February 07, 2001

Mandating the inclusion of a digital television (DTV) tuner in every television set-as proposed by broadcasters-will result in increased costs and severely limit consumer choice, the Consumer Electronics Association (CEA) reiterated today. The comments came in response to testimony delivered by representatives of the broadcast community during oversight hearings on DTV held by the U.S. Senate Commerce Committee.

”This proposal, even if phased-in, will increase costs for American taxpayers,” said CEA President and CEO Gary Shapiro. ”We estimate that such a mandate could add hundreds of dollars to the cost of almost every television set, pricing many lower-income Americans out of the market and severely slowing the DTV transition.”

Shapiro argued that the proposal also would inhibit the ability of consumers to choose how and when they will enter the digital television era.

”Consumers have demonstrated that they want options when making the decision to upgrade to DTV,” Shapiro noted. ”Our own experience combined with sales figures and reports from retailers show that most consumers are choosing to upgrade to a high quality, DTV-upgradeable monitor now - to enhance their DVD, DBS or analog experience - and purchase a digital tuner later when more broadcast programming becomes available.”

Shapiro added that now that broadcasters have ended the debate over the DTV transmission standard, manufacturers can build and consumers can finally purchase tuners with confidence and certainty.

”As the DTV market matures and as more content becomes available, manufacturers will continue to produce and distribute a wide variety of digital television products, including a broad array of products capable of receiving a digital signal. Already, manufacturers are providing consumers with a wide range of products that includes integrated television sets, DTV-upgradeable monitors and stand-alone tuners. Throughout the transition, the free market will meet the needs of consumers as manufacturers provide DTV products at varying, affordable price points.”

Shapiro further argued that manufacturers are more than doing their part to help drive the DTV transition.

”Sales of DTV products reached 625,000 in the year 2000, accounting for 1.4 billion dollars in consumer investment. We expect that 2001 sales of DTV sets and displays will grow 80 percent to 1.125 million, with consumer investment climbing to 2.1 billion dollars,” Shapiro stated.

According to CEA, annual unit sales growth and dollar sales for DTV during its first four years on the market is projected to surpass that of computers, VCRs, CD players and color TVs.

Shapiro also noted that over the last two years, receiver and display prices have plummeted by nearly half.

”This decline in the price of DTV sets is in line with the initial 44 percent price decline seen for DVD players,” he argued, ”and much more rapid than the initial price declines of products like CD players, VCRs and large screen analog TVs.

”In addition, a wide variety of set-top boxes in the $600 - $1000 range have been introduced, including boxes that incorporate reception for satellite and over-the-air DTV signals as well as analog signals. We expect this year to bring a strong upsurge in sales of set-top box receivers now that the broadcasters have finally settled on an industry-wide transmission standard.”
In addition to rejecting calls for costly and unnecessary mandates on digital television products, Shapiro said Congress should follow four key steps to speed the DTV transition:

* Insist that broadcasters transmit an ample supply of HDTV programming,

* Ensure that any copy protection solutions protect the noncommercial home recording and fair use rights of American consumers as well as the rights of content owners,

* Direct the FCC to ensure that cable providers carry broadcast DTV programs, and

* Ensure that there is a simple and consumer-friendly way to connect digital cable systems to DTV products.

”The United States stands as the worldwide leader in digital television,” Shapiro concluded. ”An expanding variety of DTV products are in the stores, and consumers are buying them in record numbers. Numerous providers are recognizing DTV’s potential and producing DTV programming. CEA remains committed to working with broadcasters, cable providers and all other interested parties to ensure the fastest, most consumer-friendly transition to DTV.

The Consumer Electronics Association (CEA) represents more than 625 U.S. companies involved in the design, development, manufacturing and distribution of audio, video, mobile electronics, communications, information technology, multimedia and accessory products, as well as related services, that are sold through consumer channels. Combined, these companies account for more than $70 billion in annual sales.

For more information at http://www.ce.org

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