Digital TV converter coupons in short supply

By Kim Dixon

WASHINGTON (Reuters) - U.S. consumers who wait too long to request government coupons to subsidize converter boxes for the digital television transition in February may come up empty-handed, a regulator has warned.

Due to a last-minute rush of coupon requests, demand may exceed supply in the coming month, said the Department of Commerce official overseeing the subsidy program.

Rep. Ed Markey, a Massachusetts Democrat who asked for the update on the digital TV transition, said Congress may need to quickly pass additional funds in early January for the coupons.

Congress ordered the switch to digital signals, effective February 17, 2009, to free up public airwaves for other uses such as for police and fire departments.

The switch will mean improved picture and sound for TV viewers, but about 15 percent of the population rely on analog-only over-the-air signals and therefore need a converter box to keep their screens from going black.

The government program doling out $40 coupons to subsidize the converter boxes is likely to reach the $1.34-billion limit of its budgetary authority in the first week of January, said Meredith Attwell Baker, acting assistant secretary for Communications and Information at the National Telecommunications and Information Administration.

"Once the obligation ceiling is reached, the program will hold coupon requests until funds from unredeemed coupons become available," said Baker in the December 24 letter to Markey who chairs the House subcommittee on telecommunications and Internet matters.

"NTIA realizes that this would likely result in consumer confusion," she added. If the high demand continues at its current rate of more than 1.5 million requests per week, the agency could run out of coupons in late January.

There are about 60 models of boxes to choose from, costing between $40 and $90, before the coupon, according to Consumers Union, which produces the magazine Consumer Reports.

Markey said Baker's response was worrying. "It is becoming increasingly clear that at minimum Congress may need to quickly pass additional funding for the converter box program in early January," he said in a statement.

(Editing by Tim Dobbyn)