New Standard for High-Definition TV Upsets Hitachi, Toshiba

Joel Brinkley, New York Times
Monday, December 20, 1999

The trade group that creates standards for television sets has determined, in essence, that some very expensive high-definition television sets being sold by Hitachi and Toshiba are not HDTVs after all. A new standard approved on Thursday by the trade group, the Consumer Electronics Association, comes as a rude shock to the two companies at the height of the holiday shopping season, as well as to consumers who have already bought the sets in question. Hitachi is threatening legal action.

``That vote was invalid,'' Gary Bennett, executive vice president for Hitachi, said Friday afternoon. ``There are some very serious legal issues here. We're going to look at an injunction, or a lawsuit.''

A senior Toshiba executive added: ``That vote is being contested right now. We absolutely don't recognize that vote.'' Both companies said they would continue selling the televisions under question and would continue to represent them as high-definition sets, despite the standard.

All major manufacturers, including Hitachi and Toshiba, are represented in the electronics association.

The first high-definition sets began appearing on store shelves 16 months ago, initially inspiring more curiosity than sales. The industry reported last month, however, that the new technology was finally beginning to take off. More than 21,000 high- definition sets were sold in October -- a 42 percent increase over the previous month. Since data are not broken down by individual manufacturers, it was not clear Friday what percentage of those sales were the Hitachi and Toshiba sets in question. Both companies have policies of not releasing their sales figures. Even before the first products went on sale in August 1998, the Consumer Electronics Association reached an agreement that detailed what level of resolution and clarity the new televisions would have to be capable of offering to be marketed as high-definition sets. The two most important rules were that the sets had to offer 1,080 lines of resolution (compared with the 480 lines on conventional sets) and that they must achieve that definition on a wide, or `letterbox'' shaped, screen.

For much of the last year, however, Hitachi and Toshiba have been selling sets, ranging in price from $2,200 to well over $5,000, that do not appear to meet those criteria. The sets offer 1,080 lines of resolution, but they have conventional, square screens. And if a wide screen, high-definition show is displayed in letterbox in the center of the screen, the resolution of that smaller picture is reduced by 25 percent -- below the industry standard. The
resolution is lower because 25 percent of the screen -- and thus a fourth of the lines that determine a set's resolution -- is not being used.

All other manufacturers selling HDTVs -- including Mitsubishi, Panasonic, Philips, Sony and Thomson -- make sets that meet all the requirements. Thomson, which makes RCA and Proscan televisions, sells two models that have
the same problem as the square-screen Toshiba and Hitachi models. But Thomson does not market those sets as HDTVs.

Hitachi and Toshiba have argued that the rule did not apply to their sets because an earlier agreement referred to ``complete products or systems.'' Their televisions are technically digital monitors, meaning they require a
separate digital tuner box to receive HDTV.
After months of discussion and debate, the video board of the Consumer Electronics Association voted on Thursday to revise the agreement to close the ``loophole they had been using,'' one member of the board said.
``It was a good-faith effort to make sure consumers know what they are buying,'' said Gary Shapiro, head of the association.

The association's solution was simply to expand the definition to monitors as well as ``complete products or systems.'' The board vote was 6-3 in favor of the modification. Toshiba, Hitachi and Thomson voted against it.
Dave Arland, a spokesman for Thomson, said Thomson's leaders believed the definition should be even more specific.

Toshiba and Hitachi also make wide-screen models that meet the industry standard. And anyone buying the square-screen televisions in question will find that they present a picture that is notably better than a conventional
television can offer. But the resolution will never be as sharp as that of fully compliant models.

Bennett, the Hitachi executive vice president who is a member of the panel that voted on Thursday, argued then and in an interview Friday that the vote was not valid because there was not a proper quorum.