DTV bill due after recess

Tauzin draws 'line in the sand' to speed transition

Wide-ranging legislation is required to get the digital-television transition on track, Rep. Billy Tauzin (R-La.) told broadcasters, consumer electronics manufacturers, television and movie producers, and technology companies last week. Tauzin, chairman of the House Energy and Commerce Committee, and the committee's top Democrat, Rep. John Dingell (D-Mich.), plan to introduce the bill after Congress returns from its August recess. Tauzin also plans to hold hearings.

"The industries have done a good job of moving the issues forward, but we still don't have a deal that everyone can agree to," said Ken Johnson, Tauzin's spokesman. "Chairman Tauzin has drawn a line in the sand and said, if you can't come to us with an agreement by September, we'll legislate one."

A key part of that bill will be a provision to establish copy-protection for DTV content, but it will also encompass cable carriage of digital TV stations, the ability of cable set-top boxes to receive DTV signals, and the inclusion of DTV tuners in new TV sets.

Disputes over copy protection are among the most intractable and disturbing for policymakers. Unless movie studios are confident that their content won't be duplicated and streamed over the Internet, they won't produce movies and other high-value programming expected to lure consumers to buy digital sets. Although some progress has been made on cable copy-protection standards, there remains strong consumer and manufacturer opposition to the so-called "broadcast flag," which would encode station signals to block or limit duplication on digital recorders. Without the restriction, broadcasters say, they will never get access to movies and other programming needed to attract viewers.

In fact, CBS, one of the most aggressive producers of broadcast digital programming, has threatened to "reevaluate the continued availability" of that programming unless a broadcast flag is implemented. As an additional way of dealing with the issue, Jack Valenti, president of the Motion Picture Association of America, last week said film studios are ready to tackle copy-protection issues with home computer makers.

Consumer groups say congressional mandate will threaten consumers' fair-use rights.

"It seems to be the networks and studios holding things back due to encryption and copyright concerns," says one industry executive. "I can't blame them."

Encryption is definitely a concern at the studios, which may be part of the reason Jack Valenti, president of the Motion Picture Association of America, praised Tauzin: "His continued determination has been instrumental in achieving real progress on the broadcast-flag issue that has been going on for a long, long time."

In May, Tauzin gave the industries a July 15 deadline to come up with a solution, but, with none apparently emerging, he decided it was time to take a stronger approach.

TV manufacturers also have balked at calls to install DTV tuners in nearly all sets. Frustrated at the industry intransigence, FCC Chairman Michael Powell two weeks ago shot an angry reply to the Consumer Electronics Association, which had offered a counterproposal he called so "loaded down" with conditions it amounted to "no commitment at all." Powell's harsh words were reiterated last week by the Bush administration when National Telecommunications and Information Administration head Nancy Victory called TV suppliers "the sole source of static" and urged CEA to reconsider its decision not to "join the DTV team."

In April, Powell asked set makers to equip half of sets 36 inches and larger with DTV tuners by Jan. 1, 2004, and all sets 13 inches and larger one year later. CEA countered with a plan to install DTV tuners in cable-compatible sets within 18 months of an agreement allowing the manufacture of "plug-and-play" sets that work without a cable-industry-supplied set-top box.

One consumer group agrees that a tuner mandate would unjustly raise the cost of TV sets for consumers. Mark Cooper, director of research at Consumer Federation of America, says he needs to see exactly what the bill would mandate. He believes built-in tuners should not be included, because consumers would be required to spend money for over-the-air tuners when 85% are cable subscribers. "I worked with Billy Tauzin when he had a 'D' after his name, and, since then, he doesn't do anything for the consumer."

Tauzin spokesman Johnson said, "Given the shakiness in the telecom sector today, the quicker we resolve these digital problems the quicker we can get people back to work and convince consumers to start buying new products."

Any bill has very little chance of moving this year because Congress is scheduled to end this session in October. A new session begins next January, and a new session requires a new start on all legislation.