Court Backs DTV Tuners Mandate - Multichannel

Court Backs DTV Tuners Mandate

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Broadcasters scored a legal victory last Tuesday when a federal court upheld rules requiring television makers to gradually include off-air digital tuners in nearly all new sets, under a timetable that begins next year.

The National Association of Broadcasters lobbied the Federal Communications Commission to adopt a tuner mandate, saying it would expedite the transition from analog to digital TV.

Initially, the agency refused, hoping market forces would accomplish the task.

But FCC chairman Michael Powell, who opted to place the DTV transition high on his agenda, voiced concern about the lack of sets with integrated off-air turners.

Starts Off Big

Last August, at Powell's direction, the FCC adopted rules that phased-in tuners over a three-year period, with all sets 13 inches and larger needing off-air DTV turners by July 1 2007.

The Consumer Electronics Association, whose members include Sony Corp. and other major set-makers, opposed the tuner mandate. The CEA claimed that the FCC lacked legal authority to require tuners, and that tuners would be an expensive waste considering that 90% of households currently subscribe to cable, direct-broadcast satellite or both.

The CEA appealed the FCC's ruling to the U.S. Court of Appeals for the D.C. Circuit.

In a unanimous decision, a three-judge panel of the D.C. Circuit held that the FCC's tuner mandate was consistent with the agency's authority under the All Channel Receiver Act of 1962, a law signed by President John F. Kennedy to ensure reception of UHF TV stations.

The D.C. Circuit's opinion was written by Judge John G. Roberts, joined by Douglas H. Ginsburg and Stephen F. Williams.

Roberts, nominated by President Bush in May 2001, joined the court in May 2003. The CEA's tuner case was just the third opinion he drafted, a court clerk said.

In his opinion, Roberts said the ACRA called on the FCC to ensure that TV sets "be capable of receiving all frequencies allocated by the [FCC] to television broadcasting."

Roberts said the CEA's argument that Congress passed the ACRA to deal with just UHF reception and no other future reception issues was "meritless" and that "the legislative history invoked by CEA does not demonstrate that Congress meant to limit ACRA's application to the analog context."

On a key economic question, the CEA argued that tuners would add $200 to the price of a DTV set with no cost reduction coming anytime soon.

In his opinion, Roberts said the FCC acted reasonably, based on long experience with economies of scale, in assuming that the incremental cost of the tuner mandate would decline with the sale of millions of DTV sets.

The NAB — which considers the tuner mandate just as important as gaining mandatory cable carriage for digital TV stations — hailed the ruling.

"The court's decision today upholding the FCC's DTV-tuner requirement is a milestone toward completing the DTV transition. Consumers buying TV sets will know that the receivers they buy will continue to receive all broadcast signals, even as broadcasting changes to digital," National Association of Broadcasters president Edward Fritts said in a prepared statement.

TV stations must return their analog licenses when 85% of local households have digital reception equipment or by Dec 31, 2006, whichever is later. The FCC hopes the tuner mandate — coupled with the agreement between the cable and CE industries on "plug-and-play" cable ready DTV sets — will speed the transition and make the 85% threshold a plausible goal not many years after 2006.

"We're on track to have most television sets digital-ready by 2007. This will ensure that consumers are able to enjoy high-quality digital broadcast programming without the hassle and expense of hooking up a separate set-top box. We're pleased that the court has upheld a key component of our digital television transition plan," Powell said in a statement.

CEA Weighs Options

The CEA can seek review by the full D.C. Circuit or appeal to the U.S. Supreme Court.

Contrary to some press reports, the CEA has not announced its next legal move.

"We obviously are disappointed by the D.C. Circuit Court of Appeals ruling, which we are still studying. We will be reviewing the full opinion and consulting with our member companies, but of course will be compliant with any final court order," CEA president Gary Shapiro said in a statement.

The tuner mandate kicks in as of July 2004 and covers 50% of all sets with screens of 36 inches. Tuners must be installed in all sets 13 inches and larger by July 1, 2007.

The FCC rules are broad. Off-air DTV tuners must be included in VCRs and DVD recorders and players, also by July 1, 2007. Tuner-equipped computers with screens 13 inches or larger are also covered by the agency's rules.

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