DigitalTV in U.S. - futures

An estimated 21 million U.S. households, those that rely solely on over-the-air television broadcasts, would be eligible to get coupons to buy digital converter boxes, according to a Commerce Department agency proposal released on Monday.

Coupons would not be offered to a majority of U.S. households because they already have an alternative. The Government Accountability Office estimates about 85 million households watch television using cable or satellite services.

U.S. television stations are required to switch to airing only digital broadcasts in February 2009. However, millions of Americans have yet to buy new televisions that receive the higher-quality broadcast signals.

Congress last year passed a law that would provide an initial $990 million, and as much as $1.5 billion, to help Americans buy converter boxes that would keep their old, analog televisions working when the digital transition is finished.

"They are the households that would be most directly and manifestly impacted by the transition," said John Kneuer, acting assistant secretary of commerce and head of the National Telecommunications & Information Administration (NTIA).

NTIA sought public comment on the proposal and other ideas such as whether to limit the coupons to low-income households, like those families living below the poverty level.

"I would expect there would be a lot of comment," Kneuer told sources in a telephone interview. "I would hope to get something done by the end of the year because of the time constraints of the transition itself."

Broadcasters estimate there are 73 million television sets in American homes that are not hooked up to cable or satellite. Though, the GAO found a smaller number -- around 44 million -- of those sets in homes that rely on over-the-air broadcasts.

The industry sells between 28 million and 30 million new digital and analog sets annually and by March 2007, all new televisions must be able to get digital broadcasts. Consumers have been reluctant to buy the new sets because many still cost more than $1,000.

If the entire $1.5 billion was used, the government could offer coupons for 37.5 million television sets. The law, approved last year, permits eligible homes to receive up to two coupons, each worth $40.

Consumers who are eligible for the discounts would have to apply for the coupons between January 1, 2008 and March 31, 2009 and would be required to certify they qualify for the program, according to the NTIA proposal.

The National Association of Broadcasters said it expected NTIA to focus on homes that rely on over-the-air broadcasts.

"However, we would hope that no broadcast-only TV sets are forced to go dark during this transition," said NAB spokesman Dennis Wharton.