mr. MARKEY. I think that is very important. 

Mr. MARTIN. One of the things that we did learn in Wilmington 

and the broadcasters actually have already come back and informed us that the soft tests need to last for a significant amount 

of time. They first ran the soft test for 30 seconds and minute, and 

they discovered that that wasn’t getting any kind of consumer response. Consumers weren’t able to go turn on the other televisions 

in their home to see if it was actually connected and they came 

back and ran one for 5 minutes the week before and that was the 

only one that actually received a significant number of consumers 

calling in. One of their recommendations to us has been to get all 

of the broadcasters to run soft tests for at least 5 minutes. 

Mr. MARKEY. Well, let us have all the broadcasters do that then 

in the near future so that they can each learn from that experience. 

Would you support at least one station in each market continuing 

an analog feed after the shut off again with such information on 

the screen? 

Mr. MARTIN. With the scroll like we have done down in Wilmington, listen, I think that would be helpful from the consumer 

standpoint but I think that we are limited by the law that requires 

broadcasters to turn off their analog signals on February 17, but 

I think it would be helpful for us to find a way to allow for the 

broadcasters to inform viewers for a short amount of time afterwards. 

Mr. MARKEY. How do we get more consumers to hook up and try 

their converter boxes prior to February 17 so that we don’t have 

chaos on that day for the help lines with everyone waiting until the 

end? 

Mr. MARTIN. Well, I think one of the both challenges and lessons 

learned from Wilmington was the problems people had just in turning on their converter boxes and making sure they were scanning 

for channels, so we need to incorporate into our education materials across the country the fact that they do need to go on and 

hook it up and try to scan and look for those channels early on so 

we will be able to make sure that they are prepared. The good 

news is those problems were relatively easily solved, but they are 

86 

going to need to be incorporated into education materials going forward. 

Mr. MARKEY. So I want to commend you for your call to retailers 

to stock more $40 analog pass-through boxes, ensuring that low income consumers can take their $40 coupon and get inexpensive 

boxes vital for certain households to make this transition successful. I hope that the retailers respond favorably because they will 

be basically on the hot seat and people are going into these stores 

across the country and those boxes are not available. Do you know 

how many stations nationally, Mr. Chairman, will shrink their coverage area when they switch? 

Mr. MARTIN. Well, the question is, how many of them will significantly shrink their coverage area like what occurred in the one 

channel in Wilmington? The engineers have gone back through and 

they are trying to estimate it. They estimate that somewhere in the 

neighborhood of around 15 percent of the markets may have a station that will shrink in some significant way. What we are needing 

to do is go back and analyze how we can go in and fill in those coverage areas through one of several different mechanisms. We are 

basically looking at putting some other kind of antenna out there 

to make sure coverage is still going to those people that don’t have 

any kind of a signal. 

Mr. MARKEY. How long will it take for us to complete that process? 

Mr. MARTIN. I have told our engineering staff that is the highest 

priority and really the number one lesson learned from the Wilmington experience because we need to make sure that we are 

working and coordinating with those broadcasters to address this 

problem, so I think it is going to take us a few weeks to identify 

what all those markets are and what we can actually do on a caseby-case basis. 

Mr. MARKEY. Again, it is very important for that to be completed 

very soon so that those stations can currently communicate with 

their consumers that they won’t be receiving that signal anymore 

and that that will be something that can be compensated for in 

some fashion either by that station or by something coming out of 

another market. Assistant Secretary Baker, the GAO today states 

that NTIA has no specific plans to address the expected surge in 

demand for coupons. Often it takes up to 15 days or more for consumers to receive coupons once they order them. With an increase 

in demand over the end of year holidays and as we near February, 

we need a specific plan to get this surge of applications processed 

and consumers out the door quickly so that consumers don’t wait 

a significant amount of time. Will you give us a plan in writing 

within 30 days NTIA’s plan for dealing with the surge in applications? 

Ms. BAKER. Yes, sir, but our plan is the legislative package that 

we have submitted to you this week. I think that that is an accounting for what we see as an important uptick in requests in the 

coming months. We would like to see that uptick in November and 

December like it was in Wilmington, a nice steady bell curve where 

it decreases in January and February so we continue our consumer 

education to—— 

87 

Mr. MARKEY. So your plan is more money. Is there anything else 

in addition to more money? 

Ms. BAKER. Well, we have looked at several different things, including downloadable coupons. Also we have had looked at a rebate 

program. 

Mr. MARKEY. If you could, put it all in a plan for us. Get it to 

us in 30 days. I understand you want more money but we want to 

see a whole plan. We want to see the concept and then we want 

to see the execution. OK? 

Ms. BAKER. Happy to do so. 

Mr. MARKEY. Concept is 20 percent, execution is 80 percent, so 

we would like to see what your plan is for the execution of this because that ultimately is the test. And Chairman Dingell and I 

wrote to you yesterday about additional funding you have requested for administrative expenses to implement the coupon program. Could we also get a timely response to that as well because 

time is short? 

Ms. BAKER. Absolutely. 

Mr. MARKEY. Could you respond to us in 48 hours on that? 

Ms. BAKER. We can—I hope that I can get it cleared in 48 hours. 

I will do my very best. They should be drafting the answers right 

now. 

Mr. MARKEY. We are adjourning for the year next Friday so time 

is of the essence. 

Ms. BAKER. Yes, sir. 

Mr. MARKEY. Please try to respond as quickly as possible. The 

chair’s time has expired. I recognize the ranking member of the 

committee, the gentleman from Florida, Mr. Stearns. 

Mr. STEARNS. Just a question, Mr. Chairman. You want it in 48 

hours and we are not—we are going to be here all next week. Is 

it possible if she runs into a very difficult situation she might have 

a forbearance here? 

Mr. MARKEY. We can’t forebear on legislating the solution. If she 

gets us the information by the end of the week, we will be in a position to be able to evaluate it to make a determination as to what 

form of any legislation that is being considered would take. We are 

hearing complaints today about the legislative process so we are 

just trying to make sure that we don’t hear the same complaint 

from your side. 

Mr. STEARNS. Well, I saw how quickly you folks turned around 

an energy bill, and so I just wondered here. Chairman Martin, let 

me ask you a question. After the transition in Wilmington occurred, I was told you got about 797 calls the first day. Is that approximately correct? 

Mr. MARTIN. That is right. 

Mr. STEARNS. And the second day you got maybe 200 calls? 

Mr. MARTIN. No, it was a little more than that. It was about half. 

It decreased by about 50 percent every day. 

Mr. STEARNS. OK. After 5 days, what was the total number of 

calls? 

Mr. MARTIN. On the fifth—our total of calls was 1,800 calls. 

Mr. STEARNS. 1,800 calls. So that would roughly be maybe the 

first day was a half of 1 percent so it might be less than 1 percent. 

88 

Mr. MARTIN. In total it was about—yes, it was around 1 percent 

of the total households. 

Mr. STEARNS. OK. So eventually 99.9 percent people were happy 

and they didn’t call, 1 percent called. Now if you extrapolate that 

for a national that is still very successful, it seems to me. Now I 

admit if you are one of those 1 percent that did not get your channel and you are upset, you obviously have to get some satisfaction. 

Do you think you could make a confident statement that this 

roughly 1 percent that were questioning, you will be able to bring 

that down significantly by February 17, 2009? 

Mr. MARTIN. We are certainly trying to work through everything 

we can to try to bring that—continue to bring that 1 percent down. 

I mean as you said 99 percent is a very high number but on the 

other hand 1 percent when you extrapolate around the country is 

a lot of people and we are trying to focus on how we can continue 

to bring that down. And I think that there are some things that 

we can end up doing. One of the simple things is trying to educate 

people about how the converter boxes actually work. A significant 

number of the calls were people just not understanding how to actually connect it to the television and to have it scan. 

Mr. STEARNS. But most likely you will bring it down to maybe 

a half a percent instead of 1 percent? 

Mr. MARTIN. Certainly the—— 

Mr. STEARNS. If this is the first transition, you are going to make 

all these new steps. You have the rest of September, October, November, December, January. You have 51⁄2 months to decide and do 

this. I think the American people and my colleagues should realize 

this has been a pretty dramatic success and you should be proud 

of it. And I think—— 

Mr. MARTIN. Well, I appreciate it. 

Mr. STEARNS. And the NTIA should be proud too. The chairman 

talks about chaos. I don’t know if chaos when you have something 

that is 99.9 percent working is chaos. 

Mr. MARTIN. No, sir. 

Mr. STEARNS. So I just want to clarify that. 

Mr. MARTIN. Well, I appreciate it, and I certainly appreciate 

that, and thank really the folks in Wilmington for their efforts and 

the community in helping make sure that the word got out. 

Mr. STEARNS. Had you thought about another demonstration 

maybe in November after the election? It might be another chance 

for you to kick it up a notch. 

Mr. MARTIN. We have, and we would like to. We haven’t been 

able to find another market that will volunteer but if we can find 

another market that will volunteer. 

Mr. STEARNS . I volunteered Jacksonville but Jacksonville didn’t 

seem to—Jacksonville, Florida didn’t seem to volunteer back. 

Mr. MARTIN. We did contact them and several other markets and 

we still are looking for a volunteer. 

Mr. STEARNS. Have you contacted Gainesville, Florida, where the 

University of Florida is? 

Mr. MARTIN. We have contacted the Florida Association of Broadcasters after our last hearing and we did talk to them and had 

them contact all the markets to see if any were willing to. 

89 

Mr. STEARNS. And no one, yes. Assistant Secretary Baker, you are asking for an additional $7 million because of the statutory cap 

on administrative funds. Let me ask you, don’t you expect to give 

back some of the $1.5 billion that we have given to you? Can you 

explain to us and remind us how much you are giving back? 

Ms. BAKER. Well, as of now with the 50 percent redemption rates, we estimate that we will return $330 million back to the 

U.S. Treasury. 

Mr. STEARNS. So $330 million back to the U.S. Treasury you are 

going to give us, so that means that you will use roughly 1.170 billion, so that is a pretty impressive figure that you are going to give 

back $330 million considering at one time Congress wanted $5 billion to do this program and a lot of us argued on this side we didn’t 

need 5, we didn’t need 4, we didn’t need 3, we didn’t need 2, we 

didn’t need 1. We could get by with 900 million, and you are almost 

at the figure. Now is it possible that you might not need this 7 million? How confident do you think you are going to need this? 

Ms. BAKER. Well, there is just no certainty to this so from our 

best data estimates we think that we might need it so we think it 

is prudent to ask for it since this is our last chance. 

Mr. STEARNS. And funds are not fundable that you can’t—just because we administratively legislatively said you can’t do it, it is not 

fundable, that you could take 7 million out of 330 million that you 

are refunding to us, you couldn’t use that? 

Ms. BAKER. We have a statutory administrative cap at 160. We 

have the funds in the coupon money. We have also submitted several other programs that were under the Digital Television and 

Public Safety Act where we could come up with the money so there 

are several places where we could come up with the money. At this 

point, we are looking for 7 million. We would like flexibility for a 

couple million more if our estimates are not correct but certainly 

we can get the money in a couple different pools. 

Mr. STEARNS. This is the last question, Mr. Chairman. Is it pos- sible you will give back more than $330 million in refund to the 

taxpayers? 

Ms. BAKER. Depending on redemption rates, sure, and demand. 

Mr. STEARNS. OK. Thank you, Mr. Chairman. 

Mr. MARKEY. The chair thanks the gentleman. The chair now 

recognizes the gentleman from Texas, Mr. Gonzalez, for 8 minutes. 

Mr. GONZALEZ. Thank you very much, Mr. Chairman. And I 

guess I need a little clarification. You weren’t here for some of the 

earlier remarks by the members on the other side of the aisle 

which dwelled on the energy bill that is coming up so I guess I 

need some sort of clarification. The title today is ‘‘Status of the 

DTV Transition: 154 Days and Counting.’’ I am wondering what 

the D stands for. Is that digital or drilling? I am not real sure. The 

other thing is I am from the State of Texas and to be quite honest 

with you, we believe that every broadcast tower out there, if it 

doesn’t double as an oil rig it is a waste of space. But I am also 

cognizant that maybe my narrow view of the energy needs of this 

country and how we meet them isn’t the comprehensive approach 

that we really need, which is what we will have on the floor and 

hopefully my colleagues will have an open mind and proceed accordingly. 

90 

We will get back to the subject matter. Chairman Martin, thank 

you for your service. I know there have been many, many challenges and this is going to be one of them. I have a couple of questions, and I think the next panel probably will give us a feel for 

what is going on the ground. As Members of Congress, we go back 

home and get a sense of it. In your own individual capacity, I am 

not real sure that you are there in those communities, but I think 

we are going to have those representatives, so I am going to kind 

of stick to kind of general policy considerations. What hinders and 

what benefits? What encourages and what discourages? And it was 

brought to my attention some time ago, and we are trying to address it because I think it does have an impact, and that is the 5 

percent tariff or import tax that is being levied by customs on these 

particular converter boxes, and in your opinion again does that 

lower cost or does it increase cost to the consumer? 

Mr. MARTIN. Any kind of a tax assessment is going to increase 

the overall cost of it for the ultimate consumer. 

Mr. GONZALEZ. Does it encourage or discourage adequate supply 

of the converter boxes? 

Mr. MARTIN. Well, I am always hesitant at any kind of a tax or 

fee assessment on any kind of a consumer product. That will always have the effect of increasing the cost to the consumer and 

therefore decreasing the demand and ultimately the supply. 

Mr. GONZALEZ. And I appreciate that, and of course since I agree 

with you I think it is a brilliant answer. I want to talk about the 

quiet period. That can be very controversial. We have something 

going on even in my city right now between broadcaster and the 

cable provider. This quiet period, and I know that we have depending on what side of the argument you might be on and also even 

what is coming out of the FCC as to what would be—if we have 

this quiet period what would be this time period? Does it make 

more sense to have the quiet period closer to the transition date 

of February 17, 2009, and shortly thereafter rather than way, way 

before and expiring before the operational date? 

Mr. MARTIN. Sure. I think it is critical that it occurs right around 

the February 17 transition date for some period of time shortly before and for some period of time shortly thereafter so that there is 

no confusion from the consumer perspective that if they lost any 

kind of a signal that it wasn’t because of the transition but rather 

because of any negotiations that were going on so I think it has to 

be centered around the transition date. 

Mr. GONZALEZ. I think we will have testimony about why people 

believe a certain period before or after or maybe not even after 

might be best, but I tend to agree with your analysis. If we are 

really addressing the problem of what is causing or constituting the 

confusion and we don’t—that is the end game here. It is not really 

to give advantage to any particular stakeholder. Secretary Baker, 

on re-issuance the numbers are fairly extreme, are they not, for 

those that have actually applied and received their coupons but 

have not redeemed them? 

