The “FATT” is fighting back this week in comments filed at the US FCC against the “Coalition United To Terminate Financial Abuses of the Television Transition” (CUT FATT) proposal to address patent overreaching in the US DTV system.

Filings from Valley View, Philips/LG Electronics, Funai, Thomson, ATSC, Harris, Zenith, MPEG LA, Philips/Qualcomm, and Retire Safe merit future comment by the Reply Comment date of May 27 (see here).

But polemics risk overshadowing a broader and more fundamental point that is skirted in the filings:

ISDB presentation to Philippines, 3/09
ISDB presentation to Philippines, 3/09

The US ATSC DTV system, once touted as a model for US global prowess, has fallen behind rivals DVB and ISDB, priced out of the world market and under-featured, and now if some of these filings are to be taken at face value stubbornly saddled with an uncompetitive process based on lack of transparency and protracted litigation.

Indeed, these filings raise a darker picture that ATSC may at least to some become seen as little more than a cash cow royalty milking opportunity for a small number of foreign vendors at the same time that their home countries promote competing standards to gain market shares in burgeoning DTV markets and opportunities around the world in South America, ASEAN, and elsewhere.

In particular, several of these filings paint the picture that the only viable or appropriate forum to consider and address patent licensing issues are litigation forums like the International Trade Commission or federal courts, and anything else would be unprecedented, unworkable, and so forth.

But this has never been the case — patent and licensing issues have always been a major topic of ongoing concern by standards groups, regulators, vendors, and users in DTV.  The rival European DVB for example, has always played a variety of facilitating roles relating to IPR  — for a long and illuminating discussion on this topic by Carter Eltzroth, Legal Director, DVB Project see here.  If anything, the direction in recent years has been to reexamine, and some cases modify and become more proactive, in these facilitating roles, in light of well-known patent pool disputes like MHP.

And the Japanese-Brazilian ISDB system has recently played effective catch-up with DVB and ATSC by offering royalty free components, trade deals, proactive government-to-government involvement and faster time to market with new features (for background, see here).

So it may be helpful in reviewing these filings to consider a simple question — if you were looking to adopt a DTV system today (as many countries are), would these filings persuade you that the US DTV system, and the process and contentions surrounding it, would be worth adopting today?


“Good technical specifications are not enough
– DVB needs to be more proactive on IPR issues”

“15 years of the DVB Project”, Presentation at DVB World 2008 by Philip Laven, Vice-Chair, DVB (subsequently elected Chair of DVB)

Other notable features of the IPR policy of DVB are arbitration and fostering of patent pooling. This article provides a commentary on the DVB’s IPR policy and on its application. It also describes the work of the DVB in resolving IPR “gateway” issues when the perceived dominance of technology contributors, notably through control over IPRs, risked, in the view of some members, distorting new digital markets. In two cases DVB has created a licensing mechanism to dispel these concerns. In addition to the quality of its technical work, DVB’s success lies in its novel IPR policy and its ability to achieve consensus to resolve gateway issues.

“IPR Policy of the DVB Project: Commentary on Article 14 of the DVB MoU”, Carter Eltzroth, Legal Director, DVB Project,

What a telling and timely juxtaposition.

On the day responses are due to the US FCC’s request for comments to the CUT FATT request for an official inquiry into patent overcharging in the US digital TV transition (the “ATSC standard”), Argentine President, Cristina Fernández de Kirchner, is reported to have confirmed that Argentina is about to follow Brazil with the rival and lower cost Japanese-Brazilian Digital TV system.

This is hardly a surprise — some three years ago Argentina decided to reverse its decision to adopt ATSC as the country’s terrestrial DTV standard and consider other options.

And this follows last week’s announcement by the government of Peru that it is also adopting the lower cost Japanese-Brazilian Digital TV system, after a meeting between President Alan García and Shunichi Yamaguchi, a special envoy of Japan’s Prime Minister.

As tempting as it might be to write off the CUT FATT petition as part of a tactical patent dispute between CUT FATT founder VIZIO and Japanese rival Funai (over patents Funai acquired from Grand Alliance  member Thomson Consumer Electronics), it is important that the US government, and the FCC in particular, look deeper and systematically rethink the confused and obsolete 1980’s-era “America-is-better-than-Japan” DTV policy that now risks seeping over into a next generation of US broadband policy.

One can hardly blame the U.S. Trade Development Agency to have funded in September 2008 a half-hearted promotion of ATSC to Peru, after all promoting ATSC abroad must seem to be nearly official US FCC policy and many still wrongly believe that because the US FCC officially adopted the ATSC standard, the “A” in ATSC must stand for America (it actually stands for “Advanced“).

