DINGELL SAYS DTV TRANSITION MAY REQUIRE GOVT. INTERVENTION

“A hands-off approach is made even more difficult because the very existence of a date-certain law creates an imbalance in the bargaining power between the parties,” Dingell said. “It is an imbalance that would not persist if the market had been left to its own devices from the start. But the market was not permitted to follow its own course, and some degree of FCC or congressional intervention now may be necessary.”

Ranking Democrat Markey (Mass.) said he hoped to “excise telecom policymaking from the budget cycle,” referring to what he said was 1997 Budget Act’s “ill-conceived” scheduling of Ch. 60-69 analog spectrum auctions without requiring manufacturers to build dual analog/digital capability into TV receivers. Before passage of budget bill, he had unsuccessfully offered amendment that would have required dual capability. House staffer said Markey might offer standalone bill this spring that would require manufacturers to develop dual capability in all new TV sets.

CEA urged subcommittee to reject govt. mandates requiring digital capability. Speaking on behalf of CEA, Thomson Multimedia Govt. Relations Dir. David Arland said digital tuner requirement “would only force prices up” and trigger consumer backlash. Mandate would be counterproductive to meeting DTV transition in light of falling HDTV set prices, citing example of RCA model to be introduced next month for $2,999, down from $3,499 last year, he said. Thomson announced average 21% cut in fully capable DTV receiver prices, effective in April.

Warner Bros. Exec. Vp Chris Cookson warned against mandating security standard to protect transmission content. He also said “5C” technology being developed jointly by Hitachi, Intel, Matsushita, Sony and Toshiba, was appropriate for cable- and satellite-delivered programming, but said current encryption and authentication technology shouldn’t be used by broadcast TV stations. Warner Bros. recently signed memorandum of understanding with 5C companies.

“Can broadcast television signals received over the air be protected under current and foreseeable technology?” he asked: “We think not, and we believe that would delay the consumer benefits of what we can do with existing technology… We wish there was a silver bullet technology to protect broadcast transmissions, but we haven’t been able to find one to date that doesn’t cause more problems than it solves.”

Rep. Shimkus (R-Ill.) questioned whether excluding broadcast TV from protections against such copyright infringement would result in a “Napster-like” scenario, in which unprotected broadcast TV signals could be retransmitted over Internet. Rep. Stearns (R-Fla.) said arrangement could have negative impact on ability of TV broadcasters to enter into licensing agreements with content providers, who would be reluctant to see programs rerouted to Web. Programming industry source shared those concerns and said hearing made clear “that Congress continues to be concerned about the fact that 5C technology discriminates against free over- the-air TV and that 5C technology will delay the digital TV transition.”

CBS Exec. Vp Martin Franks criticized govt.’s simultaneous talk of leaving most contentious issues of DTV to marketplace while incorporating planned reclaiming of analog spectrum into budget policy. “I am not sure that government can have it both ways,” he said. “Left to the marketplace, the digital transition will happen, but it will take time and there will be dislocations, very likely including some for viewers/consumers. On the other hand, if auction revenue is paramount, government will have to play some greater role, at least step up its jawboning, to help resolve some of the outstanding issues.”