Shapiro Comments Raise Eyebrows

May 16, 2005  •  Post A Comment

Throwing down the gauntlet to broadcasters, Gary Shapiro, president and CEO of the Consumer Electronics Association, dismissed over-the-air TV as a dying medium last week and made a thinly veiled threat to pull his organization out of the Advanced Television Systems Committee-the industry group charged with setting broadcast digital TV standards.

“The importance of over-the-air broadcasting is diminishing, and it will continue diminishing,” Mr. Shapiro said in an interview. “There are a number of organizations that are questioning their commitment to ATSC.”

Mr. Shapiro’s grim prognosis for broadcasting’s future was originally handed down during a private meeting of ATSC members. But his remarks inflamed some at the session and were quickly leaked.

Mr. Shapiro subsequently said he couldn’t remember the exact words he had used at the behind-closed-doors session. But he insisted that his key point had been that with the vast majority (87 percent) of households now receiving TV signals from cable and satellite, he couldn’t fathom why there is so much fuss in Congress and the industry about the impact on broadcasters of a DTV transition.

“There’s all this time and money being spent on free, over-the-air television, with very few people relying on it,” said Mr. Shapiro, who has been lobbying for Congress to force broadcasters to make the switch to digital by the end of 2006.

Mr. Shapiro’s comments drew a challenge from the National Association of Broadcasters, which noted that a recent report by the congressional General Accountability Office maintained that 19 percent of homes rely exclusively on over-the-air TV. In addition, according to NAB, 73 million over-the-air TV receivers, including second and third sets in cable homes, are not hooked up to cable.

“CEA’s cavalier dismissal of these viewers ignores the potential for consumer outrage if millions of people prematurely lose access to this programming,” said Eddie Fritts, NAB president and CEO, in a May 12 letter to Rep. Joe Barton, R-Texas. “Disenfranchising huge numbers of Americans from access to local TV should not be based on misleading data from a trade group of offshore receiver manufacturers,” Mr. Fritts continued.

But one major CEA member distanced itself from the CEA chief’s remarks. “LG Electronics believes in the future of free, over-the-air television and the important role broadcasters play in the overall media mix,” said John Taylor, VP of public affairs and communications for LG Electronics.

Mr. Shapiro said his concern about ATSC had been directed in part at a decision within the past year by the organization to adopt an enhancement in the technical standard for the nation’s DTV system that could improve the broadcast industry’s DTV transmission capabilities but also could force manufacturers to include additional technology in DTV sets.

“I did what you’re not supposed to do in Washington: I told the truth,” Mr. Shapiro said.

Mr. Taylor said his company “is a big supporter of ATSC.”

Broadcast industry sources speculated that Mr. Shapiro is steamed at them in part because NAB has strongly opposed a CEA request that the Federal Communications Commission postpone a requirement that manufacturers include by July 1 DTV tuners in at least half of the TV sets they produce that are 25 inches or larger.

NAB officials have alleged that CEA wants to postpone the requirement to allow manufacturers to unload inventories of analog TV sets during the Christmas season, the peak of the industry’s sales year.

“If we’re talking about ending analog TV, it makes no sense for manufacturers to flood the market this Christmas with millions of analog TV sets,” said NAB’s Mr. Fritts, according to the written text of remarks he delivered at the ATSC conference. “That only elongates the transition.

“Rather than seeking delays in the tuner mandate, shouldn’t we instead be labeling analog TV sets `Soon to be obsolete?”‘ he added.

CEA has suggested setting a requirement that 100 percent of sets 25 inches and larger include DTV tuners as of March 1, 2006.

But in his remarks at the ATSC session, Mr. Fritts made clear that he’s not losing sleep worrying about the marketing preferences of TV set manufacturers.

“This transition lets TV set makers share billions of dollars in the greatest transference of wealth in consumer electronics history,” Mr. Fritts said.

As of late last week it appeared Mr. Shapiro’s fight with broadcasters was just getting started. In a May 11 letter, Mr. Shapiro promised CEA’s support for an effort by Rep. Barton to force the broadcast industry’s DTV transition.

“We urge you to stay the course and impose a hard deadline and we stand ready to help you in this noble cause,” Mr. Shapiro said.

In public remarks before a group of communications attorneys two days later, Mr. Shapiro also slammed broadcasters for allegedly failing to show sufficient backbone in standing up to the federal government crackdown on indecency.