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2002 Was A Busy Year For CEA In Washington

If the folks in Washington D.C. are wondering where everyone is this month, it may very well be because scores of top lawmakers and regulators are in Las Vegas at International CES.

Again this year 100 or more leaders of U.S. state and Federal government have traveled to CES to see the newest electronic products that are at the heart of many of the issues under consideration in legislative and regulatory agencies. At CES the policy makers also have the opportunity to participate in educational sessions and network with association and company executives in individual meetings and at the annual invitation-only “Leaders in Technology” dinner.

There’ll certainly be no shortage of policy decisions pending in the areas of broadband, copy protection and home recording rights, energy efficiency, and the digital television transition. Washington will be different this year too, the first year in half a century with a Republican in the White House at the same time the GOP holds majorities in both houses of the new Congress.

In addition to long-standing issues, last year was complicated by the labor dispute that shut down West Coast ports in the fall. The shutdown put billions of dollars of imported consumer electronics goods in jeopardy. When the longshoremen’s union and shipping companies announced in late November that an agreement had been reached on a new contract that effectively ended the dispute, CEA president Gary Shapiro congratulated labor and management on reaching the agreement.

The high-tech industry was one of the most affected by the halt in shipping through West Coast ports. CEA estimates that 70 percent of imported consumer technology products enter the United States through West Coast ports.

CEA continued to press its position in Washington that market-based competition among all communication channels is the best way to promote rapid deployment of broadband technologies. Government involvement in the deployment of broadband should be limited to those areas where there are substantial market or regulatory failures.

Late in the last session, two Senators, Barbara Boxer of California and George Allen of Virginia, proposed the Jumpstart Broadband Act, requesting that part of the unlicensed spectrum in the 5GHz band be set to allow companies to develop wireless products for use in that range.

Throughout the year there was heated action in the continuing efforts to balance copyright protection with consumers’ rights to make copies of digitally transmitted material for personal use. March saw the introduction of a bill in the Senate (S-2048) by Senator Fritz Hollings of South Carolina, which would require industries to develop copyright protection standards, technologies and encoding rules within a year to be included in all digital media devices or the FCC would implement such rules. Shapiro said the bill presented “dangerous delegation of broad, unfettered regulatory authority, which could have severe, adverse long-term consequences for consumers.”

Later in the year, two House Democrats introduced separate bills designed to ensure consumers’ copying rights and flexibility with new digital content. Rep. Zoe Lofgren of California offered a bill that would codify fair use rights that until now had not been defined or had been defined only by judicial decisions rather than statutes. Rep. Rick Boucher of Virginia wrote a similar bill that would amend the Digital Millennium Copyright Act to permit circumvention of copyright protections when employing a device in accordance with fair use principles.

As the FCC continued to review proposals related to digital copy protection, which could include encryption technologies (a “broadcast flag”), last month CEA submitted a filing with the Commission emphasizing the importance of preserving normal consumer expectations under any digital copy protection regime. Among other things, “broadcast flags” are designed to restrict the redistribution of digital programs over the Internet.

Michael Petricone, CEA’s technology policy VP, said when it was filed that “Interactive digital technology offers consumers endless benefits. But this also presents the potential danger of content owners choosing by remote control not only the copy status of content in consumers’ homes but also the home interfaces that may be active at any time. This clearly exceeds the reasonable protections that may be necessary to guard against illegal use of copyrighted content.”

The transition to digital television continued to percolate in the policy realm throughout the year. Early last month CEA and the National Cable Television Association (NCTA) were close to a plug-and-play agreement between the cable and consumer electronics industries that should speed the adoption of digital television.

With more than two-thirds of Americans receiving their TV through cable, the lack of such standards for cable-ready DTV sets has been a real stumbling block to widespread acceptance. Consumers have been purchasing HDTV-ready monitors at impressive rates — some 4 million to date — but sales of DTV tuners have lagged because of sparse cable carriage even as the networks have increased their HDTV content dramatically. This year more compelling content is scheduled to come on line, including high-definition ESPN, that along with cable compatibility should provide a real spark for HDTV.

In August the FCC had voted 3-1 to force CE manufacturers to include over-air DTV tuners in virtually all TV sets by 2007. In October CEA filed a suit in U.S. Appeals Court questioning the FCC’s authority to issue a tuner mandate, but the association’s video board was later reconsidering the suit especially in light of the impending DTV/cable interoperability agreement.

DTV was also a hot topic in Congress last year. In the fall, the House Telecom Subcommittee also held hearings focused on consumer issues central to the DTV transition. Draft legislation by House Commerce chairman Billy Tauzin of Louisiana and Representative John Dingell of Michigan generated much discussion within all the industries holding a stake in the digital transition.

The discussions will continue, within and outside the Beltway and CEA will continue its work on behalf of its members and the consumers who use its members’ products — at CES and when legislators get back to Washington.

Jim Barry, a veteran journalist who spent more than two decades covering the consumer electronics industry, is now the media spokesperson for the Consumer Electronics Association.