Regulating TVs -- who wins, who loses?
The California Energy Commission unanimously approved a proposed regulation today capping the power consumption of televisions sold in California, starting in 2011. Although the Consumer Electronics Assn., which represents the world's largest TV makers, was apoplectic about the ruling, The Times' Marc Lifsher reports that one faction -- the LCD TV Assn. -- was all smiles. The reason? LCD sets are less power-hungry than plasma TVs. In other words, as so often happens when the government regulates products, it favors one technology over another -- and manufacturers know it, even if the regulators insist otherwise.
(We on the Times' editorial board had also urged the commission last month not to adopt the rules, warning that they could inhibit innovations that might do more for the environment in the long run.)
The real bite in the regulations won't come until 2013, when the caps are reduced and, potentially, the rules are extended to larger TVs. Representatives of the CEA struggled at a news conference this afternoon to cite specific examples of new, feature-laden TVs that couldn't meet the 2011 cut-off -- after a bit of research, they offered one 50-inch Samsung plasma set, although more examples are likely to be forthcoming soon. But they warned that few if any of today's models would meet the tougher limits.
Granted, this is an industry that innovates rapidly and has been particularly good in recent years at lowering power consumption. On the other hand, this is also an industry that regularly loads new features into its products to try to restore the profit margins that erode quickly in the brutal competition for buyers. At the moment, manufacturers are racing to present digital TVs that can present 3-D pictures, a task that requires either a high screen-refresh rate or polarized glass. The former drinks power, the latter drinks dollars. Manufacturers are also integrating more robust Internet capabilities into their sets, which also can demand more power.
The CEA fears that the new regulations will kill that kind of innovation and feature-expansion, as well as blocking new technologies that, like plasma and LCD, enter the market as relatively inefficient users of power only to become significantly better at managing their electricity use as they mature. It's certainly true that the rules would hold technologies off the market until they're efficient enough to meet the new standards; the question is whether manufacturers would be willing to develop generation after generation of products they can't sell just to get to that point.
One other caveat: California's new rules may have little effect on the market if no other state follows California's lead. In that case, the main losers would be California retailers, who wouldn't be able to offer as full a selection of products as online merchants in other states.
The energy commission insisted that the regulations would benefit consumers because the new TVs they buy will use less power -- an average of $30 per year. That seems overstated, however, because it ignores the improvements the industry has been making on its own. And even if $30 is the right number, that's chicken feed compared with the higher prices shoppers may have to pay to get a more efficient set with the performance they want.
The commission didn't seem to recognize that not all TVs are created equal. Just because consumers can find a more efficient model that's the same size as a power-hungry TV they like, that doesn't mean they can find one with the same picture quality in the same price range. Of course, exceptional TV picture quality isn't a birthright, and conserving energy is good for public health and the environment. But the commission asserted that its rules would be all gain, no pain, and that's a quixotic view of the market, to put it kindly.
-- Jon Healey