An effort to trim digital TV patent licensing fees has been launched by flat panel TV manufacturer Vizio and an organization called Cut Fatt -- an acronym for the Coalition to Terminate Financial Abuses of the Television Transmission.
Vizio and Cut Fatt maintain that "excessive patent charges for DTV" have already totaled more than $1 billion for TV sets that comply with FCC standards for digital television. Cut Fatt representatives said the group is planning to file a petition Monday with the FCC with a goal of reducing costs of TV sets. The issue takes on new importance as millions of the nation's TV owners will see their TV transmission switch from analog to digital reception on Feb. 17.
"This is the great untold story of the transition to digital television," said Amos Snead, spokesman for Cut Fatt, in a statement. "Since 2007, American consumers have been paying more than 20 to 30 times what consumers in Europe and Japan pay in royalties for basically the same technologies."
Vizio and Cut Fatt maintain that patent holders, whom they did not name, bundle "allegedly essential technology with worthless patents" and end up charging consumers as much as $30, compared with a $1 charge leveled in Europe and Asia for similar technologies.
The issue has slowly gathered traction since July 2007 when the FCC ordered digital tuners to be included in all TVs sold in the United States. Vizio, which has become a leading supplier of flat-panel TVs in recent months, said it favors the FCC declaring a violation of FCC rules for royalty demands for fees higher than comparable international fees.
"We believe that any patent holder seeking higher fees should be required to provide to the FCC that their license fees are reasonable and non-discriminatory," said Laynie Newsome, Vizio's co-founder and VP of sales and marketing communications, in a statement. "We also believe the FCC should initiate a rule-making proceeding in order to create a set of basic rules that apply to the licensing of all patents that are required to implement the FCC-mandated DTV receiver standards."
The issue adds another wrinkle to the coming switch to DTV, which has been shaping up as a major telecommunications and broadcasting event as millions of Americans seek to prepare for Feb. 17. Already there are widespread complaints of poor DTV reception, a shortage of converter boxes, and confusion among consumers. Consumer groups have complained that some cable and satellite operators are taking advantage of consumer confusion and apprehension to sell unneeded services.
