GOP Rep warns feds about ‘hidden tax’ on TVs

A Republican congressman is raising alarms about a “hidden tax” on American television sets.

Rep. Mike PompeoMichael (Mike) Richard PompeoCIA not inviting reporters to annual holiday party: report Overnight Cybersecurity: WH details rules for handling hacking tools | UK claims Russia behind widespread hacks | Bill to save cyber diplomacy office advances America's decision on North Korea hinges on Trump's success in Asia MORE (R-Kan.) last week wrote to the Federal Communications Commission raising concerns that a patent licensing standard increases the costs of American TV sets by $200 million each year.

“Essentially, it is a hidden tax on American consumers,” Pompeo told the FCC.

By law, every digital TV product that contains a digital receiver requires a standard set of patents developed in the Advanced Television Systems Committee (ATSC) pool.

Since it costs about $5 to license the pool of patents for each individual TV set, and there are about 40 million TVs sold in the U.S. each year, that adds up to “a $200 million annual tax on consumers,” Pompeo wrote to FCC Chairman Tom Wheeler.

The licensing fee is part of a longstanding debate within the industry.

In 2009, a number of TV manufacturers joined forces to ask the FCC to scale back its mandate that every TV use the patent pool, which the companies said was broader than it needed to be. In other countries, critics of the ATSC pool argue, a similar patent license costs just $1.  

The way that patent pools extract high fees from companies makes them look an awful lot like patent “trolls,” a research fellow at the American Consumer Institute Center for Citizen Research wrote in a recent op-ed that Pompeo referenced in his letter. Critics complain that patent trolls buy up vague patents and file lawsuits in order to extract high settlement fees.

In his letter, Pompeo asked the FCC to reply by the end of November outlining what oversight it has conducted of the patent pool fee.