The Federal Communications Commission voted unanimously to deny a Consumer Electronics Association (CEA) and Consumer Electronics Retailers Association (CERC) petition to remove a phase-in requirement that mandates television manufacturers to include DTV tuners in 50 percent of all televisions measuring 25 inches to 36 inches by July 1, 2005, and will consider proposed new rules that would push up the deadline requiring DTV tuners in all televisions 13-inches and larger to Dec. 31, 2006, from July 1, 2007.
At the same time, the commission agreed to the CEA's request to expedite to March 1, 2006, from July 1, 2006, the mandated inclusion of digital television tuners in 100 percent of all televisions with screen sizes measuring 25 inches to 36 inches.
In commenting on the actions, the CEA applauded the FCC for agreeing to the new March 1, 2006, deadline for 100 percent DTV tuner inclusion in 25-inch to 36-inch models, saying the action will “help speed the consumer migration to DTV and reduce marketplace problems with the 50 percent requirement for sets in that range,” according to a prepared statement.
But CEA's president/CEO Gary Shapiro said he was disappointed the commission elected to stay with the phase-in requirement.
“While conceived as a phase-in for the benefit of manufacturers and retailers, in reality the 50 percent requirement creates uncertainty in the marketplace for each group and slows the ramping up of volume production necessary to bring costs down,” Shapiro said. “CEA agrees that manufacturers and retailers cannot force consumers to purchase televisions with digital tuners, especially considering that only 12 percent of consumers receive their television signals over-the-air.”
Shapiro said CEA's proposal “provides the certainty manufacturers need to plan and produce products to help complete the DTV transition.”
The FCC said that eliminating the phase-in provision “would delay the wider dissemination of DTV tuners in products of this size and would be inconsistent with its efforts to advance the DTV transition as rapidly as possible.”
CEA also expressed concern with a Further Notice of Proposed Rulemaking (FNPRM) that recommends DTV tuner inclusion in all TV sets 13 inches and larger and other products without viewing screens that normally include tuners, such as VCRs, be completed by Dec. 31, 2006.
It also requested public comment on extending the mandate to TV receivers with screen sizes smaller than 13 inches.
The CEA said the proposed new Dec. 31, 2006, tuner mandate “would sharply raise prices on smaller sets, harming low-income consumers. CEA is very concerned that accelerating this schedule from its original July 1, 2007, date will be extremely difficult for manufacturers to meet and would cause severe disruption in the consumer marketplace.”
The CEA said a likely resulting jump in prices would reduce “the retail market for these sets. Manufacturers relied on the original FCC mandate in their product planning, and need a minimum of 18 months to 24 months to plan, develop and deploy new equipment.”
The CEA said some manufacturers could opt to market monitor-only models that remove both digital and analog tuners, or stop manufacturing certain sets altogether.
“For smaller sets, 13 to 26 inches, the requirement would double the development costs for manufacturers, as well as double the price of a typical 13-inch television to consumers,” Shapiro said. “If the product is rejected by lower income and other consumers because the price exceeds their budget, it will not be carried by retailers and, eventually, not produced by manufacturers.”
Shapiro said the “the unfortunate result of accelerating the tuner mandate deadlines for all sets would be to decrease the number of DTV tuners in the marketplace, which clearly does not serve the transition.”
In contrast, Edward Fritts, National Association of Broadcasters' president, commended the commission's actions, saying, “We strongly support the proposal to move up DTV tuner compliance for smaller TV sets. Allowing set manufacturers to continue selling analog-only TV sets only elongates the transition to digital.”
Commenting on the FCC's actions, John Taylor, LG Electronics' communications VP, said, “LG Electronics believes it is helpful to the DTV transition to accelerate [the mandate on] 100 percent of midsized sets to March, and is ready to meet the next phase of the DTV mandate. We are studying the impact of a possible move to December 2006 on smaller screen sets. At the same time LG Electronics applauds Chairman Martin and the commission for keeping the momentum going.”
Similarly, Greg Bosler, TTE North American Profit Center's executive VP, said “TTE is eager to complete the digital television transition as quickly as possible consistent with its commitment to the twin principles of quality and affordability.”
A Senate bill seeks hard DTV deadline. See www.TWICE.com.