Ms. BAKER. I would say it is our top complaint is that the coupons have an expiration date and that coupons are lost or stolen 

or they have not been received in the mail. 

91 

Mr. GONZALEZ. And I have also received some other, I think, answers. Simply people get them, hold them, then they decide to get 

cable or buy a new TV. That could be part of it too. I am afraid 

that may not be the majority of those unredeemed coupons. I know 

that I have had town hall meetings where people show up with two 

of the coupons and they just say we didn’t redeem them, what can 

I do? I don’t have a really good answer but I don’t believe that you 

are going to provide me with an answer. 

Ms. BAKER. Well, the answer that I give to you is the one that 

we give to folks is that we made these coupons transferable, and 

I am sympathetic with the problem but what we need here is a 

groundswell effort of family and friends and civic organizations to 

help people make the transition. Yes, their coupon has been redeemed but I could give them my two coupons and so that does 

seem to provide some solace to the fact that these coupons have expired. 

Mr. GONZALEZ. All right, and that may be one approach. It is 

kind of a practical way we can pull this off if we get the right people connected with the right people, but as far as anything that you 

may be coming up with in the way of policy or requesting rule 

changing your testimony or your written testimony indicates 

timelines don’t allow it, is that correct? 

Ms. BAKER. I think, first of all, the statute does not allow it so 

I think it would take a statutory fix. I think then we would have 

to have a rule change which has proven to be quite—even on an 

expedited basis for the nursing homes and P.O. Boxes has taken 

a good period of time. I think from a policy standpoint, I worry 

about the waste, fraud, and abuse of opening it up for re-issuance, 

but most importantly I guess from where I sit is I think it would 

throw whatever economic analysis we have about what coupons we 

have and need—I think it would throw it out the window, so I 

think there is fairness. There is waste, fraud, and abuse. There is 

timeliness. But most important, I think then we would just really 

have no idea how many people whose coupons had expired would 

come back and ask for more coupons. 

Mr. GONZALEZ. And I know this is the sixth hearing, and I want 

to commend the chairman for being so vigilant, and I know that 

we are going to have some additional hearings before that February date and we will just keep our hands on that pulse. Mr. 

Goldstein—and I don’t want to misinterpret what my colleague, 

Mr. Stearns, may have indicated about the success at this point. 

It is way too early to gauge how successful we are. Isn’t that an 

accurate statement? I mean as we get closer to it, we have high 

rates of individuals not redeeming coupons. We have individuals 

that may be getting those converter boxes, not hooking them up to 

the last minute, then we find out as in Wilmington or maybe I 

know that in my town the questions of individuals just having difficulty hooking up the converter boxes and who do we get to assist. 

When will the jury be in? 

Mr. GOLDSTEIN. I think the jury won’t be in for some time at 

some period after February 17. I would mention a couple things 

real quickly. I think we have had a lot of success in reaching out. 

I think the private sector and the FCC and NTA should be commended for the work they have done in reaching out to the public. 

92 

I think they have done quite a good job, but it is an extremely difficult task and there are a lot of moving parts here. Some of the 

issues that have been raised in Wilmington quite candidly are 

things that we raised in reports over the last year including coverage area gaps, antenna issues, hook-up issues that would be—we 

said a long time ago these things would likely be problems and 

sure they are. They are surfacing now. We have see them in Wilmington. 

The other thing I would add is we are concerned particularly 

about expiration rates that we have seen so far. In the work that 

we did for this report we found that seniors, particularly the expiration rates in areas where there were 50 percent or more seniors 

in any particular zip code in the United States that that rate was 

43.2 percent, where for the U.S. population it was 30.5 percent. 

And so there are some—and other groups as well for Latino and 

black groups. Many of the minority populations appear to still be 

at some disadvantage and we have a long way to go. 

Mr. MARKEY. The gentleman’s time has expired. 

Mr. GONZALEZ. Thank you very much, Mr. Chairman. 

Mr. MARKEY. The chair now recognizes Mr. Shimkus for 5 minutes. 

Mr. SHIMKUS. Thank you, Mr. Chairman. As I said in my opening statement, I did take August break to really try to work this 

issue. And, Secretary Baker, I want to especially thank you for 

Brian Danza in the Chicago area who came down once or twice for 

us as went around the congressional district, and I have gotten 

great response from the constituents. And I do want to encourage 

again my colleagues to really be assertive as much as the broadcasters are working hard and the cable industry and the FCC and 

you. We could also through our office, through our web sites, 

through our newsletters, through all the above be very proactive. 

Chairman Martin, the calls that you received from Wilmington 

residents, how many was your staff able to handle over the phone? 

Mr. MARTIN. We were able to handle almost 80 percent of the 

calls related to anything on the converter box. We actually think 

we will be able to handle even more of them, but 80 percent just 

on the phone initially, significantly less on the antenna, about 136 

of 600 or so calls on the antenna side were able to handle, so a 

smaller percentage on that. 

Mr. SHIMKUS. And as we talked in our conversation I think last 

week a lot of that was just encouraging the consumer to press the 

channel scan button. 

Mr. MARTIN. That is right. A significant problem on the converter 

box program was just that the consumer actually had to push the— 

to restart it and have it scan for channels. 

Mr. SHIMKUS. I am guilty of that too. Although it is on the box 

to do that. I mean if you just—and even in my discussion with constituents it is real easy, you get your box, you take the antenna, 

you plug it in, you take the digital receiver, plug it into the TV, 

but you got to press to scan the channels and things so probably 

a lot of those that you can resolve that. 

Mr. MARTIN. Exactly. That was the single biggest thing that we 

were able to resolve for our consumers just when they called up 

and said that my box isn’t working. I got it hooked up. First, is 

93 

checking the connections to make sure it was hooked up, walking 

them through that, and then just asking them to scan it. 

Mr. SHIMKUS. Now going back to Secretary Baker, two of my 

town hall meetings, one was at a senior—both of them were at senior centers. One was in Olney, Illinois, the home of the white squirrels, and Galconda, this is in—we do have white squirrels in southern Illinois. And it is the southeastern part, really rural Illinois. At 

both times, not at my prompting but with the seniors at both 

events there were seniors there who already done this on their own 

and they were offering their excitement to the other residents 

about the digital transition. What can you report on consumer satisfaction that you have heard back? 

Ms. BAKER. Well, we haven’t had a single complaint on the box 

and so now that we have Wilmington, now that we have Wilmington we know that there are some problems with the scanning. 

We know that some people did not put batteries in the remote control, that they didn’t realize the television had to stay on one channel, but as far as the box itself goes we have not had any complaints and people are really thrilled with the picture that they are 

receiving from the box. 

Mr. SHIMKUS. How about any rate of returns of the receivers to 

the retailers? 

Ms. BAKER. From what I know, which is only from the retailers 

which we stay in contact with, you know, all the time this is one 

of the lowest returned of consumer electronics products that they 

have ever had, that they see very little return. 

Mr. SHIMKUS. Well, going back to these two small rural areas. As 

I mentioned, you do the application either by phone or the web. 

You get the letter. It has one or two cards. It gives you the retail 

locations but also what was emphasized by one of these ladies is 

just phone order and mail order of these receivers. Can you talk 

about phone and internet retailers instead of the traditional brick 

and mortar, because in rural America, especially with gas prices so 

high, they may not want to drive 50, 60, 70 miles to go to the retailer. 

Ms. BAKER. I think you have hit a great issue that we need to 

process that we have 35 online retailers including Amazon.com 

now, and we have 13 phone retailers. I think what we are dealing 

with here is a population that gets in their car and they go to their 

favorite store, maybe Wal-Mart, and if Wal-Mart is out of boxes 

then they go back home and they get back in their car the next day 

and they go to the same Wal-Mart. We need to encourage people 

to think a little bit outside the box. We have 30,000 retail outlets 

as well as obviously the online and telephones. Radio Shack will 

mail the box to you for free. Best Buy, Circuit City, they all have 

phone operations that should be easy for this population who are 

not as technical to actually get the box. 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

Mr. MARKEY. Thank the gentleman. The chair now recognizes 

the gentlewoman from California, Ms. Eshoo. 

Ms. ESHOO. Thank you, Mr. Chairman. It is always nice to see 

you in the chair. 

Mr. MARKEY. You too. 

94 

Ms. ESHOO. I have three questions, and I am going to put the 

questions out. They are all to Chairman Martin. And I will start 

with the first one. I understand you know how many people called 

the FCC’s help line with questions about their converter boxes. Do 

you know how many people called a TV station with a question? 

How engaged, I guess it is a measurement of engagement. 

Mr. MARTIN. The Elon University, a university in North Carolina, had volunteered some of their students to answer calls. The 

last estimate I had, they had several hundred calls. It was less 

than 300 calls. I think 260 some odd calls. 

Ms. ESHOO. Not too many. Not too many. On this issue of a quiet 

period, I want to go back to this. I know Congressman Gonzalez 

mentioned it, and I did in my opening statement. I think it is important to know when this quiet period actually takes place because by all means we want to protect Chairman Markey’s Patriots 

or Mr. Barton’s Dallas Cowboys. Now the NAB has in its letter to 

you of August 11, proposed I think February 4 until March 4, a full 

2 weeks prior to and after the transition date. There is a big thing 

that happens in January. It is the NFL playoffs. Can you imagine 

if this thing is dropped during the NFL playoffs? I mean there will 

be a revolution in the country. So I think that we have to look at 

this with a very practical pragmatic eye. So can you tell us what 

you are planning to do with a quiet period? 

Mr. MARTIN. I had—there is an order—— 

Ms. ESHOO. When it would begin, when it would end. 

Mr. MARTIN. There is an order in front of the commissioners that 

deals with some of the other minor issues surrounding the DTV 

transition. There are some more technical issues but I had proposed to the other commissioners that we consider implementing 

and having some kind of a requirement of a quiet period. I had had 

one that was slightly longer than the one that had been proposed 

by the NAB. It was approximately 3 weeks before the transition is 

what I had proposed. 

Ms. ESHOO. So would it cover the playoffs? 

Mr. MARTIN. I don’t—— 

Ms. ESHOO. You know what, let me just put it this way. I think 

you have to keep that in mind. All right? Be on notice. And maybe 

no one thought of it but it is a big deal in the life of our country 

so I think that we should start sooner and stretch it out a little 

later, and as soon as you make a decision on that can you get back 

to us on it, and I think that you can make that decision pretty 

quickly. My third question is I am sure, Mr. Chairman, that you 

have seen the Reuters Cisco report which ranked our country, the 

United States of America, 16th in the world in broadband quality. 

Now I guess the good news is that we made it just ahead of Russia, 

but listen to who we are behind or who is ahead of us: Slovenia, 

Latvia, Lithuiana, Japan, Denmark, and Korea. 

This is not a source of pride to us in our country. America really 

should be number one. We should. We know how. So my question 

to you is on surprise, the AWS-3 auction, I believe, I think you believe is an extraordinary opportunity for our country to dramatically shift access to the internet. Can you tell us when you think 

you are going to bring this up for a vote at the Commission? 

95 

Mr. MARTIN. Sure. I do agree with you on the importance of it 

and the importance of trying to utilize it to help bridge the 

broadband gap that we have in the country so I have encouraged 

it. I have put it up for a vote once already before the Commissioners. They wanted some more time. They asked me to go—— 

Ms. ESHOO. I know you are doing testing. 

Mr. MARTIN [continuing]. And have some additional testing. We 

have now completed that testing. Just last week our engineers submitted the results of that testing into the record. We will allow 

some people to comment on those results, but I do anticipate being 

able to bring that back up in front of the other Commissioners. I 

will need the support of the other Commissioners but I will need 

to bring that back up. But I do need to wait for the testing results 

to be filed in the record and allow for people to file any comments 

they wanted on that. 

Ms. ESHOO. Good. OK. I think that my time has just about expired, Mr. Chairman. Thank you. Thank you to all of the witnesses. 

Mr. MARKEY. The chair thanks the gentlelady. The chair now 

recognizes the gentleman from Texas, Mr. Green. 

Mr. GREEN. Thank you, Mr. Chairman. And I appreciate I guess 

because of what is going on now, I do want to talk about both to 

our assistant secretary and our chair about the problem with the 

battery-operated converter boxes at our last hearing but we know 

now it is much more imperative. Without these, like I said earlier, 

I couldn’t have had TV at my own house, and even as of yesterday 

when I left to come back how our agency is planning to address 

that and since we brought it up at an earlier meeting hopefully 

there has been some discussion. 

Mr. MARTIN. That was one of the important issues that came up 

both at the earlier hearings and also in Wilmington it was one of 

the issues that was identified very early on by the broadcasters in 

Wilmington, the concern they had with it. Again, I think the importance of the test highlighted the issue and actually allowed for us 

to make some progress on it. The broadcasters there worked very 

closely with one of the manufacturers, Weingard, who makes converted boxes. They have developed a battery-operated pack that 

can attach to their converter box. It was for sale down in Wilmington before the transition. We have seen it. The Commissioners 

purchased both one of the converter boxes and the pack so that we 

can take that around and show people that this is—there is a battery-operated one to attach to battery-operated TVs and it is available now. 

Mr. GREEN. And the rabbit ears typically, the battery-operated 

television, because that is the only thing we have. 

Mr. MARTIN. It will work within a battery-operated television to 

provide signal the way the battery-operated television does in the 

analog world today, and it will have a battery-operated pack. It is 

a $12 pack you can attach to the converter box. 

Mr. GREEN. OK. So that would work. It is pretty well universal, 

any type of small battery-operated television? 

Mr. MARTIN. No, it doesn’t work—the converter works with any 

battery-operated television. It would work with any of them. The 

challenge would end up being though that the pack doesn’t attach 

to every converter box. There is only one converter box manufacVerDate Nov 24 2008 10:45 Dec 29, 2010 Jkt 037690 PO 00000 Frm 00101 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS\110-148 CHRIS
96 

turer that has developed that kind of a battery-operated pack. We 

are continuing to try to work with other manufacturers to see if 

they will develop a similar packet but that is the only one that we 

have today. 

Mr. GREEN. I appreciate any update because we still have 2 

months left of the hurricane season but if we don’t do it now then 

next year we will really be in a problem. The digital cliff where the 

picture disappears on digital televisions rather than coming in 

snowy as it did on analog sets seems to be a problem that wasn’t 

expected. Do you know of any smaller battery-operated televisions 

that would be more susceptible to this? Does severe weather affect 

that in our case? 

Mr. MARTIN. Weather can affect any kind of a signal. It can, but 

that can always have some kind of an impact when there is severe 

weather. That can always have an impact on reception of over-theair signals. 

Mr. GREEN. OK. And would it take rulemaking or congressional 

action to allow consumers to use their coupons to purchase these 

battery powered devices for emergency use if they happened to 

have when they get two coupons instead of buying one converter 

box, would it also be available? 

