TiVo General Counsel Matt Zinn has lashed out at Light Reading's coverage of the US House of Representatives' passage of a bill that would repeal the FCC's separable security mandate, a move that could endanger the future of CableCARDs. (See House Votes to Kill CableCARD Mandate.)
In a letter sent to Light Reading on Thursday (and printed in full at the end of this article), Zinn argued that the previous day's story "misrepresented the competitive realities surrounding set-top boxes, failed to take into account the benefits that CableCARDs have brought to consumers, and distorted the substance of the STELA reauthorization legislation passed by the House of Representatives on July 22."
TiVo Inc. (Nasdaq: TIVO) was also unhappy with other press coverage of the implications for CableCARD following the key House vote, according to an industry source.
TiVo has long been a strong proponent of maintaining the Federal Communications Commission (FCC) 's integration ban, despite its unpopularity among cable operators. Company officials believe, Zinn writes, that "eliminating the integration ban would undermine consumer choice and bring real harm to the retail marketplace."
The argument is a logical one for the company, given that CableCARD technology has been a critical enabler for TiVo's retail set-top boxes and other products. For years, TiVo struggled to make much headway in the cable market, before finally finding the magic formula with a new attitude towards the industry and cable-friendly hardware, software and other products.
However, the company's position is at odds with the fact that the FCC's well-intentioned separable security mandate has fallen far short of its original goals. Instituted in 2007, the CableCARD mandate did not create a thriving retail market for cable TV hardware, as it was meant to do. Seven years later, the market environment is also very different than it was when the mandate was put in place, thanks to growing support for IP video delivery, and the continuing spread of Internet-connected devices. (See Bye-Bye, CableCARDs?)
Highlighting TiVo's specific criticisms of our recent story, Zinn argued that the scenario portrayed by the article "will take the cable industry back to the noncompetitive situation that existed prior to CableCARDs -- operators locking consumers into proprietary security solutions, sticking many consumers with no real choice."
However, it should be noted that Light Reading did not advocate the scenario that Zinn describes. What the story does say is that "CableCARD technology has also largely struck out with consumers, very few of whom have installed the security modules in set-top devices that they bought at retail."
The story also says that a technology solution that Comcast Corp. (Nasdaq: CMCSA, CMCSK) and TiVo are currently developing, which would not require a CableCARD to bring cable services to TiVo set-tops, "could go a long way to appeasing TiVo fans who have traditionally been some of the most vocal CableCARD supporters." In a related story earlier this month, we also noted that Comcast specifically said it would still "support retail CableCARD devices even with a new, non-CableCARD solution in the works.” (See Comcast, TiVo May Ditch the CableCARD.)
The CableCARD debate is an important ongoing story, and Light Reading will continue to cover the news in its full context as it develops. While we stand by our recent CableCARD article, we also believe strongly in the right of reply and appreciate feedback from our community of readers. To that end, we have printed the letter from TiVo in its entirety below:
To the Editor:
Mari Silbey’s July 23 news analysis (“House Votes to Kill CableCARD Mandate”) misrepresented the competitive realities surrounding set-top boxes, failed to take into account the benefits that CableCARDs have brought to consumers, and distorted the substance of the STELA reauthorization legislation passed by the House of Representatives on July 22. Despite her flawed analysis, however, Ms. Silbey reached the correct conclusion about what would happen if the Senate passes a similar bill repealing the integration ban: CableCARDs would be effectively eliminated – the very outcome that House sponsors promised would not happen.
TiVo has said from the outset that eliminating the integration ban would undermine consumer choice and bring real harm to the retail marketplace. Without common reliance on CableCARDs, operators would have even less reason to support a technology that they would not be using for their own new boxes. Ending the common reliance requirement would also harm the competitive market for the sale of set-top boxes to operators, reducing competition and choice.
The scenario discussed by Ms. Silbey will take the cable industry back to the noncompetitive situation that existed prior to CableCARDs – operators locking consumers into proprietary security solutions, sticking many consumers with no real choice. Proponents of consumer choice and competition in the video device marketplace can only hope that the Senate does not pursue this ill-advised path.
— Mari Silbey, special to Light Reading