The Government Accountability Office (GAO) released a letter today warning that the U.S. analog-to-digital TV or "DTV" transition schedule "faces challenges that could affect the outcome of the program."

Specifically, the GAO says that TV retailers may not be able to start selling converter set top boxes to the public by January 1st, 2008, as planned.

"Retailers told us that March or April of 2008—3 to 4 months after consumers can begin requesting coupons—is a likely time frame for retailers to be ready to participate in the program," the document explains.

Marc Goldstein of the GAO's Physical Infrastructure Issues division sent the letter to John Dingell, Chair of the House Committee on Energy and Commerce on November 19th. The GAO released the communication today.

The United States has set February 17th, 2009 as the last day of analog TV broadcasting. After that date all television stations in the United States and its territories must transmit via digital signals.

The government estimates that about 21 million households in the United States still watch analog TV. Their sets will be useless after 02/17/2009.

Next year the Department of Commerce's National Telecommunications Information Agency [NTIA] will issue $40 coupons to the public, good towards a set top converter box that will make an analog TV digital ready. The Coupon-Eligible Converter Box [CECB] program is scheduled to begin on January 1st.

But the GAO says that retailers told the agency that "participating in the converter box subsidy program could require a considerable amount of effort for a one-time program with a product that has a limit shelf life and a low profit margin."

The retailers also said that

• since retail participation in the program is voluntary, consumers may be not be able to find retailers willing and able to coupon-quality stock converter boxes.
• uncertainty about the demand for the set top boxes could impact the quantity manufactured for retail sale.
• they were concerned "about the possibility of a coupon redemption system that would affect their point-of-sale systems, noting that modifying these systems can be time-consuming, resource-intensive, and expensive, and can affect other financial systems."

These findings stand in sharp contrast to big appliance retail store pledges to support the DTV transition, recently filed with the FCC. On October 16th, Best Buy, Circuit City, and Target sent the agency statements assuring the Commission that they are ready for the campaign.

"Best Buy intends to participate actively in the CECB program and believes this participation will be most effective - and most effective for retailers - if the messaging of the FCC, the NTIA, and others is closely coordinated and aligned," Best Buy's filing concluded.