Government only requires the incorporation of Ginga in 2013

Government backed down in negotiations with manufacturers of TVs for the incorporation of the Ginga middleware, enabling interactivity in digital TV.Interministerial Decree No. 140 published today in the Official Gazette, stipulatesthat only on 1 January 2013 will be required that 75% of LCD televisionsproduced in the Manaus Free Trade Zone containing the interactive features of Digital TV. As early as January 2014 the percentage rises to 90%.

For this year the government created two situations: Manufacturers are exemptedthis merger until next June 30. After that date, the insertion of middleware Gingawas established as "optional", valid until December. The incorporation of Gingashould come pre-installed, pre-configured and enabled at the factory.

Incentives for anticipation production
Although the official date for interactivity have been in 2013, the government has continued to encourage the manufacture of digital televisions with Ginga later this year. In the executive order was established that the manufacturer who produce in the second half of 2012, all televisions with interactivity, may deduct "absolute numbers" this volume produced this year, the share of production required for 2013 (75% of TVs with Ginga).

However this, "observed a minimum of 60%" of what was established as a percentage for that period. It means that up to 15% of the required planned for2013 could be anticipated this year.

The ordinance also provides that all models of televisions that make availablesupport for IP connectivity and middleware that implement interactive "should ensure the access of applications to interactive communication channels."


Residual Differences
If the manufacturer does not achieve the required percentage for 2013 and 2014,he will be obliged "to comply with the residual differences in relation to theminimum percentage established in units produced until the end of the period thereafter, subject to the continuing obligations of each period" .

That is, just as the manufacturer may deduct part of the production of 75% ofdigital televisions in 2013 - the event this year in the market place containingdevices with interactivity - who in 2013 did not meet the 75% required by the government will have to play for the following year the production waste, and stillaccomplish the goal of the subsequent year (in 2014 will be 90% of productionwith the Ginga + residual, 2013).

However, to be entitled to request to postpone part of the production required for the following year, the government decided that manufacturers may not exceed10% this residual difference, which will be fixed "by taking up the production baseof the year in which did not reach the limit".

Splits in the industry
In a way the government retreat on the issue of time of incorporation ofmiddleware Ginga - which initially would be willing to fix the percentage of production by 30% (2012), 60% (2013) and 90% (in 2014) - can be interpreted as a strategy to avoid a flood of lawsuits.

According to market sources, the percentage determined in the ordinance todaycan be absorbed by most manufacturers, who have no interest in fighting against the government because he's making industrial policy that ultimately benefit thecountry. The maneuver now the government, according to these same sources,limit the group of companies dissatisfied with the incorporation of Ginga onlythree major manufacturers: CCE, Semp Toshiba and LG Korea - which may end up in court challenging the measure.