TiVo can breathe a sigh of relief. With a deadline for compliance fast approaching, the FCC has granted the DVR provider a two-year waiver to continue selling set-tops that don't support an open standard for home networking developed by the DLNA.
The Federal Communications Commission (FCC) rule, which asserts that set-tops provided by cable companies must include a "recordable, Internet Protocol ("IP")-based output," is set to go into effect on June 1, or September 1 for smaller operators. However, with the FCC's extension, TiVo Inc. (Nasdaq: TIVO) will be able to hold off on compliance until June 1, 2017, meaning that the company's cable operator customers will be able to continue supplying existing TiVo models to their subscribers for another two years.
TiVo initially asked for an indefinite waiver from the FCC, but it was denied that motion under the argument that it should be the ultimate goal of the industry to make open standards for home networking applicable to all.
The FCC granted the temporary waiver with an acknowledgement that TiVo has delivered proprietary home networking features that "deliver much of what the rule intended to accomplish." The agency also said it didn't want to punish TiVo for acting ahead of the FCC's passage of the rule to implement its own solution. In its request for a waiver, TiVo pointed out that it couldn't slow down its own development work in order to wait for the Digital Living Network Alliance (DLNA) to finalize its open standard, which was announced in early 2012 but not formally implemented by the industry until early 2013.
It's worth noting too that TiVo likely scored points with the FCC for being the only CableCARD success story. Beyond supplying set-tops directly to cable operators, TiVo is virtually the only company selling set-tops at retail that can access cable programming.
Passed in 2007, the CableCARD mandate was meant to create more competition in the retail market, but it failed to do so for reasons both technical and operational. In one sense, the advancement of an open networking standard actually achieves a similar objective by making cable content accessible on a wide range of retail devices. However, the FCC has also formed a working committee to develop recommendations for a CableCARD successor. (See FCC Panel Debates CableCARD Successor.)
In the case of the home networking issue, the DLNA urged the FCC to deny TiVo's waiver request. The National Cable & Telecommunications Association (NCTA) and Verizon Communications Inc. (NYSE: VZ) took the opposite position, asking for the rule to be waived on an industry-wide basis if TiVo was granted its request.
— Mari Silbey, Senior Editor, Cable/Video, Light Reading