• March 1, 2009
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Stay Tuned

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For the rest of the March 2009 issue of CRM magazine, please click here.

By now you’ve heard and seen plenty about the switch to digital television (DTV), and in fact it may have already happened—for years, the cutoff date of February 17, 2009—changed from an original 2006 deadline—carried a distant feeling of finality. But as the date approached, “finality” seemed less final. The DTV switch has been fraught with controversy and complexity, and the issue became one of the first trouble spots for President Barack Obama, bound up with the recession, technology, and the government’s economic stimulus package. (See “Stimulating Citizen Experience.”)

Despite efforts to push the deadline to at least June, Congress was unable to reach a consensus, reflecting inertia or good judgment, depending on whom you ask. At press time the matter was still not completely settled—the February deadline loomed, but possibly millions of Americans remained at risk of not having the proper equipment to receive the new digital signals—and the story behind the dilemma speaks to the nature of government-level customer service. (See this month's cover story, “We the People,” for more on CRM in government.)

As part of a 2005 law regarding the DTV switch, the National Telecommunications and Information Administration (NTIA), a Department of Commerce agency, created a coupon program to help subsidize the acquisition of digital converter boxes for analog-TV owners. Each household was eligible for up to two $40 coupons to offset the cost of each box. (Retail prices for the boxes ranged from $40 to $70.) These converters are necessary for any analog TV that isn’t otherwise hooked up to a digital receiver (such as a cable TV box). Once the switch is complete, viewers who depended on antennas to receive TV broadcasts will be watching only static.

High demand for the coupons near switching time, however, sent the program to its $1.3 billion funding limit, and people were placed on a waiting list. Then-President-elect Obama and others called for a delay so that everyone who wanted a digital converter could have one before the change takes place. In January, the Senate passed a bill that would delay the transition until June 12. The House, on the other hand, defeated a similar measure, leaving the cutoff date as February 17. And that’s where the matter stood, at press time.

Fingers are being pointed in all directions. Some blame the NTIA and the federal government as a whole for mismanaging the program, while others blame consumers who waited for the last minute, or who requested coupons they didn’t need or forgot to use. And there are those who blame the news media for inflating a minor problem into a national issue.

“I do not think the situation is one in which blame is really to be given; rather, the limited number of consumers with issues are being politicized,” says Robert Heiblim, consumer electronics consultant and owner of RH Associates, via email. “The HDTV transition is not new—indeed, this started almost 20 years ago. There have been years of alerts for consumers to get ready, but the fact is that no matter what is done at least some will—for inertia, lack of funds, or ignorance—get caught short. What could anyone do?”

Why put expiration dates on the coupons in the first place? “Because Congress said so, is the easy answer,” says Bart Forbes, an NTIA spokesperson. The intent of the program, he says, was to get converter boxes into homes, and the expiration date was added in part “to create demand that would get manufacturers to want to build them.” The waiting list was a result of the way coupon programs work—it’s illegal to distribute more coupons than you have funds set aside—or “obligated”—for redemption. “We have enough cash to redeem more than 33 million coupons, but we only have funds obligated for 20 million,” Forbes says. Until the already-distributed coupons are redeemed (or expire) and the funds attached to them are “de-obligated,” the NTIA can’t distribute any additional ones.

A sampling of industry and citizen reactions indicates that any flaws in the DTV switchover effort may be systemic.

“The government is not supposed to be doing things like this at all because they always mess things up,” says Emmett Smith, a sales and marketing consultant. “The government is not supposed to have the money to pass out coupons,” he adds, alluding to the trillion-dollar budget deficit and multitrillion-dollar national debt. (As with the rest of this process, the reality’s a bit more complicated: The funding for the coupons was borrowed from the government, but reimbursed by the sale of the broadcast spectrum that analog-TV broadcasts used to occupy.)

“My only disappointment was that I was not told that the coupons would expire,” says Edward Siegel, director of marketing for SuperOffice CRM. “I acted early and got the two cards they offered about eight months ago. When I saw that they would expire shortly after I received them, I decided not to use them. I didn’t want to spend any money—not even with a discount—on a 25-year-old TV that might not have even lasted until February.”

“Talking about blame or mishandling suggests some expectation has not been met. Which one?” asks Bill Matthies, of electronics consultancy Coyote Insight. “What criteria do we have for success/failure? If we need 100 percent of…this country to be aware of the transition, happy with their options, etc., maybe we’re being a bit unreasonable.”

Many feel that it’s better to get the transition done and fix the problems later. “I think the original date for switching over to DTV should be respected,” says Tino Zottola, vice president of engineering at Genesis Technical Systems. “There will never be a perfect time.”

“Basically, I think delaying the transition would be a blunder,” says Mark Fleischmann, author and home-theater expert. “Only a small minority of the TV audience depends entirely on antennas, and of that group, only a minority is unready. So we’re talking about a subset of a subset of the total viewing audience. These folks are sitting on their hands, and while letting their screens go dark may seem callous, and will undoubtedly cause a fuss, it’s the only thing that will get them to act.” He notes that the coupon-subsidized boxes aren’t the only option. “Buying a new HDTV would be a better alternative for those who can afford it, and prices are lower than ever,” he says. “And of course there’s always cable, satellite, and telco delivery.”

Not everyone has those options—and those who rely most on the analog signal may be the least able to make the DTV switch. “Unfortunately, we as technical professionals forget that there is a whole world of people who are not as connected as we are,” Siegel says. “There are large sections of the country where TV is still the primary delivery method for information. In these places access to TV may mean survival.”

And yet the process marches on. “Delaying the transition helps no one and still there will be upset folks in the end for the same reasons,” Heiblim says. Broadcasters and manufacturers have done their part, he says. “It is quite easy to blow the issues up more than they are. People resented fax machines, but they got over it…. [L]et’s move along.” 

Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationcrm.com/subscribe/.

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