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NTIA awards converter box coupon contract

August 15th, 2007

The federal government’s DTV converter box coupon program will be operated by IBM, the National Telecommunications and Information Administration (NTIA) announced today. The Commerce Department agency awarded the contract to IBM Corp. after reviewing proposals received in May from competing vendors.

The $1.5 billion subsidy program will provide two coupons, each good for $40 off the purchase price of a converter box, to U.S. households that request them. A digital-to-analog converter box connects to a traditional analog TV, allowing it to continue displaying over-the-air broadcasts even after the analog TV shutdown on February 17, 2009.

“This is a major milestone toward implementing a successful coupon program to ensure the switch from analog to digital television is completed smoothly and as planned,” said NTIA Administrator John Kneuer. Managing tens of millions of coupons redeemed through thousands of retailers is no small task, and the computer giant doesn’t have long to prepare. “By awarding the contract on schedule, NTIA is preparing to be open for business so consumers may request coupons starting January 1, 2008, as required by law,” Kneuer said.

The government’s contract with IBM is worth $119,968,468 in total ($84,990,343 for the base period, and $34,978,125 for a contingent period; the latter period would be necessary if the coupon program exhausts its initial $990 million allocation). The company will partner with Corporate Lodging Consultants, Epiq Systems and Ketchum on the project. The contract period begins immediately and is scheduled to run through September 30, 2009.

The contract covers DTV coupon distribution and redemption, along with “consumer education.” Other responsibilities delegated to the contractor include determination of consumer eligibility, and retailer participation, payment and auditing processes.

“IBM and our business partners are pleased to support the NTIA program,” said John Nyland, managing partner at IBM Global Business Services. “A complex initiative like this requires innovative thinking, leading technologies and cooperation among retailers, broadcasters and government agencies to ensure that all Americans have continued access to free television broadcasting.”

The much-anticipated coupon program is not without its mysteries. Details that were part of vendor negotiations include the actual form the coupons will take (paper or plastic) and procedures for using coupons to purchase DTV converters from online retailers. Consumers should soon know the answers.

Related:
DTV converter box coupon program

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