TESTIMONY OF FCC ACTING CHAIRMAN MICHAEL J. COPPS U.S. HOUSE COMMITTEE ON ENERGY AND COMMERCE SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY AND THE INTERNET “OVERSIGHT OF THE DIGITAL TELEVISION TRANSITION” ***** MARCH 26, 2009 INTRODUCTION Good morning Chairman Boucher, Ranking Member Stearns and Members of the Subcommittee. This is my first opportunity to testify before you since becoming Acting Chair of the FCC, and I am especially pleased to be here to discuss the Commission’s efforts to prepare the American people for the end of full-power analog broadcasting on June 12. First, I’d like to thank the Congress and the President for extending the DTV transition deadline. It has long been clear to me—and it became even clearer when I became Acting Chair and had a chance to look under the hood—that we were not ready for a nationwide transition on February 17. Most obviously, there was the coupon waiting list. But the problems went far deeper. There was inadequate coordination between the FCC and NTIA (and other potential government stakeholders), and between the public and private sectors that led to a patchwork of often disjointed efforts on everything from consumer education to call centers to converter boxes. There was inadequate consumer outreach and support, particularly when it came to the difficult challenge of moving beyond general awareness to helping consumers deal with their specific problems and providing them with hands-on assistance. And there was inadequate attention to certain key issues, like signal coverage and antenna problems. Now, some may say that we won’t be ready on June 12 either, and that there will still be consumers left behind. And that is true—this transition will not be seamless. The hard truth is that we won’t be able to make up for the inadequate policies of the past few years in just a few short months. There will be consumer disruption—count on it. But I also know that we can use this time to make a real difference. We can provide more focused consumer outreach and support—especially for our most vulnerable citizens such as the poor, the elderly, the disabled, and non-English speakers. We can have better and more coordinated call centers. We can deploy “boots on the ground” to provide walk-in centers and in-home assistance to many who need it. And we can help consumers get a better grip on coverage and reception issues that so many are struggling with—serious problems that were for too long minimized or wished away. I’ve never sugar-coated my concern that the DTV transition lacked the committed leadership and coordinated public-private partnership to get the job done. Indeed, in December 2007, I testified before this Committee that “[i]f we don’t start making the DTV transition a national priority, we will almost certainly have a 9-car train wreck on our hands.” To be fair, I think the FCC and others did begin to act with more urgency starting in the middle of 2008—largely in response to Congressional oversight—but by then it was obviously too little, too late. The late start led to a rushed effort with little room for strategic thinking or for anticipating and fixing problems that arose. 2 When I became Acting Chair on January 22, I tried to bring a new level of coordination, collaboration and focus to the effort. We were still planning for a February 17 transition date at the time, and I told staff that our three most important priorities in the coming weeks would be DTV, DTV and DTV. We moved quickly to improve coordination of the Commission’s efforts, to deploy new ideas and resources and teams, and to do whatever we could, at that late date, to minimize what was going to be considerable consumer disruption on February 17. THE DTV DELAY ACT We moved just as quickly in early February when Congress passed the DTV Delay Act to move the transition date to June 12. The basic thrust of the Delay Act, of course, was to give consumers additional time to prepare for the end of analog service. At the same time, Congress directed the FCC to give stations flexibility about turning off their analog signals in advance of the new deadline. Clearly, then, we had—and continue to have—a balance to strike between giving consumers adequate time to prepare and giving stations the flexibility to end analog service early. We didn’t have a roadmap for achieving that balance—but we did have the commitment to finding it. I believe we have struck a reasonable balance. We have given stations the flexibility to transition early. In all, some 629 stations transitioned on or before February 17, and another 160 have elected to transition between February 18 and June 12. Added to the 21 full-power stations that have only operated in digital and never had an analog 3 channel, 810 of the approximately 1,787 full-power stations nationwide (45.3%) will be providing digital-only service prior to the June 12 deadline. At the same time, we have tried to protect consumers from a total loss of analog service. If all stations in a local market had terminated analog service on February 17, for instance, it would have been as if the Delay Act never happened for area viewers. So we tried to ensure consumers would continue to have analog service from at least one station affiliated with a top-four network. All other stations were allowed to transition whenever they wanted—no questions asked. In those markets where viewers would lose all of their top-four network affiliates, we asked those stations to comply with certain public interest requirements to help consumers in that market, including walk-in centers, telephone assistance, and staying on the air with at least one analog signal providing local news and emergency information to the community. Even then, if a network affiliate had a financial hardship, it could apply for an exemption from the requirements—and several did. Most viewers still have the transition ahead of them. The bulk of the stations that have already transitioned are in mid-size and smaller markets. So while about a third of all stations nationwide have transitioned thus far, only about 15% of TV