Stalled switch to digital TV a classic tale of breakdown

by Kim Hart and Peter Whoriskey, Washington Post

The nation's switch to all-digital broadcasts has been more than a decade in the making. The federal government has spent nearly $2 billion to help people prepare. Broadcasters spent another $1.2 billion to run warning ads and millions more to upgrade equipment. Until last week, the United States seemed ready to follow the half-dozen European countries that have made the switch.

But with two federal agencies in charge, no clear idea of how many people would be affected and constant partisan disagreements over money, the program foundered just before its long-standing Feb. 17 deadline. It has now been pushed back four months.

The result is confusion for the millions of Americans for whom the television is not simply another electronic device in the home but a crucial source of news and information. The idea that the government might deprive people of television reception strikes some as unjust and, in the event of emergencies, possibly dangerous.

Exactly how that happened is in many ways a classic Washington story.

The digital-transition bill was born amid sniping between Republicans and Democrats, which time and again complicated its implementation. The heads of the two federal agencies charged with managing the transition barely spoke to each other. And in the end, the rifts between Republicans in the Bush administration running the program and the congressional Democrats overseeing it stymied efforts to right the transition as it steered off course.

"There were so many moving pieces, and no one would step up and take ownership," said acting Federal Communications Commission Chairman Michael J. Copps. "I don't think we really managed to get out of our digital cocoon until six months ago, and then it was too late to make this plan work."

Congress and the FCC, which had been discussing the transition as far back as 1996, were ready by 2005 to lay down the hard details of the program and schedule.

Both Republicans and Democrats acknowledged that the transition offered many benefits -- and one potentially massive hang-up.

People would get better reception. The government would make billions -- as it turned out, about $20 billion -- by auctioning off the old analog radio spectrum to cellphone companies.

The potential problem involved the roughly 21 million U.S. households that still received television over the air -- that is, without cable or satellite. Elderly, low-income and Hispanic viewers were most at risk of losing reception. If they had older TVs -- and most did -- they would need a converter box for their analog sets. Boxes cost $50 to $80.

Democrats, led by Rep. Edward J. Markey (Mass.), chairman of the Energy and Commerce subcommittee on telecommunications and the Internet, argued in 2005 that because the government was making so much money on the deal, it should help pay for converter boxes. He outlined a program to give consumers two coupons for $60 each to buy the devices. The program would cost about $4 billion.

Republicans balked. To save taxpayer money, they argued, the program should be less generous. They wanted to limit the benefit to low-income households and hold the coupon amount to $40.

Eventually, the income requirement was dropped. But the bill that passed in early 2006 retained the $40 coupon amount and limited coupon funding to $1.5 billion.

Markey expressed his disappointment in a remark that turned out to be prescient: "Simply put, the Republican plan will run out of money before the need is met."

One difficult question loomed over the whole debate: How many people were out there who could receive only analog signals on their TVs?

At the time of the legislation, the FCC was still allowing analog TVs to be sold, and those sales would continue until March 2007, when all televisions shipped to U.S. retailers were required to have digital tuners.

Because the average consumer replaces TVs every 11 years, according to the Consumer Electronics Association, there were millions of analog TVs still out there. Estimates ranged from 30 million to 80 million.

Whatever the number, people had to be notified. But who should do that provoked the first round of bureaucratic finger-pointing.

Congress had divided the responsibility between two agencies. The FCC would handle the technical components of the switch, such as assigning new channels for broadcasters and approving converter-box designs. The National Telecommunications and Information Administration was in charge of running the $1.5 billion coupon program and received $5 million for consumer education efforts.

Both agencies were slow to get started.

"There is no one in charge, and that is cause for concern," Mark L. Goldstein, director of physical infrastructure for the Government Accountability Office, told the Senate health committee's panel on aging in September 2007. "There is no comprehensive planning effort, and no one is assessing what gaps exist."

Kevin J. Martin, the FCC chairman at the time, told Congress he thought the NTIA had primary responsibility for consumer education efforts because the administration had received the bulk of the budget.

But Markey and Rep. John D. Dingell (D-Mich.), chairman of the Committee on Energy and Commerce, sent a letter in May 2007 that said the FCC is the lead agency for the transition and consumer education because it has regulatory power over the broadcasting industry.

The FCC set up a Web site to inform people and was working with the DTV Transition Coalition, a group of more than 100 organizations, including AARP and retailers, to coordinate outreach efforts. Martin also requested $1.5 million in funding for consumer education.

Meanwhile, the NTIA was experiencing its own problems. In November 2007, the agency's chief, John Kneuer, left less than a year after taking the job. His deputy, Meredith Atwell Baker, assumed his role until the White House nominated Neil Patel, Vice President Dick Cheney's assistant secretary for domestic and economic policy.

Baker submitted her resignation once Patel had been named. But lawmakers thought it was not the time to make a change and asked Baker to stay through the transition.

Through it all, the public was requesting coupons, millions of them. And by September 2008, Markey's office and GAO officials were worrying that the system and the funding could be overwhelmed.

"With a spike in demand likely as the transition date nears . . . consumers might incur significant wait time to receive their coupons and might lose television service if their wait time lasts beyond February 17, 2009," GAO officials warned in testimony. Baker assured Congress that the NTIA expected to have enough money.

"The coupon program has both sufficient funds and system processing capabilities to achieve this goal, to distribute a total of more than 50 million coupons through March 31, 2009, and to do so without the creation of a large backlog," the NTIA told Congress on Nov. 6. "Also, NTIA has built flexibility into the program to respond to various or unexpected events."

As Markey and the GAO had warned, there was a surge of demand for coupons: from 1.1 million requests a week on Nov. 6 to 1.5 million requests during the second week of December.

Baker then sent a memo to the Office of Management and Budget. "In light of high demand, the program is likely to obligate all of the coupon funds in advance of the digital TV transition," she wrote.

One quick fix to the problem would have been to waive the government accounting rules so that the program could send out more coupons than it was authorized to. Since more than 40 percent of the coupons were expiring without being redeemed, the NTIA wouldn't necessarily go over budget.

But when Baker recommended that plan to the OMB, it responded, in effect, that the coupon program was Congress's idea and Congress could fix it however it saw fit, she said.

On Dec. 19, Baker met with Markey's staff on Capitol Hill. "Okay, this is your chance to say, 'I told you so,' " she told them.

The program was running low on money. The deluge of coupon requests was getting worse.

During the week of Dec. 24, the coupon requests rose to 1.7 million. The next week, requests peaked at nearly 2 million. On Jan. 4, the coupon program ran out of money. Millions were put on a wait list -- just six weeks before the transition.

The window for getting prepared was closing, and fast. Because Congress had decided that the coupons should be sent with the cheapest possible postage, it was taking four weeks to get them to people.

Markey and Rep. Joe L. Barton (R-Tex.) began drafting a bill that would have waived the accounting rules and allowed first-class postage. But given the Bush administration's opposition to the waiver, the idea was shelved.

Republicans argued that the coupons could be distributed in time. But the Obama administration said it was becoming less likely, and it worried that the FCC did not have enough people to answer consumer questions during the switch. Congress accommodated the new president and granted a delay.

"Millions of Americans, including those in our most vulnerable communities, would have been left in the dark if the conversion had gone on as planned," President Obama said in signing the bill calling for the delay. Baker said the "delay shouldn't deny the success of where we are today."

The bill allowed stations to go ahead with the transition if they won FCC approval.

On Tuesday, more than 400 stations are expected to drop their analog television broadcasts. It is not known how many people will lose programming.

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The media's job is to interest the public in the public interest. -John Dewey