FCC to Investigate DTV Licensing Fees

Vizio led the charge in creating “CUT FATT“, the Coalition United to Terminate Financial Abuses of the Television Transition. (It is not clear, but it appears that only Westinghouse has joined this “coalition”.) The group complains that they are being charged too much by the patent holders for licenses to use certain technologies that are required to create a TV with a digital tuner. They contend that manufacturers in Europe and Japan are only paying $1 in fees per TV for licenses that are costing American companies $20 to $30. When I pointed out that digital TV conversion boxes are selling for $50 or less, and it’s not possible that the manufacturers have $20 in licensing fees in that price, a coalition representative pointed to this as evidence that the conversion box makers are being charged a lower fee than U.S. television makers.

CUT FATT also contends that the patent holders are bundling in useless patents in order to inflate the fees further, and asserts that “any DTV royalty demands that exceed comparable international fees are a violation of FCC rules.” The group has petitioned for a ruling on the subject, and the FCC is seeking public comment on the “petition for rulemaking and request for declaratory ruling”. According to some sources, it’s not clear whether the FCC has jurisdiction to regulate patent license fees, so it will be interesting to see if this goes anywhere. The timing could be a little touchy, as many fear the risk of protectionist policies by the U.S. and other countries as a response to the worldwide recession.

You can find the FCC call for comments at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-09-439A1.pdf.