Report Attached link: http://www.newnetworks.com/dtvreport.htm

Teletruth September 24th, 2008

Alongside our survey, it became clear that the FCC and NTIA have been putting out numbers about the DTV test in Wilmington, NC and the DTV transition that are deceptive, attempting to play down problems with the DTV transition.

We claim that the FCC has been promulgating various statistics on coupons, the number of customers impacted by the DTV transition in Wilmington, and other areas that violates a number of Data Quality Act Statutes, including accuracy, as this information is "influential", and thus gives a misleading and distorted view about the harms to customers.

Did only 1% of Wilmington viewers have issues with the DTV transition or was it 13%, are there 1 million households going to have problems nationwide or is it 5 million as previously stated? Was 100% of coupons redeemed or some much lower number? How many customers who do not have a DTV transition issue got coupons? Is Wilmington an accurate sample of the problems that will be encountered?

Let's go through each area of the statistics presented by the FCC.

1) FCC Fudges Answer: How Many Customers will be Harmed by the Transition in Wilmington and Throughout the US? - 1% of 5% of US Households?

Chairman Martin has essentially rewritten his analysis since the beginning of the year to dramatically downplay the harms the DTV transition will have on OTA customers.

In an article in Broadcasting & Cable, (2/19/2008), Martin claims that 5 million customers will be impacted with reception problems. http://www.broadcastingcable.com/article/CA6533529.html

"Federal Communications Commission chairman Kevin Martin said there could be reception issues for up to 5% -- or more than 5 million -- of TV households, although he said those were generally issues with receiving signals that they technically weren't expected to get anyway, since they were outside of their designated market."

However, in his current testimony to Congress, he claims that it is really only 1%. - It is 5% of the 15% of over-the-air (OTA) households. (Testimony before the, Committee on Energy and Commerce, Subcommittee on Telecommunications and the Internet, U.S. House of Representatives, September 16, 2008)

"I had previously testified that our engineers estimated that about 5 percent of over-the-air viewers may need a new antenna to receive digital television due to the digital cliff effect. Only about 15 percent of viewers receive their signals over the air, so we estimated that less than 1 percent (5 percent of 15 percent) of all viewers would need a new antenna. The data from Wilmington suggests a similar estimate."

In the first case it is 5% of viewers -- 5 million customers, in the second it is 5% of 15% -- .75% (less than 1%. Thus, only 1 million customers in the entire US should be impacted by the DTV transition.

2) Playing with the Wilmington Numbers

There is a host of numbers presented about the Wilmington test that are simply cover-ups of what happened, even using the FCC's data. Here are the numbers presented by the FCC in either Chairman Martin's Testimony or FCC press releases or the NTIA's materials.

2.1) 1% Harmed vs 13.3% Harmed.

Martin claims that 1% of Wilmington residents called, an insignificant number.

"FCC Claims 99 Percent Success in DTV Shift" (PC Magazine, Sep 16, 2008)

This is patently not true. The number was 13.3% to date (updated by the FCC to 16.2% as of 9/23/08).

Here's what has been presented.

1) The FCC claims that there were 400,000 television viewers in the Wilmington area. - that are "impacted by the change were aware of the transition".

2) That represents an estimated 180,000 households

3) "14,000 receive free over-the-air television (OTA) programming with roof-top antennas or "rabbit-ears."

4) (Actual number of households is Nielsen TV Households -13,759)

5) "In total we received 1,828 calls regarding the Wilmington test, representing 1 percent of Wilmington households." (first 5 days only)

The FCC has rewritten basic mathematical analysis and statistics.

Teletruth Analysis:

a) The number of people who were impacted the transition is not 180,000 households, but 14,000. The FCC has included ALL of the households, of which 166,000 (180,000-14,000) are already on cable or satellite and were "NOT" impacted by the transition.

b) 13.29% of OTA households called the FCC, etc., not 1%. In just 5 days, with 14,000 OTA households using in Wilmington, 1,828 people called. That's 13.29% not 1%. (Note: 1,289 or 9.4% of customers had problems with the antenna or installation problems, technical difficulty, antenna problems or losing channels or signal.)

Thus, the FCC is making it seem that the number of callers is only 1% when in reality it was 13% after the first 5 days. Chairman Martin just spoke in Congress and now claims that an additional 444. "Before the United States Senate Committee on Commerce, Science, and Transportation, September 23, 2008".

http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-280209A1.doc

"In total we received 2,272 calls regarding the Wilmington test, representing about 1.2 percent of Wilmington households."

