No Evidence Justifies an Accelerated Digital Tuner Mandate, Say CEA and CERC; Acceleration Will Adversely Affect Consumers, Manufacturers and the DTV Transition; The Government Should Stick to Its Timetable

Business Wire, August 11, 2005

ARLINGTON, Va. -- There is no evidence to justify any acceleration of the July 1, 2006 date for including digital television (DTV) tuners in sets with screen sizes of 13- to 24-inches within the parameters set by the Federal Communications Commission (FCC) in 2002, said the Consumer Electronics Association (CEA) and the Consumer Electronics Retailers Coalition (CERC) in comments filed today with the FCC. CEA and CERC filed reply comments in response to the FCC's proposal presented in its Further Notice of Proposed Rulemaking (FNPRM) on digital television (DTV) receiving capability.

In the FNPRM issued on June 9, 2005, the Commission proposed to accelerate the current mandated timetable for the inclusion of a DTV tuner in television sets of all sizes from July 1, 2007 to a completion date of no later than December 31, 2006. It further proposes to extend the digital tuner requirements to receivers with screen sizes of less than 13-inches.

In their filing, CEA and CERC cautioned that the accelerated date would be extremely difficult for manufacturers to meet. Manufacturers Philips and SHARP provided the FCC with very specific factual data as to why it is simply too late to modify product, production, financial and personnel resource cycles to incorporate DTV tuners in all TV receivers 13-inches and above any earlier than March 1, 2007.

"We strongly agree with one of the Commission's original concerns, stated in the June 2005 Report & Order, 'It makes little sense to require products to be on the market before the general population of manufacturers can deliver them. As many commenting parties observe, if manufacturers were not able to meet our deadline, they might be forced to cease production of mid-range sets or switch to monitor products that do not include TV tuners,'" said CEA President and CEO Gary Shapiro. "The continued rise in DTV sales year-over-year proves the current market forces are successful and a drastic change in the current regulatory regime would only delay the DTV transition."

"It is evident from the comments received that proponents of an acceleration base their assumptions regarding price declines on an ostensible, effectively abandoned 'soft' analog shutoff date that everyone agrees will not be met, and that the Commission has ample reason to know cannot reflect reality," said CEA and CERC in their comments. Indeed, current discussions in Congress focus on a "hard" shutoff date on or about January 1, 2009.

CEA and CERC foresee that a significant decline in digital tuner costs will ultimately occur once several factors are actually in place: (1) a hard date is set, (2) the hard date of the analog cutoff actually approaches and (3) manufacturers have had 18-24 months to change their product lines.

In their filing, CEA and CERC also stated that the FCC should refrain from making any rulings regarding the inclusion of digital tuners in new receivers with screen sizes less than 13-inches until manufacturers, retailers and the Commission adequately are able to examine the impact of the small chassis products that currently are subject to the Commission's tuner requirements. At present, the changes in technology and products since 2002 would argue against, rather than in favor of, a new mandate.

"We look forward to continuing our work with the FCC to ensure a successful transition to DTV," concluded Shapiro.

About CEA:

The Consumer Electronics Association (CEA) is the preeminent trade association promoting growth in the consumer technology industry through technology policy, events, research, promotion and the fostering of business and strategic relationships. CEA represents more than 2,000 corporate members involved in the design, development, manufacturing, distribution and integration of audio, video, mobile electronics, wireless and landline communications, information technology, home networking, multimedia and accessory products, as well as related services that are sold through consumer channels. Combined, CEA's members account for more than $121 billion in annual sales. CEA's resources are available online at www.CE.org, the definitive source for information about the consumer electronics industry.

CEA also sponsors and manages the International CES - Defining Tomorrow's Technology. All profits from CES are reinvested into industry services, including technical training and education, industry promotion, engineering standards development, market research and legislative advocacy.

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