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NTIA Announces Rules Implementing the DTV Converter Box Coupon Program

March 14, 2007

The National Telecommunications & Information Administration ("NTIA") has announced final rules implementing the $1.5 billion digital television ("DTV") converter box coupon program designed to help consumers pay for devices that will enable them to continue to watch television on analog television sets after the transition to DTV in February 2009.

All U.S. households, including cable and satellite television homes, will be eligible for coupons up to the first $1 billion available under the program. If needed, the remaining $500 million will only be available to homes that rely exclusively on free, over-the-air television. The coupons, limited to two per household, are worth $40 toward the purchase of eligible converter boxes from certified electronics retailers. The coupons will have no cash value and will expire three months after they are mailed. To reduce fraud, the coupons will contain unique serial numbers and will be encoded to permit electronic tracking. Consumers may apply for the coupons beginning in January 2008.

Congress anticipated that eligible converter boxes would contain only those features or functions necessary to enable digital television signals to be reformatted for display on analog television sets. However, in addition to the minimum technical specifications adopted by NTIA under the program (which modify Advanced Television Systems Committee Recommended Practices to account for certain technological developments over the past two years), the rules allow (but do not require) manufacturers to include certain enhancements that NTIA found to be in the public interest (e.g., a smart antenna interface, software enabling display of program information, etc.). In order to participate in the program, manufacturers must submit a timely notice of intent to NTIA and comply with certification procedures outlined in the rules. Retailer participation is voluntary as well, but registration, training, data retention, and similar requirements apply.

House Democrats have criticized the rules, stating that the two-tiered structure limiting a portion of the coupon fund to non-cable/satellite households is "likely to increase consumer confusion about who is eligible for coupons and when they are eligible." The Chairman of the House Telecommunications and Internet Subcommittee has announced plans for all NTIA oversight healing to review the program.

We would be pleased to respond to ally questions regarding this matter.

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