Transition Trip-ups

Jan 28 2009

digitaltv.jpgThe digital TV transition is a rather interesting problem for America.  People want their TV, but the digital transition is going to confuse many people when it takes effect.

Let's discuss the foremost issues: funding and timing.

As of this morning, January 28th, unlike the Senate, the House of Representatives voted 'No' on the extension of the DTV transition to June. This means that time is of the essence when it comes to replenishing the DTV coupon funds and making sure the right citizens get their coupons.

 

Problem #1: Coupon expiration

The vast majority of coupons that have been given out are now expired. Coupons issued from February 2008 through October 2008 are now all expired. These funds need to be recycled ASAP. There is a rather steady trend of approximately 55% redemption rate for every wave of coupons.

 

Problem #2: Who are redeeming the coupons?

The data gets more interesting when it is filtered by households that are using OTA only (what the NTIA calls "OTA Reliant"). Here the redemption rate is closer to 60% and went as high as 65% in the last few weeks of 2008. So that means that quite a few people who claimed to be using OTA only on their request form are indeed getting the coupons, but not enough, it would be nice to see the numbers higher -- into the 70% range.

There is a second group: those that are redeeming coupons when they are not OTA reliant. Their requests make up 40% to 50% of the overall coupons requests. According to the data these people are redeeming coupons at about 55%, the same as the overall rate.

 

Proposals:

  1. Given that the overall redemption rate is on average is 55%, slightly less then half of the money every coupon period is allocated and then is not actually used. These funds need to be freed up now. If the people who requested the coupons needed to use them so badly why did they let them get past the expiration date printed on the coupon?

  2. Household income must be accounted for when doling out the coupons. The mission of the coupons is to assist those who are OTA reliant and need help purchasing the converter boxes. A person making $80,000 a year is using OTA by choice, not out of necessity. He or she can most certainly afford the full $40 - $60 cost of the boxes. These requests should be put to the bottom of the queue.

  3. Similarly, if the respondent fills out the request form and states that the household is not OTA reliant, the requests should be sent to the bottom of the queue.

This is about getting coupons into the hands of the people who truly need the government assistance. This needs to go to people who spending $60 a month on cable would mean sacrificing more essential needs or the elderly couple who are living on a restricted budget. Because of the limited funds, criteria must be used to best allocate these funds.

 

Issues and Limitations:

Since household income data is not currently requested, the coupon form must be revised to do so. In the event this is deemed inappropriate for whatever reason then a far less accurate method, using zip code average income information, could be used. However zip code level income statistics is highly problematic as there are many instances throughout the United States where a region may share a zip code but have different income levels throughout. This could penalize the very people who need access to the coupons, for example: because of being "across the tracks" from a more wealthy neighborhood those who need the coupons may be put at the bottom of the coupon priority.

On the issue of the coupon expiration, it is certainly conceivable that people with expired coupons are simply confused about if and when they should deploy the converter boxes, and/or are confused about what to do next, they've been told to get the coupons but don't know what the next step is. This is an unfortunate byproduct of the transition -- those who need coupons may indeed have to re-apply for them. With the proposed newer checks and balances in place this should allow those who need them to actually get the coupons [back].

 


Data Source:

http://www.ntia.doc.gov/ntiahome/press/press_dtv_background.html

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