Digital Television Transition: Preliminary Information on Initial Consumer Education Efforts
Published: 2007-09-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: On February 17, 2009, federal law requires all full-power television stations in the United States to cease analog broadcasting and broadcast digital-only transmissions, often referred to as the digital television (DTV) transition. Federal law also requires the National Telecommunications and Information Administration (NTIA) to create a program that subsidizes consumers' purchases of digital-to-analog converter boxes. After the transition, households with analog sets that rely on over-the-air broadcast signals must take action or they will lose television service, but some households might not be aware of this potential disruption. This testimony provides preliminary information on (1) the consumer education efforts currently underway, (2) education efforts being planned, (3) difficulties with the implementation of consumer education programs, and (4) ongoing GAO work on consumer education and awareness regarding the transition. GAO interviewed officials with the Federal Communications Commission (FCC) and NTIA. Further, GAO met with a wide variety of industry and other stakeholders involved with the transition, including members of the DTV Transition Coalition--a group of public and private stakeholders, and experts on strategic communications. GAO discussed this testimony with FCC and NTIA officials and incorporated their comments.
section_title: What GAO Found
paragraphs: A number of federal and private stakeholders have begun consumer education campaigns, with both independent and coordinated efforts underway. FCC has taken several steps to promote consumer awareness, such as launching a Web site, participating in events intended to educate the public, and requiring sellers of televisions to include consumer alerts on non-digital televisions. NTIA has created brochures in English and Spanish to provide the public information about its converter box subsidy program and is partnering with organizations to perform outreach to disadvantaged groups. Earlier this year, the DTV Transition Coalition was launched to help ensure that no consumer is left without broadcast television due to a lack of information. Over 160 private, public, and non-profit groups have joined the Coalition to coordinate consumer education efforts. While widespread and comprehensive consumer education efforts have yet to be implemented, various efforts are currently being planned. FCC, NTIA, and private sector stakeholders have plans to further educate consumers as the DTV transition nears. For example, voluntary public service announcements to raise awareness of the transition are planned by industry groups and FCC is considering requiring broadcasters, manufacturers and cable and satellite providers to insert various messages and alerts in their products and programming. In addition, the converter box subsidy program will have a consumer education component. Because many education efforts are in the planning or early stages of implementation, it is too early to tell how effective these efforts will be. Various factors make consumer education difficult. While private sector stakeholders are participating in outreach efforts, these actions are voluntary and therefore the government cannot be assured of the extent of private sector efforts. Strategic communications experts from industry, government, and academia identified potential challenges to a consumer education campaign, including (1) prioritizing limited resources to target the right audience, (2) educating consumers to help protect them from making unnecessary purchases, (3) reaching underserved populations, and (4) aligning stakeholders to form a consistent, coordinated effort. GAO has work planned to assess the progress of consumer awareness. In particular, GAO plans to conduct a series of surveys to determine the population affected by the DTV transition, levels of awareness about the transition, and demographic information about the affected population. Throughout the transition, GAO will continue to monitor government and industry education efforts and analyze these efforts relative to best practices for consumer education campaigns. GAO plans to review the government's responsibility for consumer education, monitor the outcome of FCC's rulemaking related to consumer education, and collect details of the consumer education component of the converter box subsidy program.

section_title: Letter
paragraphs: I am pleased to be here today to report on our work for the House Energy  and Commerce committee and this committee on the progress made in  consumer education efforts for the digital television (DTV) transition. We  are currently finalizing a report on initial public and private sector efforts  underway to implement the transition; as such, the findings that I am  reporting to the Committee today are preliminary in nature and principally  related to consumer education and outreach programs.
A primary goal of the DTV transition is for the federal government to  reclaim spectrum that broadcasters currently use to provide analog  television signals. The spectrum that the federal government will reclaim  at the end of the transition is considered highly valuable because of its  particular technical properties. In all, the DTV transition will free up 108  megahertz (MHz) of spectrum. The Federal Communications Commission  (FCC) has reallocated 24 MHz of the spectrum that will be recovered for  public safety purposes, which became a higher priority following the  terrorist attacks of September 11, 2001. FCC will auction the remaining  spectrum for commercial purposes, with the resulting proceeds allocated  for, among other things, reducing the federal deficit.
