Feds release plan for distributing vouchers
|'Poor' Box or 'Golden' Box?|
LG Electronics has announced plans to deliver its long-awaited prototype DTV converter box to MSTV and NAB in September. Thomson also said it will submit its own converter prototype next month, as both firms begin to grapple with a still-unknown product in an undefined market.
Thomson and LG Electronics are the only makers under contract with NAB and MSTV to work up specs for their respective inexpensive analog-to-digital converters that would meet simple technical parameters to qualify for NTIA's $40 coupon voucher program for terrestrial broadcast-only households (see accompanying article).
Citing nondisclosure agreements, neither company would confirm any specifications for their respective prototypes prior to handing them over to NAB and MSTV in probably mid-September. (LG Elelectronics also would not confirm nor deny a published report at press time that its prototype will include a single chip that combines VSB demodulation, MPEG-2 decoding and format conversion, separate ROM and RAM, a video input and RF 3/4-channel output.)
Dave Arland, vice president for marketing at Thomson, did say that the company will have a built-in electronic program guide. He said building and selling even a simple converter box in the $40-$50 range amounts to merely "a wish" on the part of government and some groups.
"Today these boxes would cost $200. Nobody's box today will cost only $40, or $50. It will probably cost less than $200 by 2009, but not as low as they want."
The government's STB coupon and modestly funded consumer education campaign notwithstanding; in reality, manufacturers have no idea whether there will be a demand for converter box shipments to retailers, even in the short term. "It's early. But no one actually even wants a converter box yet. We don't know how many may want one later," said Arland, especially since all new sets will include ATSC tuners after early 2007.
Despite the unknowns, LG Electronics spokesman John Taylor said his firm can envision a series of converter devices in the marketplace-some approved by government and eligible for subsidies, with others falling outside such boundaries (and to include more sophisticated add-ons like DVRs, DVD players and smart antennas for higher price points).
The CEA, for its part, has balked at the NAB-MSTV initiative since its inception and continues to have reservations. CEA spokesman Jeff Joseph said while his trade group strongly endorses the idea of a low-cost converter box, "We strongly believe the NAB proposal calls for a 'golden box' that may place the product well beyond the reach of many of the consumers who most need it. Their specs will drive up the cost of the box and thereby dilute the impact of the vouchers."
Taylor took exception to Joseph's claims.
"Our D-to-A converter prototype is far from a 'golden box' because it doesn't output HDTV. Nor does it have a built-in DVR or DVD or other high-end features. From the outset, our goal has been to develop a high-performance digital-to-analog converter that is both very cost effective and sets the bar high for the best possible indoor reception and ease of use. This is consistent with commitments made when LG testified before Congress."
MSTV President David Donovan added, "I do not think we're building a 'golden box' by any means. We simply want to meet consumers' needs with a box that is tough in the RF environment, and that will offer a basic feature-set for consumers." As for Donovan's wish, for example, for inclusion of program and system information protocol in low-cost boxes, "I can't believe that anyone would argue that PSIP is gold plating," he said.
- John Merli
The federal agency in charge of the digital-to-analog converter subsidy program has pared down the list of who's invited to the party.
The National Telecommunication and Information Administration would prefer to reserve the $40 subsidy coupons for households that can "certify" exclusive reliance on over-the-air TV.
The coupon program was initiated by Congress to mitigate the impact of the Feb. 17, 2009, when analog TV signals disappear and over-the-air television is entirely digital. The converters, similar to cable set-top boxes, will allow legacy analog TVs to decode digital signals.
In its much-anticipated Notice of Proposed Rulemaking on the converter program, the NTIA suggested leaving cable and satellite households out of the mix. NAB was a bit flummoxed over the decision, hoping instead to see eligibility apply to anyone with an over-the-air set in the house. There are 28 million broadcast-only TVs in cable and satellite households, by NAB estimates.
"We would hope that no broadcast-only TV sets are forced to go dark during this transition," said Dennis Wharton, NAB spokesman.
The NTIA concluded, however, that Congress intended the assistance program for people with no cable or satellite service-roughly 16 million homes.
"As a result, NTIA proposes to define those U.S. television households that will be eligible to participate in the coupon program as those households that only receive over-the-air television signals using analog-only television receivers," the notice states.
To qualify for coupons, the NTIA would require households to "self-certify" over-the-air reliance. Legal ramifications for fibbing are not determined, but an NTIA official said the scheme is open to comment.
None of the program parameters are written in stone except those included in a budget bill passed early this year. The bill designated up to $1.5 billion for the converter subsidy program, including up to $160 million for administration. The bill also dictates that no more than two $40 coupons be provided via snail mail to households requesting them between Jan. 1, 2008 and March 31, 2009; that two coupons can't be used for one converter; and that the coupons expire in three months.
The NTIA notice requested input on the remaining aspects of its proposed converter subsidy program. The agency also issued a request for information from organizations with experience on which teh subsidy program could be modeled. An "Industry Day" was held for potential participants Aug. 11; reponses to the RFI are due Sept. 15.
WHO AND HOW
While Congress eschewed a means test (privacy concerns were raised during hearings), the NTIA sought comments on whether it should administer one.
