The action by the Federal Communications Commission (FCC) to expedite the 100 percent deadline for digital television (DTV) tuners in television screen sizes 25- to 36- in will help speed the consumer migration to DTV and reduce marketplace problems with the 50 percent requirement for sets in that range, said the Consumer Electronics Association (CEA). The FCC action moves the 100 percent deadline from the initial date of July 1, 2006 to March 1, 2006 but maintains the timetable calling for 50 percent of sets with an analog tuner sized 25- to 36- in to incorporate a digital tuner by July 1, 2005. The order came as the FCC reviewed a petition submitted by CEA requesting the expedited date for the 100 percent requirement and an elimination of the 50 percent requirement.
"We are pleased the FCC has accepted our proposal to expedite the 100 percent tuner deadline. Our proposal provides the certainty manufacturers need to plan and produce products to help complete the DTV transition," said CEA president and CEO Gary Shapiro. "CEA will continue to work closely with the FCC as further actions are taken to help complete the transition to DTV."
As noted in the FCC Report and Order, and also by FCC Commissioners Adelstein and Abernathy, the realities of the marketplace make the 50 percent requirement date problematic, said CEA. While conceived as a phase-in for the benefit of manufacturers and retailers, in reality the 50 percent requirement creates uncertainty in the marketplace for each group and slows the ramping up of volume production necessary to bring costs down. Indeed, Commissioner Adelstein in comments noted that "[t]oday's decision is unavoidable even if it is at odds with the free market system." CEA agrees that manufacturers and retailers cannot force consumers to purchase televisions with digital tuners, especially considering that only 12 percent of consumers receive their television signals over-the-air.
CEA is very concerned that accelerating this schedule from its original July 1, 2007, date will be extremely difficult for manufacturers to meet and would cause severe disruption in the consumer marketplace. If implemented, such a requirement would likely cause a jump in prices, thereby reducing the retail market for these sets. An accelerated tuner mandate could force some manufacturers who determine that it is not feasible to meet the new regulations (and fear inability to comply with the FCC's regulations) to move to tuner-less sets or to stop manufacturing altogether the TV models which cannot be fitted with digital tuners-which many manufacturers are reluctant to do.
Even if manufacturers were able to meet such a severely foreshortened production schedule, an earlier timeframe could result in cost increases that the marketplace cannot sustain. For smaller sets, 13- to 26- in, the requirement would double the development costs for manufacturers, as well as double the price of a typical 13-in television to consumers. If the product is rejected by lower income and other consumers because the price exceeds their budget, it will not be carried by retailers and, eventually, not produced by manufacturers.
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