Trying To Figure Out How DTV Conversion Program Could Run Out Of Coupons

from the something-doesn't-make-sense dept

Tue, Jan 6th 2009 6:11pm — Mike Masnick

There are plenty of reports going around about how the federal government's program to supply coupons for TV digital converter boxes has run out of money while plenty of folks who need them still haven't converted (meaning their TVs won't work next month). Because there's still some confusion about this, it bears repeating: this conversion does not matter in the slightest for anyone who uses cable or satellite TV. It only impacts those who just get over-the-air TV through an antenna. Yet apparently, somewhere around 7% of those people aren't yet prepared for the changeover -- though, assuming they care (i.e., they watch TV) they'll figure out what went wrong pretty soon.

What I'm still trying to figure out, though, is how the program ran out of money. The setup of the program now seems pretty silly. Basically, the feds offered coupons to people to use when buying the boxes, and the feds funded the difference. But why didn't the feds just buy the boxes itself and sell them off at a discount? Part of the problem now is that many of the coupons haven't been redeemed, and no one's sure if they will be redeemed or not -- leaving the amount of money available in question. It seems like there are about 30 different ways that uncertainty could have been averted, such as by just having the sellers report the sales to the Feds and get the "coupon fee" directly. Either way, it seems like yet another program where the FCC didn't do a very good job planning out how this transition would work.

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Filed Under: confusion, conversion coupons, digital tv

41 Comments

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Anonymous Coward, 6 Jan 2009 @ 7:23pm

Let's be honest, none of the federal agencies are doing what they are suppose to. SEC? EAC? FCC? FEMA? FTC? I could dig into my bookmarks and post at least a dozen links on each of these organization and how they've failed in their mandates over the last decade alone.
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Don't blame me, I voted for Kodos, 6 Jan 2009 @ 7:32pm

The coupons expire
The DTV coupons expire 90 days after they are mailed, and as older coupons expire, additional new coupons can be issued.

I feel this is MUCH better than if the feds had outright bought converters from the lowest bidder. So far there hasn't been much sign of fraud using these coupons, and no real large scale fraud like you'd see with other approaches to subsidizing technology upgrades.
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LarryD, 6 Jan 2009 @ 7:40pm

One explanation...
I actually recently requested one of the coupons even though I currently receive everything over cable. My intent is to get an antenna and start doing over-the-air instead...
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Erv Server, 6 Jan 2009 @ 7:42pm

scammers
I'm tired of people complaining about the DTV conversion, there has been plenty of time to get in gear for this, you snooze you lose.
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Mel, 6 Jan 2009 @ 7:43pm

Couple of points
I recently added the boxes for my parents.

a) Having the government buy the boxes then sell them would suck. Just like any tech, some are good, some are bad. Papa Gov wouldn't care, so they'd just buy the low cost option, not necessarily the best box for the job.

b) The coupons come in a credit card style ... and they expire in 90 days. You buy the box, they ring up the sale, then swipe the coupon card. If a coupon is received from the gov but not redeemed in 90 days, then it expires and I would think the FCC accounts would roll those funds back into the available pool.

Confusion reigns supreme at some retailers too. Lowe's for instance (in my area) pulled all their outdoor antennas and sold them back to the maker because "They're going to be obsolete soon".

Answer: No, they're not going to be obsolete. You still need an antenna to pull in the signals. Antennas don't know the difference between digital or analog radio waves ... it's the tuner that does the magic bit. Yes, the antenna needs to pick up the frequencies you're wanting to pull in.

For my folks who have a clear line of site to the tower farm 40 miles away I used:

Ant: VU 90-XR from Radio Shack
Converter: Zenith DTT-901 made by LG

I also replaced their coax with quality RG6 and every outdoor connection was treated for corrosion resistance.

