CUTT FATT and DTV Transition Delay

Posted by at 7:52 pm on January 28, 2009

CUT FATT, The Coalition United to Terminate Financial Abuses of the Television Transition (CUT FATT) today applauded the Senate’s passage and the House’s expected passage of legislation to postpone the DTV transition date, yet warned that more action is needed to protect consumers from price gouging by DTV patent holders.

“Delaying the DTV transition date is the first step to protecting consumers, but is only part of the remedy needed,” says CUT FATT spokesperson Amos Snead. “Large foreign corporations that bought U.S. patents are exploiting the transition to make outrageous profits off digital television sales to consumers. Lower-income and unemployed Americans are the most likely to feel the cost of the DTV transition, and companies should not be allowed to exploit consumers under the umbrella of a FCC-mandated -˜ATSC’ standard and congressional DTV mandate -” especially in these times of economic hardship.”

CUT FATT is a coalition formed in 2008 to raise awareness among Members of Congress and the FCC concerning what they consider to be uncontrolled price gouging by ATSC patent holders and to protect American consumers. Its current members include VIZIO and Westinghouse Digital.

According to Cut FATT, even with four more months to work with, a mandated transition to digital television means consumers must buy millions of ATSC televisions or converter boxes. CUT FATT applauds the extension of the government’s converter box program, which will ensure that millions of Americans are able to receive $40 rebates. Unfortunately, Americans will buy tens of millions of DTV sets this year, and they may be overcharged $30, $40 or even $50 on each one by foreign patent holders. These overcharges dwarf consumer savings from government converter box coupons.

Some patent holders are violating the FCC’s reasonable and nondiscriminatory licensing requirements by charging American consumers 20 to 30 times more than consumers in Japan or Europe pay for similar technologies. Although the FCC requires manufacturers to use the ATSC standard, there is no publicly available list of what technology is included in that standard, what patents are needed or how much patent holders charge.

Snead added, “Other countries that haven’t yet transitioned to digital broadcasting are abandoning the ATSC standard because of the rampant price gouging by the ATSC patent holders. The U.S. has selected the ATSC standard over others, but that doesn’t mean American consumers should be held hostage for billions in patent overcharges.”

Earlier this month, CUT FATT filed a petition for rulemaking asking the FCC to adopt specific procedures to combat abuse by ATSC patent holders of their monopoly status.   When the FCC adopted the ATSC standard, it promised to protect consumers from unreasonable and discriminatory patent fees. CUT FATT believes the FCC should scrutinize the demands of patent holders who charge American consumers far more than consumers pay in other countries.

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