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FCC No Longer Inquiring About Interactive TV

The Federal Communications Commission (FCC) has formally terminated a Notice of Inquiry that sought comment and information about the emerging interactive television (ITV) market amid fears that the cable industry might somehow discriminate against competing applications.

The FCC closed the proceeding today, but you'll have to set the Wayback Machine to circa 2001 to witness its origins.

The FCC inquiry was triggered that year following the merger of AOL Inc. (NYSE: AOL) and Time Warner Inc. (NYSE: TWX) and the subsequent launch of AOLTV, a service that delivered interactive applications via a proprietary set-top box with special software and Internet connectivity. AOLTV, for those who still remember it, didn't last long. America Online killed it in 2003 after it struggled to gain consumer acceptance.

The FCC never sought an official ITV rulemaking, but the inquiry did embark on a fact-finding mission to discover who was providing ITV services, how they are being delivered, what business models might govern ITV services, and the general status of the ITV services market.

Their conclusion: There's nothing much there to fuss over, at least not yet.

"Under the circumstances, and in light of the absence of any clear direction or consensus as to how this market may develop, it would be inappropriate to commence further regulatory action at this time," the FCC said.

The Commission, however, reserved the right to monitor the development of ITV services and respond if "future market conditions warrant intervention."

Although cable's foray into interactive television has been full of fits and starts since the late 1990s, the market could heat up considerably next year as the largest U.S. MSOs outfit their digital headends for tru2way and start buying boatloads of boxes that are powered by the interactive platform. (See Revealed: The Tru2way MOU.)

Although the cable industry considers tru2way an "open" platform, cable operators will remain relative gatekeepers in terms of which apps and services gain entry to the system. Their argument: If tru2way were to become open to all comers, rogue applications could cause boxes to crash or cause problems on the cable network.

But that hasn't stopped some industry headliners from criticizing the model. In July at a Light Reading Live! event in Los Angeles, HDNet founder Mark Cuban called tru2way "a definitive walled garden," noting that the cable industry would be better served by embracing an "Internet mindset." (See Mark Cuban: tru2way Should Be More Open.)

By the same token, cable has made some concessions to ensure that some apps for future tru2way devices offered via retail are preserved. Late last year, for example, cable offered to tweak the specs so that forthcoming tru2way DVRs from TiVo Inc. (Nasdaq: TIVO) can toggle between the TiVo's native user interface and platform and those that are supplied by the cable operator. (See TiVo à la Mode .)

— Jeff Baumgartner, Site Editor, Cable Digital News

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