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 DISSENTING  STATEMENT  OF  COMMISSIONER  KEVIN  J.  MARTIN 
 Re:  Review  of  the  Commission’s  Rules  and  Policies  Affecting  the  Conversion  To  Digital  Television,  Second  Report  and  Order  and  Second  Memorandum  Opinion 
 and  Order,  MM  Docket  No.  00-  39,  Adopted  August  8,  2002 
 First,  I  commend  the  Chairman  for  bringing  this  tough  issue  to  a  vote.  As  I  have  said  previously,  I  believe  it  is  extremely  important  for  the  Commission  to  resolve  outstanding 
 DTV-  related  issues  quickly  so  that  affected  industries  and  consumers  know  the  rules  of  the  road.  While  I  believe  the  costs  of  this  isolated  proposal  outweigh  the  benefits,  as  I 
 explain  below,  I  appreciate  that  with  every  DTV-  related  decision  this  Commission  makes,  we  further  clarify  those  rules  of  the  road.  Indeed,  I  would  have  gone  farther.  I 
 firmly  believe  that  such  clarity  is  what  is  needed  to  spur  the  digital  transition,  and  I  encourage  the  Commission  to  continue  to  actively  resolve  outstanding  issues. 


 Generally,  I  prefer  market-  based  forces  to  government  regulation,  and  I  am  particularly  cautious  when  regulation  imposes  a  cost  to  consumers  or  requires  consumers  to  purchase 
 a  product  they  may  not  use.  In  such  situations,  I  believe  the  better  course  of  action  usually  is  to  refrain  from  regulation  and  instead  to  provide  consumers  with  a  choice.  If 
 government  intervention  is  necessary,  however,  I  believe  it  must  be  clear  that  the  benefits  outweigh  the  costs. 


 Currently,  consumers  can  choose  whether  to  spend  the  extra  money  to  purchase  a  television  that  includes  a  digital  tuner.  This  Order  sets  out  deadlines  by  when  television 
 manufacturers  must  include  digital  tuners,  so  that  all  but  the  smallest  televisions  will  be  able  to  receive  digital  broadcast  signals  “over  the  air.”  Today,  however,  few  consumers 
 receive  their  video  programming  only  through  over  the  air  broadcasting.  Instead,  the  vast  majority  of  consumers  receive  broadcast  programming  through  their  cable  or  satellite 
 provider.  Even  as  the  transition  to  digital  is  made,  these  consumers  will  probably  prefer  to  continue  to  receive  their  video  programming  through  cable  or  satellite.  Thus,  taking 
 action  on  digital  broadcast  tuners  alone,  as  we  do  to  today,  confers  a  real  benefit  only  on  the  relatively  small  percentage  of  consumers  (approximately  fifteen  percent)  who  do  not 
 rely  on  cable  or  satellite  for  broadcast  reception.  The  costs,  however,  will  be  borne  by  every  consumer  who  buys  a  television.  I  therefore  fear  that  the  costs  of  this  requirement, 
 as  an  isolated  action,  exceed  the  benefits,  and  I  am  not  persuaded  that  it  is  the  right  step. 
 On  the  other  hand,  if  we  were  to  resolve  the  digital  cable  and  broadcast  tuner  issues  together,  we  would  create  a  significantly  greater  benefit  for  consumers  with  relatively 
 little  additional  cost.  It  is  my  understanding  that  manufacturers  can  integrate  digital  broadcast  and  cable  reception  capabilities,  thereby  incorporating  these  functions  into 
 televisions  for  approximately  the  same  cost  as  the  digital  broadcast  tuner  alone.  The  value  of  being  able  to  view  digital  programming,  however,  would  accrue  not  just  to 
 consumers  who  rely  on  over-  the-  air  broadcast,  but  to  the  approximately  70  percent  of  consumers  who  access  their  programming  (including  broadcast)  via  cable.  Indeed,  many 
 of  those  consumers  would  have  additional  savings  as  they  would  no  longer  need  to  rent  a  set-  top  or  “converter”  box.  Thus,  if  we  were  to  ensure  equipment  functionality  and 
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 interoperability  for  all  digital  cable  systems  by  requiring  the  cable  industry  to  adopt  a  single  standard,  then  manufacturers  could  build  “digital  cable  ready”  sets  that  also 
 incorporate  broadcast  tuners.  This  action  would  impose  approximately  the  same  cost  on  consumers  as  the  Order  does  today,  yet  would  enable  significantly  more  consumers  to 
 receive  more  digital  programming.  And  if  we  were  also  to  resolve  outstanding  cable  carriage  issues,  we  could  further  increase  the  amount  of  digital  broadcast  programming 
 these  consumers  could  access. 
 I  nevertheless  am  hopeful  that,  in  addition  to  concluding  this  proceeding  today,  we  will  resolve  outstanding  issues  relating  to  cable  carriage  and  cable  compatibility  in  the  very 
 near  future.  I  believe  that  such  steps  will  facilitate  and  accelerate  this  country’s  transition  to  digital  television. 
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