FOR YOUR INFORMATION...........................FEBRUARY 9, 1993
FTC RECOMMENDS AGAINST FCC IMPOSING A DUAL-MODE RECEIVER REQUIREMENT ON TV MANUFACTURERS Consumer Should be Allowed to Choose
Requiring television manufacturers to produce "dual-mode" television receivers capable of receiving both conventional and advanced television (ATV) signals during the period prior to full conversion to ATV would not serve consumers' interests, may restrict choices, and could force some consumers to purchase certain types of equipment they would not voluntarily choose, staff economists of the Federal Trade Commission said in comments to the Federal Communications Commission made public today. The staff comments were submitted Feb. 5 in response to an FCC request for comment on whether the FCC should require that television receivers be capable of receiving both standard, or "NTSC," broadcast signals and ATV signals. (NTSC stands for National Television Systems Committee and refers to the existing broadcasting system.)
According to the FTC staff comments, economic-efficiency considerations suggest that a dual-mode receiver requirement could be justified only if it could be demonstrated that some market failure would prevent the production and distribution of television receivers that consumers demand. The FTC staff recommended that consumers' interest can best be served by permitting the production of different types of TV receivers, so that consumers can choose for themselves the equipment they prefer.
Given the FCC's mandatory 15-year conversion timetable, consumers already will have a strong incentive to invest in ATV compatible equipment, the staff noted. Some television manufacturers believe that during the transition period, ATV television sets will be dual-mode without any requirement from the FCC. - more -
(Comments to FCC on ATV--02/09/93)
"Compelling dual-mode NTSC/ATV receivers, therefore, seems an unnecessary means of ensuring that consumers are able to buy television sets that can receive both NTSC and ATV signals," staff said. "Morever, the regulation could hurt some consumers by eliminating options that would otherwise be available to them."
It is unlikely that the transition from NTSC broadcasting to ATV broadcasting will be accomplished simultaneously at the numerous individual television stations throughout the country, the staff said. Some areas of the country may have fully operational ATV systems while others have very few operational ATV systems. As a consequence, during the transition to ATV, consumers in some regions may place less value on NTS equipment than consumers in other regions.
If the FCC requires manufacturers to produce only televisions capable of both NTSC and ATV reception, some consumers may be forced to purchase ATV or NTSC equipment that they would not otherwise purchase, the staff noted. Indeed, the staff said, some consumers may prefer "to buy an NTSC television and later (once NTSC simulcasts cease) buy a downconverter to transform ATV signals to NTSC signals."
The FTC's economists conclude that because the levels of future demand for dual-mode and single-mode NTSC and ATV receivers are unknown, "the interests of both consumers and manufacturers will best be served by allowing all of these products to be produced."
These comments represent the views of the FTC's Bureau of Economics and not necessarily the views of the Commission or any individual Commissioner.
Copies of the comments are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY 1-866-653-4261.
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MEDIA CONTACT: Brenda Mack, Office of Public Affairs 202-326-2182
STAFF CONTACT: Larry Schumann, Bureau of Economics 202-326-3359