Mr. MARTIN. The coupons can currently be used for the converter box. The battery-operated pack is $12 you have to attach to it and 

the coupons can’t be used for the pack. So under the NTIA rules 

it can only be used for the converter box itself. 

Mr. GREEN. And I apologize for being in and out. One last question, Mr. Chairman, and I appreciate the—our problem is, and I 

think it was brought up in lots of the opening statements, in our 

district that people got their coupons or their little credit cards and 

they didn’t pay attention to the expiration date. And I know we 

had a disabled constituent that we actually sent the letter from our 

own office. And what is the practice of NTIA on dealing with something like that? 

Ms. BAKER. Well, unfortunately, we are not reissuing coupons. 

We have interpreted the statute to tell us that we cannot reissue 

coupons as well as we think that there is a waste, fraud, and abuse 

issue. There is a fairness issue. But we are doing exactly what you 

just said, and we are encouraging families and friends, neighbors, 

civic groups to help people make the transition since the coupons 

are transferable for someone whose coupon is expired to get the 

coupon from someone else. 

Mr. GREEN. So if someone has an expired coupon, they can’t 

apply for another one then? 

Ms. BAKER. That is correct. 

Mr. GREEN. OK. And I have to admit someone told one of my 

constituents just have somebody apply for one and then they could 

give it to you, and I questioned whether—I don’t know the falsification or anything saying if I applied for something for my son or my 

daughter or even a neighbor and I gave it to them, that is not calling into question someone not using it for their own personal use? 

Ms. BAKER. We have made them transferable to make sure that 

people could help other people in the transition, and if you had applied for one and you used one then you could apply for another. 

If you had applied for two and they had both expired then you 

97 

could not apply for another but we want to make this transition 

easier for people so we think if you can help your mother make the 

transition that is why we made the coupons transferable. 

Mr. GREEN. Well, frankly, the best way to make it easier would 

be to let them reissue the coupons instead of having a friend or a 

family member do it. Mr. Chairman, I know I am out of time. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentlewoman from California, Ms. Solis. 

Ms. SOLIS. Thank you, Mr. Chairman. I want to thank our witnesses for coming and speaking to us this morning. And I wanted 

to direct my first question to Assistant Secretary Baker and ask 

you a little more in depth about the outreach to the Latino community at large and especially along the U.S. border. The Transition 

Assistance Act which was recently signed into law according to 

your testimony there is approximately $4.5 million that will be 

available for consumer education. I would like to ask you how the 

NTIA plans to use this funding and what proportion will be used 

to educate those Latino or Spanish-speaking recipients or households along the U.S.-Mexican border but also in other parts of the 

U.S. 

And I wanted to know more about how much money was going 

to be spent for that outreach effort. You mentioned I believe in 

your testimony that there is grassroots bid that is underlined or 

monies that will be available for community-based organizations. 

How are you selecting those and what will be their effort and how 

much money is actually being allocated for that? 

Ms. BAKER. Well, in an effort to expedite this education process 

we are not doing a complete rulemaking. What we are doing is taking unsolicited bids of which we have several before us currently. 

We are looking at the underserved communities, the minorities, as 

well as actually having transition help, having people go into 

houses and help them hook up converter boxes so those are kind 

of our priorities as we see it. 

Ms. SOLIS. Will you have some of those individuals that will be 

able to speak Spanish or other languages as necessary? 

Ms. BAKER. Absolutely. That is one of the communities that is 

valuable for us to provide extra assistance to. 

Ms. SOLIS. When is this going to roll-out? 

Ms. BAKER. We are hoping the first of October the first of the 

grants will go out. 

Ms. SOLIS. And how many of those groups will be focusing in on 

the Spanish-speaking population? 

Ms. BAKER. Well, it does depend on what the proposals that we 

receive have and I think at this point that the—— 

Ms. SOLIS. So there is really no correlation between the need or 

you are just looking at whoever bids? 

Ms. BAKER. Well, we need proposals in front of us to be able to 

expedite so instead of running a full rulemaking as to how we 

would get the grants out which would be after the transition what 

we are doing is taking proposals—— 

Ms. SOLIS. One concern I have is that you might give bids out 

to people who really don’t understand or really are geographically 

more inclined to understand the demographics of particular areas 

or regions so that is something that I would draw your attention 

98 

to. Obviously, Californians, Texans, Puerto Ricans, and what have 

you are a little bit different and I don’t know one size always fits 

all so you might keep that in mind. I am also concerned regarding 

some of the information that has come back to us about how the 

converter box is actually—the coupon for the converter box is actually being utilized. And my question is with respect to what is happening in Puerto Rico, I have gotten a lot of complaints from people 

there that they have received the coupon but did not have the 

availability to go down and purchase at the local retail store so you 

obviously have a problem here, and I would like to hear your response. 

Ms. BAKER. Sure. I think, first of all, absolutely taken into account as far as the LPTV $4.5 million grants, the Hispanic considerations as we do in our target markets. As far as Puerto Rico goes, 

it is a very unique community. I think it has the highest over-theair population at 39 percent and we have now received coupon applications from 50 percent of the households there. I think that we 

heard that there was a shortage of converter boxes there. We have 

worked hard with the retailers to make sure that that has been— 

those shortages—— 

Ms. SOLIS. Apparently from a document I have here, a letter we 

sent to you, there was actually a request for 600,000 coupons but 

there were only 50,000 boxes that were available on the island. 

How do you bridge that gap? We are talking about a big problem 

here. 

Ms. BAKER. Well, we have seen now strong redemption rates in 

Puerto Rico so we feel that those—— 

Ms. SOLIS. Are you working with the retailers? 

Ms. BAKER. We have been working with the retailers. 

Ms. SOLIS. Because we have gotten complaints as of late that we 

still have a big issue here, but not only that, it is also the implementation. I think the chairman, Mr. Markey, said that earlier. 

Eighty percent of our focus should be on how we actually get the 

box in the household and people need that instruction. They probably need someone beyond just giving them the coupon actually 

calling them back did you acquire the converter box, have you 

plugged it in, do you know where to get help and having that information available in Spanish, or whatever language it is going to 

take, and we are also talking about senior citizens and rural communities who may not be as literate. 

Ms. BAKER. I think you are right and I think that our consumer 

education focus clearly needs to turn to implementation. That is 

why we changed our messages to apply by and try to make sure 

that the try part, that the converter boxes work, that people can 

get this assistance that they need, and we certainly realize that minority outreach in several different languages is important. 

Ms. SOLIS. I am still a bit concerned. I heard some of our colleagues on the other side of the aisle say that they are very happy 

to hear that monies would be returned because they wouldn’t be 

utilized because everything was going so efficiently. I would beg to 

differ with that and still would like to get more information about 

how demographic groups are going to be addressed, whether they 

are disabled, seniors, rural, and obviously, that are monolingual. 

99 

Mr. MARKEY. The gentlelady’s time has expired. The chair now 

recognizes himself. I want to say at the outset that I think the test 

run in Wilmington was a great idea and I want to thank Chairman 

Martin and Administrative Baker for you and your staff’s work in 

getting it together. I think it gives us all a much better picture of 

some of the challenges that we are going to face in February. And 

one of the things that I thought was really smart was that the 

branding was simple. I heard that they called it ‘‘The Big Switch’’ 

in Delaware and I think we need to think about that Nationwide, 

something that is a simple message and easy to convey to people. 

And I don’t think we should rush into any definitive conclusions 

considering the amount of attention that has been paid to Wilmington. I think Commissioner Adelstein said that when you send 

out so many staff to a city and give it all this extra consideration 

that the observer effect starts to come into play, so I don’t think 

we should rush to judgment on it. 

But I do have a couple questions about it. Administrator Baker, 

I saw in your testimony on the last page at the very last line that 

you estimate only 60 percent of over-the-air consumers require a 

converter box, but in Wilmington we saw the participation rate at 

203 percent, which is sort of double the estimate that we had gotten. What is your explanation for 203 percent participation rate? 

Ms. BAKER. Well, I think that Wilmington was a compressed period of time. We announced in May that we were going to switch 

in September. I think if you are—for our switch on February 17 

people are going to make different decisions. They are going to go 

through the holiday period. They might make other choices as to 

whether they are going to purchase a converter box with a coupon 

or not. I think, you know, when we look at the numbers that we 

project from Wilmington, we still find the same bucket needs to be 

filled, you know. It was quicker in Wilmington but the numbers are 

still kind of the same when we estimate our—I got several different 

estimates of data but when we separately make our estimates of 

the current request and then we bump it up for what we think is 

going to happen in November, December, and January, we come to 

the same number if you extrapolate the numbers from Wilmington, 

so I do think it is a valid test although I do think it was a compressed period of time. 

Mr. MARKEY. But aren’t you concerned that if your estimates sort 

of cuts the number in half and the actual data doubles your estimate and you start to apply that nationwide it sound like that we 

are sort of over estimating the number of people who won’t need 

boxes, at least if Wilmington is any indication of that. Do you think 

people are hoarding boxes? 

Ms. BAKER. I don’t find—we have not heard of such a thing, no. 

We found very little of that—we have not heard any of that actually. 

Mr. MARKEY. You can’t reapply once your coupon expires and you 

are going to have bunch of people out there with coupons that if 

they are hoarding them that would be the only market for coupons. 

It sounds like a pretty good industry being developed for people 

selling their coupons that they don’t need. I am just wondering if 

you are seeing any evidence of that going on as an explanation for 

why you have such a high participation rate. 

100 

Ms. BAKER. I guess a couple different things. The boxes are good 

now so we are hoping that people hook them up and use them now 

because digital programs exist now. While the coupons can be 

transferred and we encourage people to help their family and 

friends to transfer them, they can’t be sold. We have had terrific 

experience with eBay and Craigslist. We have seen coupons appear 

and they get pulled immediately. So we really at this point have 

had very little of that type of incident. 

Mr. MARKEY. Chairman Martin, I read accounts that the biggest 

problem wasn’t that people weren’t aware that the switch was coming. The biggest problem seemed to be that they didn’t have a clue 

about how to get these converter boxes installed. I guess they 

thought they would set them on top of their TV sets and by osmosis 

or something they would connect themselves. And I see we are 

going to open up a new eligibility application for firefighters grants 

now where in addition to training and equipment, putting converter boxes together is going to be a way to get a firefighter grant. 

I mean in Wilmington basically we asked the help of the firefighters to help people connect their boxes. Did we pay them for 

that? Did they do that for free? 

Mr. MARTIN. We had very small contracts with several grassroots 

organizations to be able to go into people’s homes who were disabled and were shut-ins and otherwise unable to get out and hook 

up the converter boxes for them and a special number people could 

call. The last estimates we heard as of last Monday there had only 

been about 35 people but as of today there has been about 250 people that local fire departments and local public safety officials have 

gone. 

Mr. MARKEY. So is it the Commission’s intention to contract with 

fire departments across the country come February to install people’s converter boxes, and do you have the money to do that? What 

is the game plan for—it seems that one of the big missing pieces 

of this puzzle that we are learning from Wilmington is we need a 

lot more education for folks or a way to get assistance out to seniors and disabled and other folks that need help putting the converter boxes on. 

Mr. MARTIN. Well, absolutely. We want to make sure as many 

people as possible understand how the converter boxes work and 

how to hook them up and how to scan, but we actually are trying 

to—we put out a bid for other grassroots organizations to be able 

to come forward and do the same thing that we did in Wilmington. 

We put out a bid for grassroots groups to come forward and say 

they could do the same thing for shut-ins and other people that are 

disabled that can’t get out and hook up their boxes that we would 

try to do that at least in those 81 markets that we are trying to 

target throughout the country, so we actually are trying to do that. 

Mr. MARKEY. Thank you very much. I see my time has expired, 

and the chairman now yield to the gentlewoman from California, 

Ms. Harman. 

Ms. HARMAN. Thank you, Mr. Chairman, and thank you to the 

subcommittee for holding yet another hearing on this important 

issue. I welcome the panel and I am going to use my few minutes 

just to make a couple of comments that won’t surprise Chairman 

Martin at all. Number one, this transition matters. It matters to 

101 

a lot of people, especially the folks you, Mr. Chairman, were just 

discussing with Chairman Martin, but the reason for this transition to remind us all is to make available analog spectrum for critical emergency communications, which leads me to the D block auction. And I know, Mr. Chairman, that you are having a meeting 

on the 25th or I think that is still the case, which is next week, 

of your commission to see about auction rules. I want to urge you 

to get along with this and move on with this and to make sure that 

there is full public participation in the rulemaking. I think it is 

critical that we do this, we do it right, and we do it quickly. This 

is a set of comments you have heard me deliver many times. 

Secondly, I think I spoke to you and I also have tried to follow 

up about the possibility of a regional hearing in southern California. It is not the only place that there should be such a hearing 

but I know there have been hearings in various parts of the East 

Coast. The reason I want to suggest that is, one, there is a emergency communications group out there that is keenly interested in 

this issue. LA County is the largest and most diverse county in 

America, and I think is proceeding on one path but maybe after 

such a hearing could think about some other directions. That is one 

point. 

But my second point is with respect to the DTV transition there 

is a very large minority community out there. I represent many cities, and I know Ms. Solis does too, which are majority Latino and 

so far as I can tell some real progress is being made, so we might 

actually be able to tell a success story, for example, with respect 

to markets that at least Univision reaches. They claim they have 

a very good plan for this. So I want to repeat my invitation, give 

you a chance to respond in public to my invitation if you care to 

and to urge you again about moving quickly and with full participation on a set of auction rules that will be successful this time. 

And I just would invite your comments. 

Mr. MARTIN. Sure. First, thank you for your support and for supporting the Commission going forward as quickly as possible. It 

does have to be an open process but it is time for us to go on and 

put out a further notice because we still need to go through that 

public process before we move to a final order. At this stage even 

on an expedited basis you are talking about an order not being able 

to get out until around the end of the year, which would still mean 

an auction couldn’t even occur until some time after about 6 

months. So this is really critical for us to move forward, and I appreciate that support and I think it is time for the Commission to— 

and we actually am happy to and would like to end up going out 

to southern California to end up participating in the hearing. 

We have been working with your staff on some dates that would 

make sense from your perspective. One of the original time frames 

you and I talked about on the phone was this week. With this hearing, that didn’t work out as well. But we are actually looking at 

further dates that we can come out there. 

Ms. HARMAN. Well, I appreciate that. I would just point out the 

obvious, which is that even on your time table the auction will not 

be completed before the transition is completed. I would not only 

note major natural disasters which have been occurring with regularity along the southern coast of America but my continued fear 

102 

that there may be some unnatural man-made terrorist attacks that 

could still come our way, and we don’t have a day to waste before 

putting in place a robust national interoperability capability for 

emergency communications. And at least I don’t understand how 

that happens if we don’t have either one national or several appropriate regional auctions and develop this public-private idea that 

we have been talking about for a long time where the private sector lends its enormous capability to build out for the public sector 

a capability way beyond push to talk radios that it can grow into 

over time and that will give it on U.S. battlefields the same capability or better that we have on foreign battlefields for our U.S. soldiers. America is a battlefield as well both against nature and 

against terrorist attacks. 