Box setup was drop dead simple and the picture quality is stunning. They have Direct TV and it is the same quality (they prefer local station over the air due to rain fade during severe weather ... tornado alley is like that).
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CJ, 6 Jan 2009 @ 7:50pm

You want to know how? Because people like my grandmother, who has both the the TVs that she and my grandfather use, hooked up to cable and thus don't need a converter box, watched all those damn commercials, freaked out and got coupons from the government despite the fact that I told her 7 times that she didn't need to worry about digital transmission because she has cable.
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TEA-Time, 6 Jan 2009 @ 7:52pm

Hopefully this will help that last 7%.

http://consumerist.com/5116811/a-very-simple-flowchart-explaining-the-digital-tv-transition
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Bob, 6 Jan 2009 @ 8:21pm

Peanuts!
The FCC conversion program is peanuts the way Washington is throwing money (that they dont have) around. Besides, TV is not a necessity. Why the government had to issue coupons is beyond me. People will be better off without TV. I am sure somebody definitely benefitted from the program but nobody is owning up. The way of the world.
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Nicholas, 6 Jan 2009 @ 8:28pm

What a waste
Why is our government wasting over a billion dollars on this program? Can someone please explain, because I just don't get it.

I don't know about you, but where I live (in California) the television ads talking about these converter box coupons have blatant lies and get all "scary", to the point where most of my relatives and friends all think they need one of these boxes and are filing for the coupons. It's stupid.
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voiceofreason, 6 Jan 2009 @ 8:51pm

Reasoning...
The reasoning is that the government auctioned off the bandwidth and is supposed to make money off of it, but they "took" the bandwidth from people with old TV's.

Hmmm...the idea that a physical substance / medium belongs to all the people and everyone should be allowed to use it...or get paid for someone else using it regardless of their permission because "majority rules"...

Can't we get that to apply to oil and start getting some really big checks in the mail?
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DoH, 6 Jan 2009 @ 8:54pm

Circle Jerk
How many of the 7% really don't give a shit about TV ?
It is pretty funny to watch how the MSM gets all concerned about the potential loss of viewers.

Most of these people were not watching tv in the first place, they are not stupid and will not be suprised when their rabbit ears tv stops working. They just do not care - probably because there is nothing of value to watch.
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Mikey Boy, 6 Jan 2009 @ 9:21pm

Unbelievable
can someone say SOCIALISM? why the hell does the government feel they have to supply people with these coupons anyway? let them fend for themselves and figure it out. Since when has owning or watching TV become a RIGHT? We have become a braindead nation of idiots that looks to the government to solve all our problems. The only people that get ahead are those that forget there even is a government except to pay your taxes and take care of business. The rest of the whiners...well they stay behind and whine. I'm annoyed that even one cent of my taxes went to this JOKE of a program. The government cant run anything, and now we given them investment firms, car manufacturers and God knows what else to run. The worst is YET to come...wait and see.
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Anonymous Coward, 6 Jan 2009 @ 10:29pm

Hey Mikey

This aint digg, learn some manners or go back there.
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Anonymous Coward, 6 Jan 2009 @ 10:43pm

Re: Unbelievable
Mikey Boy: you do not understand what you rant about, which makes you sound like a complete idiot.

Watching TV is not a Right, and this has nothing to do with the rights of the people to watch TV. The spectrum (or 'bandwidth' that public broadcast tv was using) was sold to FOR PROFIT uses, to companies that BID for the ability to use it. That means a PUBLIC GOOD, broadcast TV which is important to have in place for PUBLIC SAFETY warnings, was sold to companies that will profit from them and no longer provide a PUBLIC GOOD. A small amount of that spectrum is still being used for the digital TV broadcast, so that the same services can be supplied to the public using an improved technology. That change means that the public are forced to upgrade their TV reception hardware in order to receive the signals they previously received as a public good... ok if you're lost here: the government profits by selling spectrum that companies will use to make profit while the people no longer get TV. It would be SOCIALIST for the government to keep that profit and not provide the funds to change reception hardware to the new technology. It is not socialist for the government to fund the change that the government is profiting from in the first place.
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Hilary Smith, 6 Jan 2009 @ 10:47pm

What If It's True?
Clever. Take communications away from the People so it becomes harder for us to exercise our right to revolt.
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Mike (profile), 6 Jan 2009 @ 10:52pm

Re: What a waste
Why is our government wasting over a billion dollars on this program? Can someone please explain, because I just don't get it.

