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IBM Chosen for Converter Box Coupon Program

As promised, the Department of Commerce’s National Telecommunications and Information Administration (NTIA) named a contractor to administer nearly $1.5 billion worth of $40 coupons toward devices to convert DTV signals to analog for use on the tens of millions of regular old over-the-air analog television sets in use today.

The lucky contractor is IBM, which will receive some $120 million for its work including consumer education, consumer distribution, financial processing to reimburse retailers, fraud prevention, and record-keeping.¹

In addition, NTIA has repeatedly said that additional private-sector operators, such as broadcasters and consumer electronics retailers and manufacturers, would likely help with the consumer education process.

“A complex initiative like this requires innovative thinking, leading technologies and cooperation among retailers, broadcasters and government agencies to ensure that all Americans have continued access to free television broadcasting including educational, entertainment, emergency and homeland security information,” said John Nyland, managing partner of IBM Global Business.

Between January 1, 2008, and March 31, 2009, all U.S. households may request up to two coupons, worth $40 each, to be used toward the purchase of up to two digital-to-analog converter boxes until the initial $990 million allocated for the program has been exhausted. After this initial phase of the program, NTIA may request an additional $510 million already authorized by Congress. During this “contingent period,” coupons will be available exclusively to households that rely on over-the-air broadcasting as their sole source of television programming.

IBM will work with some partners. Corporate Lodging Consultants boasts “sophisticated transaction processing technology” and “both unmatched savings and comprehensive solutions that include rate negotiation, electronic auditing, consolidated billing and flexible reporting services,” according to the company’s Web site, and has worked with FEMA on paying for emergency housing. Epiq Systems claims to be a leading provider of integrated technology products and services for the legal profession, including controlled disbursement and claims administration. Finally, IBM will work with Ketchum, the giant global public relations firm.

¹(A previous version of this story incorrectly calculated the figure to $200 million.)