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Retail Reaction Mixed On FCC Tuner Ruling

8/19/2002 02:00:00 AM Eastern

While leading electronics/ appliance retailers are concerned about the Federal Communications Commission's mandate to put digital TV tuners in all new sets (see p. 1), comments to TWICE ran the gamut from muted to concerned.

A spokesperson forCircuit City said the chain's concern is "How quickly will the substantial costs cited go down over time," referring to the $200 to $250 increase the tuners will cause, according to CEA estimates.

However Circuit City added, "All agree that most consumers will receive real value only if cable TV tuners, which use substantially the same circuitry, can also be incorporated into sets." The chain agrees with two FCC commissioners who said that cable issues surrounding digital TV need to be resolved.

A Best Buy spokesperson said that it was "premature to speculate on what impact this will have on sales and pricing."

Ray Brown, home electronics VP/GM for Sears, said the decision would help his chain. "We believe Sears' consultative selling model will provide additional value to consumers if and when the FCC ruling takes effect. While sales of digital products have been strong, there is a lot of confusion in the marketplace around HDTV." Brown said that Sears' "highly trained sales associates," credit services and price match policies will make it competitive in this new environment.

Jay Lebowitz, chapter president of the Intercounty/NECO buying organization and principal of Mr. Jay's Appliance in metro New York, doesn't think much of the FCC mandate if it means higher prices. "We're telling our customers now that if they're going to spend $2,000 on a big-screen TV, to make sure they buy HD-ready or DTV. But how about the rank and file that wants a $250 set? Now it's going to cost them $500. That will take a lot of people out of the market — and there's a big under-$300 market now for 27-inch sets." — Additional reporting by Alan Wolf

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