V-Chip: Where's the Money?

The field is open, but there are many obstacles for entrepreneurs seeking to make money from TV-mounted violence filters

Move over Jim Exon, here comes the V-Chip fight.

Broadcasters and TV programmers are threatening lawsuits and lobbying to derail the bipartisan V-Chip proposal, under which all new televisions would be equipped with electronic devices able to filter out sex, foul language and violence -- the "V" in V-Chip.

But the odds are against the broadcasters. The proposal is included in both versions of the landmark telecommunications reform bill. If the measure is removed, the reform bill will be vetoed, says President Bill Clinton. And new technology is being developed that will make it much easier for parents -- with the aid of outside review groups -- to filter out objectionable programs.

"It's probably going to happen, and it's probably going to be challenged in court," said Lynn McReynolds, a spokeswoman for the Washington-based National Association of Broadcasters.

To head off the V-chip measure in Congress, the broadcasters promoted a measure sponsored by Rep. Tom Coburn, R-Okla., that asked industry to search for alternatives. The House voted Aug. 4 against the Coburn amendment, and voted 224 to 199 to support the V-chip proposal. The V-chip language was sponsored by Reps. Ed Markey, D-Mass., James Moran, D-Va., Dan Burton, R-Ind., and John Spratt, D-S.C. A similar measure is included in the Senate telecommunications reform bill.

As an alternative to the V-chip, the broadcasters are pushing a rival measure dubbed the Viewer Discretion Technology Fund, a $2 million fund intended to pay for a rival technology. The NAB will soon ask industry to offer alternative technologies for development and production, said McReynolds. Among technologies envisioned for the effort are television-mounted blocking devices that parents could use to cut out particular programs, she said.

"It is only the broadcasters who hate [the V-chip]," said Tamara Fucile, a spokeswoman for Markey. The Arlington, Va.-based Electronics Industries Association is helping develop the V-chip technology, and the cable TV companies don't mind the V-chip device, she said.

The EIA has worked with TV makers and broadcasters to develop a four-level rating system for violence, sex and foul language, said Cynthia Upson, vice president for communications at the EIA's consumer electronics group. The details have not been worked out, but once the system is operational, it will help consumers screen out TV programs that are objectionable, she said.

The V-chip effort will probably create some business opportunities for manufacturers of electronic filters, and for people who review television programs for violence and sex, said Dan Amundson, research director at the Washington-based Center for Media and Public Affairs. But "I don't envision that it will be tremendously profitable," partly because the broadcasters, programmers and cable companies are reluctant to allows others to interfere with their operations, he said.

For example, McReynolds said the television companies do not plan to electronically transmit violence or sex ratings for TV programs, nor even the electronic versions of the "parental discretion" warnings now flashed on TV screens just prior to programs with nudity or extreme violence. Without the electronic version of the warning, it would be harder for companies to sell blocking technology.

"Everyone jumped on the bandwagon before thinking about it.... There are a lot of technical difficulties" facing the V-chip plan, said Amundson.

Although Congress has written the V-chip proposals to fit current television technology, the development of computer-intensive TV networks may change the options, he said.

For example, computer-controlled set-top boxes being developed by companies such as General Instruments Corp., Chicago, could be adapted to allow parents to easily filter out a variety of programs deemed offensive. Armed with electronic set-top boxes, the parents could also be aided by third-party organizations set up to electronically label programs as offensive -- or desirable. These third-party organizations could include churches, government panels, environmental lobbies, interest groups or the broadcasters.

Spruce Run Technologies Inc., based in Mifflinburg, Pa., is studying ways to adapt its television-mounted C-Chip device to filter Internet data, says company president Stephen Connolley, The C-Chip, which will start rolling off the production lines by Christmas, can be adjusted by parents to screen out graphic TV programs scheduled for transmission on a particular channel, he said. To make it easier for parents, the company is working with cable companies and third-party organizations, such as the Washington-based National Organization for Women, he said.

"We can exercise control of what comes into our homes," he said.

The fight over the V-chip is similar to the battle over the proposal by Sen. James Exon, D-Neb., and Sen. Dan Coats, R-Ind., to outlaw smut and porn on the Internet. But the V-chip fight involves 230 million homes and vastly greater industry and advertising revenue.

"If someone comes up with a good idea, there may be a place for it. It could be a significant market," said Jeff Hamilton, director of technology for General Instrument Corp.'s communications division, based in Hatboro, Pa. The company makes TV-mounted cable boxes, which include provisions for filtering out objectionable programs.

To head off the Exon/Coats bill, industry has lined up behind a bill sponsored by Reps. Chris Cox, R-Calif., and Ron Wyden, D-Ore., which bars government regulation of the Internet, except for the regulation of obscenity. The Cox-Wyden bill was approved by the House on Aug. 4.

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