All U.S. households with televisions that use analog technology will be eligible for $40 discount coupons to buy digital converter boxes, the Commerce Department said on Monday. That means less-affluent consumers who have only analog TVs and rely solely on free over-the-air television will line up for a coupon alongside households that subscribe to cable or satellite service, or already own digital televisions.
U.S. television stations are required to switch to only digital broadcasts by February 17, 2009. An estimated 20 million households now rely solely on free over-the-air television. Analog televisions could go dark at that time if owners do not get a converter box, subscribe to satellite or digital cable, or replace their TV with a digital television.
Some industry sources have estimated the price of a converter box could range between $50 to $60.
“There are a number of options for consumers to effect transition on their own … This program is one option for consumers,” said John Kneuer, head of the National Telecommunications & Information Administration (NTIA), a Commerce Department agency responsible for the converter box coupon program. The NTIA expects to have a system in place to process coupons starting on January 1, 2008, he said.
“We don’t expect the money to run out,” Kneuer added.
All households will be eligible to request up to two $40 coupons to be used to buy up to two digital-to-analog converter boxes until the $990 million program is exhausted. At that point, Congress could approve another $510 million for the program, but the discount coupons would be limited to households that rely on over-the-air analog TVs.
Some lawmakers have expressed concern about the digital TV transition and suggested pushing the date back. On Monday, John Dingell, the chairman of the House Committee on Energy and Commerce, criticized the NTIA plan.
“If the administration believes additional funds are needed to prevent consumers’ television sets from going dark, then it should ask the Congress for such funding,” Dingell, a Michigan Democrat, said.
Before announcing the program on Monday, the NTIA considered whether to limit coupons to low-income households, such as families living below the poverty level. Industry groups back the NTIA plan, saying it provides “much needed certainty” for broadcasters, electronics manufacturers, retailers and consumers.
“I think it is important to understand that a number of consumers and homes, where one part of the home subscribes to cable, there are other parts of the home that don’t,” said David Donovan, president of the Association for Maximum Service Television, a trade association for the television and broadcast industry.
“During a hurricane, or during an earthquake, when over- the-air-transmission is the only signal that is out there and available, it would seem to make sense to have that connection,” Donovan said. During the next few months, the NTIA will choose a contractor to run the coupon program that the government agency will oversee.