households have lost two or more network affiliates and only 2.5% of households are in markets that have completely transitioned. Indeed, there is some evidence that many consumers who lose some, but not all, stations in their area will simply switch to another channel. In the wake of February 17, Nielsen reports that the viewership of those stations that transitioned to digital was down over nine percent, while viewership in those markets 4 overall actually increased by almost one percent. So we have much of the work ahead of us and we should not—we cannot—become complacent. THE ROAD AHEAD What we need to do now is to learn and apply the lessons before us. The full transitions in Wilmington and Hawaii, as well as the partial transitions on February 17 and those that will occur prior to June 12, give us the chance to have something of the phased transition I’ve long advocated. I welcomed former Chairman Martin’s support for the idea of test markets and he worked hard to find such markets. Unfortunately, only one community, Wilmington, North Carolina, stepped forward last year to volunteer. The Wilmington test had its limitations—for example, the flat terrain did not provide a very challenging reception environment for digital signals—but it was still a valuable exercise. Having the benefit of a phased transition allows us to learn lessons along the way, make necessary mid-course corrections and identify problems before they become crises. The United Kingdom is transitioning on a regional basis between 2007 and 2012, learning at every step along the way and making necessary adjustments. Our single transition date did not afford us the luxury of a built-in learning curve. Now we have a short one, and we need to make the most of it. Here’s some of what we’re doing to move up the learning curve at the FCC: Better consumer education. We recently revised our consumer education requirements to reflect the signal coverage, antenna and re-scanning problems that consumers have had to date. Starting April 1, stations must notify viewers about signal loss areas, the use of antennas, and the importance of re-scanning converter boxes and 5 digital TVs. The logic behind these new requirements is simple: consumers deserve the truth. If some of them are going to need new antennas to receive digital signals, let’s tell them so. If a station’s coverage area has shifted and some consumers won’t get a signal no matter what they do, they should know that too. In addition, stations also must publicize the location and operating hours of walk-in help centers, and telephone contact information for the station and the FCC Call Center. Better targeted outreach. While the FCC will provide support to all markets, we have worked with NTIA to develop a list of 49 “hot spots” based on factors such as number of over-the-air households, demographics, coupon request and redemption rates, signal coverage problems, as well as our hands-on field experience. Better “boots on the ground.” Another lesson the Commission has learned is that it is critical to have staff on the ground to assist with the transition, including walk-in help centers for consumers to get answers to their questions, apply for converter box coupons, learn how to install their boxes and receive advice on antenna and reception issues. In addition, there will be some consumers who will not be able to install a converter box or cope with antenna issues on their own—regardless of the number of call centers and walk-in centers available. The Commission must partner with organizations that can provide in-home assistance to these consumers. We are in the process of identifying and contacting local organizations that are willing to provide these services and can be trained to do so. For instance, we are working through the details of an interagency agreement with AmeriCorps National Civilian Community Corps (“AmeriCorps NCCC”) to provide 6 outreach and in-home installation assistance to at-risk populations in target markets across the country. We have identified Denver, Colorado as a test market to launch this partnership and will be conducting joint training there in advance of the early station transitions in Denver planned for mid-April. We are also in the process of finalizing a Statement of Work for a proposed contract with the International Association of Fire Chiefs (“IAFC”). The IAFC is in a unique position to provide locally-based consumer assistance. Through the efforts of its member fire chiefs, it will be able to select and engage qualified fire service professionals in fire departments across the country to volunteer to assist consumers who need help installing their converter boxes. The plan is to link participating fire departments’ contact information with the FCC’s Call Center, thus enabling at-risk consumers to expeditiously obtain needed assistance from trusted, qualified and locally-based public servants. In addition, the Commission is preparing to issue Requests for Quotation (“RFQs”) to solicit bids for contracts to provide call centers, walk-in centers, basic and expert in-home installation assistance and media support. In light of the need for these services, we have five contract officers and 42 contracting officer technical representatives supporting them to expedite the bid and contracting process. Better Call Centers. Shortly after I became Acting Chair, we worked with our industry partners to establish a single number for consumers to call for nationwide help. We developed a common set of materials for agents to respond to consumer inquiries and a process for referring calls to local resources. We now have the opportunity to take that foundation to the next level—to provide more in-depth training 7 for certain agents to handle longer, more technical calls, and to improve the tools available to agents for handling problems and the databases for referring consumers to help centers and other local resources. For instance, agents can now access the FCC’s online mapping tool to walk consumers through the best way to get reception at their particular address. The agents can also