California Jumps the Gun on DTV Energy Policy

ARLINGTON, Va. - April 11, 2006 - The following statement was issued by the Consumer Electronics Association (CEA) President and CEO Gary Shapiro and National Association of Broadcasters President and CEO David K. Rehr regarding the California Energy Commission's (CEC) mandatory regulation for digital television (DTV) adapters. The Commission is expected to respond this week to public comments requesting the Commission rescind the regulation.

"We strongly urge the CEC to withdraw the energy regulation for digital television adapters. These converters are necessary for existing analog televisions to receive the new digital and high-definition television signals by antenna. This regulation would likely raise the cost and limit the availability of these products, potentially leaving millions of Californians on the wrong side of the digital divide.

"The CEC has acted prematurely, setting energy standards for a product that is not yet on the market. The federal government is preparing to announce a $1 billion program to help American families purchase these converters so they can continue to receive television over-the-air once the nation shifts to DTV - including the millions of Californians who rely solely on over-the-air television reception. By mandating energy consumption specifications for these products before government and industry have the opportunity to define what types of converter boxes will be eligible for the subsidy, the CEC's regulation jeopardizes the ability of Californians to participate in this program in a meaningful way. The regulations could force the boxes eligible for sale in California to come at a premium price, reducing the value of the subsidy.

"Alarmingly, the CEC has promulgated this regulation on false facts and assumptions concerning DTV converters. For example, the CEC concluded that 46,000 digital television converters are in use throughout California, despite the fact that set-top DTV converters are not available on the market in the United States . Nonetheless, the Commission conducted a cost-benefit analysis and calculated energy consumption and savings figures for this non-existent product .

"Saving energy is important, but the CEC's regulation misses the point. The digital television transition itself will save energy as broadcasters stop running both analog and digital transmitters. In fact, with every month that the transition to digital television is delayed, California could relinquish more than $1.6 million or almost $20 million per year in energy savings.

"The consumer electronics and broadcast industries are committed to energy conservation. The consumer electronics industry, for example, has long participated in the voluntary federal Energy Star program, which aids governments, businesses and consumers in making energy-efficient choices that save energy, save money, reduce greenhouse gas emissions and protect the environment. Additionally, manufacturers are deeply involved in industry-led standards-setting activities focused on energy efficient design. More, new multi-functional consumer electronics devices that combine the operations once performed by a series of products into one converged device also help reduce energy consumption by providing higher energy efficiency than multiple devices.

"The California Energy Commission's unnecessary and unjustified regulation for DTV adapters must be withdrawn to ensure that no Americans are left behind in the digital transition."

Other industry leaders also weighed-in on the California Energy Commission's regulation of DTV adapters:

"(We) are concerned that the (CEC regulation) could have adverse consequences for the public. It may result in establishing a different, perhaps more expensive, converter box just for California residents. As a result, California viewers may not receive the full benefits of the federal (subsidy) program. In turn, this may have the unintended consequence of delaying the availability of these converter boxes to the citizens of California. Consumer acceptance is the key to the digital transition, and any delay or impediment to the roll out of digital to analog converter boxes could slow down the digital transition."

- David Donovan, president, The Association for Maximum Service Television

"As the country has finally developed a clear path to the decades of effort in the transition to digital television and all its benefits, it is unconscionable that any agency with a mandate to work for the public interest could be foolish enough to place any unilateral impediment or single out the last key enabler of this long anticipated transition with an arbitrary rule like this."

- Charles H. Jablonski, former vice president of Broadcast and Network Engineering, NBC

"Retailers want their California customers to have the same range of opportunities that our customers in other states will have to keep receiving broadcast television."

- Robert S. Schwartz, Consumer Electronics Retailers Coalition

"The evolution from analog to digital television must continue unencumbered to insure a smooth and cost effective transition. Artificial restraints service no one."

- Randall Dark, co-founder and president, HD Vision Studios, Los Angeles

About CEA
The Consumer Electronics Association (CEA) is the preeminent trade association promoting growth in the consumer technology industry through technology policy, events, research, promotion and the fostering of business and strategic relationships. CEA represents more than 2,100 corporate members involved in the design, development, manufacturing, distribution and integration of audio, video, mobile electronics, wireless and landline communications, information technology, home networking, multimedia and accessory products, as well as related services that are sold through consumer channels. Combined, CEA's members account for more than $125 billion in annual sales. CEA's resources are available online at www.CE.org, the definitive source for information about the consumer electronics industry.

CEA also sponsors and manages the International CES - Defining Tomorrow's Technology. All profits from CES are reinvested into industry services, including technical training and education, industry promotion, engineering standards development, market research and legislative advocacy.

About NAB
The National Association of Broadcasters is a trade association that advocates on behalf of more than 8,300 free, local radio and television stations and also broadcast networks before Congress, the Federal Communications Commission and the Courts. Information about NAB can be found at www.nab.org.