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The government program that subsidizes DTV converter boxes in the U.S. hit its $1.34 billion funding ceiling set by Congress on Sunday, January 4. This means that anyone applying for converter box coupons will be put on a waiting list. There are already 103,000 on that list, with thousands added every day. People who are further down on the waiting list won't likely get their boxes before the February 17 digital switchover date.
The limit was reached because of unexpected demand. The National Telecommunications & Information Administration (NTIA) expected that the increase in demand would level off, but instead it has spiked.
People who are on the waiting list for coupons won't get them until money becomes available from expired coupons, a tally of which is done weekly. NTIA head Meredith Baker warns that raising the statutory cap could prevent "queuing up" coupon requests, which would start once the cap had been met. She explains that the NTIA could run out of money to distribute the coupons soon given an expected jump in redemption rates.
Baker is unsure of how long people would be on the waiting list for, but points out that $14 million per week was being freed up in expired coupons.
Baker explains that " 'once the [$1.34 billion] obligation ceiling is reached, the program will hold coupon requests until funds from unredeemed coupons become available for obligation. NTIA realizes that this would likely result in consumer confusion and dissatisfaction with the program.' "
The NTIA is currently set up to distribute 51.5 million coupons, but that number could reach 60 million by the end of the program on March 31. If it does, even with the money freed up from expired coupons, the NTIA might need some more money.
For people with coupons, Baker says that the demand could outpace supply by 2.5 million if additional coupons were distributed, but points out that retailers have " 'generally kept pace' " with demand and " 'would work to ensure inventory is available if additional coupons are to be distributed.' "
Since people applying for their coupons now won't get them in time for the switchover, Baker is encouraging viewers to buy a box for at least one of their TV sets. As the law is currently written, however, if a consumer receives their coupon after February 17, they couldn't go to a retailer and get their money back in exchange for the coupon. If Congress wanted to change the law though, Baker says they would " 'implement those changes as quickly as possible.' "
The National Association of Broadcasters (NAB) has asked both Congress and the FCC to help unclog the backlog of coupons. David Rehr, president of the NAB suggested four options to address the problem. They could:
- Raise the redemption rate assumption
- Increase funding
- Waive the expiration on coupons (currently 90 days)
- Waive the Antideficiency Act requirement that NTIA not send out more coupons until money is freed up from unredeemed coupons
Sources: Broadcasting & Cable, 01/05/2009, Toronto Star, 01/05/2009, Broadcasting & Cable, 01/07/2009
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