The Digital Television Transition and Public Safety  Act of 2005 addresses the responsibilities of two federal agencies—FCC  and NTIA—related to the DTV transition. The act directs FCC to require  full-power television stations to cease analog broadcasting by February 17,  2009. Private and Federal Stakeholders Have Undertaken a Myriad of Activities Aimed at Increasing the Public’s Awareness of the DTV Transition

Private sector stakeholders from the broadcast, cable, retail, and  consumer electronics industries have committed over $1 billion to  voluntary and required consumer education efforts to inform the public of  the DTV transition. Private sector  stakeholders have also produced DTV transition educational programs for  broadcast and distribution, developed Web sites that provide information  on the transition, and engaged in various other forms of outreach to raise  awareness. Specifically, they focused their efforts on 45 areas of the country that have  at least 1 of the following population groups: (1) more than 150,000 over- the-air households, (2) more than 20 percent of all households relying on  over-the-air broadcasts, or (3) a top 10 city of residence for the largest  target demographic groups. The target demographic groups include  seniors, low-income, minority and non-English speaking, rural households,  and persons with disabilities. NTIA Is Effectively Implementing the Converter Box Subsidy Program, but Concerns Exist about NTIA’s Ability to Manage a Potential Spike in Coupon Demand

NTIA has processed and issued coupons to millions of consumers, but a  sharp increase in demand might affect NTIA’s ability to respond to coupon  requests in a timely manner. Through June 2008, households had  requested almost 19 million coupons. In our recent consumer survey, we found that 35 percent of U.S.  households are at risk of losing some television service because they have  at least one television not connected to a subscription service, such as  cable or satellite. As a result, consumers  might incur significant wait time before they receive their coupons and  might lose television service during the time they are waiting for the  coupons. Participation in the Converter Box Subsidy Program by Hard-to-Reach Populations Varies

We analyzed data to compare areas of the country that comprise  predominantly minority and elderly populations with the rest of the U.S.  population and found some differences in the coupon request, redemption,  and expiration rates for Hispanic, black, and senior households compared  with the rest of the U.S. population. However, households in predominantly black and  Latino or Hispanic zip codes were less likely, compared with households  outside these areas, to redeem their coupons once they received them. To determine participation in the converter box subsidy program in the 45  areas of the country receiving targeted outreach by NTIA and FCC, we  analyzed NTIA coupon data (including requests, redemptions, and  expirations) in the 45 areas compared with the rest of the country not  targeted by NTIA and FCC. As part of our work, we conducted a “mystery shopper” study by visiting  132 randomly selected retail locations in 12 cities across the United States  that were listed as participating in the converter box subsidy program. At most retailers (118) we visited, a representative was  able to correctly identify that the DTV transition would occur in February  2009. In addition, our analysis confirms that  a spike in coupon requests is likely as the transition nears. Appendix I: Objectives, Scope, and Methodology

The objectives of this report are to provide information on issues  surrounding the digital television (DTV) transition, specifically, (1) what  consumer education efforts have been undertaken by private and federal  stakeholders and (2) how effective the National Telecommunications and  Information Administration (NTIA) has been in implementing the  converter box subsidy program, and to what extent consumers are  participating in the program. According to FCC  testimony, it has found that the majority of store managers are well- informed about the DTV transition and the converter box subsidy  program.
Why GAO Did This Study

The Digital Television Transition and Public Safety Act of 2005 requires all full-power television stations in the United States to cease analog broadcasting after February 17, 2009, known as the digital television (DTV) transition. The National Telecommunications and Information Administration (NTIA) is responsible for implementing a subsidy program to provide households with up to two $40 coupons toward the purchase of converter boxes. In this requested report, GAO examines (1) what consumer education efforts have been undertaken by private and federal stakeholders and (2) how effective NTIA has been in implementing the converter box subsidy program, and to what extent consumers are participating in the program. To address these issues, GAO analyzed data from NTIA and reviewed legal, agency, and industry documents. Also, GAO interviewed a variety of stakeholders involved with the DTV transition.

What GAO Found

Private sector and federal stakeholders have undertaken various consumer education efforts to raise awareness about the DTV transition. For example, the National Association of Broadcasters and the National Cable and Telecommunications Association have committed over $1.4 billion to educate consumers about the transition. This funding has supported the development of public service announcements, education programs for broadcast, Web sites, and other activities. The Federal Communications Commission (FCC) and NTIA have consumer education plans that target those populations most likely to be affected by the DTV transition. Specifically, they identified 45 areas of the country as high risk that included areas with at least 1 of the following population groups: (1) more than 150,000 over-the-air households, (2) more than 20 percent of all households relying on over-the-air broadcasts, or (3) a top 10 city of residence for the largest target demographic groups. The target demographic groups include seniors, low-income, minority and non-English speaking, rural households, and persons with disabilities. In addition to targeting these 45 areas of the country, FCC and NTIA developed partnerships with organizations that serve these hard-to-reach populations. NTIA is effectively implementing the converter box subsidy program, but its plans to address the likely increase in coupon demand as the transition nears remain unclear. Almost 19 million coupons have been issued by NTIA, but as of June 2008, only 9 percent of U.S. households had requested coupons. As found in GAO's recent consumer survey, up to 35 percent of U.S. households could be affected by the transition because they have at least one television not connected to a subscription service, such as cable or satellite. With a spike in demand likely as the transition date nears, NTIA has no specific plans to address an increase in demand; therefore, consumers might incur significant wait time before they receive coupons as the transition nears and might lose television service during the time they are waiting for the coupons. In terms of participation in the converter box subsidy program, GAO analyzed coupon data in areas of the country comprising predominantly minority and senior populations and found that households in both predominantly black and Hispanic or Latino areas were much less likely to redeem their coupons compared with households outside these areas. Additionally, GAO analyzed participation in the subsidy program in the 45 areas of the country on which NTIA and FCC focused their consumer education efforts and found coupon requests to be about the same for zip codes within the 45 targeted areas compared with areas that were not targeted. Retailers play an integral role in the subsidy program by selling the converter boxes and helping to inform their customers about the DTV transition and the program. GAO visited 132 randomly selected retail stores in 12 cities. Store representatives at a majority of the retail locations GAO visited were able to correctly state that the DTV transition would occur in February 2009 and explain how to apply for a converter box coupon.