The Digital Television Transition and Public Safety Act of 2005 mandates  the cessation of analog television broadcast signals on February 17, 2009.  After that date, households that had previously viewed television on  analog sets solely through the reception of over-the-air signals must take  action to ensure that they have the necessary equipment, such as a digital- to-analog converter box, or subscription video service to be able to view  the digital broadcast signals. If they do not take such action, they will lose  the ability to view the digital signals on their analog sets. The act also  directed the National Telecommunications and Information  Administration (NTIA) to establish a $1.5 billion program through which  households can obtain coupons for the purchase of digital-to-analog  converter boxes. NTIA issued a final rule that adopted regulations to  implement the converter box subsidy program, and in August 2007,  selected IBM Corporation (IBM) to administer the program. Beginning  January 1, 2008, households can request up to two $40 coupons toward the  purchase of eligible digital-to-analog converter boxes.
Three private sector groups have asserted various estimates of the number  of households that rely solely on over-the-air television. While one group  estimates that 11 percent of households rely on over-the-air broadcasts,  another group’s estimate is 16 percent of households, and a third group’s  estimate is 20 percent of households. Further, private sector estimates  claim an additional 5 percent to 27 percent of households that subscribe to  cable or satellite television have at least one television set that receives an  over-the-air signal. One group asserted that households that rely on over- the-air broadcasts are disproportionately comprised of older citizens than  other households. Although it is unclear what percentage of households  that rely exclusively on over-the-air broadcasts use analog rather than  digital television sets, millions of those households potentially stand to be  left without any television service unless they take action. To help the  public understand the DTV transition and the various options they have,  consumer education and awareness programs are underway and  additional programs are being planned.
While there are many steps necessary to successfully complete the DTV  transition, my testimony today will focus on consumer education and  awareness. In particular, I will discuss (1) consumer education efforts  currently underway, (2) education efforts and programs being planned, (3)  the difficulties that may arise in the implementation of such programs, and  (4) ongoing work on DTV consumer education and awareness that we will  undertake.
To meet these objectives, we interviewed officials with FCC and NTIA, as  well as a wide variety of industry and other private stakeholders, such as  broadcasters, manufacturers, retailers, and consumer advocacy groups.  Further, we consulted strategic communications experts representing  public, private, and academic organizations to identify potential challenges  that might obstruct consumer education efforts. We performed our review  from January 2007 through August 2007 in accordance with generally  accepted government auditing standards. We discussed this testimony  with FCC and NTIA officials to obtain their comments. FCC and NTIA  provided additional information that we incorporated where appropriate.
subsections: section_title: Background
paragraphs: The United States is currently undergoing a transition from analog to  digital broadcast television, often referred to as the DTV transition. The  transition will enable the government to allocate valuable spectrum from  analog broadcast to public safety and other purposes. Further, digital  transmission of television signals provides several advantages compared  to analog transmission, such as enabling better quality picture and sound  reception as well as using the radiofrequency spectrum more efficiently  than analog transmission. With traditional analog technology, pictures and  sounds are converted into “waveform” electrical signals for transmission  through the radiofrequency spectrum, while digital technology converts  these pictures and sounds into a stream of digits consisting of zeros and  ones for transmission.
The Digital Television Transition and Public Safety Act of 2005 addresses  the responsibilities of two federal agencies—FCC and NTIA—related to  the DTV transition. The act directs FCC to require full-power television  stations to cease analog broadcasting and to broadcast solely digital  transmissions after February 17, 2009. As we have previously reported,  households with analog televisions that rely solely on over-the-air  television signals received through a rooftop antenna or indoor antenna  must take action to be able to view digital broadcast signals after the  termination of analog broadcasts. Options available to these households  include (1) purchasing a digital television set that includes a tuner capable  of receiving, processing, and displaying a digital signal; (2) purchasing a  digital-to-analog converter box, which converts the digital broadcast  signals to analog so they can be viewed on an existing analog set; or (3)  subscribing to a cable, satellite, or other service to eliminate the need to  acquire a digital-to-analog converter box. The act also directed NTIA to  establish a $1.5 billion subsidy program through which households can  obtain coupons toward the purchase of digital-to-analog converter boxes.  The last day for consumers to request coupons is March 31, 2009, and  coupons can be redeemed through July 9, 2009. As required by law, all  coupons expire 90 days after issuance. Consumers can redeem their  coupons at participating retailers (both “brick and mortar” and online) for  eligible converter boxes.