But as the CUT FATT filing aptly points out (Exhibit 2), even as of May 2008, in a written response to the US Congress, then FCC Chairman Kevin Martin outlined clearly that the FCC has little idea of who even owns the patents in the ATSC standard, and must rely on news reports and second and third hand information.

Finally, as advocated in several places on this blog, a royalty-free standards process, rather a patent-pool based process, is worthy of serious consideration by the US FCC as a preferred process — and to see how this royalty-free process has already helped Brazil and other countries in Digital TV, see this article.


“Peru follows Brazil with ISDB”, Friday, April 24, 2009

“On the other hand, the DVB Coalition sent a press release by means of which it is highlighted that DVB is the cheapest set top box (U$S 28), whereas for the Brazilian standard, such cost amounts to U$S 138 and for the Japanese standard it amounts to $82. According to the Coalition, Peruvians would have invested U$S 161 millions in their digital TV transition if they had turned to DVB, whereas the Japanese-Brazilian standard will involve U$S 795 millions and the Japanese one will involve U$S 472 millions.”

“Confirmed: Argentina is close to ISDB”, Monday, April 27, 2009

“[L]ast week, the Argentine President, Cristina Fernández de Kirchner, confirmed that the country is about to follow Brazil with ISDB. “We are working to complement and agree on a common digital TV system so that part of the TV sets’ production elements can be produced in Argentina””

“Government selects Japanese-Brazilian digital TV standard”, Monday, Apr 27, 2009

“Digital TV decoders to be sold in Peru for $28 in six months”

“[T]he Andean country’s Ministry of Communications (MTC) stated decoders would begin being sold for $28….Jorge Cuba, the vice minister of communications explained that the Japanese-Brazilian standard had been chosen, among other reasons, for its low cost.”

“European Commission offers Peru €500,000 to implement digital TV standard”, 2 April, 2009

“[President of the European Commission] José Manuel Durao Barroso … offered Peru five hundred thousand Euros if the South American country decided to implement the European DVB-T standard instead of the Japanese-Brazilian SBTVD one.”

“José Manuel Durão Barroso, the current president of the European Commission, offered Peru €500,000 if Peru decided to implement the DVB-T standard instead of the Japanese-Brazilian SBTVD one.” (retrieved April 27, 2009)

Peru Digital Television Standards – In 2008, USTDA funded an orientation visit to support the Government of Peru’s efforts to update the country’s telecommunication regulatory framework, including the adoption of a national digital satellite television (DTV) standard. The visit was designed to provide the Peruvian delegates with an opportunity to learn about the U.S. approach to telecom regulatory issues such as long distance licensing, broadband networks, Voice-over-Internet-Protocol (VoIP), digital television, convergence, spectrum, allocation, and local loop unbundling.

“TRI manages and provides technical, logistical, and communications
support to the U.S. Trade Development Agency (USTDA) Orientation Visit on Digital Television Standards”, September 21-27, 2008

“The purpose of this Orientation Visit is to educate and promote the ATSC Standard, which is the standard developed and used by the U.S. for digital television and to encourage the Peru policy makers to choose this standard when Peru makes the transition from digital to analog.”

“Argentina Favoring Brazilian Version of ISDB-T for Terrestrial DTV”, 09.12.2008

“Three years ago this month Argentina decided to reverse its decision to adopt ATSC as the country’s terrestrial DTV standard and consider other options.”

Royalty-free standards, the very foundation of the Open Internet, are not even mentioned in the FCC’s 60-page Broadband Plan notice of inquiry.

Surprising?  Not really.

Bridging even first principles of the Internet era to the realities of telecommunications policy since 1934 is a high order challenge for communications policy scholars, regulators, and network practitioners.

But boiling down, there are three basic foundations/themes/policy tools that underpin network infrastructures and their regulation, and no serious policy consideration should agnostically treat them as co-equals:

  1. multiple proprietary solutions: think of the metric “market share”
  2. franchise/royalty-bearing standards: think of the metric “profit share”
  3. royalty free standards: think of the metric “deployment share”

Each is perhaps as millennial as common carriage; each has its merits, proponents, and detractors (and stimulus-response regulatory challenges); and each can claim to fit under the umbrella of the four principles of the recent, bare-bones FCC Internet Policy Statement (excerpted below).  Some might consider 2 and 3 as just variants of the same theme, but even a cursory look at the Digital TV standards debacle should highlight the fundamental difference.

