CEA Offers Positive, Pro-Consumer Response To FCC Chairman Powell's Voluntary DTV Proposal

24-Jul-02

In an ongoing effort to drive the transition to digital television (DTV), the Consumer Electronics Association (CEA) announced that each of its members who sell digital television products in the U.S will include an over-the-air DTV tuner in digital cable-compatible televisions within 18 months following the implementation of an open, national, and fully-featured ""plug-and-play"" cable standard. In addition, most of these manufacturers voluntarily plan to market and promote strongly at least one set-top box that can receive and decode digital television signals by December 31, 2003.CEA also announced that some manufacturers are moving aggressively to integrate digital tuners into their television lines -- digital, analog and/or both -- within the next two to three years in the spirit of Federal Communications Commission (FCC) Chairman Michael Powell's proposed timeline for manufacturers to phase-in the inclusion of DTV tuners in new sets.The announcement was made as part of an industry effort to support Chairman Powell's proposed voluntary industry actions to speed the DTV transition, made earlier this year. CEA provided its response in a letter to Chairman Powell delivered today.""With more than 70 percent of Americans currently receiving their primary video signal through cable, CEA remains convinced that a successful DTV transition is dependent on the adoption and implementation of a nationwide standard for sending HDTV over cable,"" wrote CEA President and CEO Gary Shapiro. ""Our approach reflects the critical importance of compatibility between digital cable systems and availability of DTV products. CEA believes the current lack of compatibility is the single largest remaining obstacle to the DTV transition.""Shapiro noted that CEA's approach also provides several solutions for the seven percent of Americans who rely exclusively on over-the-air antennas whom the Powell plan aggressively targets.""The vast majority of television manufacturers are committed to phasing in ATSC tuners (as integrated tuners and/or stand-alone set-top boxes) in their product lines. Indeed, manufacturers such as Mitsubishi, Thomson, and Zenith are announcing plans to move aggressively to integrate digital tuners into an increasing number of their television models,"" said Shapiro. ""Manufacturers' specific plans will differ based on the breadth and orientation of their products, their assessment of consumer preference for integrated versus set-top tuners, and each company's fundamental need to be responsive to consumer demand in this intensely competitive market. We reiterate, however, our unified belief that competition among CEA members to promote and fulfill consumer demands for ATSC tuners -- along with nationwide implementation of digital cable compatibility and the other measures offered in our response will foster the transition -- which is our shared objective.""Shapiro added that different manufacturers serve different market segments, making some manufacturers concerned about a ""one-size fits all"" approach to providing digital over-the-air tuners.""CEA's membership is comprised of companies that sell a wide range of television products. Some manufacturers specialize in high-end high-definition television (HDTV) displays. For these companies, the integration of ATSC tuning and decoding may be a natural progression of their advanced product line. Other manufacturers serve a larger share of the television marketplace, offering relatively inexpensive analog TV sets as well as some HDTV models. For these manufacturers, the addition of ATSC tuning and decoding capability in virtually every TV set would result in a major cost increase for consumers and would jeopardize the affordability of many lower-priced models.""It would not serve consumers to require every digital and analog television set buyer to pay up to $400 for the over-the-air reception that the overwhelming majority of Americans don't need, use or want,"" Shapiro argued.Shapiro said that CEA's approach would ensure that Americans continue to have product choices to meet their interests and needs -- specifically, a wide range of televisions with varying features and prices.""Rather than forcing over-the air viewers to purchase a new television to enjoy the benefits of DTV, under this approach consumers will have the option of initially purchasing only a set-top box. If consumers desire to upgrade to an HDTV or DTV monitor, their investment will not be wasted, as they will be able to plug their set-top box into a compatible monitor to enjoy a DTV or full HDTV picture,"" wrote Shapiro. ""Additionally, our approach provides a seamless and market-oriented transition for the millions upon millions of cable households.""As part of their response to Chairman Powell, CEA's members also pledged to use digital inputs (e.g. 1394/5C and/or DVI/HDCP) in new large screen DTV models introduced after December 31, 2003 in an effort to respond to concerns regarding the need to protect digital content from unauthorized duplication and redistribution.""We ask the FCC to seek assurances from cable operators that cable set-top boxes will also provide support for both DVI/HDCP and 1394/5C,"" wrote Shapiro.Shapiro called on the FCC to ensure cable operators rapidly implement and universally support compatibility standards in cable systems.""For [our] initiative to succeed, cable operators must have incentives to resolve outstanding business and licensing issues related to compatibility between digital cable systems and DTV products,"" said Shapiro. ""CEA believes the majority of the necessary technical standardization work has been completed, and what remains are difficult, but not necessarily time-consuming, licensing, and implementation issues. We continue to ask the FCC to use its jurisdiction to make sure consumers can receive DTV and HDTV programming via cable as seamlessly as possible.""The consumer electronics industry is proud of the leading role we have played in driving the transition to digital television,"" Shapiro stated. ""For the past three years, manufacturers have been selling digital television products far in excess of CEA's initial projections, despite the obstacles presented by the lack of programming and the minimal participation of the cable industry. Several manufacturers have even provided financial support to broadcast networks to underwrite the production of high definition programming.""CEA sales statistics show that 2.95 million digital television integrated sets and monitors have been sold since products first came to market in the fall of 1998. Sales of digital television devices capable of receiving over-the-air signals have increased in direct relationship to a rise in the amount of available digital programming. 2001 sales of digital set-top boxes totaled 128,845, representing a 251 percent increase from 2000. Unit sales of integrated sets for 2001 reached 70,295 -- a 1,025 percent increase over 2000.""We believe that the voluntary measures outlined in this letter to be taken by the consumer electronics industry respond to Chairman Powell's challenge, address the all-important issue of cable compatibility and are pro consumer in every way,"" Shapiro wrote in closing. ""Our industry remains committed to working with Chairman Powell and all the affected industries to continue to make the transition a success.""

For more information about the CEA, visit www.ce.org.

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