TAUZIN TO INTRODUCE BILL IN SEPT. ADDRESSING DTV TRANSITION

Tauzin’s move comes after he set July 15 deadline for industries to resolve all policy and technical issues involving broadcast flag. That deadline obviously wasn’t met. Industry executives announced in June (CD June 5 p1) that their Broadcast Protection Discussion Group (BPDG) had reached consensus, but their report included much dissension. Tauzin’s move also followed very public battle between Powell and CE industry over what Powell said was CE industry’s refusal to budge on DTV transition. Powell in April had asked set-makers to equip 50% of sets 36 inches and larger with digital-TV tuners by Jan. 1, 2004; 100% by Jan. 1, 2005; and all sets 13 inches and larger by Dec. 31, 2006. His request was part of broader initiative asking industries to make “voluntary” commitments to speed DTV transition. Powell has praised all other industries except CE, which has insisted that equipment interoperability must be resolved before issues can be resolved. That and other issues are likely to be part of hearings Tauzin has said he will hold in fall to discuss legislation. Tauzin set Sept. target for his bill to be introduced.

In addition to Powell, representatives of Disney, News Corp., Viacom, Vivendi Universal, Sony, AOL-Time Warner, MGM, MPAA, 5C, Napster, EchoStar, CEA, NCTA, CableLabs, NAB, Philips, others attended. While few would speak for record, persons who attended said Tauzin indicated that Mon. roundtable -- which was part of series of informal meetings with industry representatives -- would be last, and legislation would do job that negotiations couldn’t. Sources were unsure who would come out as winners and losers in Tauzin’s legislation, saying its contents would be crucial in resolving issues. However, MPAA Pres. Jack Valenti said he believed industries were “near the edge of an agreement on remaining technical aspects of the broadcast flag, and we're anxious to avoid further delay. We hope to resolve these remaining matters in the very near term.”

Meanwhile, Consumer Federation of America (CFA), which was not at Tauzin meeting, said effort by BPDG to reach consensus on broadcast flag was “off target” on all counts because group members based their discussions from start on “the premise that all consumers are thieves.” CFA’s comments were in letter Mon. to members of House and Senate committees considering legislation on digital copy protection and fair use. BPDG’s report had recommended use of redistribution control descriptor “flag” established earlier by Advanced TV Systems Committee (ATSC) for signal protection of DTV content. Many companies and groups that were part of BPDG negotiating process objected to final report, citing problems with almost every aspect. Within CE industry, Philips was among most vocal dissenters, calling on Congress to create public discussion forum to resolve issue of DTV content protection because BPDG proceedings were flawed and represented views of narrow interests and that recommendations would threaten consumers’ fair use rights.

It was last issue on which CFA letter, signed by Research Dir. Mark Cooper, took BPDG most strongly to task. BPDG “has set out to develop a hardwired antitheft system that destroys consumers’ abilities to make fair use of the programming that comes into their homes,” Cooper said. BPDG approach effectively would “render obsolete tens of millions of dollars of electronic equipment that consumers have already purchased,” he said. In long term, BPDG licensing recommendations will “stifle innovation” and put handful of “gatekeepers” in charge of approving recording and display devices,” Cooper said. Inevitably, he said, those companies will seek to “protect their private corporate interests at the expense of the public interest.” Moreover, he said, design characteristics of BPDG copy protection proposal “will be unnecessarily complex,” which within CE industry, will impose “unnecessary monetary costs and severe reliability problems on consumers.”

Like Philips and others, Cooper urged lawmakers to “step back from the drive to rush restrictions on consumer use of digital content through the Congress.” CFA believes issues involved “are simply too important to be swept up in an expedited legislative process,” Cooper said: “They deserve full legislative hearings and an open debate that enables consumers, content providers, equipment manufacturers and other key stakeholders to fully present and defend their views.”

Separately, CEA Pres. Gary Shapiro said in interview with our affiliated Consumer Electronics Daily that FCC should use its statutory authority over cable industry to establish “plug-and-play” DTV cable connectivity standard to benefit of “the more than 70% of Americans” who get their primary video signal from cable. Shapiro’s comments followed latest swipe at CE industry by Powell, who last week said CE industry’s response on digital TV tuners amounted to no commitment at all (CD July 12 p2). Shapiro said he didn’t believe Powell personally “has anything against” CE industry. “I just think he feels intense pressure to try to respond to the needs of broadcasters,” Shapiro said. “But as much as we'd like to do what the chairman would ask us, our manufacturer members just keep looking and saying: ‘We just don’t get it.'” Fewer than 10% of Americans use their antenna for over-air reception, and “we've tried everything we could do to get the broadcasters to work with us on over- the-air stuff, and they haven’t done a thing,” Shapiro said, citing CEA’s 5-year antenna promotion campaign. Instead of tuner mandates, Shapiro asked rhetorically: “Why aren’t we focusing on the [FCC’s] statutory mandate in cable, where 70% of Americans get their signals?” He said Commission “doesn’t have statutory authority to require manufacturers to add tuners. They do have statutory authority -- indeed a mandate -- to set a cable standard, and we're hopeful they'll focus on a cable standard.”

Shapiro contended that including ATSC reception was steep cost factor for TV makers and price burden to retailers and end users. “This isn’t like a V-chip or closed- captioning or some of the other mandates we've had. This is a very expensive add-on -- right now it’s $200-$300 -- and even if it gets to $100 or less, it’s still extraordinarily expensive,” Shapiro said. “For a $239 set at Wal-Mart, to add $100 onto the cost of it, some of the manufacturers are and quite frankly should be resistant to it.”