Fed Calls For Consideration of Improved TV Receivers

fcc-logo_teal-gradient-on-gray-0313Improved TV receivers with higher-performance tuners may be on the way, if receiver manufacturers agree with the FCC. The Middle Class Tax Relief and Job Creation Act of 2012 (often called “the Spectrum Act”) was signed into law a year ago, and authorized the use of “incentive auctions” of broadcast spectrum. Included in the Act was a requirement that the Government Accountability Office (GAO) conduct a study on the effect of spectrum reassignment on wireless transmission systems, including all telecommunications, broadcast, satellite, mobile or other communications systems that employ radio spectrum.  Part of that requirement included a requirement to consider the value of improving receiver performance as it relates to increasing spectral efficiency.

That study has now been released, including a report to Congress entitled “Further Consideration of Options to Improve Receiver Performance Needed.” The report identifies three challenges to improving receiver performance: lack of coordination across industries when developing voluntary standards, lack of incentives for manufacturers or spectrum users to incur costs associated with using more robust receivers, and the difficulty of accommodating a changing spectrum environment.

The broadcast and consumer electronics industries are generally on opposite sides of the fence concerning mandated receiver performance, and several examples illustrate the scenario. When color TV was first introduced in the 1950s, there was one company that stood to benefit from development of both ends of the content food chain: RCA.  Controlling a growing broadcast network (NBC) as well as commercial broadcast equipment and television receivers meant that the umbrella corporation had a good chance to profit – which it did, subsidizing new product development and then reaping the rewards all around.  But it wasn’t until the mid ’60s that a concerted effort to promote color programming really made the difference, by which time substantial investments had been made in the consumer electronics industry.

Along the way, with broadcasters now crowding the VHF channels 2 through 13, the FCC opened up the UHF spectrum for television use, hoping to bring on more stations and competition. But receiver manufacturers saw no need to support spectrum that would require new product development and specifications. So, Congress passed the All-Channel Receiver Act of 1962, allowing the FCC to require that all television set manufacturers must include UHF tuners, so that new UHF TV stations on channels 14 to 83 could be received by the public.

An unintended consequence of this Act was that new receivers would be susceptible to interference from combinations of channels known as “taboos,” ultimately decreasing the actual number of available channels in any particular broadcast market. These problems have been corrected in modern digital television receivers, due to advances in receiver technology as well as the different interfering qualities of digital modulation.

When DTV receivers emerged, there were complaints that reception was marginal, at best, raising the specter of a legal mandate. But CE manufacturers – including those with patent income – had much to lose from poor receiver performance, and new DTV chips from various manufacturers quickly emerged as market forces drove a competitive environment where better receivers would incur fewer product returns.

But with the growing stature of the Consumer Electronics Association, the CE industry’s primary mechanism for capital beltway lobbying, new initiatives aimed at requiring receiver standards now face powerful – and political – opposition. And razor-thin profit margins make any added costs extremely hard to justify, especially if the improvements would yield a benefit that is lost on the customer when they power up their TV. Further clouding the issue is the fact that tighter receiver standards are blindly aimed at more dense use of the spectrum, which would in some cases benefit non-incumbent spectrum entrants, whose presence does not directly benefit the purchaser of the improved receiver.

The FCC has issued a Notice of Proposed Rule Making on various aspects of conducting incentive auctions of broadcast spectrum; comments were due in January, and reply comments are due on March 12.