Consumers Union Testifies Before FCC on the Digital Television Transition

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FOR IMMEDIATE RELEASE
June 3, 2009

(Washington, DC)— Joel Kelsey, Policy Analyst for Consumers Union, testified today before the Federal Communications Commission on the Digital Television Transition. The full testimony is below:

“Chairman Copps, Commissioners Adelstein and McDowell, thank you for the opportunity to testify today. Consumers Union is the non-profit publisher of Consumer Reports. In addition to fighting for consumers in Washington, D.C., we also provide unbiased advice and educational materials to assist consumers in making marketplace decisions. All of our educational materials about the digital television transition – including our ratings of selected digital converter boxes; advice on troubleshooting antenna and signal issues; and a tutorial on how to set up your converter box – are available at www.consumerreports.org/dtv. You do not need to be a subscriber to access Consumer Reports DTV information. I have also attached our DTV Made Easy guide, which we published in partnership with the FCC, to this testimony.

Six months ago Consumers Union wrote Congress with grave concerns about the nation’s preparedness for the transition to digital television. We were concerned that millions of consumers were stranded on a waiting list for converter box coupons from the Commerce Department; millions more were still unprepared for the switch; and many more remained confused about how to navigate the transition. We feared over seven million largely rural, low-income and elderly households that rely on free over-the-air broadcasts for news and information were about to be left behind by the very government that mandated the DTV transition.

However, this potential debacle was averted. Congress listened and responded by passing the DTV Delay Act of 2009 (P.L. 111-4), postponing the transition from February 17th to June 12th. Under the new leadership of Acting Chairman Copps, and with just over three months to pick up the pieces of a disorganized education campaign, the FCC has responded quickly and effectively. We applaud Chairman Copps for working closely with Commissioners McDowell and Adelstein to focus and coordinate the agency’s management of the DTV transition. In our view three critical actions created this pivot moment at the agency:

(1) Better hotlines – Working with industry partners, the FCC consolidated various DTV hotline efforts into one central number, with well trained agents, allowing consumers to get all of their questions answered by dialing one number, rather than a half dozen.

(2) More hands-on assistance – Based on successes in the media markets that transitioned early, the FCC has worked with community centers in a comprehensive way to create DTV Assistance Walk-in Centers, to provide on-site help to consumers having trouble navigating the transition.

(3) Better information about signal coverage – In addition to exploring ways to expand the coverage of digital signals, like digital transmission service (DTS) and fill-in translators, the FCC has developed effective consumer-facing materials to help those experiencing signal issues. Of particular note is the new web function which shows a consumer the anticipated strength of the full-power digital signals at their address, providing needed guidance on whether to purchase a new antenna.

Credit must also be given to the National Telecommunications and Information Administration. Within one month of the DTV Delay Act, the NTIA was able to make modest adjustments to the coupon program ensuring expedited delivery to consumers – some of whom were waiting up to six weeks for their coupons – and allowing millions of early adopters with expired coupons to reapply. With new funding the NTIA was able to address the growing appetite for converter box coupons and eliminate the coupon waiting list, which had grown to 4.2 million requests by the end of March. Of the additional $650 million Congress allocated to the coupon program, $490 million will be used to supply consumers with an additional 12.25 million coupons.

We have come a long way. In our annual survey, the Consumer Reports National Research Center posed a number of DTV related questions to just over 38,000 of our subscribers.3 In May, twelve percent of our subscribers indicated they rely on over-the-air broadcasts. Of these respondents, we found that eighty five percent were prepared for the transition to digital broadcasts. Last week, Nielsen Media Research reported that 3.1 million households remain unprepared for the transition. That number is down from 7.75 million homes in December of 2008.5 Millions of consumers have been able to access the federal coupon program to prepare for the transition due to the DTV Delay Act of 2009 and the subsequent hard work of FCC and NTIA.

However, there is still work to be done in the nine days between today and June 12th, and afterwards. Reception and signal strength issues continue to loom large with consumers. Among the respondents who relied on free over-the-air broadcasts and had been prepared for the transition, Consumer Reports found:

— 16% had to purchase a new indoor antenna

— 8% had to install a new outdoor antenna to receive an adequate signal

— 17% reported losing some channels

— 20% found it difficult to get their antenna to receive the stations that were supposed to be currently available at the time when the respondent took our survey.

We urge the agency to continue to prioritize education efforts aimed at troubleshooting reception and signal issues.

Although much has changed in the few months since a crisis loomed in February, some issues have stayed the same. We continue to receive consumer complaints resulting from incomplete and sometimes misleading advertisements by cable companies, which present cable subscriptions as the primary option to navigate the transition and failing to mention other low-cost options available to consumers. For example, our colleagues at the Consumer Reports Money Blog point to a Cablevision ad modeling a public service announcement—which has been around, and criticized, since last year. The company

offers a “deal” to those who want to sign up for cable service, but when our editors called, they offered him a $53-a-month plan that climbs to $73 after the first year. It took a good amount of probing to get the call representative to even mention their cheapest basic plan ($17 a month, plus a $34 installation fee). For consumers, this transition is complicated enough without industry ads trying to take advantage of the confusion. We urge cable companies to stop using this mandated transition as an advertising opportunity and join other industry partners in educating consumers about all available options.

We also continue to hear from community groups whose members report being sold more expensive and sometimes unnecessary equipment by retailers. The federally mandated DTV transition should not be an opportunity to make money on the backs of cash-strapped consumers. We urge retailers across the country to follow the examples of retailers like Mosquito Productions in Minnesota, Fred Meyer in Seattle; as well as H.E.B. and Best Buy in San Antonio by signing the “No Cost Box Pledge” and committing to carrying at least one $40 converter box option for consumers.

We applaud the Commission for quickly and effectively turning around the DTV transition and assisting millions of households in navigating the switch to digital broadcasts. As June 12th quickly approaches, we offer the following observations to the Commission:

(1) While civil society organizations and direct service agencies have clearly taken the lead in providing on-the-ground assistance to consumers in need, community groups report a demand for local elected officials to play a larger part in DTV transition education efforts. We invite the agency to continue using its bully pulpit to urge municipal leaders to play a larger role.

(2) The transition is most expensive for rural consumers. After traveling longer distances to get to electronics retailers, the lowest cost converter box and antenna options are often sold-out. We advise the agency to consider this while continuing to implement search-and-rescue style programs targeted at the difficult to reach households that have yet to take action by working to ensure mobile DTV teams focus on under-resourced rural areas and urging retailers to provide a range of boxes at accessible stores in appropriate quantities.

(3) Once consumers obtain a converter box many need help setting it up. Working with the FCC, Consumer Reports was able to publish a guide to help consumers with several set-up scenarios. However, sometimes elderly or non-English speaking consumers need in-person assistance. The FCC walk-in centers, as well as partnerships with local firefighters, meals on wheels and AmeriCorps have been invaluable resources for consumers in this regard. We hope those centers and partnerships remain after June 12th to help the consumers that will inevitably still need assistance.

Thank you. I look forward to answering any questions you may have and Consumers Union remains committed to continuing to work with the agency past June 12th to help consumers in need of assistance.”

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Contact: David Butler or Kristina Edmunson, 202-462-6262, dbutler@consumer.org, or kedmunson@consumer.org