So I will continue to ask the same questions to all of you until 

we get to the right place. And I have 3 seconds, but if anyone has 

any additional comments, I am sure the chairman would let you 

speak. Thank you, Mr. Chairman. 

Mr. MARKEY. The chair thanks the gentlelady. There being no 

further questions from members, the chair would like to thank this 

panel for being here, and we are going to get ready to seat the second panel. Thank you so much. OK. We are going to get started. 

We want to welcome our second panel. We are going to go right 

down in order. Our first speaker will be Mr. Tom Romeo. Mr. 

Romeo is currently Vice President of Federal Services for IBM 

where he is responsible for managing IBM’s business with numerous federal agencies. Most importantly, he is responsible for managing IBM’s contract with NTIA to run the converter box coupon 

program. Mr. Romeo, welcome, and turn your microphone on and 

you have 5 minutes for your opening statement. 

STATEMENT OF TOM ROMEO, DIRECTOR, FEDERAL SERVICES, 

GLOBAL BUSINESS SERVICE, IBM CORPORATION 

Mr. ROMEO. Thank you, Mr. Chairman. Mr. Chairman and members of the subcommittee, thank you for the opportunity to testify 

before you today on the continuing progress the IBM team is making implementing the NTIA TV converter box coupon program. 

Earlier this morning, you heard from NTIA Acting Assistant Secretary Baker about how interest in the TV converter box coupon 

program continues to grow. Consumer demand for coupon remains 

high with over 26 million total coupons ordered as of September 10, 

representing an average of more than three million coupons ordered on a monthly basis. The continued high rate of demand is exceeding expectations. Consumers requested the total initial base 

phase allotment of 22,250,000 coupons as of July 31, 2008. 

After hitting this milestone, the coupon program shifted to a twotrack distribution mode. The program now ships both contingent 

phase coupons which go only to over-the-air reliant households, as 

well as recycled initial base phase coupons. Because the redemption rate for coupons remains below 100 percent, funds continue to 

be available to recycle coupons from the initial base phase of the 

program. This allows households not solely reliant on over-the-air 

broadcasting to continue to request and received coupons. Between 

August 1 and September 10 over two million recycled coupons were 

103 

ordered. During this same time frame, over two million contingent 

phase coupons were ordered. 

The unique and fluid nature of the coupon program continues to 

require our team to react quickly to pinpoint needed adjustments 

and implement alternative solutions when necessary along the 

way. When Wilmington, North Carolina was designated as a test 

market for the DTV transition, we were able to expedite updates 

to the web site providing information specifically tailored to consumers in Wilmington. We refined consumer education targeted for 

the Wilmington market, resulting in over 70,000 coupons ordered 

by Wilmington residents. 

We continue to refine the Interactive Voice Response or IVR system to make it easier and faster for callers to order their coupons 

over the phone. A new IVR script implemented in July increased 

by 15 percent the number of callers able to complete their coupon 

order within the IVR system. Overall, the IVR system is able to 

support 60 to 65 percent of the callers without the need for a live 

agent, a very high IVR resolution rate by industry standards. We 

continue to adjust messaging on both the English and Spanish IVR 

system to expedite the coupon ordering process and provide a positive experience for the consumer. 

I am pleased to report the voluntary participation of both large 

national retailers and smaller, local retailers remains strong. As of 

August 29, 2008, more than 2,300 retailers, representing more than 

29,000 stores Nationwide, are currently certified and participating 

in the program. Eight of the largest consumer electronics retailers 

are among the retailers participating in the coupon program. Consumers are also able to order converter boxes from 35 online retailers or from any of the 13 retailers offering a phone order option. 

Amazon.com became a participating online retailer earlier this 

month. The strong demand for coupons indicates the effectiveness 

of our consumer education strategy. We are on the right track educating consumers about the coupon program and remain focused on 

intensifying and further refining consumer education as we end towards February, 2009. 

Our partner, Ketchum Public Affairs, continues to lead the consumer education effort focusing on communities most likely to rely 

more heavily on over-the-air broadcasting than the general population but continuing to build and leverage a network of committed 

partners. The proportion of households ordering coupons who self 

identify as over-the-air reliant has increased from 47 percent in 

January to 55 percent today. The consumer education campaign is 

increasing its reach to those consumers most at risk as we transition to digital broadcasting. 

We are now refining coupon program messaging to encourage 

consumers to act early in the process and order their coupons prior 

to December 31, 2008. Today, a consumer can expect to have their 

coupon order processed and mailed within 10 to 15 days, and to receive their coupon within 3 to 4 weeks of placing their order. Ordering coupons prior to the end of 2008 will give consumers enough 

time to buy a converter box, install it, and troubleshoot any issues 

before February 17, 2009. The IBM team is pleased to be part of 

implementing this vital program and recognizes that many challenges remain on the way to February 17, 2009. Our team conVerDate Nov 24 2008 10:45 Dec 29, 2010 Jkt 037690 PO 00000 Frm 00109 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS\110-148 CHRIS
104 

tinues to be ready to meet those challenges and work to ensure 

that consumers across the United States have continued access to 

free television broadcasting, including educational, entertainment, 

emergency and home-land security information. Thank you for the 

opportunity to testify today, and I will be happy to answer any 

questions. 

[The prepared statement of Mr. Romeo follows:] 

STATEMENT OF TOM ROMEO

Mr. Chairman and Members of the Subcommittee, thank you for this opportunity 

to testify before you again on the status of the DTV Transition. My name is Tom 

Romeo and I am Vice President of Federal Services for IBM’s Global Business Services, Public Sector. I am here today to update you on the progress the IBM Team 

is making implementing the National Telecommunications and Information Administration (NTIA) TV Converter Box Coupon Program. 

BACKGROUND

The Coupon Program, authorized by the Digital Television Transition and Public 

Safety Act of 2005, provides for distribution and redemption of coupons that consumers may apply toward the purchase of certified digital-to-analog converter boxes 

from participating retailers. As you know, this act allows U.S. households to request 

a maximum of two coupons, worth $40 each, to be used toward the purchase of a 

certified converter box. 

NTIA awarded IBM the contract to provide services for the TV Converter Box 

Coupon Program on August, 15, 2007. Working within the program parameters, 

IBM designed the NTIA TV Converter Box Coupon Program to be consumer-focused, 

easy to use, and provide maximum choice and access for both consumers and retailers. IBM and its business partners, Ketchum Public Affairs, Epiq Systems and Corporate Lodging Consultants are providing services in four areas: 

• Consumer education 

• Coupon distribution to consumers and redemption 

• Support for retail store participation 

•Financial processing to reimburse retailers, and to maintain records. 

Ensuring high retailer participation and satisfaction are essential elements to the 

overall success of the program. Our goal continues to be to successfully communicate 

the details of the TV Converter Box Coupon Program to targeted consumers, distribute coupons, and complete the redemption process efficiently. 

PROGRAM METRICS AND STATUS

On January 1, 2008 the Consumer Support Center opened for business and began 

to take orders from consumers across the nation for their TV Converter Box Coupons. Consumers continue to be able to order coupons using any of the four available options. Applying online at www.DTV2009.gov continues to be the option used 

most frequently by consumers. Other options include the toll-free phone number (1- 

888-DTV-2009) which is operational 24x7 to accept coupon orders, and by mail (P.O. 

Box 2000, Portland, OR 97208-2000) or via fax (1-888-DTV-4ME2). Coupon application forms are also available in Braille for the visually impaired. 

As we reported to you in June, interest in the TV Converter Box Coupon Program 

continues to grow. Consumer demand for coupons remains high with over 

26,686,001 total coupons ordered as of September 10 representing an average of 

more than 3,000,000 coupons ordered on a monthly basis. 

The continued high rate of demand is exceeding expectations. Consumers requested the total initial base phase allotment of 22,250,000 coupons as of July 31, 

2008. After hitting this milestone, the Coupon Program shifted to a two-track distribution mode. The Program now ships both contingent phase coupons which go 

only to over-the-air reliant households, as well as ‘‘recycled’’ initial base phase coupons. Because the redemption rate for coupons remains below 100%, funds continue 

to be available to recycle coupons from the initial base phase of the program. This 

allows households not solely reliant on over-the-air broadcasting to continue to request and receive coupons. Between August 1 and September 10 a total of 2,020,219 

‘‘recycled’’ coupons were ordered. During this same time frame, 2,415,782 contingent 

phase coupons were ordered. At the current rate of demand, and assuming some 

spike in demand as we move closer to the actual transition date of February 17, 

105 

2009, we anticipate over 50,000,000 coupons will have been mailed out to consumers 

by the end of the program. 

The unique and fluid nature of the Coupon Program continues to require our team 

to react quickly to pinpoint needed adjustments and implement alternative solutions 

when necessary along the way. When Wilmington, North Carolina was designated 

as a test market for the DTV transition, we were able to expedite updates to the 

web site providing information specifically tailored to consumers in Wilmington. We 

refined consumer education targeted for the Wilmington market resulting in over 

70,000 coupons ordered by Wilmington residents. 

We continue to refine the Interactive Voice Response (IVR) system to make it 

easier and faster for callers to order their coupons over the phone. A new IVR script 

implemented in July increased by 15% the number of callers able to complete their 

coupon order within the IVR system. Overall, the IVR system is able to support 60- 

65% of the callers without the need for a live agent, a very high IVR resolution rate 

by industry standards. 

We continue to adjust messaging on both the English and Spanish IVR system 

to expedite the coupon ordering process, and provide a positive experience for the 

consumer. 

RETAIL PARTICIPATION

I am pleased to report the voluntary participation of both large national retailers 

and smaller, local retailers remains strong. As of August 29, 2008 a total of 2,316 

retailers representing more than 29,053 stores nationwide are currently certified 

and participating in the program. Eight of the largest consumer electronics retailers—Best Buy, Circuit City, Fry’s, Radio Shack, Sears, Sam’s Club, Target, and 

Wal-Mart are among the retailers participating in the Coupon Program. This includes locations in all 50 states, Guam, Puerto Rico, and the U.S. Virgin Islands. 

These stores have completed certification in the Coupon Program, indicated that 

their employees are trained, have converter box inventory in their stores, and have 

their point-of-sale systems prepared to redeem coupons. Consumers are also able to 

order converter boxes from 35 online retailers, or from any of the 13 retailers offering a phone order option. Amazon.com became a participating online retailer earlier 

this month. A list of all participating retail outlets, searchable by state and 5-digit 

zip code, can be found on www.DTV2009.gov under ‘‘Locate a Retailer Near You.’’ 

CONSUMER EDUCATION

The strong demand for coupons indicates the effectiveness of our consumer education strategy. We are on the right track educating consumers about the Coupon 

Program, and remain focused on intensifying and further refining consumer education as we head toward February 2009. Our partner, Ketchum Public Affairs, continues to lead the consumer education effort focused on the five communities who 

most likely rely more heavily on over-the-air broadcasting than the general population: 1) senior and older Americans; 2) the economically disadvantaged; 3) rural 

residents; 4) people with disabilities; and 5) minorities. We continue to build and 

leverage a network of committed partners who already have access to many of the 

population segments we are targeting, and currently work with over 300 public and 

private sector partners with ties to senior citizen, rural and disability communities. 

The Partnership Toolkit which includes DTV and Coupon Program background material, fact sheets, posters, sample public service announcements, and presentations 

is co-branded for use by partners at a variety of events. Also included and used by 

our partners are specific strategies on how to reach the media to effectively deliver 

the Coupon Program message, and ideas and resources for informing consumers 

through community and in-store events. In addition, our work with the media to 

place stories about the Coupon Program is heavily focused not only on national 

media, but also the television markets that have the largest estimated number and 

percentage of over-the-air reliant households. 

The proportion of households ordering coupons who self-identify as over-the-air reliant has increased from 47% in January to 55% today. The consumer education 

campaign is increasing its reach to those consumers most at risk as we transition 

to digital broadcasting. 

We are now refining Coupon Program messaging to encourage consumers to act 

early in the process and order their coupons prior to December 31, 2008. Today, a 

consumer can expect to have their coupon order processed and mailed within 10– 

15 days, and to receive their coupon within 3–4 weeks of placing their order. Ordering coupons prior to the end of 2008 will give consumers enough time to buy a converter box, install it, and trouble shoot any issues before February 17, 2009. 

106 

CONCLUSION

As mentioned above, educating consumers to take action and order coupons before 

the end of 2008 is a high priority for the Program and an important component to 

a smooth transition overall. The majority of consumer messaging is focused on making sure consumers understand the transition to digital broadcasting will occur on 

February 17, 2009. Consumers who wait until February 17 or after that date to request their coupons may not realize that it will take several weeks for their coupons 

to arrive by mail. In light of these sobering scenarios, we are working with our partners to adjust public messaging to encourage consumers to act well in advance of 

the February 17 transition date. 

The IBM Team is pleased to be part of implementing this vital program and recognizes that many challenges remain on the way to February 17, 2009. Our team 

continues to be ready to meet those challenges and work to ensure that consumers 

across the United States have continued access to free television broadcasting, including educational, entertainment, emergency and homeland-security information. 

Thank you for the opportunity to testify today and I will be happy to answer any 

questions. 

Ms. HARMAN [presiding]. Thank you. The Committee now welcomes Christopher A. McLean, who is the Executive Director of the 

Consumer Electronics Retailers Coalition of the Nation’s largest 

electronic retailers. Mr. McLean has also served as the Administrator of the Rural Utility Service. Please summarize your testimony in 5 minutes and begin now. 

STATEMENT OF CHRISTOPHER A. MCLEAN, EXECUTIVE 

DIRECTOR, CONSUMER ELECTRONICS RETAILERS COALITION 

Mr. MCLEAN. Thank you very much. Thank you for inviting the 

Consumer Electronics Retailers Coalition to appear today. Our 

members include Best Buy, Circuit City, Radio Shack, Amazon.com, K-Mart, Sears, Target, and Wal-Mart, as well as three 

major retail associations. As we gear up for the final DTV push, we 

can be very proud of how far we have come. Retailers have now accepted more than 10 million NTIA coupons with very few problems. 

I am pleased to report that every CERC member company is now 

a participant in the NTIA program coupon program. CERC members have been working at the local level with community organizations, government leaders, and the media to take the initiative in 

DTV public education. 

Our members have transitioned their inventories to feature analog pass-through boxes and the current supply seems to be plentiful. The Wilmington pilot has been very useful to all DTV stakeholders. We were gratified that Chairman Martin specifically 

thanked CERC and our members at the September 8 Wilmington 

ceremony. Our members participated in educational events, donated converter boxes to senior centers in conjunction with the 

CEA, and directed the earlier shipments of analog pass-through 

boxes to Wilmington. A few issues from the Wilmington pilot stand 

out for retailers. Even with extraordinary educational efforts some 

shoppers waited until the last minute to purchase their converter 

boxes. 

