FCC Opens Rulemaking On CE Revisions to DTV Tuner Phase-In

CEA and the Consumer Electronics Retailers Coalition (CERC), in a joint petition (CED Nov 10 p1), had asked that the July 2006 date by which all 25-36” receivers must have the DTV tuners be moved up to March 2006 and that the July 2005 date by which half the sets must be ATSC-capable be eliminated. They cited unforeseen and “unduly disruptive” consequences of the Commission’s phase-in schedule. CE itself had previously urged such a phase-in to accommodate manufacturers’ 18-month design lead times and 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.

However, the CE groups said their experience with the deadline last July for sets 36” and larger “compels the conclusion” that the 50% phase-in schedule was “antithetical” to the purpose of the DTV tuner mandate, which was to increase market demand for TV sets with built-in ATSC reception capability. They said the phase- in would slow, rather than speed, consumers’ migration to such products because consumers are likely to choose lower-priced sets without the DTV tuners. They argued the 50% rule gave retailers more incentive to “over-order” the potentially scarce non-DTV tuner products at the expense of the more costly TVs with built-in ATSC tuners. Moving up the date for 100% compliance would better align the policy behind the DTV tuner rule with market forces and consumer expectations, the CE groups have told the FCC. Not acting on the request would only magnify the problem encountered with 36” and larger sets because with the much larger volume of 25-36” product, the DTV tuner cost represents a much higher proportion of the total product cost, CE has said.

The Commission said in launching the rulemaking and considering the CE request, “it is our intent that any revisions we may make to the tuner requirement should not serve to delay the completion of the DTV transition.” It ruled out any extension of the current July 2007 deadline for full implementation of TV sets with built-in ATSC capability. “We also continue to believe that it is desirable and important to provide for the gradual introduction of the DTV tuner requirement in order to allow manufacturers and importers to develop the economies of scale that are necessary to reduce the costs of DTV tuner when they are included in smaller screen sets and other devices such as [VCRs] and DVD recorders that do not include a viewing screen.” That class of products is scheduled to be the last to become ATSC-compliant by the July 2007 deadline.

The FCC said it’s seeking comments on the merits of CE’s arguments and “suggestions for specific revisions to the schedule for such devices to address that need.” Besides seeking comment on the schedule revision proposed by CEA and CERC, the FCC invited “alternative approaches for addressing the market situation” described in the CE industry petition. The Commission said it intended to consider “the full range of options” consistent with its stated goals. Comments are due in 30 days, replies in 45 days.