U.S. Seeks Ways to Win Race for Highly Defined TV

The Bush Administration is launching a fast-track effort to come up with measures that can help propel the United States into the race to produce high-definition television--possibly including relaxation of federal antitrust laws and a new research and development tax credit.

U.S. officials said Wednesday that a new interagency task force headed by Commerce Secretary Robert A. Mosbacher is exploring these and other options, although it has not yet decided which of them to endorse or even whether the government should act.

The Administration is concerned because high-definition TV, which offers viewers a television picture that has the clarity of motion-picture film, is likely to dominate the television market of the future. Yet Japan has taken the lead in developing it, while U.S. firms have stayed out of the race.

Sources said that Mosbacher has begun consulting informally with U.S. electronics and telecommunications firms on the new technology and is scheduled to meet with industry representatives next Wednesday.

U.S. officials said that the proposals the task force is considering so far would be limited to development of high-definition television--or HDTV as it is commonly called. But they said that some proposals--such as relaxing the antitrust laws so that U.S. firms could launch joint production and manufacturing efforts--could have broader application.

Mosbacher has said several times that he believes the time is ripe to propose such changes. Congress is deeply concerned about the ability of U.S. firms to compete internationally. And the public mood on antitrust issues has changed as well.

The officials said Wednesday that the Administration may seek to make its proposal to cut capital gains taxes a part of any HDTV package. Mosbacher believes that a reduction in capital gains taxes is necessary to help high-tech firms raise the capital they need.

The Administration’s efforts come as the industry, too, has begun exploring ways to catch up with the Japanese. The American Electronics Assn. has hired a private consulting group to draft a plan for U.S. entry into the field and plans to unveil it to Congress next week.

Still, experts warn that the entry of the United States into the market is far from assured. Critics already have begun questioning whether it is even realistic for U.S. firms to seek to develop HDTV technology on their own, given the Japanese lead in the field.

Commerce Department officials said that Mosbacher hopes to fashion any new Administration HDTV package on the basis of what the U.S. industry itself believes will be feasible in the next several years. At this point, they said, that still is unclear.

They said that Mosbacher himself still has not decided whether the group should recommend a relaxation of antitrust laws or any of the other options now on the table. They said that the secretary especially wants to “remove any impediments” that the government is imposing.

Under any such plan, relaxation of the federal antitrust laws would be necessary only to enable companies to cooperate in the production and manufacture of HDTV products. Joint efforts for research and development already are permitted under federal law.

Another possible measure being considered, restoration of the tax credit for research and development, would bring back a tax incentive that Congress enacted in the early 1980s but later repealed.

The United States already is providing seed money for research and development on HDTV. In early March, 87 high-technology firms submitted applications for $30 million in Defense Department grants. The Pentagon is interested in HDTV for military applications.

The Washington-based Economic Policy Institute issued a study recently that predicted that unless the United States moves aggressively into the new technology, it could lose more than 2 million jobs a year and suffer a $225 billion trade deficit in electronics by 2010.

Japan expects to have an HDTV system in full operation by the mid-1990s.