Also, apparently many consumers also waited to hook up their 

DTV converter boxes. Some viewers also had more problems with 

antennas than had been anticipated. Our members are looking 

closely at the Wilmington experience to analyze and apply the lessons learned. As we approach the final days of this Congress there 

is one more thing that can be done to approve the DTV transition 

107 

for consumers. It is ironic that with one hand our government is 

subsidizing the distribution of converter boxes to consumers, yet 

with the other apparently inadvertently is imposing a 5 percent 

tariff that makes the product more expensive. Representatives Ron 

Kind and Kevin Brady have introduced bipartisan legislation to 

correct this problem, and we respectfully ask members of this committee to support the timely passage of this bill. 

As we enter the home stretch of digital transition some challenges remain. Retailers are working to keep up with broadcasters 

soft shut-offs. These on air experiments are very useful to viewers. 

We are working with the NAB to share scheduling information 

with retailers to prepare for customer response. We are also preparing for early shut-offs. CERC is aware of a handful of communities where stations are planning to complete convert to digital 

and cease analog broadcast in advance of the February deadline. 

These situations, most notably in western Nebraska, where public 

television stations and a couple of commercial stations convert 

ahead of schedule create many Wilmington experiences. 

Retailers are studying the Wilmington lessons and we are working with NTIA and the FCC to understand not just what happens 

in advance and at the time of conversion but that happens in the 

aftermath. Retailers are assisting the FCC and their 81-city DTV 

tour, and we are focused on Puerto Rico. Our understanding is that 

the supply and demand situation on the island is improving. 

Madam Chairman, nobody knows that the end game will look like. 

However, there are two key dates that we keep in mind in this respect. First, of course, is the February 17, 2009, transition date. 

The Wilmington data suggests that some consumers will wait until 

the last minute to address their conversion needs. The more conversions that can be banked in advance of the switch, the better. 

Second is the date when the last coupon expires perhaps well into 

2009. As unprecedented as the coupon program is the post coupon 

market for converter boxes is completely uncharted territory. 

In conclusion, it has been our privilege to work with this subcommittee as well as the NTIA and the FCC to make the DTV 

transition a success. The chairman and the subcommittee has literally planted the first seeds of the DTV revolution many years 

ago. CERC and our individual members are committed to helping 

all Americans reap the rewards of a rich DTV harvest. Thank you. 

[The prepared statement of Mr. McLean follows:] 

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Ms. HARMAN. Thank you, and thank you for the interesting information about some communities acting in advance. It seems to me 

that is a wise idea. Our third witness is David K. Rehr, President 

and Chief Executive Office of the National Association of Broadcasters. Prior to joining the NAB, Mr. Rehr served as the President 

of the National Beer Wholesalers Association. Welcome, and please 

summarize your statement in 5 minutes. 

STATEMENT OF DAVID K. REHR, PRESIDENT AND CEO, 

NATIONAL ASSOCIATION OF BROADCASTERS 

Mr. REHR. Thank you. Good morning, Congresswoman Harman, 

Congresswoman Solid, and Mr. Gonzalez. My name is David Rehr, 

and I am President and CEO of the National Association of Broadcasters, a trade association that represents over 8,300 free overthe-air radio and television stations and networks. I was in Wilmington, North Carolina with Chairman Martin, Commissioner 

Copps and Secretary Baker on Monday, September 8, when the 

four commercial and one religious station transitioned to all digital 

broadcasting. So what lessons did we learn and what are we doing 

to implement those lessons? One, in Wilmington there was universal awareness of the DTV transition. On the day after the 

switch stations received preliminary data that showed out of the 

226 telephone calls received only one caller was unaware of the 

switch to digital. 

This is indicative of the nationwide numbers that show DTV 

transition awareness near universal levels. Despite these high 

numbers, however, broadcasters will continue to run DTV action 

spots to educate viewers. Additionally, the NAB is compiling polling information from the Wilmington experiment which I will be 

happy to share with the committee. Two, we learned that many 

viewers needed help adjusting or moving their antennas or needed 

more detailed information about what kind of antenna they needed. 

Prior to Wilmington, NAB released two spots, Antenna Highway 

and Not Tech Minded, that raised this important issue. The announcer is the same person that we used to help build awareness 

of the DTV transition, and our spots are all closed captioned in 

both English and Spanish, and I would like to show one now. 

[Video shown.] 

Most viewers experienced reception problems following the 

switch because they failed to scan for digital channels using their 

new converter box. As part of our national education campaign, 

NAB will create and distribute spots detailing how to use the scanning feature. Four, the call center in Wilmington was a key ingredient to their transition. A centralized call center will be invaluable 

to the success of the nationwide digital switch. As you know, in just 

154 days the remainder of the country will make the historic 

switch from running DTV action spots to organizing speakers bureaus to driving the DTV trekkers to communities across the country. NAB and its television networks, syndicators and local TV stations are executing a $1 billion plus marketing plan to inform the 

country about the transition. 

Now in addition to all that we have done, NAB has taken another step to further minimize the potential for consumer confusion. While we do not believe there will be any consumer confusion 

125 

in an abundance of caution the NAB television Board of Directors 

has voluntarily committed not to disrupt any relationship with our 

cable or satellite distributor partners beginning on February 4, 

2009, and running through March 4, 2009, a full 2 weeks prior to 

and after the DTV transition date of February 17. 

History demonstrates that broadcasters and our distribution 

partners have a positive relationship, and we have every incentive 

to continue to work together. At present, there are 1,017 stations, 

that is 81 percent of commercial stations that support the NAB resolution. We have a broad range of stations endorsing this proposal 

from NAB, members like ABC, NBC, Hearst-Argyle, and Belo to 

non-NAB members like Sinclair Broadcasting. I expect that we will 

continue to add more stations and companies in the upcoming 

weeks. Through this DTV journey, I am most proud of the outreach 

we have done with diverse and varied groups around the country, 

including the Black Church initiative, Esperanza USA, Native 

American tribal groups, the Leadership Conference on Civil Rights, 

state and local governments, AARP, the Congressional Hispanic 

Caucus, the Congressional Black Caucus, the 241 members of the 

DTV coalition, and local television broadcasters across the country. 

Working together, we can meet the goal of insuring that no one 

is left behind for lack of information. Thank you for having me, and 

I look forward to your questions. 

[The prepared statement of Mr. Rehr follows:] 

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Ms. HARMAN. Thank you very much. Our fourth witness, Kyle 

McSlarrow, is President and Chief Executive Officer of the National Cable & Telecommunications Association, NCTA, the trade 

association representing the nation’s largest cable operators. Mr. 

McSlarrow also served as a deputy secretary of the Department of 

Energy, and I would like to welcome back our chairman of the subcommittee, Mr. Markey, who has chosen to stay down there in the 

corner. He is very modest and shy. And, Mr. McSlarrow, you are 

now recognized to summarize your statement in 5 minutes. 

STATEMENT OF KYLE MCSLARROW, PRESIDENT AND CEO, 

NATIONAL CABLE AND TELECOMMUNICATIONS ASSOCIATION 

Mr. MCSLARROW. Thank you, Mr. Chairman, distinguished members of the committee. I think I can safely say I am glad to be here 

talking about the DTV and not energy. 

Ms. HARMAN. You are the only one who feels that way, Mr. 

McSlarrow. 

Mr. MCSLARROW. Well, it is because I knew I was on the hot seat 

all those other times. In many respects, I think the industry cooperation to educate consumers to make available the information 

they need to know about the tools that they should be equipped 

with to manage the transition has gone very well. And I should say 

that we are very pleased. I want to compliment David Rehr and 

other leaders in the industry for what they have done to insure 

that cooperation has moved forward. But I do want to flag what is 

potentially a coming storm, which is called re-transmission consent. 

And I know on the first panel there was an exchange of views 

about this but I think it is important to understand the context. 

Re-transmission consent was added to the legal landscape. In 1992, 

a time when the marketplace was very different, and by and large 

over the last 15 years most broadcasters, most cable and satellite 

operators have managed to work through that in a way that there 

is a rough equivalence of value being exchanged that consumers 

have been well served. 

But is in increasingly clear with a new election coming up on October 1 in terms of broadcasters electing to be must carry or pursuing re-trans that with the economic pressures on the broadcasting side with more and more equity or hedge funds investing 

in the broadcasting sector looking for a quick buck as opposed to 

a long-term view that there is going to be greater tension. And it 

is important to point out that re-transmission consent is not a free 

market negotiation. Every broadcaster walks into a room knowing 

that at the very least they can insist on must carry carriage or if 

they feel up to it they can choose to pursue re-transmission consent 

negotiations so it is a classic ‘‘heads I win, tails you lose’’ proposition. 

When they enter the negotiations, they then know that every 

cable customer has to, by law, buy a package with all the broadcast 

stations in it before they can buy any other cable network, including premium networks, and the networks know and the broadcasting station groups know that you can’t as a cable operator or 

a satellite operator go out and negotiate for another signal with 

similar or identical program because network non-duplication and 

syndicated exclusivity rules prevent you from carrying an out of 

150 

market signal which competes with what is essentially an exclusive 

product in a local market. So it is not a free market negotiation, 

and as I say the overwhelming number of cases I am confident will 

probably be worked out at the bargaining table, but it is clear that 

increasingly there is tension, and if you go by public statements 

from some broadcasters there is a desire to ratchet up dramatically 

in some cases 500 percent the cost of those signals that would be 

carried by the consumers. 

Now this is relevant in the short term to the digital transition 

because most of the re-trans agreements will expire around December 31 of this year, and so we have been having conversations with 

friends of the broadcasting industry about a quiet period, but the 

problem is if you are putting consumers to the choice of either, A, 

paying a higher bill the cable operator insists on protecting the interest of the consumer, then the threat is going to be that a broadcaster is going to pull the signal. And when are they going to do 

that? Well, they are going to do that in January, the precise time 

that NAB’s voluntary quiet period doesn’t cover so you have this 

odd lapse of time where the food fights are undoubtedly going to 

break out where consumers have two choices, pay a higher bill or 

lose the signal. 

So I would urge this committee to make clear in unmistakable 

terms in the short term to broadcasters around the country that 

the digital transition is not business as usual. Cable operators, satellite operators are carrying—in the case of cable operators were 

carrying must carry stations in a dual format which we didn’t 

think we were required to do but we voluntarily agreed to do that. 

It was incorporated into an FCC order. Everybody is leaning forward. This is not the time to confuse consumers about what is happening. 

And I should hasten to add that this isn’t about leverage in the 

market place. I heard you, Mr. Gonzalez, before. I agree with your 

point. It should be short. Whatever the deal is, whenever it is 

struck, it should be retroactive back to the date of the expiration 

of the agreement, and then I think for the committee there is a 

long-term challenge that we would like to work with you on reforming re-transmission consent. Thank you, Mr. Chairman. 

[The prepared statement of Mr. McSlarrow follows:] 

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Ms. HARMAN. Thank you, sir. I would just note for the panel that 

there is a motion to adjourn on the House floor and we will recess 

this hearing 5 minutes before the conclusion of that vote. It is now 

10 minutes so we have time to hear from another witness, David 

Candelaria, who is Vice President and General Manager of 

Entravision Communications, a Spanish language media company. 

Entravision operates one of the largest Spanish language radio networks as well as the largest affiliate group of two Univision network channels. Welcome, and please summarize your testimony. 

STATEMENT OF DAVID CANDELARIA, VICE PRESIDENT AND 

GENERAL MANAGER, ENTRAVISION COMMUNICATIONS CORPORATION 

Mr. CANDELARIA. Thank you and good morning. I have worked 

in the broadcasting industry for nearly 20 years and have spent 

nearly 40 years of my life living in El Paso, Texas. What I particularly want you to know is how important it is that the Congress 

pass the Border Fix Act legislation. Each and every member of 

Congress from the border region supports the legislation. While 

they may be Democrats, support of the legislation is bipartisan, 

and we have heard from other Republican members that they are 

behind the Act as well. 

The reason I care so much about the bill is as our Congressman 

Silvestre Reyes has said that unless we do so that tens of thousands of families and individuals in our region may be left behind. 

There is a fact of life in the Hispanic community along the border 

that you should be aware of. In El Paso, for example, approximately 45 percent of the Hispanic population is Spanish language 

dominant. That is 310,000 people, approximately. When Spanish 

speakers in El Paso and along the border need information, they 

turn to Spanish language television. Our television station, KINT, 

who share the evening news, is six times that of the ABC affiliate, 

achieved that success by consistently providing quality news and 

vital information. Unless this Congress passes the Border Fix Act, 

our Spanish-speaking viewers will simply tune into Mexican television. 

As I have spoken about the Act with various parties, a number 

of questions have been posed to me, and I would like to address 

them. First, I have been asked is this not the best time for viewers 

to transition since we have the educational efforts and the converter box subsidy. While it is a good time, you need to be aware 

that there is a cultural resistance that will prevent it from being 

completed at this time. Second, I have been asked why we don’t 

seek to educate our Hispanic viewers to convert. In fact, our station 

has helped achieve in El Paso coupon orders and redemptions at 

240 percent of the national rate, yet this is still not enough. 

Third, I have been asked why should not expect our young people 

to press their parents to acquire digital sets in order to be able to 

watch the English language networks. The Nielsen numbers prove 

it. In El Paso between my station, KINT, and the most popular station in the market, Mexico’s XHJC, we take 30 percent of the viewing in prime time. The NBC affiliate, in contrast, takes just 4 percent in prime time, which I believe represents the English language population in the market. Fourth, I have been asked why 

160 

would 4 years help if I am worried about getting Hispanic viewers 

to transition. The reason is simple. We just need more time to persuade Hispanics to transition and to acquire the digital receivers. 

Fifth, I have been asked whether this sends the wrong message 

to other broadcasters who have invested in the transition. Now we 

have all invested in the transition, and to continue the analog signal is simply optional. Sixth, I have been asked whether the legislation will prevent the recovery of the 700 megahertz spectrum so 

that it can be used by wireless and public safety purposes. The answer is a definite no. We have determined and the FCC has confirmed to the Senate that there is no impact on any proposed 700 

megahertz user should the Congress pass this legislation. Finally, 

I know that you will hear from English language broadcasters as 

to why the Act is a mistake. However, these are the very same 

broadcasters who readily admit that dominant Hispanics do not 

watch their stations anyway. 

This testimony will be in the great tradition of the broadcast 

community that it has resulted in our poor reputation before the 

public sector. If there is a legislative or regulatory proposal that 

would maintain or promote competition broadcasters rush to stifle 

it with arguments claiming that the sky is falling. In fact, my 

English language competitors view the digital conversion as their 

opportunity to grab my business. Their view is that if Hispanics 

migrate to Mexican stations, the share of domestic English language stations will increase. This translates to money. 

