Special Section on the Digital TV Transition

August 21, 2007

Mr. M. R. Kneuer
Assistant Secretary for Communication and Information
National Telecommunications and Information Administration
U.S. Department of Commerce
1401 Constitution Avenue, N.W.
Washington, DC 20230

Dear Mr. Kneuer:

Thank you for your letter of August 2 in response to mine of July 24.

First, please allow me to correct a significant apparent misunderstanding. In your fourth paragraph, you mention that the NTIA’s Final Rule regarding the Coupon Program “permits eligible converter boxes to include a stereo output that uses THAT Corporation BTSC technology.” (Emphasis is mine.) While we appreciate your generous implication that THAT Corporation has some sort of exclusive rights to BTSC technology, this is simply not the case. The BTSC standard is a public standard, endorsed by the NAB and EIA, and authorized by the FCC in the 1980s.

While THAT holds many patents in the field of BTSC, all our current patents apply only to digital realizations of what was originally an analog standard. Prior to 2002, we owned patents which applied to any realization – analog or digital – of certain portions of the BTSC standard. However, such patents expired several years ago.

THAT does offer patented technology that would be very useful in applications like DTV converter boxes. But, others offer similar technology which is not licensed by us. Moreover, it is possible to realize an analog BTSC encoder or decoder without infringing any patents owned by THAT or, to the best of our knowledge, any other entities. So, there is nothing proprietary to THAT Corporation about BTSC technology.

Turning to the main focus of your letter, we do understand that the Final Rule for the Coupon Program does allow for two types of stereo audio outputs, one through audio/video (RCA) connectors and a second using the RF connector. However, as you point out, a minimum CECB must include left and right RCA connectors. But, providing stereo at the RF connector is only an optional feature. And, as I stated in my previous letter, it appears that there will be at least some CECBs which will lack stereo in the RF connector. Therefore, consumers who use their government-issued coupons to purchase such minimum-standard CECBs can preserve the stereo audio they currently enjoy only if they use the RCA connectors.

We believe it is a fact that most consumers who purchase CECBs will hook them up using the RF connection, not the RCA connectors, even if the TV has such connectors. As we have pointed out in our filings with the NTIA, the RF connection is the simplest and most logical way to hook up the box. The NTIA appears to recognize this through its requirement that a minimum-standard CECB include an RF cable with the converter. No RCA-connector cable is required.

So, to be clear, consumers who purchase a minimum-standard CECB and hook it up in the simplest and most obvious way, will be deprived of the stereo audio their TV sets are capable of, that they paid for, and that they currently enjoy. These consumers will lose the clarity and separation of dialog, music, and effects which come with the stereo viewing experience. This seems to us to create a new sort of disenfranchised group of Americans, and serves as a poor way to “facilitate” the transition to DTV.

While we are disappointed by the Final Rule requirements, we do understand that the NTIA expects to rely on manufacturers and retailers in the marketplace to determine which of the permitted features, including stereo in the RF connector, will serve their customers best. And, we very much appreciate your pledge that you will “carefully monitor the marketplace to ensure that all Coupon Program converter boxes are properly labeled…”

Yet it is imperative that the NTIA enforce clear and unambiguous labeling guidelines in regard to the nature of the audio options supported by CECBs. A CECB that offers stereo audio only at the RCA jacks must not be labeled “stereo” without a disclaimer that additional cables and equipment may be required in order to maintain stereo reproduction. Only CECBs that support stereo both as mandated at the RCA jacks and as optionally permitted at the RF jack should be allowed to be labeled “stereo” without any disclaimers. Moreover, the disclaimer should be prominently displayed on the box’s exterior packaging and point-of-purchase materials, as well as in advertising that mentions stereo sound so as to avoid confusion among consumers, retailers, and other interested parties.

Clear and accurate labeling is vitally important because, first, many older TVs, including stereo TVs equipped to receive BTSC stereo audio signals, lack the audio/video (RCA) jacks required to connect to the RCA jacks on the converter box. For consumers who depend on such TVs, the RF connection is the only way to get a picture and sound using the CECB. Without stereo in the RF jack, these consumers will be deprived of stereo via this hookup.

Second, it is well known that even in those cases where RCA jacks are available on their TV sets, most consumers use the RF jacks to hook up those sets to “set top boxes” such as CATV and satellite equipment or auxiliary equipment such as a VCR. It is unrealistic to think that these consumers will suddenly begin to make use of these unfamiliar connections when hooking up a CECB.

Third, in the case of current analog broadcasts, consumers using satellite receivers and VCRs receive BTSC stereo as a “pass through” from the original broadcast. These devices provide an input for an external antenna wherein broadcast signals are passed through to the TV via the RF jack. Current consumers enjoy stereo audio because the original BTSC broadcast signal is passed transparently through this connection. If a CECB is connected into such systems, the consumer will no longer hear stereo audio unless the CECB provides BTSC stereo at the RF jack.

Fourth, of those consumers who understand and might possibly use the RCA jacks to connect a TV to the CECB, at least some of those are likely to have already dedicated those jacks to use with another source, such as a DVD player. Such consumers will lose the stereo they have come to enjoy from broadcast TV unless the CECB contains BTSC stereo at the RF jack.

I, and THAT Corporation, will continue our educational efforts regarding this issue. I appreciate your commitment to clear labeling standards. We pledge to work with your office to develop appropriate labeling standards, as well as to educate consumers about the potential of audio degradation and about CECB connection requirements. We look forward to working with you and the industry to make the transition to digital a success for all consumers and the nation.

In closing, I’d like to remind you of an experience we both shared when I visited your offices last summer. You showed me a prototype converter box hooked up to a TV set in your conference room. We discovered that that TV was hooked up to the converter box using the RF connection. The TV, which was capable of receiving BTSC stereo sound, did have RCA jacks with which it could have been hooked up. But, they were not used. And, when we listened to the sound, it was monaural. It is exactly this type of situation we are hoping to avoid with millions of Americans.

It is not too late to require all CECBs to provide stereo sound from both the RCA and the RF jacks. We understand that manufacturers are awaiting certification standards before beginning production. Short a change of those minimum standards, only a clear, prominently displayed and well considered labeling requirement for CECBs, can prevent this same story from repeating at millions of Americans’ homes across the country. I urge you to formalize the NTIA’s plans to do just that.