The End of Analog; The Beginning of the Coupon-Eligible Converter Box Program; and an Opportunity to Approach Recycling

1. The End of Analog; The Beginning of the Coupon-Eligible Converter Box Program; and an Opportunity to Approach Recycling Responsibly Marc Pearl – CERC Executive Director Metropolitan Washington COG Recycling Committee March 20, 2008

2. Consumer Electronics Retailers Coalition • CERC formed >10 years ago to represent CE and general retailers who sell CE on their public policy agenda and help coordinate their “voice” • Primary role – to educate, advocate and instill consumer and market confidence in CE policy issues. • Cable Box; DTV Transition; Theft of Service; IPR; and Recycling. • Represent a wide range of national CE companies and related trade associations – including Amazon.com, Best Buy, Circuit City, RadioShack, Sears, Target, Wal-Mart. • Retail Industry Leaders Association (RILA); North American Retail Dealers Association (NARDA); and the National Retail Federation (NRF) and work closely with all the state retail associations. • Consumer Education: CERC members are the “face” consumers see when purchasing CE and to find out about opportunities to return those that have reached their EOUL. • Advocacy Position: How best to incorporate a ‘true’ Product Stewardship | Shared Responsibility Approach involving ALL of the affected stakeholders. • Our nation needs a national solution and cannot afford a patchwork of divergent state laws on the handling of CE devices.

3. Why America is Switching to Digital Television (DTV) • Digital is a more efficient way to broadcast, which will free up the airwaves for other services, such as public safety. • DTV also results in clearer pictures and more programming channels, and enables over-the-air high-definition television (HDTV) for consumers with HD television sets.

4. Who is Affected? Disproportionately Affected Groups: • Seniors • Minorities • Low Income • Rural Areas Who is not Affected? • Any TV that already has a digital (ATSC) tuner and/or is connected to a cable, satellite or teleco service.

5. U.S. TV Reception ProfilePercentage of U.S. Households

6. How Does One Receive a DTV Signal? • Purchase a DTV converter box beginning mid-February 2008. • Purchase a new television set with a built-in digital tuner recently and going forward – DTV or HDTV • Subscribe to a pay TV service – i.e. cable, satellite or a telephone company video service provider – providers probably will continue to send an analog signal to their subscribers for at least another 3-4 years.

7. Past Key Dates/Timelines • March 1, 2007 – Tuner Mandate – Last date manufacturers could import any device with an analog tuner ONLY – • Therefore, most consumers who have already purchased a new device will have an ATSC tuner inside, so they will not need a converter box if they use an antenna • May, 2007 – FCC mandated that retailers label (on shelves and website) any/all remaining analog-only TV receivers. • August 15, 2007 – NTIA announce choice of IBM Consulting as the “Turn-key Program Contractor” for $1.5b “Coupon-Eligible Converter Box” (“CECB”) Program.

8. Going Forward – Key Dates • January 1, 2008– Households have begun to apply to the NTIA for up to two (2) $40 “coupons” – Coupons mailed out beginning mid-February. • Early 2008 – CECBs have begun to be distributed to participating retailers and on shelves – ready for coupon redemption. • March 31, 2008 – Last day retailers have to “Register & Qualify” for the program. • Willingness & ability to accept the government-issued “coupon” towards payment of a CECB. • February 17, 2009 – Last Analog OTA Broadcasts • March 31, 2009 – Last day for a household can apply for their $49 coupons • Around July 10, 2009 – Last coupon expires

9. Some Background Statistics • $1.5b for total program ($40/coupon – no more than 2 per household address; administration; marketing; consumer education) • Enough $$$ for about 33.3m coupons • 2.8 TVs per household • About 17% of households (about 20m) are 100% OTA • Additional 35-50m TV sets are ‘untethered’ • Some are being used for DVDs & games only (30%) • NAB survey data indicates that by February 2009 more than 25% of OTA households and 33% of those with “untethered” sets will have purchased a new DTV or HDTV receivers.

10. Retailer Participation/Certification • Voluntary • No compensation to participate • Need to complete a Central Contractor Registration (www.ccr.gov) to receive timely EFT payment (this should not make you a “government contractor,” as such registration is only a first step for those who wish to become one) • Certification by NTIA based on – • Ability to redeem “expeditiously and efficiently” • Established distribution channels • Ability to enforce restrictions on use of coupons • Previous experience in selling CE products

11. The Market for CECBsQuestions all the Interested Parties Have to Face • Statistics differ as to how many households – • Rely exclusively on antennas • Have “untethered” TVs • Watch OTA broadcasts on untethered sets • Will want CECBs

12. Retailer Role in Consumer Education • In store now on remaining “analog-only” products (FCC imposed a labeling program) • Answering previous customer questions on sets sold over past years • Customers may ask – Do you plan to offer basic converter boxes? Will you offer ‘more’ choices? • Coupon Program – eligibility, application process & certification of eligible boxes • Concerns surrounding “upselling” • CERC Guides and Information • Active participation in DTV Transition Coalition

13. Who Will “Make” the CECB? • At least 61 converter boxes have already been certified • Expected MSRP before the $40 coupon is applied: $39.99-70 per box

14. Consumer Electronics Retailers CoalitionResources • CERC has published a CONSUMER GUIDEto the DTV Transition and the NTIA Program, at – http://www.ceretailers.org • Visitors can find links to NTIA, FCC, and DTV Transition Coalition • Look for updates to the CERC Guide as more information becomes available – Spanish version also • CERC posts NTIA-related guide information • Government Resources: • www.dtv.gov – FCC • http://www.ntia.doc.gov/dtvcoupon/index.html - NTIA

15. .com DTV Education

16. Founded on February 28, 2007 with 8 members – now with more than 200! • CERC is a “Founding Member” • The Coalition is comprised of business, trade and industry groups as well as consumer organizations that share a vital interest in a smooth transition. Coalition’s Mission • No consumer should lose free over-the air television reception in February 2009 due to a lack of information about the DTV transition.

17. But What About the OLD TVs? • Will people throw out more than usual? Not sure • Why should they? The analog-only tuner TV is still good and will work with DVDs, VCRs, Games, on Cable, through a CECB. • A number of options will still exist…

18. What To Do With Unwanted TVs • Are old TVs “unusable” or merely “unwanted”? • Where can strong “Consumer Education” play a role? • Go to: www.MyGreenElectronics.org • Plug in zip code and learn where to recycle • Encourage Goodwill and other groups to provide analog TVs to consumers with links to CECBs

19. Voluntary Efforts Must Continue, Be Encouraged and Expanded • Recyclers, Retailers, Manufacturers, Municipalities and Charitable Organizations must cultivate and develop nurturing partnerships to encourage active voluntary efforts. • Voluntary/Marketplace Examples Abound: • Plug-In-To-Recycling Pilots and Collection Events • E.g., Best Buy, Staples, Office Depot, HP, Dell, Apple • Retailers have installed in-store recycling kiosks that take-back batteries, ink cartridges and/or cell phones, etc. • Additional retailers either sponsor mail-back programs or on-site collection events.

20. Thank YouWe Look Forward to Continuing to Work Closely with the COGBut in the meantime…Please Join the DTV TRANSITION COALITION!! Marc Pearl – CERC Executive Director info@ceretailers.org http://www.ceretailers.org