All I can say is that the opinion of our Congressman and local 

leaders such as Mayor Cortez of McAllen, State Representative 

Veronica Gonzalez of the Rio Grand Valley, who all support the 

legislation, should weigh more heavily on the scale than my selfinterested competitors. In summary, I urge you to consider that 

neither education, more coupons, more converter boxes, or visits 

from the FCC will convince the great number of Spanish speaking 

population along the border to transition when they have a clear 

alternative available. I am pleased that Hurricane Ike did not hit 

the border, but I worry that next year if there is a hurricane that 

hits the Rio Grande Valley and then El Paso how the word will get 

out if domestic Spanish language television stations are not transmitted in analog because we cannot rely on Mexican competitors. 

So as to protect the Spanish speakers along our border, I urge you 

to enact this legislation before this Congress recesses. I am prepared to answer any questions you may have. 

[The prepared statement of Mr. Candelaria follows:] 

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Ms. HARMAN. Thank you, Mr. Candelaria. I would just point out 

that your last argument is also an argument for clearing the 700 

megahertz spectrum so we can have true national interoperable 

communications. 

The subcommittee will now stand in recess for the shortest possible time while members who are still here go to vote. And when 

we return, we will begin with Mr. Kittleman for 5 minutes. 

[Recess.] 

Ms. SOLIS [presiding]. We would like to call the hearing back to 

order. Since we do have expedited votes that are coming up, we 

would like to hear from all our witnesses, so next I would like to 

introduce our witness, Mr. John Kittleman. Mr. Kittleman is the 

General Manager of KRGV-TV, the ABC affiliate serving the 

Weslaco, Harlingen, Brownsville, and McAllen areas of south 

Texas. Welcome, and you have 5 minutes. 

STATEMENT OF JOHN KITTLEMAN, GENERAL MANAGER, 

KRGV-TV NEWSCHANNEL 5, KRGV-DT 5.2 LATV 

Mr. KITTLEMAN. Thank you, Chairman Markey, Ms. Solis, members of the Subcommittee on Telecommunications and the Internet. 

Thank you for allowing me to testify today in opposition to H.R. 

5435, the DTV Border Fix Act. My name is John Kittleman, General Manager of KRGV-TV, the ABC affiliate serving the Westlaco, 

Harlingen, Brownsville, and McAllen areas of deep south Texas. 

America’s transition to digital is a major undertaking for government, broadcasters and the public. Thank you for your continuing 

commitment to make this transition as smooth as possible. A key 

component of a smooth transition, however, is coordination among 

the parties to insure that public confusion is minimized. Congress 

recognized this when it changed the law governing the digital transition from one which would have permitted individual television 

markets across the country to transition at various time spread 

over the course of years to the current law which sets a single, nationwide deadline of February 17, 2009, for the termination of analog broadcasts. 

Unfortunately, H.R. 5435 threatens to undermine the effectiveness of a unified national transition by permitting stations in border markets to delay the transition for as long as 5 years creating 

tremendous public confusion. Now is not the time to delay the transition for our border markets. Converter box coupons are easily acquired on the phone and online. Converter boxes themselves are 

widely available in stores, over the phone and online, and all passthrough converter boxes are widely available and will allow border 

residents to benefit from the advanced U.S. digital services as well 

as to continue reception of analog signals from Mexico. 

An unprecedented national and local education effort is underway and will grow substantially as we draw closer to the transition 

date. As broadcasters serving along the U.S.-Mexican border, we 

understand fully the challenge before us. However, I would ask, 

imagine the challenge for border markets on our own to transition 

to digital in 5 years. No government subsidy program. National 

manufacturers and retailers unlikely to produce and sell converter 

boxes for the border residents who have not yet transitioned. No 

national education program. No unified local education effort as 

169 

stations convert to digital piecemeal over 5 years. Attached to my 

written testimony is a letter written by 11 border market broadcasters from Brownsville to San Diego acknowledging these and 

similar concerns and opposing H.R. 5435. 

Also of concern is the impact on educational broadcasters such as 

our local PBS affiliate. I spoke with Mr. Pedro Briseno, General 

Manager of KMBH, last week. KMBH must vacate its analog frequency, Channel 60, because the FCC has auctioned that spectrum 

for non-broadcast use. In addition, he indicated he cannot afford to 

continue to maintain analog and digital service, and explained the 

difficulty of obtaining replacement analog parts as the country 

moves to the digital platform. 

Indeed, under the Border Fix Act, the date of a station’s transition to digital will not be governed by a carefully choreographed 

public education campaign, but by the date that that station’s analog equipment fails and is too expensive to repair. Despite its analog difficulties, KMBH is well positioned to embrace the digital future. Their station’s digital lineup is as follows: PBS in English, 

PBS in Spanish, EWTN in English, EWTN in Spanish from 38.1 

to 38.4, respectively. Imagine the educational opportunities for our 

market that will be lost if our viewers wait 5 more years to transition to digital. 

Attached today is a letter from four border market PBS stations 

from Harlingen to San Diego stating opposition to 5435. This is all 

the PBS stations along the border. Congress has asked broadcasters to convert their stations to digital and our stations along 

the U.S.-Mexico border have risen to that challenge. We have spent 

millions of dollars to be digital ready on February 17. Many of us 

offer multiple digital channels including local weather and targeted 

entertainment formats to better serve our communities. In today’s 

difficult financial environment, should Congress now add the significant financial burden to border broadcasters alone of continuing 

analog broadcast operations for an additional 5 years or finding 

themselves at a competitive disadvantage against those that do. 

I would ask proponents of the bill, what will change in 5 years 

to make this transition any easier? We will still face the challenges 

of serving Spanish speaking residents, low income residents, and 

the elderly. What will change is that we will not have a government converter box subsidy, manufacturer and retailer support, nor 

a nationwide education effort. Border broadcasters will be left on 

their own with the massive task of educating and equipping an unknown number of analog only consumers. We ask Congress to help 

our border markets by assuring an abundant supply of coupons, of 

converter boxes, and education’s efforts continue. Once again, 

thank you for your leadership in the transition to digital and for 

your consideration of these concerns. 

[The prepared statement of Mr. Kittleman follows:] 

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Ms. SOLIS. Thank you. Our next witness is Mr. Andrew Setos. 

Mr. Setos is the President of Engineering for Fox Group. He is the 

Senior Technology Strategist for the company with oversight of engineering for all the Fox divisions. He is also a Fellow of the Society of Motion Picture and Television Engineers. You have 5 minutes, and thank you for coming. 

STATEMENT OF ANDREW G. SETOS, PRESIDENT, 

ENGINEERING, FOX GROUP 

Mr. SETOS. Thank you, Madam Chairwoman. My name is Andrew Setos. I am President of Engineering of the Fox Group, and 

I thank you for inviting me to participate here today. As we approach the deadline for digital transition, Fox is incredibly excited 

about the many benefits that digital television will bring to the 

American public. We have been working diligently to prepare our 

network, our own stations, and our affiliates for this important 

transition from analog to digital, and we are on schedule. From the 

beginning, Fox has been a leader in the digital TV build out, in the 

creation and distribution of high definition programming, and in 

the effort to educate consumers on how to prepare for the digital 

transition. 

To that end, Fox has aired more than 38,000 public service announcements on its own stations. I would like to focus on one issue 

that is vital to the long-term success of local broadcast television, 

the broadcast flag. The flag is a descriptor that broadcasters may 

imbed in a television program that signals that the program is not 

to be indiscriminately redistributed. Currently, there is no requirement that any television product respond to the broadcast flag. 

Local broadcasters are required by law to provide their content in 

the clear. This means that high value content like the Super Bowl, 

the World Series, The Simpsons, and American Idol is not technologically protected against indiscriminate redistribution. Other 

platforms, such as cable, satellite, telephone companies, and Internet distributors have already spent millions on the design, deployment, and maintenance of increasingly sophisticated technology for 

content protection. By contrast, local broadcasters are unable to 

offer any protection. 

This imbalance threatens the long-term viability of local broadcasting, which will lose high value content to platforms that offer 

technological protections. The broadcast flag is the best way to prevent this serious threat to the future of free TV and we therefore 

strongly urge Congress to pass legislation that would authorize the 

FCC to adopt the broadcast flag rule. The digital revolution has 

created the opportunity for the theft of content on an unprecedented scale. The formerly burdensome and time-consuming process of uploading high definition video content has become easy to 

accomplish. Millions of users of peer-to-peer applications upload 

and download copies of broadcast television shows stripped of their 

commercials, thus putting local television at risk. 

Why? Because local broadcast TV cannot exist without advertising revenue, which is determined based on the size of the broadcast audience that is exposed to those advertisements. Fewer local 

broadcast viewers translate into less advertising revenue. If our 

revenues drop because of content theft, local broadcasters will no 

182 

longer be able to compete with other distribution platforms for high 

value content. This, in turn, means that people will no longer be 

able to watch their favorite shows or national sporting events from 

their local broadcasters for free. And without high value content, 

local broadcasting will struggle to survive. 

The demise of local broadcast stations would be devastating for 

tens of millions of Americans for whom local broadcast stations are 

the sole source of news and entertainment. But even for people who 

have cable or satellite, local broadcast stations are the only source 

of televised local news, local political races, local community affairs, 

local sports, local traffic, and local weather reports. These include 

lifesaving emergency weather updates like those we are doing 

around the clock on our Houston station, KRIV, as Hurricane Ike 

devastated Texas. Local broadcast television, free to the public, is 

uniquely American. 

The broadcast flag is the only solution to protect against the indiscriminate redistribution of local broadcast content while at the 

same time protecting the television viewing experience. With the 

broadcast flag, people will continue to enjoy the ability to make 

multiple copies of their favorite television shows. They will continue to enjoy the flexibility of their home network, and they will 

continue to enjoy the features of every digital TV product that they 

have purchased to date. 

In conclusion, the broadcast flag will have no impact on the 

American public’s legitimate enjoyment of broadcast television 

while at the same time will help protect the future of free, local television. Thank you once again for the opportunity to address this 

important matter. I would be pleased to answer any questions. 

[The statement of Mr. Setos follows:] 

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Ms. SOLIS. Thank you very much. Our next witness is Mr. Chris 

Murray. Chris Murray is Senior Counsel to the Consumers Union 

where he manages advocacy for Consumers Union on technology, 

communications, and media policy in the United States and internationally. You have 5 minutes, Mr. Murray. 

STATEMENT OF CHRIS MURRAY, SENIOR COUNSEL, 

CONSUMERS UNION 

Mr. MURRAY. Madam Chairman Solis, Representative Deal, Mr. 

Gonzalez. I would like to thank you for your extraordinary attention span today to sit through a long hearing. I would like to start 

with a story, a true story from a friend of mine, about John Smith, 

not his real name. He is a retired bus driver who lives in northeast 

Washington, D.C. He watches his favorite football team, the Washington Redskins, on an over-the-air television. That is the only kind 

of television he has in his home, so he is going to need a converter 

box. He doesn’t have an Internet connection, so my friend helped 

him order coupons and find a retailer near him and the government’s printed information directed him to a Radio Shack, which 

was within walking distance. 

When he was there, he was surprised to hear the employee tell 

him that the only box they were carrying in the entire D.C. metro 

area was $60, not $40 as he had expected. He wasn’t prepared to 

spend almost $50 for two converters plus tax so he went home. My 

friend and I tried to find another store in the D.C. area and came 

back empty-handed for a $40 box. His wife eventually went and 

bought the converters for more than $60 each and, sure, they got 

two converter boxes for $50 out of pocket, which is a lot better than 

the more than the $100 it would have been without the coupon program, but that is still $50 just for them to keep their TVs working 

as they always had been working. I will come back to Mr. Smith, 

but I would like to turn quickly to lessons learned from the DTV 

transition test in Wilmington. 

And I would like to echo Chairman Martin’s gratitude to Commissioner Copps for his excellent plan for a test market in Wilmington. I think it has yielded some valuable information. We 

learned in the Wilmington test that there are more Americans who 

rely on over-the-air than we had previously imagined. In Wilmington Nielsen had put the number at 13,500 over-the-air viewers, and what came back was that between 16,000 and 18,000 

households said they rely on over-the-air and purchased a converter box. Now that means not only did every single last over-theair viewer in that market get a converter box but another 20 to 35 

percent also said they relied on over-the-air and got a converter 

box, so we should expect, I think, a big increase in demand. We 

should expect a spike as we near the end of the transition. 

And, frankly, if the transition has an open moment, I think that 

is by definition a good thing. We really want people to be sensitized 

that this is happening. We want them to know that if they are an 

over-the-air family and they don’t get a converter box their television is going to turn into a brick. My colleague, Dr. Book, has an 

excellent idea that we would like to second for a series of national 

blink-outs, basically taking 5 minutes out of popular programming 

to say here is where you can go for information about the transiVerDate Nov 24 2008 10:45 Dec 29, 2010 Jkt 037690 PO 00000 Frm 00194 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS\110-148 CHRIS
189 

tion if you need it. The problem that we were most interested in 

today was that the least expensive converter boxes aren’t always 

making it to electronics retailer shelves as I noted with Mr. Smith. 

When our magazine Consumer Reports tested 24 DTV boxes, we 

found little variance in picture quality and features. In other 

words, we recommended that consumers buy the less expensive box 

but the problem is they are just not widely available. 

We have one electronics retailer who—excuse me, manufacturer 

who has a $40 converter box and is selling that direct to consumers, but we are not seeing it in stores. In a country where 25 

million of these boxes are likely to be purchased, why is it that we 

are not seeing the less expensive options? We hope that the Committee would use its bully pulpit and insure that consumers have 

these less expensive choices. We are also hearing complaints about 

cable providers taking channels out of basic tiers and moving them 

into the more expensive digital tier under the cover of the DTV 

transition, which forces consumers to buy a more expensive package to get identical service. When consumers paid for the same 

service at—excuse me, when consumers pay more for the same 

service, it is a rate hike, and at $10 per set per month, in some 

cases it is $5.00, $6.00 in other cases, this hike is not minor. And 

with the DTV transition already confusing consumers, we feel that 

the timing of the industry’s rate hike is deceptive. 

I am also concerned to hear Mr. Setos discuss the broadcast flag 

as a solution to the DTV transition. We heard Viacom in 2002 tell 

us that they wouldn’t put HD programming over the air unless 

they got the broadcast flag. They didn’t get it. That program eventually made it out there. I fear that this has long been a story of 

trying to restrict the innovative consumer electronics market place 

and we would vigorously oppose any such proposals. In conclusion, 

I will just say that on February 17 the U.S. is going to make the 

jump to digital. At that time either millions of Americans will have 

been educated about exactly what they need to do to minimize 

transition hiccups or millions of Americans will wake up to find 

that their TVs don’t work anymore. I hope that we will void the 

latter scenario and I hope that we will apply some serious pressure 

to get that done. Thank you very much for the time today. 

