Special Section on the Digital TV Transition

July 24,2007

Mr. M. R. Kneuer
Assistant Secretary for Communication and Information
National Telecommunications and Information Administration
U.S. Department of Commerce
1401 Constitution Avenue, N.W.
Washington, DC 20230

Re: Notice of Intent

Dear Mr. Kneuer:

I appreciate the opportunity to provide comments regarding the Notice of Intent (NOI) published by the National Telecommunications and Information Administration (NTIA) regarding the Digital TV Converter Box Coupon Program (the DTV Program). In that NOI, the NTIA announced its intention to review specifications of digital TV converter boxes to ensure that such boxes meet at least the minimum and do not exceed the maximum requirements of the NTIA's DTV Program rules.

While it is important that NTIA have a full understanding of the capabilities of Coupon-Eligible Converter Boxes (CECBs), it is even more important that consumers are given complete information on the capabilities and shortcomings of converter boxes before they actually purchase a CECB. Failure to provide full disclosure will result in consumer disappointment, and a high level of retail returns, creating an administrative nightmare for consumers, retailers, and the NTIA, thus adding significant and unnecessary complication and cost to the program.

Consumers have an absolute right to know whether the CECB they purchase will preserve or degrade the performance of their current television equipment, will conveniently connect to their television set, or will require additional equipment to preserve system performance.

THAT Corporation filed formal comments on the NTIA's Notice of Proposed Rule Making regarding the DTV Program. Our comments were based on our extensive experience with audio for television. We strongly urged the NTIA to require all CECBs to include BTSC stereo, be-cause only BTSC, will preserve the audio performance of stereo televisions regardless of the type of connections used. We were disappointed that the NTIA chose not to require BTSC stereo in CECBs and believe that NTIA should quickly reconsider its position on this issue.

However, we are grateful that the NTIA chose to allow BTSC stereo as an optional feature in CECBs. As you are aware, BTSC stereo is the stereo audio system for television unanimously recommended by the Broadcast Television Systems Committee of the Electronic Industries Association (EIA) and the National Association of Broadcasters (NAB) in the mid 1980s, and subsequently approved by the FCC. Without BTSC stereo, most Americans who purchase CECBs will be deprived of the stereo audio that they have come to enjoy as part of their current television viewing experience.

THAT Corporation is working to encourage manufacturers to include BTSC stereo in the CECBs they offer to American consumers. We believe it is in the best interest of all Americans that the NTIA and the Congress so encourage manufacturers as well. We believe that to ensure success in the DTV transition, it is essential that all American TV viewers maintain at least their current standard of viewing experience after the transition.

Based on our conversations with manufacturers of ICs and set-top boxes, and as a direct result of NTIA's decision to make BTSC an optional rather than a mandatory feature of CECBs, we anticipate that manufacturers are likely to offer at least two versions of CECBs: one including BTSC and another that does not. Only CEBCs containing BTSC will deliver stereo audio to all Multichannel-TV- Sound-equipped TVs (MTS TVs), regardless of the TV set's compliment of jacks and the technical skill of the installer. No additional cables will be required beyond the NTIA-required RF cable to maintain the current viewing experience. Those lacking BTSC will deliver stereo only if an MTS TV is equipped with available audio/video RCA input jacks, the consumer purchases or has available the appropriate cables, and the installer hooks the CECB up properly.

Many TVs, especially older sets, do not have audio/video RCA input jacks and have a single RF jack. For a consumer with an RF jack to preserve stereo sound, an additional RF converter box using an additional three cables must be connected to the CECB. A typical RF converter box sold at popular electronics retailers is about $25 and may require the purchase of additional cables. This consumer cost could be completely avoided if the CECB included BTSC stereo.

For retailers, the cost of not having BTSC stereo included in the CECB will be extensive. Consumers will be frustrated and disappointed in the connection process and performance of their equipment. The result will be a higher-than-normal level of out-of-package returns of CECBs and associated products. At the customer service counter, you can imagine the problems which will arise when consumers attempt to return a CECB and reclaim their original discount coupon. Retailers and legislators will pay a heavy price as consumers complain about the degradation of their television quality and cope with the administrative nightmare of dealing with CECB coupon refunds.

By contrast, we estimate that including BTSC stereo in a CECB would cost about 40 cents per unit - the cost of a postage stamp. As we have pointed out, the true cost of not having BTSC stereo in the CECB will be many multiples more for consumers, taxpayers, and retailers.

If the NTIA is not going to require BTSC stereo, it is in the interest of consumers, retailers and taxpayers that CECBs be clearly and prominently labeled to distinguish CECBs with BTSC from those without. We suggest that such labels must be prominent enough to leave no doubt in the consumer's mind before purchasing as to the difference between these two types of CECBs. The label should emphasize not only audio quality, but ease of connection. Packaging should clearly disclose to consumers which CECBs provide full stereo to all connections as well as whether additional equipment is needed to preserve a television's stereo audio.

We understand that the acronym "BTSC" is not well known to consumers. If it were used to identify BTSC-equipped CECBs it would fail to convey the importance of its inclusion. Therefore, we propose that NTIA require that only CECBs which provide stereo audio from all outputs (i.e., those that include BTSC) be permitted to be labeled "stereo audio." CECBs that do not provide stereo output from all connection jacks should be labeled as delivering "mono audio" or "additional equipment may be required to preserve stereo performance." The NTIA should require that this labeling be at least as prominent as other major features and functions described on the box and related point-of-purchase materials.

There is a substantial risk that without a BTSC stereo requirement for all CECBs, millions of American consumers (prominent among them low-income, elderly, and minorities) will be downgraded to monaural audio as a result of the DTV transition. This will inadvertently turn back the clock for these unfortunate Americans.

The NTIA can still, on its own motion, quickly amend its rules to require BTSC stereo. Short of that, the only step left to the NTIA to prevent the degradation of television performance is to ensure that manufactures fully, clearly, and prominently disclose on the outside of packaging the capabilities, especially the audio capabilities, of the CECB and thus ensure that American consumers are well informed about the choice they will be making when they use their NTIA CECB program coupons.

We urge you to change your ruling to prevent consumer confusion, administrative difficulties, and increased program cost. Failing that, we insist that you empower consumers with the information they need to preserve the quality of their television experience, by requiring that manufacturers clearly label CECBs to distinguish those that will fully deliver stereo audio from those that will deliver mono audio.