In a new challenge to the digital TV transition, the government’s program offering $40 coupons for TV converter boxes is out of money, weeks sooner than anyone expected.
The Department of Commerce today announced that it has committed the entire $1.34 billion available for the coupons and is starting to put new requests on a waiting list.
It was just two weeks ago that Meredith Atwell Baker, acting assistant secretary of the Department of Commerce’s National Telecommunications and Information Administration, warned U.S. Rep. Ed Markey, D-Mass., chairman of the House Energy and Commerce Committee’s telecom panel, that the $1.5 billion set aside for the coupon program might run short of requests.
That wasn’t expected to happen immediately. A blitz of media stories over the Christmas holidays, however, brought in a flood of requests.
Ms. Atwell Baker had warned Mr. Markey that although a third or more of coupons haven’t been redeemed, the way the program is structured could force it to delay sending out new coupons.
The government sets aside money for any coupons issued during the 90 days they can be redeemed; Ms. Atwell Baker's worry was that the agency might have to temporarily stop issuing new coupons.
At a news conference this afternoon, Ms. Atwell Baker suggested the coupon program was a victim of its own success. She cited a “massive spike” in December that brought requests for 7.2 million coupons rather than for the 4.3 million that NTIA expected.
She also speculated that the economy could be affecting the number requested, with more consumers choosing to use converter boxes rather than buying new DTV-ready TVs.
Ms. Atwell Baker said NTIA began keeping its waiting list Sunday, and already there are 103,000 coupon requests on the list. Instead of getting a coupon, consumers on the list will be notified there will be a delay.
Through Feb. 11, about 351,000 coupons are expected to expire unused each week, and the same number then can be issued.
Because more consumers applied for coupons in November and December, the number that will expire later in February and March also will grow, but that will come after the Feb. 17 DTV transition.
Ms. Atwell Baker said that while she’s in touch with Congress and the incoming Obama administration, there has been no formal request for additional money.
New Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., called the NTIA's announcement "simply astounding."
"The change to digital television is just weeks away, and today we learn that the Bush Administration’s approach to nickel-and-dime efforts aimed at making this conversion easier on consumers is flat broke. NTIA has known for months and months that the coupon program needed hundreds of millions more in funding to make sure that every American can get the digital television transition assistance they need. The failure to protect consumers is simply astounding."
He added, “Congress must act to safeguard consumers in the weeks leading up to and after the digital transition. Doing nothing is not an option.”
As of the end of 2008, the government had issued 41.9 million coupons to 24.1 million households. Of that amount, 18 million coupons have been redeemed.
(2:20 p.m.: Updated with statement from Sen. Jay Rockefeller)