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The Set-Top Files (Part I)

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
12/22/2009
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Consumer electronics giants, cable MSOs, and industry pressure groups alike are filling up the Federal Communications Commission (FCC) docket with comments in response to the Commission's call for how it can spur innovation in the video device market. (See Whither the CableCARD?)

After a relatively quiet period, filing activity heated up big time Tuesday as documents began to go public a day after the FCC's December 21 deadline on the proceeding, which is getting underway as the Commission prepares a National Broadband Plan it intends to present to Congress on Feb. 17, 2010. (See FCC Explains Its Broadband Plan and FCC Boots Up National Broadband Plan .)

We'll have much more later (stuff's still pouring in), but here's a summary of who's said what so far:

  • NCTA: Look to the TV
    The National Cable & Telecommunications Association (NCTA) has already acknowledged that CableCARD rules have yet to produce a vibrant retail set-top market but suggested that the Commission, should it conclude that Internet capabilities need to be forced into a "ubiquitous device, it would do better to choose the television itself for its mandate rather than the set-top box."

    At the same time, the NCTA reiterated a stance that a retail market for set-tops will have trouble getting off the ground unless separable security rules are also required of the nation's satellite and telco TV providers, and not just cable.

    On that front, the NCTA is asking the FCC to open up a separate Notice of Inquiry on the so-called "All-MVPD" (multichannel video programming distributor) device, which, in the Association's estimation, could be handled by a "set-back" box that communicates with TVs through the HDMI-CEC (High-Definition Multimedia Interface - Consumer Electronics Control) interface. (See Cable's Got Ideas for a Universal Retail Box .)

    At the same time, NCTA holds that a "mandate to add Internet and browsing capability to every MVPD set-top box would be extraordinarily expensive for consumers," but suggests that tru2way could still play a role in the delivery of video and other content sourced from the Internet.

    Although tru2way defines a technical baseline for the delivery of interactive cable apps like video-on-demand, its presence "does not restrict manufacturers from combining video sources or adding full-fledged Internet access to their 'digital cable ready' DTVs (digital televisions)," the NCTA said, noting that MSOs have already deployed north of 2.5 million tru2way-based boxes (for leased, not retail, distribution).

  • Time Warner Cable: Let the market develop on its own
    Time Warner Inc. (NYSE: TWX) chimed in that "new regulatory mandates are not necessary or appropriate at this time," noting that, oh, by the way, it's got its own TV Everywhere initiatives well underway.

    But if the FCC insists on intervening, the MSO said it's most in favor of an HDMI-connected, small set-back device along the lines of the NCTA proposal.

    The MSO says it's "eager" to deliver Internet content to set-tops but adds that Internet-connected set-tops aren't necessarily a viable strategy for "bridging the digital divide" and encouraging broadband adoption.

    "In TWC's experience, most households lacking Internet access report reasons unrelated to PC ownership, including lack of interest or cost. Moreover, a disproportionate share of households with TVs but no Internet service have no set-top boxes at all and thus may be unwilling to attach a new device in order to obtain broadband access."

  • Another vote for 'SimulCrypt'
    The American Cable Association (ACA) , an org that represents about 900 independent MSOs, recommended that the FCC keep all existing box waiver orders going, but added that the Commission should also ensure that Motorola Inc. (NYSE: MOT) and Cisco Systems Inc. (Nasdaq: CSCO) support "SimulCrypt," an interface that allows MSOs to use multiple encryption keys and conditional access systems on the same stream of video (therefore preventing the need to simulcast those streams and eat up bandwidth unnecessarily).

    The ACA, echoing a claim made by Ohio's Massillon Cable TV Inc. earlier this year, said Moto and Cisco don't support SimulCrypt in North America (where they are incumbents), but do so in international markets where they are trying to break in. (See Cisco, Moto Called Out by Ohio MSO.)

    Irdeto Access B.V. also chipped in its support for SimulCrypt.

  • Sony likes the gateway, hates bandwidth caps
    Sony Corp. (NYSE: SNE) supports a "network gateway model" because it would offer a standard interface to a variety of MVPD networks and permit connections to Web-sourced video content.

