Press Releases

FOR IMMEDIATE RELEASE | FEBRUARY 26, 2009

CUT FATT Applauds FCC Action to Protect Consumers

FCC Seeks Public Comment on Price Gouging by DTV Patent Holders

Washington, DC – Today the Federal Communications Commission (FCC) issued a public notice seeking comment on a Petition for Rulemaking and Request for Declaratory Ruling filed on January 2, 2009 by the Coalition United to Terminate Financial Abuses of the Television Transition (CUT FATT). The CUT FATT Petition urges the FCC to take immediate action to protect consumers against uncontrolled price gouging by DTV patent holders.

“On behalf of digital TV consumers across the United States, CUT FATT applauds the action today by the FCC,” said Amos Snead, spokesman for CUT FATT. “CUT FATT asked the FCC to hold these abusive patent holders accountable to stem the overcharging of consumers and today’s FCC action is the first step towards providing relief for millions of Americans.”

Consumers are willing to pay a fair rate for patent licenses, but they are not willing to be victim to uncontrolled price gouging. The public is urged to comment on the petition before April 27, 2009. Click here to read the FCC Daily Digest notice and for information on submitting comments.

With the conversion to digital television slated for June 12, 2009, American consumers are poised to spend more than $2 billion on digital TVs in the next few months. The extension of the digital television transition will allow millions of Americans more time to obtain converter boxes with the help of $40 coupons provided through the National Telecommunications and Information Administration (NTIA) coupon program. Unfortunately, in this critical transition year, consumers will be overcharged up to $1 billion and perhaps more by parties controlling rights to use the ATSC digital television standard adopted by the FCC in 1996. The overcharges in 2008 and 2009 alone will dwarf all consumer savings through the NTIA program, and the price gouging will continue until the FCC takes action.

In its Petition to the FCC, CUT FATT urges the agency to implement a two-step remedy to protect consumers from abusive ATSC patent licensing practices:

• Declare that royalty demands for “essential” patents that exceed international comparables violate FCC rules and that “essential” patent holders have the burden of proving that their fees are reasonable and nondiscriminatory (RAND) based on international and industry comparables if their licensing terms are challenged.
  
  
• Adopt rules that encourage all essential patent holders to form a comprehensive pool offering all “essential” patents on a “free or RAND” basis. Any patent holder that chooses not to join a pool should be required to publish its licensing terms, and demands that exceed international or industry comparables by more than 50 percent should be deemed to violate the FCC’s “free or RAND” licensing standard.

CUT FATT was formed in 2008 to raise awareness about uncontrolled price gouging by ATSC patent holders and to protect American consumers. When the FCC adopted the ATSC standard, it promised to protect consumers from unreasonable and discriminatory patent fees. CUT FATT applauds the FCC for scrutinizing the demands of patent holders who charge American consumers far more than consumers pay in other countries.

For more information or for copies of the Request for Temporary Relief, contact Amos Snead at amos.snead@fd.com, 202-715-1531.