On March 12, the National Telecommunications and Information Administration ("NTIA") released its Final Rules for the Digital-to-Analog Converter Box Coupon Program (Coupon Program). This program is designed to allow consumers to purchase converter boxes which will allow analog televisions to receive over-the-air broadcast signals after the February 17, 2009 transition date when all full-power television broadcasters will be broadcasting only in digital. This was a long-awaited action that many view as a necessary step before the country can meet the February 2009 digital conversion deadline. The Order gives details of the implementation of the converter box program, providing guidelines for consumers, retailers and equipment manufacturers. Details of the program are set out below.
The heart of the program is the coupons to be distributed to consumers. Starting January 1, 2008, all U.S. households can request up to two $40 coupons than can only be used toward the purchase of two digital-to-analog converter boxes. There is no needs test, i.e. any household that wants coupons can request them, regardless of household income. Only one coupon can be used for each converter box. The coupons will be in the form of an “electronic coupon card;” like a gift card, but they will not carry any value that can be used for anything but a converter box. The coupons will expire three months (90 calendar days) after the coupon is placed in the U.S. mail. In no case may consumers receive any cash value for the coupon so, if the cost of a converter box is less than $40, consumers cannot receive a refund or credit towards the purchase of another item. Consumers are also prohibited from selling their coupons. If a converter box does not work properly, consumers will be permitted an exchange only for another converter box. Applications for coupons will be accepted only between January 1, 2008 and March 31, 2009 and will be able to be requested by mail, by phone, by fax, or through a website.
Only households are eligible for coupons. No business, schools, or similar entities are eligible. Also, multifamily residences (i.e., a residence occupied by more than one family unit) will not be eligible for more than two coupons unless each household has separate living quarters and has a separate U.S. postal address. Because Post Office Boxes are prevalent on Indian Reservations, Alaskan Native Villages and other rural areas, these households may be required to supply additional information to identify the physical location of the household. An NTIA fact sheet for consumers summarizing the above information can be found here.
Coupons can only be used to purchase a certified “digital-to-analog converter box.” Manufacturers must comply with the technical specifications and features set out by NTIA in order for the converter box to qualify for the Coupon Program. The Final Rules define a certified converter box as “a stand-alone device that does not contain features or functions except those necessary to enable a consumer to convert any channel broadcast in the digital television service into a format that the consumer can display on television receivers designed to receive and display signals only in the analog television service, but may also include a remote control device.” Because the NTIA is funding only basic boxes, a converter box that contains a recorder cannot be purchased using a coupon. While manufacturers are free to market feature-rich converter boxes which have do not comply with the requirements of the Final Rules, such devices would not be eligible for the Coupon Program. An NTIA fact sheet for manufacturers summarizing the technical specifications and approval process for converter boxes can be found here.
Retailers must also be certified in order to redeem coupons toward the purchase of a converter box. Certification requests can be submitted to the NTIA between June 1, 2007 and March 31, 2008. Retailers must meet the following requirements in order to become certified:
· Having been engaged in the consumer electronics retail business for at east one year.
· Having completed a Central Contractor Registration (www.ccr.gov).
· Having in place systems that can be easily audited.
· Agreeing to have coupon-eligible converter box sales audited.
· Providing redemption information and payment receipts to NTIA for coupon-eligible converter boxes.
· Agreeing to accept only coupons for, and receive payment resulting from, authorized purchases made for coupon-eligible converter boxes.
An NTIA fact sheet for retailers summarizing retailer certification process and obligations can be found here.
The NTIA has available initial funds of $990 million for the coupon program. Once those funds have been used up, if additional funds are needed to fulfill coupon requests, an additional funding of $510 million can be requested from Congress. If this additional funding is needed to fulfill coupon requests, eligibility for coupons will be limited to those households that only receive over-the-air television signals using analog-only television receivers; households requesting coupons during this phase must self-certify that the household does not subscribe to any pay TV service