    Not surprisingly, Sony, which is trying to make some hay off movie downloads via the Playstation3, is not in favor of "artificial limits on Internet use, such as monthly 'usage caps.' "

    The Consumer Electronics Association (CEA) also offered support for the gateway approach.

  • Dish: No on the All-MVPD
    Dish Network LLC (Nasdaq: DISH), like DirecTV Group Inc. (NYSE: DTV) before it, is resistant to any new rules that would also ban the satellite TV giant from using set-tops with imbedded security. (See DirecTV Disses Cable's 'All-MVPD' Plans.)

    "Mandating the development of a nationally portable video device that works across all delivery platforms does not serve the public interest," Dish said, in a joint filing with tech spinoff and set-top maker EchoStar Technologies LLC.

    As for its reasons, Dish says satellite TV is a different animal and subject to "the physical constraints of one-way spectrum." Moreover, combining cable, telco, and IPTV requirements into a single box "would be to make it overly complex and prohibitively expensive for consumers."

  • TVS pitches another security approach Transparent Video Systems Inc. (TVS) , a company that's supplying digital video systems to Tier 2 and Tier 3 MSOs, agreed that the CableCARD and its Personal Computer Memory Card International Association (PCMCIA) interface is outdated, and hasn't done a good job fostering set-top competition. At the same time, TVS urged the FCC not to toss out the whole idea of separable security. (See TVS Debuts Set-Top-Free Security.)

    Instead, it's pitching an alternative system that uses the SD/MicroSD or USB form-factor. Beyond Broadband Technology LLC (BBT) is also pursuing a separable security platform that leverages USB. (See FCC: Retail Set-Top Is Possible, at Least.)

  • CERC: Enforce the CableCARD The Consumer Electronics Retailers Coalition (CERC) wants the FCC to provide "vigorous oversight and enforcement" of cable's CableCARD obligations so consumers can more easily, quickly, and routinely receive and install the modules.

    "Making CableCARDs routine will build sufficient consumer confidence that retailers can with confidence market MVPD access as a feature rather than be concerned that consumers will view it as a deadweight expense," CERC said.

    But the organization's also open to the gateway idea, thinking such a device could be made to operate on multiple types of MVPD networks, as Internet modems and routers are today.

  • DLNA makes its play The Digital Living Network Alliance (DLNA) claims that a "gateway" that, naturally, uses DLNA to shuttle content around the house offers a good fit, and that High-Definition Audio-Video Network Alliance (HANA), a competing platform that relies on the IEEE-1394 "Firewire" interface, does not.

    Its argument: Firewire's on the verge of obsolescence and not widely adopted or supported. "Even [IEEE-1394] cables can be difficult to find in electronics stores," DLNA claims, noting that more than 6,000 DLNA-capable devices are already certified.

    Intel Corp. (Nasdaq: INTC), meanwhile, replayed its call for the FCC to waive a rule that requires HD cable boxes to house the Firewire interface, claiming that DLNA is a better option . (See Intel Wants In on Set-Top Waiver Action .)

  • Firewire group gets fired up But the IEEE-1394 group isn't going away without a fight. Texas Instruments Inc. (NYSE: TXN) countered that adoption of Firewire is being hampered by MSOs that refuse to allow bi-directional support of the Firewire port in set-top boxes for the purpose of controlling or receiving video.

    So, in TI's view, 1394 and HANA are ideal for multimedia home networking. "If this Commission were to adopt another network interface standard (or adopt a home networking standard using a different network interface), it would not solve the problem that has slowed the growth of IEEE-1394," TI said.

    The 1394 Trade Association essentially echoed that view in its own filing.

  • Baja Broadband still wants a waiver
    Baja Broadband Operating Company LLC used this as an opportunity to urge the FCC to grant the operator a waiver for refurbished set-tops with integrated security, claiming that it can't afford boxes with CableCARDs.

    Baja, a rural operator with 67,000 subs on 12 systems in rural parts of New Mexico, Utah, Nevada, Colorado, and Texas, said the costs of supporting the separable security rule is "among the major reasons" why the company still can't provide high-speed broadband services.

    But it also believes it's "profoundly unfair and unsound" for the FCC not to impose similar rules on DirecTV and Dish, claiming they've been given a "free ride" so far.

    — Jeff Baumgartner, Site Editor, Cable Digital News

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