CE Seeking Changes in DTV Tuner Phase-in on 25"-36” Sets
The CE industry petitioned the FCC to move up the deadline by which all TV sets with 25"-36” screen sizes must have ATSC tuners. CEA and the Consumer Electronics Retailers Coalition (CERC), in a joint petition, asked that the July 2006 date by which all such receivers must have DTV tuners be moved up to March 2006 and that the July 2005 date by which 1/2 the sets must be ATSC-capable be eliminated. They cited unforeseen and “unduly disruptive” consequences of the Commission’s phase-in schedule.
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Originally, CE had urged the DTV tuner mandate to be phased in. Because of that, CEA and CERC said, the FCC “appropriately took note that manufacturers typically require 18 months to redesign their products to comply with new requirements.” The phase-in also was designed to allow economies of scale to be achieved on higher-priced, larger displays so DTV tuner costs would be lower when required for less expensive smaller sets, the groups said. Except for the 50% requirement, the phase-in has worked as intended to minimize disruption to production and retail cycles and “provides time needed for the economies of scale to begin to be realized as sales of receivers increase,” CEA and CERC said.
However, CE’s “recent and ongoing experience” with the first 50% “metric” that took effect in July 2004 on 36” and larger TVs “compels the conclusion that the 50% requirement itself is antithetical to the purpose of the requirement, which is to increase marketplace demand for broadcast TV receivers that incorporate DTV tuners,” the petition said. The 50% requirement “threatens to slow, rather than to speed, consumer migration” to TVs with built-in DTV tuners because “consumers typically choose a lower-priced product with otherwise similar features, except for the DTV tuner,” it said. This “detriment” can only be “magnified” when applied to the “much larger volume” of 25"-36” TVs, “in which the DTV tuner cost represents a much higher proportion of the total product cost,” the CE groups said.
“The undesirable results of the 50% requirement would be mitigated by a single 100% deadline,” CEA and CERC said in their petition. As for their proposed new deadline of March 2006, it’s “the earliest feasible for manufacturers to meet,” the groups said. CE makers are “laboring” to reduce the cost of DTV tuners, they said. But despite their best efforts, the cost of each DTV tuner added to 25"-36” TV sets in July 2005 “still will represent a significant cost for consumers,” they said. Analog-only 25” and 27” TVs typically cost less than $200, “so adding a DTV tuner in many or most cases may represent a doubling in price to the consumer,” they said.
Regardless of how committed retailers are to the DTV transition, the 50% rule “provides an imperative to over- order the potentially scarce non-DTV tuner products and to under-order the more expensive products with the tuners whose price may be driven down later as a manufacturer seeks to achieve a 50/50 balance,” the petition said. If allowed to “shape” the market for 25"-36” TVs, it said, “this process can produce a result for the DTV transition that is the opposite of the result” all would like to see. Eliminating the 50% July 2005 deadline “will prevent marketplace distortion and help ensure that manufacturers and retailers each will compete on a level playing field conducive to achieving the Commission’s DTV goals,” CEA and CERC said.