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NTIA Recycles Unredeemed Coupon Funds

An awful lot of the government coupons for DTV converter boxes are expiring and otherwise going unused, and the agency in charge of distributing them has plans to crank the funds for 6 million of them back out.

The National Telecommunications and Information Administration originally ordered 33.5 million from IBM, its main contractor on the mission. July 18, NTIA began negotiations with IBM for an additional 6 million.

The agency also said it would not use any of the coupon funds to pay administrative costs, such as postage, for the new round of coupons. Rep. John Dingell, D-Mich., chairman of the House Commerce Committee, and Rep. Ed Markey, D-Mass, chairman of the committee’s Subcommittee on Telecommunications and the Internet, had asked clarification of the financial condition of the coupon program in a letter to NTIA Acting Administrator Meredith Attwell Baker.

In her response, Baker said that as of July 23, NTIA had accepted more than 11.3 million requests for more than 21.3 million coupons, of which 19.8 million have been mailed. Coupon requests continue to average approximately 105,000 per day.

Of coupons mailed during the program’s first nine weeks, which have now passed their 90-day expiration dates, 45.8 percent have been redeemed. At that rate, even with increased holiday demand, NTIA estimates it could distribute more than 50 million coupons by the time the program ends March 31, 2009.

On the funding issue, NTIA said it’s negotiating with IBM on a fair price for its services. “NTIA is working closely with IBM to ensure that sufficient administrative funds within the existing statutory administrative cap are available to achieve this goal,” Baker’s letter said. “NTIA’s goal is to fulfill as many coupon requests as possible at the lowest cost and without changing coupon program messaging to consumers.”

She said NTIA still believes the $1.5 billion authorized will be enough.

The funding issue gained extra scrutiny from Congress after an NTIA official suggested in a June hearing that the agency might run out of funds for administrative costs for re-issued coupons. An NTIA spokesman said quickly after the hearing that it would not be seeking additional funding from Congress.