Re: FCC Orders All TV's To Have Digital Tuners By 2007

[Garrett Wollman <wollman@lcs.mit.edu>]

<<On Thu, 08 Aug 2002 21:26:37 -0400, "A. Joseph Ross" <lawyer@attorneyross.com> said:

> I hear that TV set manufacturers have been complaining about how
> much it will add to the price of TV sets.  But I suspect that mass
> production will reduce the price, as it did with UHF tuners in the
> 1960s.

There is actually a legitimate concern here.  Economies of scale only
help the manufacturers when the additional costs are related to the
physical production of the devices.  In the case of digital TV, there
are literally hundreds of patents which each manufacturer must license
in order to legally make a DTV receiver -- and the ongoing draconian
curtailment of fair use rights adds even more patents to the mix.  (Of
course, it also reduces the value of DTV to consumers even more.)
Patent licenses account for about 20% of the cost of a typical DVD
player; digital TVs need almost all of those plus quite a few more --
and those costs are not reduced by economies of scale, particularly
when it's a patent-owner's market.

-GAWollman