Actually, this makes plenty of sense. The government will make back significantly more than a billion dollars auctioning off the spectrum, and that spectrum will be put to significantly better use. The one billion is nothing compared to what we get back.
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Mikey Boy, 6 Jan 2009 @ 11:10pm

Re: Re: Unbelievable
First of all...I do understand it or I wouldn't have come to this blog in the first place. Second of all...yeah yeah yeah...PUBLIC good...if you believe that YOUR the idiot. My point is I am tired of paying for the rest of the public good. How about this? take the money and put it toward the deficit or the education budget instead of giving it back to losers who cant afford 40 bucks?

whose the idiot now?
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Mikey Boy, 6 Jan 2009 @ 11:17pm

over and out
OK. I'm done her3e and dont want to say anymore but I leave all you who think the government is doing sucha great jobwith this factoid.......

Back in 1990, the Government seized the Mustang Ranch brothel in Nevada for tax evasion and, as required by law, tried to run it.

They failed and it closed. Now, we are trusting the economy of our country and 850+ Billion Dollars to a pack of nit-wits who couldn't make money running a whore house and selling booze.

Now if THAT doesn't make you nervous, what does?? !!
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Anonymous Coward, 6 Jan 2009 @ 11:51pm

Re: Re: Re: Unbelievable
Apparently you don't see any issue with the government selling off (for a profit) something that was already yours as a citizen, without giving you any benefit for it. I hardly see how that serves your best interests as a citizen that was paying taxes already. The spectrum was sold, which is a DAMN GOOD THING since it is better for everyone to utilize that spectrum most efficiently, getting more services to fit into the air waves by using narrower bands and less wasted bandwidth between services in the spectrum. Once it is going to be sold, you think it would have been best for the government to just pocket that and use it elsewhere? Ok, I definitely disagree. The education budget should be filled by removing waste and over spending all over the government, not by profiting by selling off spectrum and leaving American citizens without a service that was already theirs... it isn't about whether they CAN afford the converter or not, but whether they should have been forced to spend their own money on it while both the government and other companies profit on the technology change.
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Anonymous Coward, 6 Jan 2009 @ 11:54pm

Re: over and out
What in the hell does this have to do with the FCC selling spectrum and helping people change over to digital broadcast? You're nuts.
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Billy BoB, 7 Jan 2009 @ 12:07am

You are.
Mikey Boy: whose the idiot now?

You are.

This is one of those cases where it is important to remember that possessive pronouns never take apostrophes, even though possessive nouns do (see it’s/its). “Who’s” always and forever means only “who is,” as in “Who’s that guy with the droopy mustache?” or “who has,” as in “Who’s been eating my porridge?” “Whose” is the possessive form of “who” and is used as follows: “Whose dirty socks are these on the breakfast table?”
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Mikey Boy, 7 Jan 2009 @ 12:20am

Re: You are.
typical of people who know they've lost an arguement...

they start correcting spelling and grammer of someone who was typing an unimportant post a million miles an hour at 2am, while multitasking on issues that are really important (unlike this)to show everyone how smart they are and they somehow think this makes their arguement more credible...

hah hah!
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KD, 7 Jan 2009 @ 1:03am

They sure didn't send any to me ....
How could they run out of coupons? Beats me. They never sent the ones I requested to me. At least they never reached me, if they sent them.

I requested the coupons back in April. They never came. Perhaps I should have tried to inquire about them, but I didn't. I figured it probably was pointless -- I expect it was another example of the government's inability to run anything efficiently, and it would only drive my blood pressure up higher than it already is to try to get them to straighten out their screw-up.
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CC, 7 Jan 2009 @ 1:50am

Why?
The entire auction raised $19.592 billion. And now, the government can't give us back more than $1.3 billion back? With so much money, I would expect free converter boxes sent to my doorstep!

