High-Definition TV Study Sparks Dispute

High-definition television, touted as the next wave in electronics, might not be a big enough breakthrough to restore competitiveness to the American industry, the Congressional Budget Office said in a report released Tuesday.

The findings triggered immediate criticism from an industry trade group and congressmen who support increased federal funding to develop the new technology.

HDTV, which produces a picture as sharp as movies and has many potential applications, has become an international issue, with the 12-nation European Community asking the United States to help head off any Japanese effort to control the field.

But the CBO study questioned HDTV’s potential impact on consumer electronics and said any federal support should have other justifications, such as job creation, national prestige and scientific advancement.

CBO Director Robert Reichauer told the Senate Governmental Affairs Committee on Tuesday that private estimates of HDTV sales were based largely on the premiums consumers were willing to pay in the past for color television over black-and-white.

But he questioned whether consumers would pay the price for a high-definition television--in excess of $2,000, some experts say--when the picture quality of standard televisions still is improving.

Reichauer also questioned whether HDTV would be the instant success some predict, saying even such successful products as videocassette recorders and microwave ovens caught on slowly.

He told the committee that even the optimistic predictions for HDTV sales were small in relation to the overall electronics market.

More Direct Route

“It is unlikely that HDTV will pay a pivotal role in the competitiveness and technology development of the sector as a whole,” Reichauer said. “Exactly how the HDTV market would change the competitiveness of U.S. producers on the whole is unclear.”

Reichauer said it was laudable to try to cut the U.S. trade deficit by fostering HDTV but that reducing the budget deficit and thereby raising national savings was a more direct route toward ending the trade imbalance.

Reps. Mel Levine (D-Santa Monica) and Don Ritter (R-Pa.), co-chairmen of the congressional HDTV caucus, called the CBO report “dangerous nonsense.”

Levine said the United States already lagged behind its top competitors in HDTV development, with foreign countries spending billions of dollars to develop their industries.

“Does the CBO really know something that has escaped Japan, Europe and the vast majority of American experts, all of whom say that HDTV is critical?” Levine asked.

The American Electronics Assn., which represents 3,500 high-technology companies, said the report contained erroneous assumptions and flawed conclusions.