To help inform consumers about the transition, eight private sector  organizations launched the DTV Transition Coalition in February 2007.  These eight organizations are the Association for Maximum Service  Television, Association of Public Television Stations, Consumer  Electronics Association, Consumer Electronic Retailers Coalition,  Leadership Conference on Civil Rights, LG Electronics, National  Association of Broadcasters, and the National Cable and  Telecommunications Association. These founding organizations comprise  the Coalition’s steering committee and make decisions on behalf of the  Coalition. To better represent the interests of at-risk or underserved  populations—such as the elderly—AARP later joined the steering  committee. The Coalition’s mission is to ensure that no consumer is left  without broadcast television due to a lack of information about the  transition. Currently, the Coalition has over 160 member organizations  comprised of business, trade and industry groups, as well as FCC.
Recent surveys conducted by industry trade associations indicate that  consumer awareness of the digital transition is low. The Association for  Public Television Stations reported in January 2007 that 61 percent of  participants surveyed had “no idea” that the transition was taking place.  Another study conducted by the National Association of Broadcasters  focused on households that primarily receive their television signals over- the-air—and will therefore be most affected by the transition—and  reported that 57 percent of those surveyed were not aware of the  transition. Both surveys found that most people with some awareness of  the transition had limited awareness of the date the transition will take  place.
section_title: Federal Government and Private Stakeholder Consumer Education Efforts Are Underway
paragraphs: Federal and private stakeholders are making progress in educating  consumers about the DTV transition, with both independent and  coordinated efforts underway. FCC and NTIA have been involved in  consumer education and awareness programs and some private sector  organizations are voluntarily taking the lead on outreach efforts.
FCC has taken several steps toward educating consumers about the  transition. For example, FCC has launched a Web site (DTV.gov), which,  among other things, provides background information on the DTV  transition and answers common consumer questions. In addition, FCC has  met with some industry groups, consumer groups, and other government  agencies and participated in public events intended to educate audiences  about the transition. Moreover, in April 2007, FCC adopted a rule requiring  all sellers of television-receiving equipment that does not include a digital  tuner to prominently display a consumer alert that such devices will  require a converter box to receive over-the-air broadcast television after  February 17, 2009. To ensure that retailers are in compliance, FCC staff  have inspected over 1,000 retail stores and Web sites and issued over 250  citations with potential fines exceeding $3 million. In addition, FCC has  issued notices to television manufacturers with potential fines over $2.5  million for importing televisions without digital tuners. In June 2007, FCC  announced that it had re-chartered an intergovernmental advisory  committee comprised of 15 representatives from local, state, and tribal  governments to help it address, among other things, consumer education  about the DTV transition. Similarly, it re-chartered a consumer advisory  committee that will also make recommendations to FCC about the  transition on behalf of consumers, with specific representation for people  with disabilities and other underserved or at-risk populations.
NTIA has also taken initial steps towards educating consumers about the  transition. NTIA has statutory responsibility for the converter box subsidy  program, for which Congress appropriated up to $5 million for education  efforts. According to NTIA, its education efforts are focused on the  subsidy program and more specifically on five groups most likely to lose  all television service as a result of the transition: (1) senior citizens, (2) the  economically disadvantaged, (3) rural residents, (4) people with  disabilities, and (5) minorities. According to NTIA, it has begun outreach  efforts to these groups through partnerships with private organizations as  well as other federal agencies. Also, it has created “information sheets” for  consumers, retailers, and manufacturers that outline the subsidy program  and are available on its Web site. NTIA said it has provided informational  brochures in English and Spanish to the public and provided a copy to  every member of Congress and federal agencies that serve some of the  populations noted above. The agency also created a consumer hotline that  provides information about the transition in English and Spanish, and TTY  numbers that provide information in English and Spanish to the hearing  impaired. In addition, in August 2007, NTIA contracted with IBM to  implement the broad consumer education component about the program.
On a voluntary basis, some private stakeholders have begun implementing  measures to inform consumers about the DTV transition. As previously  mentioned, one such private-sector led effort is the DTV Transition  Coalition, which has developed and consumer tested various messages  about the transition, using surveys and focus groups of the affected  consumers—the general population, senior citizens, minority groups, and  over-the-air analog television households—to understand what messages  are most effective in informing them about the transition. Subsequently,  the Coalition said it agreed upon one concise message that includes  information about the transition itself, the rationale for the transition, and  the ways consumers can effectively switch to DTV. In particular, the  Coalition suggests consumers can prepare for the transition by purchasing  a DTV converter box, purchasing a new television set with a built in digital  tuner, or subscribing to a pay television service such as cable, satellite, or  telephone company video service provider. The Coalition said its member  organizations will distribute this information to their constituents,  including senior citizens, the disabled, and minority groups. The Coalition  message will also be delivered to media outlets.
