Agenda Clash Over Digital TV Tuner Phase-in, Finds ABI Research.

Business Editors/High-Tech Writers

OYSTER BAY, N.Y.--(BUSINESS WIRE)--May 26, 2004

The FCC mandate governing the phased introduction of digital TV tuners to new television sets spotlights an arena where multibillion-dollar issues will be thrashed out over the next three years.

According to ABI Research's Director of Broadband Research, Vamsi Sistla, the protagonists are the consumer electronics and cable industries, represented publicly by the Consumer Electronics Association (CEA); the broadcasters, represented by the NAB; the FCC itself; and consumers, whose best interests all parties claim to promote. The parties differ not only on the interpretation of market data, but also on the facts themselves.

The FCC's agenda is the simplest: to push the transition to a fully digital TV environment, free up analog spectrum for other uses, and "save" the television industry. The FCC has pressured TV station heads, broadcasters and CE vendors to do their part. Broadcasters are generally in favor, seeing opportunities for new services and higher ad revenues, although they will have to spend a lot of money to reap the benefits. The CEA is generally critical of any such move that encourages free-to-air competitors. The cable industry, on the other hand, has successfully persuaded the CE industry to agree on one-way digital interoperability and is hoping to use cable's plug and play convenience to compete more effectively against DBS and others. Both these parties are working towards two-way interoperability.

Disputed variables include the final additional cost of the tuners and whether the added revenues will cover the cost of digital broadcasting conversion.

ABI Research sees, in the near future, many households owning several TVs, using different technologies and service providers. Vamsi Sistla concludes that, "whoever comes up with the optimum package to serve such consumers is going to be the winner."

Several upcoming ABI Research studies analyze these critical market trends in detail, including "Residential Entertainment Technologies", "Digital Set Top Box Quarterly Service" and "Broadband Subscriber Service."

Founded in 1990 and headquartered in New York, ABI Research maintains global operations that support annual research programs, quarterly intelligence services and market reports in wireless, automotive, semiconductors, broadband, and energy. Their market research products can be found on the web at www.abiresearch.com, or by calling 516-624-3113.