Policy Watch: TiVo, Cable Trade SDV Barbs
TiVo Inc. (Nasdaq: TIVO) and a good portion of the US cable industry remain on opposite ends in the debate on whether the Federal Communications Commission (FCC) should impose new rules on switched digital video (SDV) as it looks to "fix" what's wrong with the CableCARD regime.
The Commission is expected to vote on new CableCARD rules later this year. The deadline for reply comments was this week, and plenty of fire and brimstone was splashed on the SDV issue.
The cable industry doesn't want the FCC to impose any new SDV-related mandates, while TiVo wants the industry to adopt an IP backchannel so its CableCARD-capable DVRs/set-tops can access SDV channels without the need for separate tuning adapters made by Cisco Systems Inc. (Nasdaq: CSCO) and Motorola Inc. (NYSE: MOT). (See Cable Defends Its SDV Crutch.)
Here's a roundup of the arguments and counterarguments made this week and some other points of contention that circulated in the FCC docket:
TiVo used Time Warner Cable Inc. (NYSE: TWC), an operator that has SDV widely deployed, to amplify its point, noting that the MSO has already spent about $2 million deploying tuning adapters. That's based on TWC saying it's provided 16,000 of the boxes at a cost of $125 each.
At that price, "the cost of a few hundred adapters exceeds the cost of the IP backchannel approach," TiVo claimed.
TiVo also poked holes in Cisco's earlier suggestion that the IP backchannel approach would be technically onerous because 12 combinations of standards would have to be addressed to accommodate all the cable headend and SDV systems on the market. TiVo questioned whether all of those combinations are actually used and noted that each headend need only work with one SDV server platform.
As for cable's arguments that an IP-fueled backchannel could expose operators to possible service theft, that's a "canard," TiVo said, because the proposal uses location, authentication, and authorization protocols. TiVo noted that RCN Corp. is already using the new backchannel system to validate customers that have signed up for TiVo's "Premiere" DVR. (See RCN to Expand TiVo 'Premiere' Rollout.)
The Consumer Electronics Association (CEA) and others have suggested that cable's recently introduced "TV Everywhere" services show TiVo's proposal would be easily implementable. (See Comcast to Expand 'Xfinity' to DSL Subs.) But Cisco said there's "no connection" between TV Everywhere, which uses Web-based delivery, and SDV, which relies on QAM-based technology.
Cisco disclosed that it has shipped more than 42,000 tuning adapters so far, and expects to ship 35,000 adapters annually over the next several years.
Even if TiVo's suggested implementation costs were correct, it's still a substantial sum for smaller cable operators, BendBroadband said.
The FCC "should turn away from the failed approach of technology mandates," Verizon said.
They claim the economics of tuning adapters "provides a powerful disincentive [for MSOs]to support competitive products... Any growth of the UDCP [Unidirectional Digital Cable Products] market through the success of competitors like TiVo, Moxi, Roku, and new entrants can only tend to incite the industry to do even more to force or persuade its subscribers to accept leased boxes."
Beyond the IP backchannel
Not every argument posed in this week's reply comments centered on SDV. Here's a sampling of other topics.
Nagra specifically wants the FCC to clarify whether a downloadable security platform from Beyond Broadband Technology LLC (BBT) truly conforms to the separable security rules. BBT's system uses a secure microchip in set-tops that's designed to work with conditional access systems from multiple vendors.
The FCC Media Bureau acknowledged in January 2007 that BBT's approach was within the rules, but Nagra, which describes itself as a "motivated" customer for conditional access systems, is holding off on shopping until it's sure of the FCC's position. (See BBT Notches First Install .)
BBT also argued that a "no-DVR" restriction on HD-DTAs could be circumvented with whole-home, network DVRs or a "modular DVR add-on device."
— Jeff Baumgartner, Site Editor, Light Reading Cable