Of note, Kevin Werbach, co-lead of the Federal Communications Commission Agency Review for the Obama-Biden Transition Project, maps the grey-area gaps of Internet policy regulation in an upcoming article, “Off The Hook”.

And at a symposium last fall on the legacy of the 1968 Carterfone decision, often invoked as the start of modern telecommunications regulation, Werbach also touched on a Carterfone-is-not-enough theme,  articulating the perspective that although “Carterfone established a principle of interconnection”, the decision alone produced “[n]o significant or game-changing competitive entry” without subsequent implementation standards.

Werbach went on to note “[s]tandards define industry structure … [c]rucial in network industries”, and to allude to the potential of the “FCC as a catalyst for open standards” and of “Reinvigorating Standardization”.

A suggested next step:  consider the critical role of royalty-free standards (as opposed to an easy vague acknowledgment of standards in general, which may devolve into captured, segment-favoring “franchise specifications”) and the need for a policy preference that recognizes and leverages royalty-free standards.


“Broadband Recovery Needs A Policy Preference for Royalty-Free Standards”

Werbach, Kevin D.,Off the Hook(March 31, 2009). Cornell Law Review, Forthcoming. Available at SSRN:

“Copps: FCC needs fifth net neutrality principle”,

“Beyond Liberalization II: The Impending Doom of Common Carriage”, Eli M. Noam,

From FCC Internet Policy Statement,

“To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to …

… access the lawful Internet content of their choice.

… run applications and use services of their choice, subject to the needs of law enforcement.

… connect their choice of legal devices that do not harm the network.

… competition among network providers, application and service providers, and content providers.”

Recovery Act § 6001 (emphasis added)

Concurrent with the issuance of the Request for Proposal for grant applications pursuant to this section, the Assistant Secretary shall, in coordination with the Commission, publish the non-discrimination and network interconnection obligations that shall be contractual conditions of grants awarded under this section, including, at a minimum, adherence to the principles contained in the Commission’s broadband policy statement (FCC 05-15[1], adopted August 5, 2005).”

47 USC 256, Coordination for interconnectivity:

(b) Commission functions
In carrying out the purposes of this section, the Commission –

(2) may participate, in a manner consistent with its authority and practice prior to February 8, 1996, in the development by appropriate industry standards-setting organizations of public telecommunications network interconnectivity standards that
promote access to –
(A) public telecommunications networks used to provide   elecommunications service;
(B) network capabilities and services by individuals with  disabilities; and
(C) information services by subscribers of rural telephone  companies.

Good to see prominent billing for “Java in Brazilian Java DTV” at the upcoming JavaOne conference.

Second topic listed in the press release right after cloud computing!

SANTA CLARA, Calif. April 13, 2009 Sun Microsystems, Inc. (NASDAQ: JAVA) today announced the 2009 JavaOne conference schedule

Some of the accepted sessions include:

  • Cloud Computing: Show Me the Money – Jeff Barr,; Jeff Collins, Intuit; Adam Gross,, Inc.; Simon Guest, Microsoft; Gregor Hohpe, Google, Inc.; Raghavan Srinivas, Intuit; Lew Tucker, Sun Microsystems, Inc.
  • Java in Brazilian Digital TV: Interactivity and Digital Inclusion on TV – Magno Cavalcante, Petrobras; Clayton Chagas, Brazilian Army Research Center

Yesterday’s kickoff of the FCC’s Broadband Plan proceedings were broadcast over the Internet in a proprietary video format.Standards "a key element in broadband deployment"

Worse, it was likely converted from a standards-based format to a proprietary format before it was put on the Internet! (The tip-off is that the closed-captioning overlay was already composited in).

Clearly, a proprietary broadband internet would not be, borrowing one Commissioner’s phrase, an “enlightened public policy” for America’s Broadband Plan.  The FCC’s notice of inquiry states (emphasis added):

“We also note that the development of equipment and protocol standards is a key element in broadband deployment and seek comment on the appropriate role of the Commission in facilitating the development of such standards.”

So here is a clear, actionable role for the Commission — use standards.   Just say no to proprietary formats.

Statements by Commissioners echoed the historic policy importance and high stakes of this proceeding (emphasis added):

Broadband can be the great enabler that restores America’s economic well-being”…

…. “the most important public policy initiative affecting broadband since the landmark Telecommunications Act of 1996” …

…. “it is critical that our plan be competitively and technologically neutral … our plan must not favor one particular technology or type of provider over another, even inadvertently”

Please do not inadvertently favor turning the open Internet into a proprietary one in the name of broadband policy.