An Open Letter To The FCC Chairman Regarding The DTV Transition

17-Nov-00

The following was addressed to FCC Chairman William Kennard by Gary Shapiro, CEA (Consumer Electronics Association) President and CEO.November 14, 2000The Honorable William KennardChairmanFederal Communications Commission445 12th Street SWWashington DC 20554Re: DTV and the American ConsumerDear Mr. Chairman:In your landmark address last month at the Museum of Television and Radio, you made a number of proposals regarding the digital television (DTV) transition. The Consumer Electronics Association (CEA) enthusiastically supports your overall goal of speeding the transition to DTV, and ensuring that all Americans have the opportunity to experience free over-the-air DTV and high definition television (HDTV).We are concerned, however, that one of your proposals would undermine these goals by unfairly penalizing American consumers. The proposal to require DTV reception capability in every TV receiver over 13-inch by 2003 would have a severe and harmful effect on American consumers by adding two to three hundred dollars to the retail price of every such receiver sold. We agree that broadcasters have yet to provide viewers with plentiful HDTV content. However, it would be unfair to punish American consumers for this shortcoming.Rather than imposing costly consumer mandates, we urge the Commission to focus on the content side of the DTV transition. It is axiomatic in the consumer electronics industry that an ample supply of compelling and easy-to-acquire content is necessary to sell hardware. That is why consumer electronics manufacturers have been instrumental in financing broadcastersí HDTV efforts. However, even with this help, there is very little HDTV or new digitally originated programming being broadcast, and what content exists is not being carried by the vast majority of cable systems.Despite the broadcast industryís promises to provide HDTV to the American public, the vast majority of the content available on existing DTV stations is merely digitized versions of the stationsí regular, analog programming.Therefore, we would suggest that the Commission insist all broadcast networks commit to a growing number of HDTV and DTV programming hours. At a minimum, they could start by following the example of CBS which has provided, for two years, an essentially complete prime-time schedule in HDTV, plus a variety of special events and sports programming. Similarly, we ask the Commission to bring certainty to the marketplace by finally and conclusively settling the DTV broadcast standards issue. It is unreasonable to ask manufacturers to build DTV reception capability into every receiver when some broadcasters are still publicly questioning the FCCís standard.At the same time, it is essential that HDTV and DTV programming be available to consumers the way most consumers get their TV - that is, by cable. While approximately 70 percent of consumers receive their primary video signal through their cable systems, only a tiny minority of cable providers are currently retransmitting any broadcast DTV and HDTV programming. We urge the Commission to enact rules that would reassure American cable subscribers that, if they purchase a DTV receiver, they will be able to receive their locally broadcast DTV and HDTV programming through their cable systems. This may also require that the FCC continue its role in encouraging the resolution of the key issues surrounding copy protection - a subject that is already under consideration in an on-going proceeding before the Commission.Fortunately, even with lack of programming and cable carriage, more and more Americans are choosing to invest in DTV and HDTV. More than 150,000 DTV products were sold in August and September 2000 alone, and we are on track to exceed our projection of 425,000 units sold by the end of the year.That is because consumer electronics manufacturers are giving consumers a wide choice of DTV products, including integrated receivers with built-in DTV (and NTSC) decoders, DTV monitors, and DTV set-top decoders. To date, a majority of consumers are electing to purchase DTV and HDTV displays that require the addition of a set-top box to receive digital broadcasts. We expect that an increase in the sale of integrated sets and set-top box decoders would correspond to any increase in compelling HDTV and digitally originated over-the-air programming. Indeed, all of our consumer surveys show that it is the availability of programming that encourages consumers to buy into the HDTV and digital experience.The highly competitive environment among consumer electronics manufacturers will continue to ensure that Americans are offered a wide array of DTV products, including those that incorporate DTV reception capability. Meanwhile, it is essential that consumers retain their ability to buy televisions with a wide range of capabilities at a variety of price points, and not be required by the government to pay for advanced capabilities that they do not yet need or want.The FCC has identified the primary remaining barriers to the DTV transition: lack of DTV content and lack of cable participation. We encourage the Commission to ensure that broadcasters meet their commitment by providing free over-the-air HDTV; and ensure that the 70 percent of consumers who rely on cable are able to receive DTV and HDTV broadcast offerings.The consumer electronics industry will continue to do its part in moving the HDTV transition forward. CEA and its member companies are open to further discussions with the Commission on how best to accelerate the number of deployed DTV receivers, as long as other industries also agree to fulfill their obligations regarding the transition. Sincerely,Gary ShapiroPresident and CEO