U.S. could face glitch in TV converter box program (Reuters)

WASHINGTON (Reuters) - U.S. officials are facing apotential glitch in a program designed to help televisionviewers make the switch to digital TV next year.

A Commerce Department official told House lawmakers thatmore money might be needed to mail out all the $40 governmentcoupons that will be available to subsidize converter boxesthat some TV owners will need for the February 2009 switchover.

Bernadette McGuire-Rivera, associate director of theNational Telecommunications and Information Administration,said at a hearing that it was possible the agency "would haveto get more money, basically to buy more stamps to send outcoupons."

"This sounds like it could be a big problem here," Rep.Edward Markey, chairman of the House Subcommittee onTelecommunications and the Internet, said at the hearing beforethe panel.

The NTIA is an arm of the Commerce Department that isoverseeing the converter box program.

Congress ordered the February 17, 2009 switch to digitaltelevision to free public airwaves for other uses, such as forpolice and fire departments. The switch also is to lead toimproved picture and sound for TV viewers.

The transition is being closely watched because owners ofanalog televisions will be unable to watch television unlessthey subscribe to satellite or digital cable, replace their TVwith a digital television by that date, or get a converter box.

The federal government is subsidizing the cost of buying adigital-analog converter box by offering the $40 discountcoupons to anyone who owns an analog television. The $1.5billion program has enough funding to subsidize as many as 33.5million converter boxes.

The converter box coupons expire if they are not redeemedwithin 90 days.

More than 100 retailers have been certified to participatein the converter box program, including Best Buy Co Inc,Circuit City Stores Inc, RadioShack Corp, Sears Holdings Corp,Target Corp and Wal-Mart Stores Inc.

The government began mailing coupons on February 21. As ofJune 3, it had received requests for more than 16 millioncoupons, McGuire-Rivera said in a prepared statement.

But extra coupon mailings could be needed because manypeople who applied for them did not use them before theyexpired.

Only 42 percent of the coupons sought by consumers werebeing redeemed before they expired, according to NTIA figures.

Funds for expired, unredeemed coupons are being returned tothe subsidy program and will be available so more coupons canbe mailed.

But McGuire-Rivera said, "The program currently has limitedadministrative funds to distribute additional numbers ofcoupons that might be issued from the returned funds."

The NTIA issued a statement after the hearing saying it"has no plans to ask Congress for any additional funds."

A more accurate forecast of the costs would be possiblesometime after July 1, when NTIA gets further redemptioninformation.

Reuters/Nielsen