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Market Should Set DTV Issues, Powell Says

LAS VEGAS -No one could accuse Michael Powell of pandering to the consumer electronics industry.

In a one-on-one “CES Supersession” with CEA president Gary Shapiro, FCC commissioner Powell expressed his thoughts on digital cable must-carry, HDTV’s potential, and copyright regulations. And what the articulate Powell had to say wasn’t exactly what TV set makers wanted to hear.

Powell, widely expected to serve as FCC chairman under incoming President George W. Bush, wasn’t patting the FCC on its back, either. He gave the commission a B- in implementing the 1996 Telecommunications Act, although he allowed that the Act “didn’t fully appreciate the rate of technology change” that would affect the communications industry.

“You cannot take a year and a half to reach a decision in this type of market,” said Powell. “You could when it was Ma Bell [you were ruling on].”

Nonetheless, Powell said he would stick to the parameters of the Telecommunications Act and other federal statutes, saying the FCC’s role is not to “just drive a truck through every possible ambiguity.”

In enforcing federal regulations, Powell said he would make consumers the No. 1 priority. “I don’t work for any company. I don’t work for any industry.”

As for DTV, Powell said he’s not a fan of industrial policy governing the transition. He also thinks the FCC’s proposed target date of 2006 for turning back the analog broadcast spectrum is wildly optimistic and says expectations of 85 percent digital penetration by that date “are so wrong.”

As evidence, he pointed out that VCRs didn’t reach 85 percent penetration “until recently,” and that computers remain at 60 percent. He clearly doesn’t like the idea of consumers being forced to replace their analog sets.

“There is perhaps nothing so dramatic to change for the family than its suite of television sets,” said Powell.

Broadcasters, set manufacturers, studios and the cable industry have to work together to address unresolved DTV issues and get on with the transition, he said. “There’s too much energy being spent on trying to divert blame. No one gets to wait until it’s a perfect system.”

As for the debate over the 8-VSB and COFDM modulation systems, Powell didn’t think the issue required a switch to COFDM unless it was proved that 8-VSB is “clearly and demonstrably flawed.” But set makers will have “to step up to the plate” to improve 8-VSB receivers if necessary.

Powell added that after visiting several retailers to look at DTV products, “you need to get some salespeople who know what they’re talking about.”

He sidestepped Shapiro when asked about the FCC’s timetable on deciding whether the cable must-carry rules will apply to broadcasters’ DTV signals. “Eventually, we’ll do something,” said Powell. “Whether you like it remains to be seen.” He also noted that it was “easy to diminish” the technical challenges in making digital must-carry work.

Shapiro mentioned that most CEA members consider HDTV to be inevitable, and asked Powell if he agreed. Powell replied that DTV was inevitable, but the quality level would depend on the value proposition to consumers.

Shapiro then pressed Powell on one of CEA’s hot-button issues, continuing the “fair use rights” of consumers to record programming in the digital television age. But Powell demurred, saying that when it came to copyright issues, the FCC’s role is “extremely limited, if there is one at all,” and that copyright law is Congress’ domain.

Separately, days after the show, Bill Kennard said he will be leaving his post as FCC chairman, a move that was expected.