Judges Tackle FCC Tuner Mandate - Broadcasting & Cable

Judges Tackle FCC Tuner Mandate

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Whether the Federal Communications Commission’s digital-TV-tuner mandate withstands
a court challenge may come down to cost/benefit analysis.

Federal appeals judges in Washington, D.C., Tuesday examined in their questioning
whether the FCC adequately measured the costs of requiring the most popular
television models to begin being outfitted with over-the-air digital tuners
next summer.

The mandate is being fought by the Consumer Electronics Association on behalf
of most TV-set makers as an needless expense that will hurt consumers' bank
accounts more than it will speed the digital transition.

"The commission made no effort to estimate the costs this new mandate will
impose," CEA attorney Jonathan Nadler told the court.

But Judge Douglas Ginsburg said the costs to consumers cannot be considered
in a vacuum because reclaiming analog spectrum and auctioning it to new users is
a countervailing reward to society that also must be weighed. "That's a benefit,
too," he said.

Ginsburg also questioned CEA arguments that the 85% of consumers who rely on
cable or satellite for TV would pay up to $500 for tuners they don't need.

By setting standards for ladders so that "only an idiot could fall off,"
federal safety regulators jack up the costs for more careful individuals, he
said.

Still, the judges questioned whether the FCC adequately took into account the
royalty payments due to Zenith Electronics Corp. when the commission predicted that tuner prices would
drop substantially as production ramps up.

Judge Stephen Williams said the FCC's prediction of much lower costs over
time "falls down" if CEA estimates are correct.

The FCC ruled in 2002 that 50% of 36-inch sets must include digital-TV receivers by
July 1, 2004, and 100% one year later.

All sets 13 inches and larger must include digital-TV tuners by July 1, 2007.

The mandate was imposed to halt the proliferation of analog-only sets and to
bring closer the day when 85% of TV households are equipped to receive digital
channels from their local broadcasters -- the trigger for reclaiming analog
spectrum in a market.

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