provide callers with the names, locations, and contact information for every walk-in help center and other local resource in their area. Better signal coverage/better information about signal coverage. In some cases, portions of the existing analog service areas of some full-power stations will no longer be able to receive service after the station transitions to digital broadcasting. The Commission is taking several steps to provide stations experiencing such service losses possible ways of restoring coverage to those areas. First, the Commission approved the use of distributed transmission service (“DTS”). With DTS, instead of using a single transmitter to air programming, a station can utilize a series of synchronized, lower power transmitters placed throughout its service area, with each transmitter broadcasting on the station’s DTV channel. DTS has potential to enable broadcasters to improve coverage to service loss areas, particularly stations that changed channels or transmitter sites for their digital service or serve areas containing mountainous or uneven terrain. Unfortunately, the Commission only approved the use of DTS last November—too late for deployment by February and likely too late for deployment by June. Second, the Commission has proposed to permit stations to improve coverage to loss areas by establishing a new “fill in” translator service that would permit full-power 8 stations to use translators to maintain existing service. I hope that we can adopt final rules soon. While we are working on the final order, we have and will accept requests for special temporary authorizations to allow stations that seek such facilities in order to mitigate their station’s loss areas to construct and operate their fill-in translators. To date, we have granted six STA requests. The additional time may give those stations and others the opportunity to construct a relatively simple solution like a fill-in translator. Third, we are focusing now on the cross-border coordination of requests from U.S. licensees to change certain station technical parameters – such as power levels, coverage or antenna height. For the most part, licensees request these changes to better reach viewers within their station service areas. Technical staffs in both Canada and Mexico are currently analyzing each of these “maximization” requests to assess compatibility with their respective country’s TV stations. The fact that the U.S. is transitioning in advance of either of its neighbors adds some complexity – as the existing analog stations across the borders will need to be protected in the near term. That said, FCC staff has been working closely with Canadian and Mexican counterparts to facilitate expedited review of each request. And I have personally reached out to my cross-border counterparts as well in an effort to seek continued assistance as we move toward the conclusion of our DTV transition. Just last week, I had a discussion with a senior Canadian official about the importance of our maximization applications and my hope that they can be acted on quickly. Whether or not these coverage issues are resolved, we should at least let consumers know that they exist. That is why we mandated that stations that anticipate significant service losses must notify their viewers. And that is why our FCC engineers 9 recently developed a new web-based tool to help consumers understand what stations they should be able to receive at their home addresses and what kind of antennas they might need to receive them. CONCLUSION That is a small piece of what we are doing at the Commission. I would be remiss if I did not mention the heroic efforts of the FCC staff, and particularly our outreach team, a group of 200 truly dedicated public servants who have traveled far and wide to make a real difference in communities across the country. I also want to thank my two colleagues, Jonathan Adelstein and Rob McDowell, both for their tireless outreach and for the leadership that they and their staffs provide every day on these important issues. Sincere thanks also go to Acting Assistant Secretary Gomez and her talented team at the National Telecommunications and Information Administration for the coordinated and constructive working relationship that has developed between our agencies. It goes without saying that NTIA has faced some pretty tough challenges in its administration of the TV Converter Box Coupon Program, and I want to congratulate them on the rapidity with which they eliminated over four million requested coupons on the waiting list. We have many additional challenges ahead of us as we move toward June 12, and it’s great to know that NTIA will be right there next to us to continue to prepare the American people. And I want to thank the affected industries as well—broadcasters, cable, satellite, consumer electronics manufacturers and retailers and others—for stepping up to 10 help the country make this transition. They have played an important role from the beginning, and when we provided them with a measure of enhanced coordination and the opportunity for public-private collaboration, they were able to accomplish even more. These industries and others have shown what a committed public-private partnership can accomplish in a short period of time, and, in doing so, they have made a tremendous contribution to the public interest. Finally, I want to thank the groups too numerous to mention—the community and civil rights organizations, consumer groups, state and local governments, and others—who have reached out to help a friend, a relative, or a neighbor. Tip O’Neill famously said that “all politics is local.” Well, the DTV transition is local, too. In fact, it’s downright personal, and it will require that personal touch if we are to succeed. I know we all will continue to work as hard as we can. Because our work is only partly done and the greatest part of the test is still ahead of us. Working together, we can—we will—make a huge difference for consumers. Thank you for the opportunity to testify today. I would be happy to answer any questions you may have. 11