The Department of Commerce’s National Telecommunications Information Administration has tapped IBM to help manage the government coupon program aimed at helping consumers pay for the converter boxes they may need to watch digital TV on analog sets.

In a move crucial to the nation’s digital TV transition, NTIA today awarded IBM a contract worth up to $120 million. IBM will design a Web site, phone center and fulfillment procedures to track the issuing and redemption of the $40 coupons the government is offering to households without cable.

“This is a major milestone toward implementing a successful coupon program to ensure the switch from analog to digital television is completed smoothly and as planned,” said NTIA Administrator John Kneuer. “By awarding the contract on schedule, NTIA is preparing to be open for business so consumers may request coupons starting Jan. 1, 2008, as required by law.”

The United States switches TV broadcasting from analog to digital on Feb. 17, 2009. On that day, millions of analog sets not connected to a cable or satellite box will go dark unless they are connected to a converter box.

Those boxes are expected to cost up to $70 each. The government has set aside up to $1.5 billion to provide $40 discount coupons to households that could lose service.

There has been increasing concern among congressional Democrats that the coupon program won’t be in place in time and that the $1.5 billion isn’t enough to aid all the households needing help.

Democrats have talked of delaying the transition date if too many consumers will lose signals.
In announcing the contract today, NTIA said IBM will start work immediately. As of Jan. 1, consumers may apply for the coupons by calling 888-DTV-2009 or going to the Web site, www.ntia.doc.gov/dtvcoupon.

IBM’s contract calls for consumer education, coupon distribution to consumers and retail stores and financial processing to reimburse retailers and track redemptions.

An NTIA spokesman said IBM also will help develop a plan for spending $5 million on consumer education in a way that provides the greatest outreach to the most affected communities: the poor, the elderly, the disabled, minorities and rural residents.

The National Association of Broadcasters praised the awarding of the contract.

“This is an important step in a process that will bring digital television to all Americans,” said Jonathan Collegio, VP of the NAB’s digital television transition unit. “The success of the converter box coupon program is critical to upgrading America to digital television … to ensure all Americans continue to have access to free, over-the-air television.”

(Editor: Horowitz)

Updated: 08/16/07 8:54 a.m. (PT)