In addition to coordinated efforts within the Coalition, private sector  organizations also have independent education efforts underway. For  example, a number of industry associations host Web sites that inform  consumers of, among other things, common consumer questions about the  transition, how to check if the television they own is digital-ready, and  how to dispose of analog television sets. One national retailer told us that  it added a feature to its registers so that when a consumer purchases an  analog television, a message about the transition is printed on the bottom  of the receipt.
section_title: Many Consumer Education Efforts Are Still in the Planning Stages and Have Not Been Widely Implemented
paragraphs: Widespread and comprehensive consumer education efforts have yet to be  implemented, but additional efforts are currently being planned. FCC,  NTIA, and private sector stakeholders have plans to further educate  consumers as the digital transition nears. The converter box subsidy  program, to be administered by NTIA, will also have a consumer education  component implemented by its contractor, IBM. Because many education  efforts are in the planning or initial stages of implementation, it is too early  to tell how effective these efforts will be.
FCC has solicited input on proposed consumer education programs. In  August 2007, in response to a letter containing proposals on advancing  consumer education submitted by members of Congress, FCC released a  notice of proposed rulemaking soliciting public comments. These  proposals include requiring television broadcasters to conduct on-air  consumer education efforts and regularly report on the status of these  efforts, requiring cable and satellite providers to insert periodic notices in  customers’ bills about the transition and their future viewing options, and  requiring manufacturers to include information on the transition with any  television set or related device they import or distribute in the United  States. Each of the requirements mentions civil penalties for  noncompliance. Another proposal on which FCC sought comment would  have FCC work with NTIA to require that retailers participating in the  converter box subsidy program detail their employee training and  consumer information plans, as well as have FCC staff spot check the  retailers for compliance. Also, FCC sought comments on a proposal  requiring partners identified on FCC’s DTV.gov Web site to report their  specific consumer outreach efforts. The comment period on the notice of  proposed rulemaking is scheduled to close on September 19, 2007; the  period to file any rebuttal closes October 1, 2007.
NTIA also has not fully implemented education efforts about its subsidy  program in large part because it is contracting out the consumer education  component of its program. The contract was recently awarded in the  middle of August 2007 to IBM and plans are in the development stage.
Many private sector consumer education efforts are in the planning stages  and have yet to be fully implemented. Representatives from private sector  organizations told us there are several reasons why they are waiting to  fully launch their consumer education campaigns. In particular, some said  they are trying to time their education efforts for maximum effectiveness  and that they do not want to start too early and possibly lose the attention  of consumers later on. Another reason is that they are waiting for key  events to occur, such as the availability of converter boxes in retail stores,  so that education efforts can contain complete information. A number of  nonprofit organizations told us that a lack of dedicated funding hampers  their ability to educate and outreach to their constituents. Through its  many member organizations, the DTV Transition Coalition intends to  disseminate information about the transition in a variety of formats,  including through presenting at conferences, creating media attention, and  distributing informational materials to Congressional offices. The National  Cable and Telecommunications Association has created public service  announcements about the transition in both Spanish and English, which  will be aired by cable operators and networks in markets throughout the  country in the fall of 2007. The National Association of Broadcasters also  has plans to launch a public service announcement campaign related to  the transition by the end of 2007, which will air on its local television  broadcasting affiliates, independent stations, and broadcast networks.
section_title: Difficulties Remain in the Implementation of Consumer Education Programs
paragraphs: Despite efforts currently underway and those being planned, difficulties  remain in the implementation of consumer education programs. Private  sector organizations are participating in outreach efforts, but these actions  are voluntary and therefore the government cannot be assured of the  extent of private sector efforts. Moreover, given the different interests  represented by industry stakeholders, messages directed at consumers  vary and might lead to confusion. For example, in addition to providing  information about why the transition is occurring, some industry  stakeholders have incentives to provide consumers with information on a  wide host of technology equipment or services that consumers could  purchase, at varying costs. Advocates for the elderly, disabled, and non- English speaking households told us that they are concerned that their  members will become confused by the options and end up purchasing  equipment they do not need or more expensive equipment than necessary  to maintain their television viewing.
