One of the reasons that China gave for rejecting the ATSC standard was the cost of the license fees for the patents required to implement the standard.
With its large population, such per-set licensing fees have a huge impact on its total DTV transition cost. In the United States, all TV sets have to include ATSC tuners, and manufacturers have no choice but to pay the required licensing fees.
Vizio, a major manufacturer of HDTV sets, has decided to fight back.
Last week the company announced its support of the Coalition to Terminate Financial Abuses of the Television Transmission (CUT FATT). Vizio said the organization was formed to protect American consumers from excessive patent charges for DTV. In a press release, Vizio said that it is estimated that in 2008 and 2009 alone, "The aggregate royalty cost to American consumers will be well over one billion dollars for fees that would total only about $65 million in Europe and Japan."
CUT FATT was formed in mid-2008 to advise Congress and the FCC about the "uncontrolled price gouging of these patent holders." Vizio and CUT FATT petitioned the FCC to "hold abusive parties responsible for excess charges, and to impose new rules for patent licensing to end the overcharging."
"Without action now, this abuse could continue for many years," said Laynie Newsome, Vizio vice president of sales and marketing communications and co-founder. "We believe that the FCC must declare that any DTV royalty demands that exceed comparable international fees are a violation of FCC rules. We believe that any patent holder seeking higher fees should be required to prove to the FCC that their license fees are reasonable and non-discriminatory."
Newsome added that the FCC should also start a rulemaking proceeding to establish some basic rules that would be applied to the licensing of all patents required to implement FCC-mandated DTV receiver standards.
Amos Snead, spokesman for CUT FATT, was also on the bandwagon, stating that American consumers were getting a raw deal.
"This is the great untold story of the transition to digital television," Snead said. "Since 2007, American consumers have been paying more than 20 to 30 times what consumers in Europe and Japan pay in royalties for basically the same technologies. What’s worse, patent holders bundle allegedly essential technology with worthless patents, jack up the rates, and stick consumers with the bill. The FCC created this system, and it's time for the FCC to fix it by establishing basic rules that make pricing fair and transparent."
If the licensing fee issue is as big as Vizio and CUT FATT are indicating then it’s likely to impact not only the price of home DTV receivers, but also implementation costs for new technology such as the ATSC mobile/handheld candidate standard which builds on the ATSC DTV standard.
Doug Lung is one of America's foremost authorities on broadcast RF technology. He has been with NBC since 1985 and is currently vice president of broadcast technology for NBC/Telemundo stations.
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