But no! Instead, we still have to go buy boxes within 90 days upon receiving those coupons and in the meantime, our money goes straight to bailing out Wall Street and car companies.

What's next?
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John Duncan Yoyo, 7 Jan 2009 @ 6:10am

Verizon FIOS switched to QAM tuning
To make things even worse Verizon FIOS in NoVA switched to QAM tuning which is the same standard as the new TVs. So I need the new turner boxes for my cable as well.
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Nicholas, 7 Jan 2009 @ 8:20am

Re: Re: What a waste
I understand the spectrum, I just don't understand why it's seen as a government requirement that people living in the 70s should be able to watch their Oprah/Judge Judy episodes during the day after the conversion. Just sayin'!
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Anonymous Coward, 7 Jan 2009 @ 9:54am

Re: over and out
SUMMARY: Forwarded email casts doubt on the wisdom of taxpayer-funded industry bailouts by pointing out that in 1990 the U.S. government seized Nevada's Mustang Ranch brothel, tried to run the business, and failed.

Description: Email joke / Rumor
Circulating since: Oct. 2008
Status: False

http://urbanlegends.about.com/od/government/a/mustang_ranch.htm
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Mikey Boy, 7 Jan 2009 @ 11:46am

Re: Re: over and out
it was a joke you idiot. Not that I think the government can run anything....they obviously cant. Everything they touch turns to crap.
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RD, 7 Jan 2009 @ 12:26pm

re: Govt takes over Mustang Ranch
"it was a joke you idiot."

Says the man (presumably) who just took another guy to task for correcting grammar as a demonstration of his failing the argument. Way to make your point, by using an anecdote of a false story that you KNEW was false.

Pot, meet kettle.

MikeyBoy FTW! (and by FTW, we mean F-ing Total Wanker)
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nasch, 7 Jan 2009 @ 4:45pm

Re:
I doubt it. The people who know whether their TV has a digital tuner are the same people who don't need help, and vice-versa.
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Derek Kerton (profile), 7 Jan 2009 @ 5:08pm

Funding TV - Talk
People,

Although I don't agree with the tone or writing style, Mikey is right. Why should the government fund the TV habit of a very few (8%) of Americans who CHOOSE to get their TV over the air. These people have already voted with their wallets that TV isn't very important to them, or they would spend on cable or satellite.

In Britain, there is a TAX every year for every TV set you have in the home. The tax, 80 pounds I think, is used to fund the BBC. They actually must PAY every year to have a TV. In the US, the FCC pays us to get off the 1940s broadcast technology and convert to digital. Should the gov't also have paid to upgrade from B&W to color, or my cassette Walkman to MP3? In a free country, if people want to upgrade to the latest technology, they are free to go to the store and buy the upgrade.

TV is not an essential service. TV is mind numbing. Every study ever done on the subject agrees. And American watches too much. Kids 4 and under watch on average 4 hours a day, despite AMA recommendations that
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Shane, 7 Jan 2009 @ 8:18pm

I wish folks could read
So this amazing program to move us all to the magic of DTV got more funding than all reading and literacy programs for the entire country in 2008. So was want to make sure that folks that can't read instead can order coupons to get boxes that will let them continue to not read.
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Alex Simmons, 8 Jan 2009 @ 6:46am

The reason that they did not keep boxes on hand is simply overhead. The distribution and storage present a huge overhead when coupons can simply be sent in the mail.
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Cie Kay, 15 Jan 2009 @ 11:31am

Why???
I live in Tornado Alley, and often we lose power due to severe weather. What are we supposed to do during a blackout after the switch? Most of us have portable battery-powered TVs in our storm shelters. Now they won't work. Digital TV isn't portable.