[The statement of Mr. Murray follows:] 

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Ms. SOLIS. Thank you very much. Our last witness is Dr. Connie 

L. Book. Dr. Book is the Associate Dean of the School of Communications at Elon University in North Carolina. She serves on the 

board of the North Carolina Agency for Public Telecommunications 

and has conducted a wide array of research on broadcast communications issues. Thank you and you have 5 minutes. 

STATEMENT OF CONNIE LEDOUX BOOK, PH.D., ASSOCIATE 

DEAN, ASSOCIATE PROFESSOR, ELON UNIVERSITY 

Ms. BOOK. Thank you, Madam Chairman and members of the 

subcommittee. We handled 172 calls that came into local television 

stations in the Time Warner Cable call center from noon to 10 p.m. 

on the day of the transition. I brought a handful of bright and energetic Elon University students with me and one of them is here 

today with me, Lauren Limerick, and she handled several calls 

gracefully and patiently that day, and so we are grateful for the opportunity to share some of what we have learned in that process. 

When I was in the 6th grade my sister, Yvette, who was the pretty 

one in our family, was a huge fan of Elton John. ABC, which aired 

on Channel 33 in Baton Rouge, Louisiana, was scheduled to have 

a live concert. Unfortunately, we only had a VHF TV station. 

My dad, faced with five teenage girls, succumbed and on the day 

of the concert brought home a new color UHF TV set, raised the 

antenna, and, bam, we had Elton. I remember my dad fooling with 

the TV to get the best signal, the concert, the big sunglasses, and 

the white leather suit. I start there this morning because that is 

what we are asking Americans to do on February 17, 2009, not a 

hard task for my dad at the time because he had the means and 

the ability, but that is not the case for all Americans, and we don’t 

want them to miss the concert. Today I would like to share just a 

few of the lessons that we learned as part of our efforts in Wilmington. 

First, the information campaign in Wilmington was a hands 

down success. Virtually everyone that faced disrupted signals and 

called knew about the transition and had purchased a converter 

box. The means employed by the FCC, local government, broadcasters, and grassroot efforts worked. The rest of the country will 

need to follow suit, and we asked people where they had heard the 

news about digital television and most said I heard it on TV. And 

TV can be used more effectively to help Americans make the transition. Prior to the switch on Monday, Wilmington conducted what 

I call a series of blinking tests, soft tests, where they interrupt analog program with a slate that says if you are looking at this you 

are not ready. They were 30 seconds, a minute, and were at different times of day. 

We would recommend that other markets in the U.S. start blinking that signal more frequently and during viewers’ favorite programs. That may sound odd but the truth is a viewer can forgive 

you for missing 5 minutes of their favorite program but not the 

whole program. We learned that in Wilmington when phones heated up after Oprah Winfrey went on the air at 3:00 on Monday with 

the launch of her new fall season. Those viewers left with a slate 

telling them to call a 1-800 number or a county office weren’t 

thinking too kindly of the digital TV mandate. Also, interrupting 

195 

viewers’ favorite program will create a sense of urgency that they 

need to get ready. In Wilmington, most of the callers had ordered 

and redeemed coupons for their digital converter boxes. Elon students assessing the retail conditions found Wal-Mart to be the primary point of purchase. 

When local residents went to Wal-Mart and got that box, they 

did so from a shelf with a small typed up on white paper note saying the switch was scheduled for September 8, nothing fancy, and 

on a shelf with lots of other products. More can be done at this 

point of sale. The primary issue with callers was not that the converter box wasn’t working but the antenna wasn’t picking up signals. In Wilmington analog signals sat on one tower and digital signals on another. People had to move their antennas to receive the 

new UHF signals. Working with key retailers like Wal-Mart, 

broadcasters should create documents that are visually heavy to 

walk through the local information needed to install the best antenna and to point it in the right direction. 

To do this, the local TV engineering staff should be busy the next 

month testing signal strength at local points throughout their communities and creating one-page documents with neighborhood level 

data. For example, we got calls from different pockets of Wilmington, and residents would say nobody on my street can get that 

signal. This street level neighborhood data should be available at 

the point of purchase of DTV converter boxes. We recommend 

broadcasters get busy creating them. 

Even with a slate telling them to call the FCC, 172 Wilmington 

residents decided to call their local TV stations, a telephone number they probably had to look up in the phone book. A majority of 

these callers were elderly residents, and frequently there was 

someone calling on their behalf. People have a relationship with 

their local broadcaster, especially the older, often home-bound. We 

would recommend rather than a slate that directed viewers to call 

a 1-800 number that stations use local talent to teach viewers experiencing problems what is necessary to acquire a signal. For example, Atlanta should have Monica Kauffman explain how to set 

up the converter box and antenna using a graphic. The Hispanic 

community should hear from local Spanish speaking broadcasters 

at Univision or another station teaching them how to get their signal. 

These local segments could be aired on continuous loops in the 

marketplace and give people a chance to solve their own problem 

rather than calling a 1-800 number, and if they do call TV stations 

need to set up prototype viewing environments so that if callers 

work through issues with station volunteers or staff they can have 

a visual in front of them to look at what the caller is experiencing 

and more effectively walk through resolving the problems. You still 

will have hardship cases and in these we need to create an emergency converter box. 

[The prepared statement of Ms. Book follows:] 

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Ms. SOLIS. Thank you very much. Before I turn to our members 

for questioning, I want to request unanimous consent for 3 items. 

One is a press release and fact sheet concerning consumer awareness of the transition by the Consumer Electronics Association, second, a letter from Commissioner Copps, the FCC to Chairman Martin concerning steps the FCC should take to prepare for the DTV 

transition, and then third a letter sent by Chairman Martin to the 

Consumer Electronics Retailers Coalition regarding the availability 

of low cost converter boxes. I request unanimous consent to submit 

these for the record. 

[The information appears at the conclusion of the hearing.] 

Ms. SOLIS. And I would recognize Congressman Gonzalez from 

Texas for a line of questioning. He has 5 minutes. 

Mr. GONZALEZ. Thank you very much, Madam Chair. The question is going to be to Dr. Book because you had mentioned something about making available emergency converter box and then 

your time was up, and I am not going to let you get away with 

that. So what is an emergency converter box? 

Ms. BOOK. Well, I was just trying to make the argument that 

there needs to be some system for hardship cases and that broadcasters should have either a supply of boxes on hand at the broadcast stations or retailers should be empowered to provide a box to 

a hardship case and know that they will be reimbursed for that so 

there needs to be some last resort so that people can solve people’s 

problems. 

Mr. GONZALEZ. Which I think is a good suggestion and we need 

to start thinking in those terms so the next question kind of goes 

to that. Mr. McLean, I am trying to figure out the relationship between the deadline and such. In your written testimony you point 

out an important fact and that is going to be applications for the 

coupons will be accepted up until what date? 

Mr. MCLEAN. March 31 if there are sufficient resources to be 

able to fill coupon requests. 

Mr. GONZALEZ. What was that date again? 

Mr. MCLEAN. March 31. 

Mr. GONZALEZ. All right. And then these coupons will have an 

expiration? 

Mr. MCLEAN. Ninety days. 

Mr. GONZALEZ. Ninety days, so that conceivably would still be 

going to the retailers to purchase these boxes all the way up until 

90 days from whenever this coupon is issued, so that the supply 

has to be out there. I am not a business person. Obviously, I am 

in Congress and if I was a business person we would probably be 

running this show a little differently but inventory, are we going 

to have sufficient inventory because it seems to me that you are 

going to anticipate a surge of some sort and like most surges just 

regardless of their application the surge is temporary as well as the 

consequence of that surge so are you going to be—are these retailers going to be stocking tremendous numbers of converters figuring 

that after February 17 and so on that you are going to have a consistent high demand all the way 90 days after the March date? 

Mr. MCLEAN. I can report that our members are working very, 

very hard to assure that our customers have product available 

when they want it, but you have identified I think precisely the 

204 

challenge here because we are—we have no playbook. We have no 

prior program to look at. We have one future program. This is a 

once in 100 years, once in a lifetime transition, one of unprecedented complication, and one that is done on a free market basis 

where we have competitors unable to coordinate with each other on 

price or availability and you have like in Star Trek where you have 

the multi-level chess game where you have competitors in the market place moving product and price and supply in response to what 

other competitors are doing. 

We are analyzing the data from the coupon redemptions and fulfillments. We are looking at the data at the Wilmington experiment, and I know that they logistics and the buyers are studying 

that very hard to try to make the right decision. The big question 

is what happens when the coupon program ends. Do we have a 

product that suddenly is unpopular and we have shelves stocked 

with products that we cannot sell without a $40 coupon, so that is 

another piece of the puzzle that our buyers are trying to make 

independently of course of each other and to make sure the customers are happy, so we are working very hard to make sure that 

we don’t have a problem but we are in uncharted territory in general and it is going to take, I think, a high degree of data communication which thankfully we have received from NTIA and the 

FCC and the broadcasters to make sure that we can make adjustments as we approach those two critical dates. 

Mr. GONZALEZ. And my fear is that we don’t have that coordination as we get closer to it, and all I can say is what I am saying 

in anticipation, we had nothing about reissuance and that is an 

issue that has been out there for some time, under utilization, the 

number of boxes not being available, none of that. I know there is 

a certain degree of success but I am saying I hope this is not true, 

but I think the real challenge still awaits us as we get closer to 

that date. So all I am saying is let us just work together, try to 

give you as much predictability as possible so you retailers will 

have those boxes. 

Mr. Kittleman, I only have 4 seconds but I want to cover quickly, 

don’t Spanish language TV stations have a totally different situation than your TV station, and that is they got competitors you 

don’t have. Right over the border they are going to continue to 

broadcast in analog. Should that be a concern? 

Mr. KITTLEMAN. You are correct. They do compete directly with 

Mexico channels. I would point out the largest station in Mexico, 

XERB, is already digital in our market. 

Mr. GONZALEZ. And I am out of time. Thank you, Madam Chair. 

Ms. SOLIS. Thank you. Mr. Deal from Georgia for 5 minutes. 

Mr. DEAL. Thank you. I want to go to an issue that has already 

been alluded to and that is the fact that a number of retransmission consent agreements are going to expire around the end of 

the year, and some cable operators as we have heard Mr. 

McSlarrow enunciate are concerned that if the programming is 

simply pulled at the end of the year because of a failure to reach 

an agreement on retransmission that there probably will be a confusion as to whether or not that actually is attributable to the DTV 

transmission issue. I have a quote from NAB, and I am going to 

205 

ask Mr. Rehr and Mr. McSlarrow if they would respond to this 

after I give you the quote and then ask you a question. 

And the quote is this: ‘‘Many major broadcast events will occur 

in early 2009, think National Football League playoffs and Super 

Bowl, and that a quiet period longer than 1 month would shift significant negotiating leverage away from broadcasters to the multichannel video providers and without a resulting benefit to the public that could justify such a government thumb on the scale.’’ Now 

my question is, and this is attributable to NAB from a publication 

broadcast I cable, the question is this: what significant negotiating 

leverage is NAB referring to? Do you believe that the broadcasters 

on admission of having significant negotiating leverages due to government created rules whereby they have the leverage of must 

carry and the retransmission consent regulatory regime and the 

significant negotiating leverage created by cable operators not 

being allowed to shop the broadcast signals from neighboring 

DMAs or is it simply a natural result of the so-called free market 

system? Mr. Rehr, I will start with you and then I will go to Mr. 

McSlarrow. 

Mr. REHR. Thank you, Mr. Deal, for that question. I would like 

to, and I brought with me and I would like to put into the record, 

an explanation of the retransmission consent process. This hearing 

is about the DTV transition. We can get into the quiet period relating to it, but I think it will answer a number of concerns. Let me 

make just a couple points. Number one, the retransmission consent 

law has been in effect since 1992. That means that there have been 

five cycles of tens of thousands of contracts, agreements, between 

cable and satellite operators and broadcasters. You can count the 

number of problems where there hasn’t been some accommodation 

by all sides less than the number of fingers on my hand. 

So if we are looking at is it going to be a big problem and we 

multiply five cycles, which is probably in the upwards of 30,000 to 

40,000 contract less than 10 problems, that would give kind of the 

weight of significance to a potential problem. Number two, Congress wisely built in checks and balances since 1992. For example, 

the FCC does have a right if either party, not just broadcasters but 

cable operators as well are not operating in good faith. There has 

only been one occasion when FCC has said a party has not been 

negotiating in good faith and it wasn’t a broadcaster. It was a satellite distributor. 

The FCC has never found a broadcaster not operating in good 

faith. Point number three, local communities see the benefits of 

this local programming in this retransmission process and I have 

a great respect and a great admiration for my good friend, Kyle 

McSlarrow, but broadcasters, local broadcasters, have to choose for 

3 years must carry or retransmission consent. Once you choose retransmission consent there are a number of variable on the table 

which are negotiation with cable operators including program insertion options, spot sales, fiber runs between transmitters and 

head ends, promotion spot guarantees, channel position, tier placement, et cetera, et cetera, et cetera. It is all outlined in this kind 

of what I refer to as the Candyland way to understand retransmission. 

206 

Mr. DEAL. I apologize for interrupting you, but I am down to less 

than a minute. Let me use that for Mr. McSlarrow to respond. 

Mr. MCSLARROW. I don’t think this is a matter of good faith. I 

think this is the structure of the system. People in good faith can 

reach a result that harms consumers, and it is different in 2008 

and it is increasingly becoming different, I think, in the out years 

from the way it has been the last 15 years. The economics and the 

balance of leverage, if you will, was roughly equivalent for many 

years, and I think as David said in most cases people work it out 

in a way that serves consumers’ interests, but you are now talking 

about public statements from what used to be—and remember 

every broadcaster has said it today, free over-the-air. You are not 

talking about exorbitant cash demands. They are going to change 

the balance and put operators who stand in the shoes of their consumers in a position of having to either pass that cost on or to insist that it be something lower which is what raises the threat of 

pulling the signal. 

The quote that you just read, assuming that it is an accurate 

quote, I think, tells the story. The point is if you are saying we 

have a retransmission agreement that expires December 31, what 

would get us through the digital transmission—— 

Ms. SOLIS. Can you sum up real quick? 

Mr. MCSLARROW. Yes. You would naturally just say take it from 

that point through the transition. The fact that they have chosen 

January as a carve out is precisely because some stations, some 

broadcasters would like to threaten the loss of signals. That is the 

risk of confusion. 

Ms. SOLIS. OK. Thank you. Our time is almost up but I still have 

5 minutes so I want to go through my questions. But I want to just 

make a comment to Mr. Rehr, Mr. McSlarrow and others who have 

really worked with the Congress and the different entities in helping to bring about more awareness for the transition, particularly 

in the Spanish language media and the senior citizen and those different segments of our population. I really think that is great, but 

one of my questions still remains, how we do get the retailers to 

provide sufficient boxes there that are needed that are at a low cost 

preferably for many folks that can’t afford them, and what is it 

going to take to make that happen. That is a question I have generally for Mr. Romeo. 

