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Two-Way Battle Reaches FCC

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner

There's a big political battle brewing about the way the National Cable & Telecommunications Association (NCTA) and the Consumer Electronics Association (CEA) believe two-way "Plug & Play" should emerge onto the marketplace.

In one corner is the OpenCable Platform, which is being pushed to the hilt by the U.S. cable industry. In the other is the CEA's non-OpenCable proposal called DCR+.

The FCC is expected to scrutinize both proposals, because the cable and CEA have been unable to find common ground on their own, as they did in late 2002 with the one-way Plug & Play agreement, which the FCC later adopted.

That one-way agreement paved the way for CableCARD-capable TVs that could display digital cable content, including premium networks such as HBO, without a separate set-top box. Those same sets, however, cannot handle interactive, two-way services such as video-on-demand (VOD) without a set-top.

The FCC is expected to just pick a two-way option unless the cable industry and the CEA can negotiate a deal on their own. The agency has not set a timeline for that decision, but chairman Kevin Martin seems to want it done before the 2008 holiday season, which falls just ahead of the hard digital-TV transition on Feb. 17, 2009.

Timing clearly was in mind when the NCTA submitted its comments to the FCC on Aug. 24, suggesting that the OpenCable Platform "is not only the fastest path for retail: It is the only one that has any prospect whatsoever of bringing two-way retail options to consumers and retailers in time for the year-end 2008 holiday selling season."

The NCTA also chided the CEA's DCR+ proposal, occasionally referring to it as the "consumer-minus solution, because it would strip away cable services and features that consumers want and expect," including all of the interactive services offered by cable today.

The CEA likewise filed comments to the FCC on Aug. 24, claiming DCR+ lets devices have a "limited set of interactive services" such as VOD, impulse pay-per-view, and switched broadcast video -- without the OpenCable Platform. It also claims to permit access to all interactive services offered by cable MSOs through OpenCable "but would make certain minor modifications to that technology and its licensing requirements."

The CEA believes the DCR+ approach would open up access to two-way services, including VOD and switched digital video (SDV), that are not accessible under the one-way Plug & Play deal.

The cable industry, meanwhile, has proposed its own solution when it comes to SDV and the current base of one-way products. The so-called "Tuning Resolver," a small adapter, would allow one-way Digital Cable Ready sets to receive networks in cable's switched video tier. (See NCTA Sees Solution to Switching Snag.)

The NCTA also questioned the commercial availability of DCR+. That technology, "while promoted by some CE companies as a whisper away from current standards, is purely vaporware," the NCTA claimed.

In turn, the association pointed out that a handful of major MSOs are either deploying or testing the OpenCable Platform. Time Warner Cable Inc. (NYSE: TWC) has it installed on 41 headends and more than 100,000 set-tops, while Comcast Corp. (Nasdaq: CMCSA, CMCSK) is conducting tech trials in four markets.

Cox Communications Inc. is trying out OpenCable set-top boxes from Samsung Corp. in two markets -- one using Scientific Atlanta for conditional access, the other using Motorola Inc. (NYSE: MOT).

The NCTA also held that several consumer electronics companies, including Samsung, Panasonic Corp. (NYSE: PC), Toshiba Corp. (Tokyo: 6502), and LG Electronics Inc. (London: LGLD; Korea: 6657.KS) , have already signed licenses to build two-way retail devices. Silicon giant Intel Corp. (Nasdaq: INTC) was the latest to join this group of licensees. (See Intel Goes Inside Cable... Again and Cable Intel-ligence.)

Another aim of OpenCable played up by the NCTA filing: The specs let content developers write interactive applications that work on all cable systems outfitted with the platform, "creating a national footprint."

The NTCA claims DCR+, by contrast, would require new VOD protocols, new program guide protocols, a costly and time-consuming redesign of a multi-stream CableCARD, and would derail the development of next-gen downloadable conditional access systems.

— Jeff Baumgartner, Site Editor, Cable Digital News

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