WASHINGTON (AdAge.com) -- In a new challenge for consumers facing the transition to digital television, the government's program offering $40 coupons for a TV-converter box is out of money, weeks faster than anyone expected.
The Department of Commerce today said it now has committed the entire $1.34 billion available for the coupons and is starting to put consumers now requesting the discount on a waiting list.
Only two weeks ago Meredith Attwell Baker, acting assistant secretary of the Department of Commerce's National Telecommunications and Information Administration, warned U.S. Rep. Ed Markey, D-Mass., chairman of the House Energy and Commerce Committee's telecom panel, that the $1.5 billion set aside for the coupon program might run short of requests. (Not all of the money is earmarked for consumers; some goes for administering the program.)
Flood of requests
That wasn't expected to happen immediately. A blitz of media stories over the Christmas holidays, however, brought in a flood of requests. NTIA has scheduled a press conference this afternoon to discuss the situation.
Ms. Baker had warned Mr. Markey that although a third or more of coupons haven't been redeemed, the way the program is structured could force NTIA to delay sending out new coupons. The government sets aside money for any coupons issued during the 90 days they can be redeemed and her worry was that the agency might have to temporarily stop issuing new coupons.
Today the agency said it won't be able to issue to issue more coupons unless Congress acts or the coupons expire.
At a news conference this afternoon, Ms. Baker said the coupon program was a victim of its own success. She cited a "massive spike" in December that brought requests for 7.2 million coupons rather than for the 4.3 million that NTIA had expected.
She also speculated that the economy could be affecting the number of coupons requested, with more consumers choosing to use converter boxes instead of buying new DTV-ready TVs.
Ms. Baker said since NTIA began its waiting list Sunday, and already there are 103,000 coupon requests on the list. Consumers, instead of getting a coupon, will be notified there will be a delay. Through Feb. 11, about 351,000 coupons are expected to expire unused each week, and the same number can be issued. Because more consumers applied for coupons in November and December, the number that will expire later in February and March also will grow, but that will come after the Feb. 17 DTV transition.
Ms. Baker said that while she's in touch with Congress and the incoming Obama administration, there has been no formal request for additional money.
An approved request for a coupon filed today at dtv2009.gov elicited the following response: "We have determined that you are eligible to participate in this program and your coupon application has been approved. However, because program funding is not currently available, you will not receive coupons unless more funding becomes available. If program funding becomes available you should receive your coupons in the mail."
As of the end of 2008, the government has issued 41.9 million coupons to 24.1 million households. Of that amount, 18 million coupons were redeemed.