But I want to hold off for a minute because I want to go to Mr. 

Candelaria. You come from Texas, the area that may be affected 

more heavily in a different way regarding the transition here. And 

I wanted to ask you what has been your feeling or what are you 

picking up out there in terms of the information that is getting out 

to the Hispanic community about the transition? 

Mr. CANDELARIA. Well, the information is getting out there but 

not to the rate that we would like for it to get out there. And the 

simple barrier here is the Spanish language. We have over 310,000 

people just in El Paso alone that are Spanish language dominant. 

They are not getting the information that they need on a regular 

basis. I mean they are watching our station but that is the difference between us and the English language stations. If their language was Spanish or at least bilingual then this wouldn’t be an 

207 

issue. This wouldn’t even be a question anymore and it wouldn’t be 

a fight. 

Ms. SOLIS. What about the issue regarding your opponents that 

say 4 years is too long and is actually going to be a cost that will 

be a burden on many that will be affected by this? 

Mr. CANDELARIA. Well, it is only a burden if they choose to continue analog but it is only optional. We have the same expense 

they do. We have converted, and our expenses are that much or 

more than any of the broadcast stations simply because of what we 

have, but the transition is we are asking for 4 years just to appease 

certain people, and I think that that will give us enough time at 

least to get the majority of the Hispanic population in compliance. 

Ms. SOLIS. Could you touch on the public safety aspect issue? 

Mr. CANDELARIA. Well, yes. In El Paso alone we had the 100-year 

flood a couple years ago and there were literally houses under 

water in El Paso. Imagine. And without our broadcasting signal 

and strength there were a lot of people that could have perished, 

and just the simple fact that, you know, natural disaster, you have 

the border war over there in Juarez where it is starting to spill 

over into El Paso where there is way over 1,000 people have been 

killed in Mexico alone, and it is a disaster that is just waiting to 

spill over to the U.S. side of the border, and that is the concern just 

to mention a few things that we are greatly concerned about as far 

as our public safety. 

Ms. SOLIS. I wanted to ask you about advertising revenues for 

local affiliates. That is an important part of this debate. If tens of 

thousands of Spanish dominant households opt to watch Mexican 

analog TV instead of purchasing a converter box to transition to 

U.S.-based digital television advertising revenue for both English 

language and Spanish language border stations based in the U.S. 

would undoubtedly be impacted. Specifically how would a large 

drop off of Spanish dominant viewers in the border region affect 

revenue for both English and Spanish language affiliates? 

Mr. CANDELARIA. Well, the shift, right now our station is the 

leading station in the market both in revenue and in ratings, and 

a lot of the over-the-air signals that are predominantly Spanish 

dominant households receive that jut through the over-the-air 

waves, and the problem here is that there would be a shift because 

it is a dire rated market, and that shift would go away to the Spanish language Mexican stations simply because they are broadcasting in analog when everybody else is broadcasting—— 

Ms. SOLIS. Is it disadvantaging some of our folks—— 

Mr. CANDELARIA. It is a total disadvantage and the shift would 

go to the English station rating. 

Ms. SOLIS. Just one last question. We talked about the expiration 

of the coupons and if this program, if this bill were to be signed 

obviously there would have to be a whole new mechanism set up 

for something like that. How would you see something like that 

working? 

Mr. CANDELARIA. Well, it has got to be promoted well, and there 

has got to be an extension on the couponing, and we are over delivering our redemption rate in El Paso to the tune of about 240 percent, so I think with a little bit more time that is all we are asking 

208 

is just a little more time to consistently promote, then we can 

foreseeably get the majority of the Hispanic population on board. 

Ms. SOLIS. And you are saying opting in is kind of a key word 

here that people need to know about. OK. We will recess momentarily for the chairman to come back. He is on his way back here 

to the committee and I have to go vote, so we will recess momentarily. Thank you to all the witnesses, by the way. 

[Recess.] 

Mr. MARKEY. The hearing is reconvened with apologies to our 

panel. Just for the purposes of understanding what is going on, we 

do not have a filibuster rule in the House of Representatives so you 

cannot filibuster. However, you can call any number of irrelevant 

roll calls to adjourn and do many things which is a substitute for 

what actually makes filibustering look rational. So that is what we 

are now engaged in out on the House floor and why the members 

have been running in and out like it is the 400 meter relay in the 

Olympics, and we just hope no one drops the gavel here on the 

Democratic side so that we are not disqualified. And we are trying 

our best here to be respectful of the panel, and we appreciate all 

the effort that you have made to be here and to present your testimony. 

So, Mr. McLean, how can we get retailers to stock more of the $40 analog pass-through devices so that consumers can watch this 

brand new technology? 

Mr. MCLEAN. Well, our members have worked extraordinarily 

hard to get products onto the shelves. When they go to market individually and independently to purchase products, they have to be 

able to buy it at a scale that could fill hundreds of stores. And it 

is a complex matrix of features and price points and quality and 

returns that the retailers have to make. Our counsel has done a 

survey of online suppliers and has identified the $40 box available, 

but we have found that the supply chain issues that we faced at 

our last hearing were very severe and it required rapid action and 

in some cases extraordinary absorption of costs in order to be able 

to get pass-through boxes onto shelves. 

Among the members they have had to incur costs for air freighting the pass-through products. There has been a tremendous 

amount of training and point of sale requirements and complying 

with the program. As a coalition of competitors, we cannot do any 

kind of coordination on price or product so each one of our members are making individual decisions. I will let the chairman know, 

however, with Chairman Martin’s letter introduced into the record 

today and published on the web last night everyone of our members is aware of Chairman Martin’s request about the $40 box. 

Mr. MARKEY. We are going to have a really, really difficult situation along the border. And what do you need in order to insure that 

all the companies are cooperating at the point at which that becomes a much more urgent matter? What do you need from us? Do 

you need an anti-trust exemption for that purpose? Do you need 

something that we can make legal for a temporary period of time 

in order to deal with the specific situation because I would like to 

be able to find a way in which we can authorize all of you to go 

into one room and then all of you are responsible for putting together a plan and then we can hold you all accountable if someVerDate Nov 24 2008 10:45 Dec 29, 2010 Jkt 037690 PO 00000 Frm 00214 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS\110-148 CHRIS
209 

thing goes wrong rather than saying, well, we didn’t have stores 

here, there or the other place. So do you need an antitrust exemption? 

Mr. MCLEAN. Well, our members have of course accepted the 

premise of the program itself which did not—— 

Mr. MARKEY. No, that is great, that is great. I just don’t like the 

fact that you are not able to talk to each other comfortably if that 

is what I am picking up from your testimony. 

Mr. MCLEAN. Well, we certainly under the current law cannot coordinate price, product selection, terms of sale. That is absolutely 

prohibited as a coordinated basis. In terms of the border, I can tell 

you that each one of our members has gone to extraordinary 

lengths to be able to have Spanish language and English language 

availability of information. There are installation videos available 

in Spanish. There is tremendous outreach through the DTV coalition into Hispanic community in order to be able to put forward the 

urgency of conversion, and in the fact the polling validates that 

among the highest level of awareness is in the Hispanic community. 

Mr. MARKEY. So they can’t talk to each other though. Can they 

talk to you? Can each company talk to you? Does each company 

talk to you? 

Mr. MCLEAN. Companies do talk and there are things they cannot tell other companies. 

Mr. MARKEY. You can know everything though, is that right? 

That is the point I am trying to reach. You can know everything 

even if you can’t share it with the other companies? 

Mr. MCLEAN. Counsel advises me that I may not be able to know 

everything. I certainly would not pretend to know everything. 

Mr. MARKEY. How about this, if we asked you the questions that 

we want to have answered, could you ask each one of the companies to tell you what the answers to those questions are and then 

you tell us, would that violate any law? 

Mr. MCLEAN. It depends. Again, counsel advised me it depends 

on the subject matter. However, that is precisely how we prepared 

our testimony today is—— 

Mr. MARKEY. I want you to share the specifics with us and then 

we will know who to really cut down hard on. So does that violate 

anything that you can then tell us and then we will know who you 

think isn’t doing the job, and if you tell us everyone is doing the 

job then we can rely upon you to be the person who is determined 

that they are all doing the job. Can we construct something like 

that? 

Mr. MCLEAN. I can certainly report to you that each one of our 

members is working very hard—— 

Mr. MARKEY. I know that. What I would like to do here is make 

sure that it is coordinated to the maximum extent possible so that 

there are companies getting an A in your opinion, a B, not generally. Generally, the class is doing very well. But there is a first 

row and a last row and then it averages out to a grade in the middle. I just want to know who is getting the A’s if you can kind of 

tell us, and who is in the last row and then we can coordinate to 

get Mr. Candelaria down here a little bit more comfort that the 

stores are going to have—we got to know who is not doing the job. 

210 

Mr. MCLEAN. And, Mr. Chairman, your analogy of the classroom 

is exactly perfect because some of my class members excel in certain areas and others excel in others, and yet they are not coordinated in any way. We have some members that are online retailers, some members that have telephone services, some members 

that are exclusively consumer electronics and some members that 

are general retailers. 

Mr. MARKEY. I appreciate that. You know, the nuns at the Immaculate Conception grammar school, we had 60 boys in the room 

and there were six rows of 10 a piece. There was a first row and 

a last row, if you know what I mean. In the last row the sister 

would always let them know what they needed to do to get out of 

the last row, but you needed first to know who was in the last row. 

She had high expectations for them because she really wanted 

them to maximize all their God-given abilities but it wasn’t as 

though there was some charitable attitude that there was an average here in the middle that they could benefit from. OK. So all I 

am saying to you is, and we are going to press you on this and then 

hold you accountable that we are going to use you as an intermediary to insure that there is accountability so that if during that 

period of time which has more urgency something has gone wrong, 

OK, that you will have had the ability to know. 

Mr. MCLEAN. And our ability to inquire on price and product 

plans is limited. I do not want to be sent to Mother Superior’s office 

as a result of those inquiries. 

Mr. MARKEY. Mr. Setos, your testimony paints the broadcast flag 

as pro-consumer and you are sitting next to Mr. Murray who differs as a consumer advocate. Could you tell me succinctly why you 

think he is mistaken and then, Mr. Murray, if you could respond. 

Mr. Setos. 

Mr. SETOS. Thank you, Chairman. The challenge we face, and I 

sit here not as a producer of a movie studio, not as a broadcast network, but as the operator of 27 full power local broadcast stations, 

and many corporations are operated like this. The local broadcast 

stations are very concerned. The ones that we own and operate, 

they will not be able to compete for high quality, high value content in the coming years because their content can now be absconded with and transmitted all over the world in digital pure 

high definition form with impunity, and other platforms such as 

pay television operators, cable satellite, even on the Internet like 

iTunes insure that the content is only used as the official bargain 

to the consumer so states. 

And so those local broadcasters are saying to their own company 

we are very exposed, we are very concerned, and so the benefit that 

it brings is as I said in my testimony it continues the promise of 

free local television in the market. On the other side of the equation is what harm might this cause, and as I have mentioned in 

this testimony and previous testimonies the flag doesn’t add any 

cost to the product nor any limitations to the product nor does it 

obsolete any product that was ever sold to a consumer or probably 

is going to be sold to a consumer so we see no down side except 

what the rule that the Commission did pass in fact insures that 

products that see the flag in a broadcast won’t allow that content 

to be indiscriminately redistributed. Thank you, Mr. Chairman. 

211 

Mr. MARKEY. Mr. Murray. 

Mr. MURRAY. I come at this as a big believer in innovation and 

competition. I think that we are better suited by if we turn the 

Federal Communications Commission into the Federal Computer 

Commission and have them have purview over a series of consumer 

electronics products and have to have companies vet business plans 

through the agency, I think that is ill suited to innovation and ill 

suited to strong competition. I don’t see revenues eroding rapidly. 

In fact, some have made the case that market share is growing because of additional content distribution. 

We are not saying people shouldn’t be able to protect their products. We just don’t think that they should be able to fob off a mandate onto the whole of the consumer electronics industry to get that 

done. We have been through this throughout the broadcast flag. We 

thought it was anti-consumer then. We think it is anti-consumer 

now. 

Mr. MARKEY. Back to you, Mr. Setos, 30 seconds. 

Mr. SETOS. Well, the court threw it out because the judicial 

branch pointed out that the FCC didn’t have the jurisdiction, not 

on the merits, not on the substance. 

Mr. MARKEY. Back to you, Mr. Murray. 

Mr. MURRAY. Right. The FCC doesn’t have jurisdiction, I think, 

to be regulating consumer electronics products given a mandate to 

manufacturers. The story of the motion picture industry has been 

a struggle to lock down technology since the 1980s. We have heard 

from them then that the VCR was to—the motion picture industry 

is the Boston Strangler as to the woman alone and of course the 

end of that story was that it became the most lucrative slice of 

their copyright pie. But how do we lock that technology down? 

Then I don’t think we would have seen all of the benefits of innovation that we have seen over the last 20 years. 

Mr. MARKEY. Well, thank you. We thank each of you. The roll 

call did go off one more time, and there is 5 minutes left to go on 

the House floor on that roll call, so I think I can report to you that 

a sense of relief can set in down at the witness table that no members of Congress will return here to ask you any more questions. 

So it is with the thanks of the committee, and we know that everyone here is interested in the solution. We just have to make sure 

that everyone else that is related to each one of the entities that 

is represented down here has the same sense of commitment and 

that is really our highest goal. 

We think we can do this but we absolutely have to have a plan 

because the consequences can be catastrophic. Thank you so much. 

The hearing is adjourned. 

[Whereupon, at 1:25 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

STATEMENT OF HON. EDOLPHUS TOWNS

Thank you Chairman Markey and Ranking Member Stearns for holding this hearing. Our continued and vigorous oversight of all issues surrounding the DTV transition serves a crucial role in making sure that our constituents can enjoy the enhanced consumer and public safety benefits that this transition will provide. It is 

important to make sure that the transition date does not slip. I commend my colleagues on this subcommittee for their attention to this issue. 

212 

I would like to welcome the witnesses and thank them for their work. I am particularly interested to hear of the results of the test run in North Carolina. I understand that the public awareness of the switch was high but that in executing the 

switch and hooking up the equipment there were major problems. I believe this 

shows that the FCC and the stakeholders still have a considerable amount of work 

to do and urge them to concentrate almost exclusively on these issues as we go forward to February 17, 2009. I remain concerned that seniors, non-English speaking, 

and lower income Americans are in danger of being left behind. 

I look forward to all the witness’s suggestions about what if anything Congress 

can do to make sure this transition is as smooth as possible. 

Thank you and I yield back the balance of my time. 

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