FCC Opens ATSC Patent Costs Proceedings

February 27, 2009

WASHINGTON: The FCC is asking for public comment on alleged abuses to DTV patent licensing practices.

The commission issued the public notice this week after CUT-FATT, a group of consumer electronics manufacturers, asked the FCC to look into what the group claimed were patent licensing overcharges for digital television products based on the ATSC standard.

In its January petition filed with the commission, the “Coalition United to Terminate Financial Abuses of the Television Transition” asked the FCC “to immediately declare that it will impose the same fines on companies abusing RAND (reasonable and non-discriminatory) licensing obligations that it has imposed in connection with violations of other DTV transition rules.”

CUT-FATT also said the FCC should adopt rules to curb future abuses.

“Compared to the digital television patent licensing process elsewhere in the world, licensors in the United States operate freely in an un-regulated 'Wild West' without supervision or accountability,” the organization said.

The CUT-FATT petition said that American consumers pay $20 to $30 per television receiver for intellectual property rights that would cost about $1 elsewhere.

Considering that American consumers will purchase more than 45 million DTV sets, CUT-FATT says consumers will be overcharged by more than one billion dollars alone in the DTV transition years of 2008 and 2009.

CUT-FATT’s petition notes that the Consumer Electronics Association and several other parties have alerted the FCC to problems involving DTV patent licensing practices, but observed that the Commission had failed to take any investigative action regarding alleged abuses and had not imposed any “appropriate remedies.”

 

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“A government that creates a mandatory standard and then forces its citizens to buy tens of millions of digital televisions and receivers using proprietary technology quite plainly has a responsibility to protect those citizens from uncontrolled price gouging that the government itself enabled,” the group said.

CUT-FATT asked the FCC immediately take two steps to prevent this abuse.

“First, it should declare that ATSC royalty demands that exceed international comparables are presumed to presumed to violate the FCC's RAND requirements, and that each patent holder with higher fees has the burden of proving that its proposed license fees are reasonable and non-discriminatory,” the group said. “Second, the FCC should initiate a rulemaking proceeding to adopt appropriate rules to protect consumers.”

The petition noted that the royalty per set imposed by the MPEG LA ATSC licensing pool is five times higher than those for far more comprehensive DTV pools offered in Europe and Japan. The MPEG LA ATSC license does not include patents from a number of entities that claim to hold essential patents, such as Sony and Thomson.

Comments and oppositions to the Media Bureau’s Public Notice are due by April 27, 2009. Reply comments are due May 27, 2009.

The FCC will treat the proceeding as “permit but disclose.” Pleadings sent via email to the commission will be considered informal and will not be part of the official record. Filings can be made using the FCC's Electronic Filing System. Use the FCC Search for Filed Comments form to view comments and the petition. Enter 09-23 in box 1, “Proceeding” to see comments in this proceeding.

 

 

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