Digital TV coupon program runs out of money

by Ira Teinowitz, TV Week

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 faster than anyone expected.

The Department of Commerce today announced that it now has committed the entire $1.34 billion available for the coupons and is starting to put new requesters 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. NTIA has scheduled a press conference this afternoon to discuss the situation.

Ms. 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 and her worry was that the agency might have to temporarily stop issuing new coupons.

Today the agency said that has now happened and it won’t be able to issue to issue more coupons unless Congress acts or previously-issued coupons expire, freeing up funds to back new coupons.

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.

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