Further, we heard from strategic communication experts from industry,  government, and academia that potential challenges might obstruct  consumer education efforts. In particular, the experts and others  highlighted several challenges:    Prioritizing limited resources. With limited time and financial resources,  it is likely to be a challenge for stakeholders to determine how best to  allocate those resources within the campaign—for example, whether to  target a smaller audience over a set period of time, versus targeting a  broader audience over a shorter period of time. This is applicable because,  according to industry stakeholders, there may be specific groups that are  more vulnerable than others to losing television service.
Educating consumers who do not necessarily need to take action. Many  of the outreach efforts will be focused on educating consumers on what to  do to keep their television sets from going dark after the termination of  analog broadcasts. However, a large proportion of U.S. households will  not need to do anything—for example, because they have cable or satellite  television service that will enable their analog set to continue to display  programming. Because many messages focus on the actions that  households that rely on over-the-air analog broadcasting need to take,  consumers unaffected by the transition might become confused and  purchase equipment they do not need. In our past work looking at a  similar digital transition in Germany, we have described this potential  confusion to cable and satellite households as a challenge of educating  consumers about the transition.
Reaching underserved populations. Conveying the message to  underserved populations, such as senior citizens, the disabled, those  residing in rural areas, or non-English speaking households, will provide  an added challenge. Many groups reaching out to consumers about the  transition are doing so on Web sites, which may not be available to people  who lack Internet access or are less technically savvy. Another challenge  is providing information in a wide variety of formats, such as in different  languages for non-English speaking consumers and in text, video, voice,  and Braille for the disabled. Overall, a challenge of consumer education is  that those households in need of taking action may be the least likely to be  aware of the transition.
Aligning stakeholders. Industry representatives also noted the challenge  of aligning stakeholders—some of whom are natural competitors—to  work together. In our past work, we have reported that federal agencies  engaged in collaborative efforts—such as the transition—need to create  the means to monitor and evaluate their efforts to enable them to identify  areas for improvement. Reporting on these activities can help key decision  makers within the agencies, as well as clients and stakeholders, to obtain  feedback for improving both policy and operational effectiveness. Some  progress in aligning stakeholders, such as the formation of the DTV  Transition Coalition, has been made, but some stakeholders may have  competing interests. For example, recent announcements produced by the  National Cable and Telecommunications Association invoke the DTV  transition, but ultimately promote the role of cable television in the  transition.
section_title: Our Future Work Will Focus on Consumer Awareness of the DTV Transition
paragraphs: In our ongoing work for the House Energy and Commerce committee and  this committee, we plan to assess the progress of consumer education and  awareness about the DTV transition. We will continue to monitor  consumer education programs and plan to conduct a series of consumer  surveys throughout the year prior to the transition date. These surveys will  be aimed at determining the population that will be affected by the DTV  transition and the public awareness of the transition. In determining the  affected population, we will look at the percent of the population relying  on over-the-air broadcasts for their primary television, as well as the  percent of the population with non-primary televisions being used to  watch over-the-air television. Additionally, we will review the  demographic characteristics of the affected population to determine what  groups might be most disrupted by the transition. We will survey for public  awareness of the DTV transition, and specific knowledge of the transition,  such as when the transition will take place. We will seek to determine the  level of public awareness of those who will be affected by the transition  and awareness of the converter box subsidy program and other options for  viewing digital signals after the transition. We plan to report on changes in  consumer awareness over time by conducting surveys throughout the  transition process.
Furthermore, we will continue to assess government and industry  consumer education efforts and will analyze the efforts compared with key  practices for consumer outreach. We will review the government’s  responsibility for consumer education, monitor the outcome of FCC’s  notices of proposed rulemaking regarding the transition, and collect  details on IBM’s consumer education plan as they become available.
Mr. Chairman, this concludes my prepared statement. I would be happy to  respond to any questions you or other Members of the Committee may  have at this time.
section_title: Contacts and Acknowledgements
paragraphs: For questions regarding this testimony, please contact Mark L. Goldstein  on (202) 512-2834 or goldsteinm@gao.gov. Individuals making key  contributions to this testimony included Matthew Cail, Colin Fallon, Simon  Galed, Bert Japikse, Crystal Jones, Sally Moino, Andrew Stavisky, and  Margaret Vo.
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