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Shapiro to Broadcasters: Let Them Eat Cake

Gary Shapiro leaves the impression that he was once forced to play the role of human antenna by wearing aluminum foil rabbit ears while balancing on a hassock. The chief of the Consumer Electronics Association delivered multiple messages this week about households that rely exclusively on over-the-air TV signals, the theme of which was more or less, "let them eat cake."

In this particular case, cake signifies cable. In a letter dated May 11 to House Commerce Committee Chairman Joe Barton, Shapiro argued for a hard analog shut-off date on the premise that so few people rely on OTA signals.

"...if the cut off occurred today, less than 13 percent of the population of 110 million TV households would not have access to a broadcast signal through cable or satellite," he wrote. "Though they could certainly start subscribing."

Hellooo, the National Association of Broadcasters shot back.

"It has come to our attention that the Consumer Electronics Association recently sent you a letter in which CEA President Gary Shapiro dismissed the value of free, over-the-air television and made a series of wildly inaccurate claims," NAB chief Eddie Fritts said in his own letter to Barton.

The government's own estimate of OTA reliance, from GAO testimony on Capitol Hill in February, is 19 percent, Fritts pointed out.

"The GAO's Mr. [Mark] Goldstein testified that 'roughly 21 million' homes in America are totally reliant on an over-the-air signal. That is more homes than are located in the states of Texas, Florida, Michigan, Mississippi, Montana, Alaska and Hawaii, combined," Fritts continued, and then removed his gloves.

"Perhaps CEA believes people who rely solely on over-the-air television reception are not important," he said. "If so, CEA should tell that to parents of more than 200 kidnapped children who have been rescued by Amber Alerts, an initiative launched by free, over-the-air broadcasters. Or CEA should tell that to victims of last year's Florida hurricane victims-- weather alerts from local television stations with saving their lives."

Shapiro had already raised the ire of broadcasters with remarks he made at the annual meeting of the Advanced Television Systems Committee (ATSC). At that gathering, held at the Crystal City Hilton in Arlington, Va., on Tuesday, he told broadcasters their medium was dying, and he made veiled allusions to pulling the CEA out of the organization, according to those in attendance.

In an interview with Doug Halonen of TV Week later the same day, he said, "There are a number of organizations that are questioning their commitment to ATSC."

The CEA later released a statement summarizing Shapiro's remarks at the meeting. It made no mention of pulling out, but instead leveled criticism at the process by which E-VSB became a standard.

"The recent activities to develop enhanced-VSB standard have been a disappointment and a misguided endeavor," he said. "Furthermore, we strongly believe that standards should be created and decided upon by consensus, which did not occur in the development of E-VSB."

Parties familiar with the ATSC vote on enhanced-VSB confirm that it was a close and sometimes contentious vote. Several sources said Zenith (owned by LG Electronics) was a major supporter of standardizing E-VSB because it could serve to prolong the life of its VSB patent portfolio.

Not exactly, said Richard Lewis, senior vice president of technology for Zenith. Lewis said Zenith is offering the use of E-VSB for free with any 8-VSB license, (8-VSB demodulators are necessary for digital over-the-air reception). When the 8-VSB patent portfolio expires in 2016, the E-VSB licensing program would then kick in. Lewis said E-VSB patents are pending, but "if and when they are" awarded, they would run to about 2022.

"E-VSB patents have no effect on 8-VSB patents," Lewis said. "There's going to be an 8-VSB program and an E-VSB program. People will be free to license one of those or both. During the life of 8-VSB, there will be no patent fees on E-VSB. After that, there would be an E-VSB program."

"We know the transition is slow and there's concern with E-VSB applications," he said. We developed this program to help stimulate it."

Zenith does not divulge its 8-VSB licensing fees. John Taylor, vice president of public affairs at LG Electronics USA said licensing is negotiated with each manufacturer.

Sources indicated that TV set manufacturers pay about $16 for the intellectual property rights for each ATSC receiver made. Zenith's portion of that for 8-VSB is in the neighborhood of $5, manufacturers say.

The situation leaves Shapiro in the midst of a membership with diametrically opposed interests, which one member noted is par for a Washington, D.C. lobby. The vocal CEA chief returned to the theme of plugging the broadcast horse at a breakfast of the Federal Communication Bar Association on Thursday morning.

"The NFL is no longer on free over-the-air TV, and no one noticed," he said, alluding to ABC's recent announcement that it would boot Monday Night Football over to sibling cable net ESPN next year. He again referred to over-the-air households as a "diminishing" group, and castigated broadcasters for not promoting free TV, as he did in his letter to Barton. Broadcasters responded that local cable franchise managers do not take kindly to such promotions, and have threatened to pull lucrative advertising accounts from broadcasters.

Shapiro's campaign to kill analog broadcast signals comes as folks await the other shoe to drop on the broadcast flag, which the court kiboshed last week. The CEA railed against the flag, but when it came to the court challenge, Shapiro's team let public interest groups led by Gigi Sohn at Public Knowledge do the heavy lifting. Ask if he was going to let Sohn continue to carry the water, Shapiro only replied, "we love Gigi Sohn."