Set-top boxes

TWC Chief Slams FCC STB Proposal

In a sign of the fierce opposition rapidly mounting to the FCC's latest move to open up the set-top box market to competition, Time Warner Cable Chairman and CEO Rob Marcus ripped into the rationale behind the Commission's new proposal Thursday morning.

Speaking on Time Warner Cable Inc. (NYSE: TWC)'s fourth-quarter earnings call with financial analysts, Marcus questioned why the Federal Communications Commission (FCC) sees a need to mandate that pay-TV providers separate their video streams from their existing set-tops and programming navigation guides. As reported yesterday, the Commission is now considering proposing such a requirement at its next regular meeting in February. (See FCC Ready to Rule on Set-Top Overhaul: Report.)

"It appears an attempt to create a regulation that's really unnecessary" because of market forces, Marcus said, "It's hard to really see the need for regulation in a market as dynamic as this one."

Marcus noted that he was reserving judgment on the FCC's proposed rule until it actually comes out and he can study "the specifics of what's proposed." But he said he's "highly skeptical" that an open set-top mandate would make sense.

Expanding on his theme of market dynamics, Marcus pointed to TWC's current beta trial of IP-only TV service in New York City. He said the trial -- which involves the delivery of its full programming lineup to IP-connected video devices, rather than traditional cable set-top boxes, in customer homes – "represents the first stage of a potentially substantial service" that TWC and other cable operators can offer without set-tops. (See TWC Steps Toward All-IP TV.)

Marcus also cited his company's early success with its TV everywhere app, known as TWC TV. He said TWC TV, which offers more than 100 linear TV channels both inside and outside the subscriber's home, generated a record 20 million viewing sessions in December. About 10% of TWC's 10.8 million video customers, or nearly 1.1 million subs, now use the app. "It's starting to get good traction," Marcus said.

Despite recent reports of mounting public opposition to Charter Communications Inc. 's proposed twin acquisitions of TWC and Bright House Networks , Marcus sought to sound optimistic about the prospects for Charter's takeover of his company. He noted that New York State regulators recently approved the proposed takeover of TWC, California regulatory authorizes just held a favorable hearing on it and the FCC recently re-started its 180-day "shot clock" for reviewing the deal.

"I certainly wouldn't characterize it as more uncertain," he said. "We're further along than before."

But, with the California regulatory timeline for the merger's review now stretching out until June, Marcus said he couldn't offer "a specific timetable" for consummating the deal. He also didn't repeat his quip from the end of the company's last earnings call that TWC might not be around for the next earnings report.

Want to know more about the pay-TV market? Check out our dedicated video services content channel here on Light Reading.

Marcus made his comments on the FCC set-top proposal and Charter deal during another otherwise upbeat earnings session with analysts that spotlighted Time Warner Cable's latest customer and revenue gains. Winding up its strongest year in maybe a decade, TWC added residential subscribers across the board for both the fourth quarter and all of 2015. It also reported continued strong gains on the business services front.

Specifically, TW Cable picked up 54,000 video, 281,000 broadband and 227,000 subs in the fall quarter as it continued to boost triple-play take rates, cut customer churn and improve customer service. For the full year, the No. 2 US MSO netted 32,000 video, 1 million broadband and slightly over 1 million voice subs after years of declines or sluggish gains. Business services revenues rose to $864 million for the quarter and nearly $3.3 billion for the entire year.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

gconnery 1/28/2016 | 1:56:36 PM
Really? Especially from Time Warner Sure its a dynamic open marketplace.  You've got your Tivo's and ... oh, there isn't anything else.  All the cable card TVs died a long time ago, and Microsoft isn't selling Media Center anymore so...  Oh, and of course TW uses SDV, which is fine, except of course for the required external adapter in addition to the cable card, and how buggy those things are and how they often crash or fail to tune anything.  So yeah, great.  Thanks.

If these guys were at all rational they would embrace this change.  A dynamic market for open STBs from lots of players (Apple, TiVo, Roku, et al) each experimenting with the best way to present things could be amazing.  Is the guide really the only metaphore we're ever going to try in this evolving marketplace?  People are barely aware of channels anymore.  Binge-watching is all the rage.  Yet the VOD platforms surfaced by TW and Comcast are completely and totally awful.  These should and must be updated if these guys have any hope of surviving into the next century.

Look the best bet would be that these guys are going to slowly die as they continue to crank prices up and fewer and fewer people pay their bills.  Newer approaches will almost certainly kill these guys.  But without embracing innovation these guys are almost certainly sealing their doom.
Sign In