CE Facing More Trade, Regulatory Issues In 2011

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As consumer electronics devices have become ingrained in everyday life, the stakes have been raised for legislators and regulators in Washington D.C. and statehouses across the nation.

So, as always, the new year promises new challenges for the industry and for the Consumer Electronics Association’s (CEA) government affairs staff in Washington.

Technology is inherently disruptive to the established order, and now it seems the accelerated pace of change that defines the consumer electronics industry is taking hold in national politics too.

Just two years after the historic election of 2008 when Barack Obama swept into Washington with a Democratic majorities in both the House and Senate, there’s a new Congress with Republicans holding sway in the House, Democrats (but with fewer seats) in the Senate and the White House adding a new dynamic to the scene.

At the forefront of issues confronting the industry are some continuing battles that may be seen in a new light with a divided legislature and chastened executive.

Spectrum allocation and the need for more space in the airways for the multitude of new wireless devices that are already on the market — and the legions more that will undoubtedly be introduced in the coming decade – are in the vanguard.

That will be followed by:

• environmental issues including end-of-product-life dispositions and energy efficiency;

• free trade for this global marketplace that requires the fair and unfettered flow of goods to and from the U.S.; and

• putting the reins on the increasing penchant of the Federal government for mandating features to be built into consumer electronic devices.

On the spectrum front the Federal Communications Commission (FCC) last month issued an order designed to set a framework for broadband Internet service that forbids both wired and wireless providers from blocking lawful content. The proposal does, however, allow providers to charge consumers different rates for different levels of service.

“Spectrum issues will be huge for CEA in the coming year,” noted Michael Petricone, CEA’s government affairs senior VP. “Spectrum is the oxygen of innovation and we need to double the amount of spectrum available in the next decade.”

At this week’s International CES the roster of Internet- connected televisions and other devices designed to connect to the web will underscore the rising desire of consumers to freely navigate the Internet. And there seems to be some momentum building for more spectrum to be opened up.

Petricone suggests there should be strong bipartisan support for the Hill to give the FCC the authority for a spectrum auction. The Simpson Bowles commission recommendations for National Debt Reduction even suggested spectrum auction as one of the means to bring new funds into the treasury. “There’s an added benefit,” Petricone pointed out. “Added spectrum spurs innovation and helps our ability to compete internationally.”

On the environmental front, CEA continues to promote national voluntary efforts by committed manufacturers in the face of a patchwork quilt of local rules. There have been a number of state environmental regulations enacted in recent years but that trend may also slow as a result of the gains made by Republicans in statehouses in the 2010 elections.

If you’re reading this in Las Vegas at CES, you should know that the world’s coolest tradeshow is also the greenest. Trade Show Executive Magazine named the 2009 International CES North America’s Greenest Show and CEA has continued “greening” the show in subsequent years. The magazine also honored CEA with the highly coveted Leader in Green Initiatives Gold Grand Award for outstanding green presence in producing the world’s largest consumer technology trade show.

This year you’ll find the Sustainable Planet TechZone, Sponsored by Earth911, the official recycling partner of CEA and CES, showcases the latest in eco-friendly products and energy efficiency technologies. It highlights the latest products that make it possible for every person on this planet to stay connected and informed, and live sustainable lifestyles through advances in green building, alternative energy technologies, green business services and solutions, smart grid technologies, solar and renewable products, sustainable packaging and wireless convergence.

The new Republican majority in the House most likely means two initiatives that were ballyhooed in the prior Congress – so called “cap and trade” and “card check” legislation, both of which were opposed by many members of CEA – will not be put forward in this congress.

Last month, the lame-duck session didn’t vote on the “Dream Act” which proposed a path for legal residency or citizenship for immigrants who came to the U.S. as youngsters with their parents. Portions of the Act that provided a path to legal residency for immigrants who completed advanced degrees in STEM disciplines – science, technology, engineering and mathematics, would be especially beneficial to the technology industry. “We need to make the U.S. a magnet for the best and brightest,” Petricone said, “and keep them here after they earn advanced degrees.”

Last year was also a busy year for what Petricone described as “mandate whack-a-mole,” with a series of proposals that would have required certain features in products, including FM tuners in every handheld device or requiring every product to be accessible to everyone regardless of capabilities. “Some of these proposals are ludicrous,” Petricone said, “but there’s no issue too wild to come up in Washington.” There will likely be less appetite for this type of federal government interference in business with the new Republican-controlled House.

New issues will surely arise in the coming months, but there is a young, tech-savvy new generation of legislators in D.C., many of whom know and use BlackBerrys, iPhones, iPads, 3D TVs and other electronic devices, which will bring a new perspective to the conversation.

Jim Barry, who has covered the industry for consumer and trade publications for years, is the media spokesman of the Consumer Electronics Association.


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