The government is obviously trying to control what we know and when we know it, and by what means. Just wait for the day they do this to our radio signals and our telephones. In the event of a national blackout, we will all be in the dark.
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tv watcher, 23 Jan 2009 @ 11:10am

Not seeing a huge problem here:

I got two coupons as soon as I found out about them. I ran right out and bought one box immediately. I waited until nearly the expiration date on the second coupon to get the second box.

There were plenty of coupons available when they were first available.

There's no reason that the government cannot know how many cards are issued: they issued them. There's no reason why the government cannot know how many of them have been used: they are swiped and electronically recorded just like a credit card when they are used. Since the coupon has an evaluation date, there should be no problem in knowing how much will be left from any block of cards when that date expires.

When the date expires, the government will know how much is available. The remaining amount can then be apportioned to those on the waiting list for coupons, who panicked at the last moment and applied recently for their coupons.

It isn't as if people can squirrel these cards away forever and it isn't as if the use of the cards is not electronically recorded -- the data is available and the cards have an expiration date.

And, like anything else, those who are tardy or put off doing something about well announced conversion until the last minute will have to bear responsibility for not "getting with it" earlier.

Finally, it is not as if no boxes are available. We are talking about a $40 discount.
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Glenn Feehan, 28 Jan 2009 @ 7:13pm

digital convertor boxes
I completely disagrgee with you saying it wasnt planned that well - it's simple. If you have an over the air antenna attached to and old 2nd or third TV you apply for a $40 coupon. Your comment "and no one's sure if they will be redeemed or not" is just ill informed (maybe just plain wrong). The coupons have an expiration date on them - just like a creit card - not hard to find - you dont redeem it you dont get the discount and . . . money goes back into the fed's "pot" ready to go out again. If people dont redeem in time they just re-apply (get in line again). I mean how hard is this? It's something for near nothing anyway. When a person redeems the coupon it is swiped like a credit card and the card info/number gets beamed off to a central data base. This is the year 2009 right - software knows exactly where we are at $ wise at the end of any given day! Pull a report How down and dirty does it have to get. There are 5000 Radioshack stores with a handful of employees waiting to help you figure it out.
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ffs, 29 Jan 2009 @ 5:23am

Re: Re: You are.
Spelling mistakes come from fast typing, not grammar mistakes. That just shows YOU'RE the one WHO'S not credible. Did you get held back in grade school a few times?

P.S. YOU'RE an idiot.
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Bob, 30 Jan 2009 @ 2:02pm

can't get coupons in time
I recently stopped getting cable tv. now the coupons are not available to me. I see some of you complaining about everyone who waited too long to get them. Not everyone requested them if they already had cable.
I'm just as tired of hearing some of you whine about those of us who don't have the coupons in time for the transition.
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Anonymous Coward, 1 Feb 2009 @ 6:27am

coupons expired!
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Big Mac, 12 Feb 2009 @ 9:06am

Re: over and out
You tell em Mikey, the Govt. could run anything because:
1. They are not held to the laws of the jungle.
2. The Laws are:
a. Be profitable or die...
b. Refer to a.
Since they have a 'guaranteed' income which they can increase and do increase at any time they want to then; they are not held accountable to the Laws of the Jungle.
They are like the poor little rich kid complaining that he wanted a red Ferrari and got a black one instead...
And we are trusting these rich idiots to get us out of a mess created by a bunch of other rich idiots?
I don't think so...
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Big Mac, 12 Feb 2009 @ 9:13am

Re: Funding TV - Talk
So stay in Britain. If they are so much better than us poor old Americans then by all means, stay there. And pay taxes, taxes, taxes, taxes....
As far as TV's merrit goes:
It has potential, many people would have no clue whatsoever about the rest of the world, current events, cooking, traveling, etc. so forth and so on if they did not have a TV in their life.
And what about those who are less fortunate than us? Are you really that arrogant to believe that TV does not provide a good service for the elderly or poor; people who cannot afford other forms of entertainment. Do you really believe that these people don't deserve something?
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