Challenges Too Tough to Meet Dec. 2006 Tuner Mandate Deadline, CE Tells FCC

Only NAB and MSTV, in their joint reply (CD Aug 11 p7), argued in favor of the Commission’s Dec. 2006 proposal and said they agree with Motorola that advancing the deadline to Nov. 2006 would have a far more “positive effect” than the FCC’s year-end date. But all those filing from the CE camp urged a deadline no earlier than March 1, 2007, and Philips asked that July 2007 be left unchanged for DVD recorders and VCRs.

Like other CE makers, Panasonic said at least 18-24 months is needed to introduce integrated DTV products because they typically require “making fundamental changes to the engineering design, electronics implementation and physical structure of a product.” The challenges are all the more formidable as the shift to flat-panel TV displays “has become the norm, and as consumers seek alternatives to the larger, bulkier and boxy CRT-based TVs that sometimes offered easier packaging implementation,” Panasonic said.

As for requiring DTV tuners in “interface” products such as VCRs and DVD recorders earlier than the existing July 1, 2007, deadline, Panasonic said it “makes no sense to require a digital tuner in such products if they cannot record” HDTV programming. The transition in the U.S. to HD-capable disc recorders such as Blu-ray is expected to begin within a year, Panasonic said. Therefore, the timing of the existing July 2007 deadline “will mesh well” with that introduction “by not mandating a new cost” for the DTV tuner “before the underlying full HDTV recording capacity is in place to truly exploit it as consumers will expect.”

CEA and CERC said the earlier round of comments from Philips and Sharp provided “very specific support” for the argument that it’s “simply too late to modify product, production, financial and personnel resource cycles” to meet a deadline earlier than March 1, 2007. “These specific facts are uncontradicted in the record and are not addressed by any other commenters in this proceeding,” CEA/CERC said.

In their joint reply, CEA/CERC blasted Motorola for arguing the FCC’s proposed Dec. 31, 2006, deadline would better align the DTV tuner mandate with the date currently on the books for the handover of the analog spectrum. But CEA/CERC pointed out that the Dec. 2006 handover can’t happen under current law until 85% of households in a given service area have over-the-air DTV reception capability. CEA/CERC recalled the testimony of Motorola executive Mike Kennedy, at the recent Senate Commerce Committee hearing on the DTV transition, that no analog handover won’t come soon Dec. 31, 2006, because DTV penetration stands well below 85%.

Many of those calling for acceleration of the deadline are doing so “based on desire rather than fact,” CEA/CERC said. To urge, as broadcasters have, that earlier dates be imposed to minimize any DTV tuner subsidies required in a hard analog cutoff is irrelevant “to the questions posed by the Commission” in the tuner mandate proceeding, CEA/CERC said. Besides, “it would simply be wrong to assume that every television sold with an analog tuner will in fact require and over-air converter box,” CEA/CERC said. That was in line with CEA’s oft-stated argument that few analog TV households would be disenfranchised in a hard analog cutoff and the proportion would decline rapidly over time.

Philips said that under the current July 2007 deadline, all TV sets will be required to have DTV capability “by a comfortable 18 or more months before even the earliest projected” hard cutoff date of Jan. 1, 2009. It urged again that the Commission accept the CEA- recommended date of March 2007 for sets 13” and larger -- but leave the rule on DVD recorders and VCRs unchanged because equipping those devices with digital turners would be difficult without exorbitant price jumps in products that are low-priced commodities.

As for the March 1 date, Philips noted it’s only 2 months later than the Commission’s proposed Dec. 31, 2006, deadline. “Any minuscule potential benefit to the DTV transition of a 2-month-earlier deadline is dwarfed by the significant potential for serious harm to the transition if the first digital set families purchase is not as reliable as its earlier analog set and comes at a steep price increase” because it was rushed to market, Philips said.

TTE likewise argued there’s “ample evidence” the FCC’s Dec. 2006 deadline “would not be achievable without seriously threatening the quality and availability” of DTV products “and causing “steeper price increases than would be the case” without speeding the deadline from the current July 2007. In light of the “broad, bipartisan support in Congress” for a hard analog cutoff date in 2009, a March 2007 deadline “would more than adequately serve the Commission’s goal of ensuring that all TV receivers 13” or larger include a DTV tuner by the end of the DTV transition,” TTE said.

The Commission’s “finding” that the increased costs of integrating DTV tuners in the smallest sets would be modest “is erroneous and contrary to the data in the record,” TTE said. A typical 13” TV set today retails for $60-$80, TTE said. The cost to add standard-definition DTV tuning and reception capability is about $70, it said. While all expect this “digital differential” cost to decline with economies of scale, “it will not drop so dramatically as to be anywhere near a ‘modest’ increase for these small-sized sets,” TTE said. “Unfortunately, that will likely still be the case under almost any near- term integration deadline for these models, a truism that is inescapable given the level of affordability of these sets. Unquestionably, however, the more dramatic the acceleration of the deadline for small sets, the greater the cost impact on consumers.”