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Revealed: The Tru2way MOU

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
6/12/2008
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Mark your calendars: July 1, 2009, is shaping up to be a key date in the U.S. cable industry's adoption of tru2way, an "open" platform that aims to spawn a retail market for interactive digital cable set-tops and televisions. (See Cable Makes Big 'tru2way' Play .)

That's according to newly revealed deployment details and other elements of "mutual support" outlined in a "binding" memorandum of understanding (MOU) for interactive digital cable products (IDCPs) that Sony Corp. (NYSE: SNE) negotiated with the six largest U.S. cable MSOs -- Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), Cox Communications Inc. , Charter Communications Inc. , Cablevision Systems Corp. (NYSE: CVC), and Bright House Networks . (See Sony Supports tru2way.)

Together, those operators represent 80 percent of all U.S. cable subscribers and about 105 million homes passed.

Two weeks after the Sony-cable MOU was announced, it was revealed that a handful of other companies -- Panasonic Corp. (NYSE: PC), Samsung Electronics Co. Ltd. (Korea: SEC), Intel Corp. (Nasdaq: INTC), Advanced Digital Broadcast (ADB) , and Digeo Inc. -- had signed the agreement. More are expected to follow suit. (See More Firms Go the Way of Tru2way.)

But what's in the MOU? CE firms and MSOs presently tied to the agreement haven't officially released the terms, but Comcast revealed them in a filing to the Federal Communications Commission (FCC) dated June 10, 2008.

A good portion of the MOU, effective for 10 years after the signing, details the commitment and general support that operators and Sony (considered an "adopter" in the MOU language) will give to tru2way.

In essence, the MOU will forge "common reliance," a requirement generally sought by the consumer electronics companies before they make a significant commitment to a technology.

Target: July 1, 2009
From a deployment standpoint, the cable MSO "founders" have agreed to provide network support for tru2way middleware and also to support tru2way in the headends serving all digital cable systems by July 1, 2009.

Moreover, MSOs are also committed to including tru2way middleware in 20 percent of new "interactive navigation devices" (i.e. set-top boxes) they purchase after July 1, 2009. However, that requirement will terminate once the cable industry has deployed a total of 10 million interactive navigation devices with tru2way middleware.

Among the cable MOU "founders," Charter's deployment commitment on both counts (network support and devices with tru2way middleware) is deferred to July 1, 2010.

Although "founding" operators (and presumably any other MSOs that sign up) have committed to certain tru2way deployment milestones, the MOU also references a tru2way "sunset," or get-out clause, that means the MOU is scrapped if retail uptake is too low.

Specifically, that "sunset" option becomes effective if fewer than 500,000 additional new retail IDCPs (set-top boxes or TVs) from tru2way adopters are connected to receive cable services via CableCARDs or another "mutually agreed upon conditional access technology" in any rolling 24-month period following July 1, 2009.

Here are a few other highlights of the MOU, as detailed in the filing:

  • On-screen navigation display: "Multifunction IDCPs" are allowed to overlay the manufacturer's navigation control method over cable screens so long as the overlay is user-initiated for each use, is solely for navigation (i.e. there are no advertisements), is transitory, and appears the same regardless of the channel. Recent tweaks to tru2way, for example, allow for some forthcoming DVRs from TiVo Inc. (Nasdaq: TIVO) to toggle between its navigation system and the operator's native guide. (See TiVo à la Mode .)

  • A fab FAB: CableLabs will establish a Founders Advisory Board (FAB) made up of representatives from the cable, content, consumer electronics, and "information technology" industries. In addition to providing input to CableLabs, the FAB will vote on any proposed changes to the tru2way hardware specs.

  • Digital outputs: CableLabs is also responsible for approving (and rejecting) digital outputs and/or content protection technologies "on a reasonable and non discriminatory basis." The R&D house must make those decisions within 180 days of submission by an "adopter." CableLabs, however, agreed to be bound by a final order of the FCC.

  • Beyond the specs: Although CableLabs and the MSOs appear to have significant control over the applications that tru2way equipment vendors develop and integrate into their set-tops and interactive TVs, "innovative features and functions… are allowed and encouraged." The caveat is that they must be "consistent" with the tru2way specifications and licenses. So, the vendors are encouraged to develop their own apps, so long as they comply with the over-arching system and don't break anything!

  • What's next? The FCC has yet to take any official action on tru2way or a competing platform called DCR+, but Comcast, in the filing's cover letter, argues that the MOU amounts to a "binding contract" and, therefore, "does not require further government action to facilitate bidirectional compatibility of cable television systems and consumer electronics equipment." (See Two-Way Battle Reaches FCC.)

    — Jeff Baumgartner, Site Editor, Cable Digital News




    Interested in learning more on this topic? Then come to Cable Next-Gen Video Strategies: Meeting the Satellite & Telco TV Challenge, which will take a comprehensive look at the cable industry's attempts to fend off its leading rivals and generate fresh revenues by deploying next-generation video technologies. To be staged in Los Angeles, July 24, admission is free for attendees meeting our prequalification criteria. For more information, or to register, click here.


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