This brings it to 16.2% who called about an issue with the DTV transition in Wilmington --- and counting.

3) The Current Wilmington Test Is Not Valid For Rural Fringe Areas

Commissioner Michael Copps laid out just some of the reasons why the current Wilmington test is not a valid sample of the US. This includes 'relatively flat terrain', the percentage of OTA views was half of the US average and there was massive outreach by Wilmington to make sure everyone was included.

"In Wilmington, 1,536 residents called the FCC or their local broadcaster or cable operator for help in the two days following the switch-over. Extrapolating from this number is dangerous, especially since: (1) the percentage of Wilmington households that rely exclusively on over-the-air service is only about half of the national average; (2) consumers nationally will not receive the intensive on-the-ground outreach that Wilmington residents received; (3) the relatively flat terrain in Wilmington may not reflect the reception issues that other markets will experience. Those factors would argue for a higher level of disruption nationwide. For illustrative purposes, however, and conservatively assuming that the number of calls would have increased by 50% if Wilmington had twice the number of over-the-air-exclusive households-thus tracking the national average-the total number of calls would have been 2,304-or 1.28% of the 180,000 total households in the market. Assuming 114.5 million TV households in the U.S. that could mean that 1.46 million consumers could be looking for answers when full-power analog broadcasting ends next February."

While we applaud the Commissioner for bringing some reality into this discussion, Commissioner Copps extrapolates some of the issues for the rest of the country, his analysis is missing some fundamentals, such as whole communities may never get a signal, as our study indicates.

Also, the numbers supplied by Chairman Martin reveal that 14,000 households out of 180,000 household had over-the-air TV reception in Wilmington, which is only 7.8%, not 15% as stated for the rest of the United States.

4) Coupon Numbers Are Missing Information.

The FCC claims that:

1) "28,000 converter box coupons were redeemed"

2) "14,000 receive free over-the-air television (OTA) programming with roof-top antennas or 'rabbit-ears'."

NTIA Information.

3) "NTIA received requests for more than 69,000 coupons from 37,500 households in the Wilmington DMA, 47 percent of which were from OTA households. Of the coupons issued and mailed, over 28,000 were redeemed as of September 7. (Obviously, the NTIA is rounding their statistics.)

Teletruth's Response:

a) The FCC's data presented is misleading about 'coupons'. The FCC claims that 28,000 coupons were redeemed and there were 14,000 OTA households. Thus, if each household got 2, 100% would have been served. Without caveats, it would seem that everyone who was an OTA household got 2 coupons. However, when we examine the data we find that 252 households called within the first 5 days to say they didn't have a converter or weren't aware of the transition - that represents about 2% of OTA households, so 100% is not correct.

b) Based on the FCC's or the numbers created by the NTIA, we have no idea about how many of the estimated 14,000 OTA households actually redeemed their coupons, or even how many expired.

c) The 28,000 coupons redeemed - Who are they? With an average of 1.84 coupons per household (69,000 divided by 37,500 households mailed), how many OTA households redeemed coupons or how many non-OTA redeemed coupons is all unknown at this time.

d) There were 69,000 coupons yet only 47% of households were OTA households. Thus, 53% who already have cable or satellite also received coupons? They cost money. Did they have second TV's without cable service?

5) False Advertising and Misrepresentation Claims -Not Telling the Truth about the Problems of the DTV Transition, Especially Antennas, to Customers.

The FCC, along with the NTIA, NAB and the NCTA have been able to convince the media to run public service announcements about the transition, and everyone from ABC, CBS, Fox, NBC, and even Telemundo and PBS have been running advertisements which continue to not explain that millions of customers will need more than just the converter box and a current working antenna, and it might cost hundreds of dollars more to upgrade.

Conclusion:

The FCC should redo all statements, testimony and other documents to reflect accurate data to both the public as well as to other regulators and politicians and the media.

With only a few months until 2/19/09, Congress should immediately require the hard questions answered - What is going to happen to rural and rural fringe areas?

Teletruth's analysis clearly shows that the FCC and NTIA have supplied misleading data and that the timeframe for the transition may be too short to fix the problems customers will encounter before the deadline.

For more information:

Bruce Kushnick, Chairman, Teletruth

Executive Director, New Networks Institute

bruce@teletruth.org

Tom Allibone, Director of Audits,

President, LTC Consulting

Tom@teletruth.org

http://www.teletruth.org