The Federal Communications Commission contends its plan for switching the nation from analog to digital television makes the best of a complicated problem dropped in its lap by Congress.
A major consumer-electronics group counters that the plan forces consumers to spend more for a product they don't want.
The fate of the FCC's plan now rests on a three-judge panel on the U.S. Court of Appeals for the D.C. Circuit.
The judges heard oral arguments about the FCC's orders on Tuesday.
In 2006 — or whenever 85% of the nation is receiving DTV signals, whichever comes first — each broadcaster must return to the FCC the channel used for analog broadcasting. That returned slice of spectrum would then be put up for auction to cellular-phone providers and other private parties to help pay down the nation's debt.
The FCC ordered that all television sets 13 inches and larger include off-air digital tuners by July 1, 2007. The mandate outlined a phased-in approach over five years, starting with larger-screen sets.
The Consumer Electronics Association sued the FCC over the tuner mandate, claiming it would unnecessarily add a few hundred dollars to the cost of TV sets that 90% of households use for viewing cable or satellite, not for watching off-air local TV stations with an antenna.
The judges asked questions about both the arguments made by both the CEA and the FCC, but seemed to have more bones to pick with the FCC's changeover plan. The panel consisted of Chief Judge Douglas H. Ginsburg and Senior Judge Stephen F. Williams, both appointees of President Reagan; and John G. Roberts, appointed by President Bush in May 2003.
Jonathan Nadler, a lawyer with Squire, Sanders & Dempsey who represented the CEA, said the FCC order was "arbitrary and capricious" and constituted a "pointless regulatory requirement."
"It cannot possibly have been the intention of Congress to make consumers spend a lot more money on a technology they can't use, just so the commission can count them and set up a situation where they can sell off the analog spectrum," Nadler said. He added that the Dec. 31, 2006, deadline in the analog spectrum-return legislation was established as "a goal, not a binding mandate."
Roberts asked why a digital tuner would be useless to a cable or satellite subscriber. Nadler explained that after the changeover, if a consumer's cable or satellite service were interrupted, they would have to get a special A/B switch that could receive digital signals.
"Then you would have to go into the cellar and find the old antennae, put it back up on top of the house, and then you might be able to get a signal," he said. "But your remote control may not work, or your channels may show up on different numbers."
At one point, Ginsburg observed, "It's clear there's no demand for this; that's not in dispute."
But when Nadler complained that the FCC mandate would punish the majority of consumers who subscribe to cable or satellite only to benefit a small minority of broadcast-only viewers, Ginsburg indicated that such a phenomenon is common in federal regulations.
"Some of us are clumsy, so we have OSHA," the judge said, referring to the Occupational Safety and Health Administration. "They make us use ladders only an idiot would fall off of. Only a few benefit, but the cost is to everyone. That's the nature of the regulatory beast."
FCC lawyer Joel Marcus told the judges regulators were attempting to implement a complicated, comprehensive regulatory change mandated by Congress.
A/B? No problem
"This is not a market-based change," Marcus said. "Congress and the FCC have said, 'We're going to go from point A, analog broadcast, to B, digital,' and we have to force this through."
Marcus also said that it was wrong to measure the costs and benefits of the changeover solely by the increased prices of televisions. "You can't quantify the benefits of better television service."
Marcus also said use of A/B switches is growing more common, as some satellite subscribers have bought the devices so they can watch their local broadcast channels.
Marcus also disputed the CEA's estimate that the costs of televisions would increase by $200.
"There has never been a consumer-electronics technology where prices did not fall. Market forces, economies of scale and technology innovation are always at work," he said.
States News Service