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FCC Mandates Digital Tuners

Washington, D.C. – The Consumer Electronics Association condemned today’s Federal Communications Commission (FCC) decision that all new digital TVs and related equipment must include digital tuners to receive over-the-air HDTV signals starting July 1, 2007.

In a three-to-one vote, the FCC decided that 36-inch and above sets will be required to have digital tuners by July 1, 2004, with sets 13-inches and larger including VCR and DVD hardware by July 1, 2007. The CEA reiterated its stance that the ruling will increase the cost of an average TV set by $250 each. Broadcasters countered this by reportedly saying the additional cost would be $15. TV manufacturers have said that mandating digital tuners in all sets is a waste of money for consumers because close to 90 percent of the country watches either analog or digital cable, or satellite TV, using an outside tuner.

‘The FCC has just imposed a multi-billion dollar annual TV tax on American consumers,’ CEA president and Gary Shapiro said, ‘With fewer than 13 percent of American households relying on over-the-air reception for their TV signal, we don’t need a digital broadcast tuner embedded in every new television in order to accelerate the DTV transition; we need digital cable equipment compatibility ‘

In his statement during the proceedings, Michael Powell, head of the FCC called that phrase FCC TV Tax ‘outright ridiculous.’

He added that the new sets will ‘have slightly higher prices, but more capabilities’ and that the decision moves the marketplace from ‘HDTV-ready to HDTV-reality.’ Powell also disputed the $250 price tag, noting that by the time the deadline is reached ‘there will be a marginal increase in cost’ due to the ever-plunging price of microchips.

The largest obstacle to wide spread adoption of DTV is the lack of a nationwide standard for sending HDTV over cable, not the lack of over the air tuners, said the CEA.

One retailer contacted by TWICE does not think much of the FCC decision. Jay Lebowitz, chapter president of the Intercounty/NECO buying organization and principal of Mr. Jay’s Appliance in metro New York said, ‘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.

‘And what about 9-inch sets and portables? How about LCDs? The prices on LCDs are finally coming down to $600, $700, and now you have to add another $250 back to that. We wouldn’t like to see that.’

Additional reporting by Alan Wolf and Doug Olenick.