"For example," the notice reads, "should we distribute coupons only to those households with an annual income of $19,806 or below," the poverty level for a family of four.
The NTIA also asked what to do if the money runs out before coupon requests do, proposing a "first-come, first-serve" arrangement.
Under the NTIA framework, coupons would have traceable serial numbers to prevent fraud, and could only be redeemed at certified retailers. To qualify, retailers would be legally bound to tell people about the necessity of converters and how to install them; maintain auditable systems that prevent fraud; accept a drop-in audit from the NTIA; run electronic coupon-tracking reports; and submit for redemption only coupons used for converters. Dealers would have 30 days to turn coupons in to the NTIA for redemption within 60 days.
NTIA said it's "particularly interested in retailers that can handle converter-box purchases with the coupons via mail, phone or the [sic] Internet-based sales."
To further prevent fraud, the converters would be nonreturnable and nonrefundable, although lemons could be brought back for replacement.
Retailer participation would be voluntary, and with no special compensation from the government other than a chunk of the $1.5 billion (less administrative costs) set aside for the converters.
Congress in its converter legislation declared that it would subsidize only "a standalone device that does not contain features or functions except those necessary to enable a consumer to convert" digital signals to analog, and that "may also include a remote control device."
The NTIA proposed that qualifying converters must adhere to ATSC Receiver Performance Guidelines A/74, comply with FCC closed-captioning, EAS and parental control rules, have a remote control and tune TV Channels 2 through 69. All stations will be relegated to Channels 2 through 51 come 2009, but the converters are expected to hit the market before the analog end date.
"This is a transition period... the channels up to 69 will still be operating," the NTIA official said. "We want to encourage people to get these as soon as possible and not wait until the last minute."
I/Os on the boxes would entail one antenna input, a Type F output for Channel 3 or 4, and RCA for composite video and stereo audio output.
Performance standards were a chief concern of broadcast advocates in Washington, D.C. The Association for Maximum Service TV (MSTV), along with the NAB last year solicited proposals for converter prototypes. Many of the criteria turned up in the NTIA notice.
"The purpose was to create a reference design for a low-cost box that we know would have the technical specifications to work in a tough RF environment," said David Donovan, MSTV president.
LG Electronics and Thomson were ultimately tapped to make prototypes, which Donovan said he expected to be finalized by this fall (see sidebar).
Regarding the notice, Donovan said, "It appears that the NTIA has concerns similar to ours; that this is a unique technology market, and that since it is linked to a government subsidy program, it makes sense to make sure that from a technical standpoint, these boxes function properly and work well."
Donovan said MSTV was pleased to see A/74 performance guidelines referenced, but that "in certain aspects, we'd like to see it go a bit above A/74." For example, the association would like to see PSIP capability included.
"We believe transmission of an electronic programming guide should be part of this," he said.
One small query in the NTIA notice likely to generate a raft of responses involves energy consumption standards.
Earlier this year, the California Energy Commission proposed setting energy consumption limits on converters at 8 watts powered up and 1 watt in standby. The proposal elicited a unified objection from the NAB and the Consumer Electronics Association. Both lobbies would prefer to keep the cost of the boxes as low as possible so people will buy them. Although manufacturers have not set a price, Congress is expecting something in the $50 to $60 range, and achieving a 1 watt standby mode would potentially double that, chipmakers say.
Meanwhile, the Environmental Protection Agency has launched a program targeting converters under its Energy Star banner. A draft of the EPA policy is expected to be released in September.
While Donovan was skeptical about energy standards in general, Dave Arland, vice president of communications and government affairs for Thomson, said a national standard would be preferable to state decrees.
"Regardless of where you are on this issue," he said, "you should probably say, 'yes,' instead of having different states do different things, since we're dealing with a national product."
Arland said he found no surprises in the NTIA notice, and that Thomson "was pleased with the seriousness with which they've approached the issue. We were encouraged by what we read. It shows a tremendous amount of thought."
He also indicated some optimism on Thomson's part about the market for digital-to-analog converters, even though they're expected to create only short-term, one-shot demand.
Regarding the subsidy, he said, "We believe there will be different types of products that will qualify and some that won't. For example, what if you build a DVD player into this box... or a home theater-in-a-box system. This shouldn't misread that every box that's sold will be NTIA compliant."
Arland said converters will probably hit store shelves around mid-2008, assuming people start asking for them-demand is expected to be contingent on when people find out they'll need them.
"Before we can build them, we have to have retailers that are interested in carrying them," he said. "We don't have that today... and they don't have any consumers marching in saying, 'I need one of these things.'"
Public education is part of the NTIA charter, but the agency has only $5 million to carry it out, and requests as much assistance as possible in that arena. Comments are due on the NTIA notice by Sept. 22. There will be no reply comment period, as with FCC notices. The NTIA needs to finalize the rulemaking as soon as possible, the NTIA official said, "so consumers know about it... and manufacturers know what kind of boxes to make."
Directions for filing comments are available at http://www.ntia.doc.gov/otiahome/dtv/FAQ_v6_07212006.htm.