FCC Floats 'Simple' Gateway, CableCARD Rules

The Federal Communications Commission (FCC) is formally recommending the development of a "simple" gateway/bridging device applicable to all multichannel TV operators and the development of new CableCARD rules -- all in the name of sparking and expediting set-top innovation and competition. (See Gateway to Heaven or Hell?)

The FCC, as expected, included those recommendations within a 376-page National Broadband Plan that was sent to Congress on Monday and offered for all to see today. (See The National Broadband Plan, FCC Seeks 1-Gig Speeds at 'Anchor Institutions', and FCC Plan to Revamp USF, Intercarrier Payments .)

Those recommendations (they are still far away from becoming codified rules) are coming into play as the FCC comes to the conclusion that a truly competitive retail channel for boxes has not blossomed despite a federal ban on set-tops with integrated security that took effect in July 2007 and involved cable's heavy adoption of the removable, CableCARD-based security.

The plan notes that set-tops "are becoming increasingly important for broadband as video drives more broadband usage," and bemoans the fact that Motorola Inc. (NYSE: MOT) and Cisco Systems Inc. (Nasdaq: CSCO) (the resident cable box "duopoly") still represented 95 percent of the North American cable set-top box market through the first three quarters of 2009, up from 87 percent in 2006.

FCC unlocks its 'gateway' idea
The recommended FCC solution is the development of a standards-based "gateway" that can start to replace traditional set-top boxes (for cable, telco, and satellite TV operators) starting on or before Dec. 31, 2012.

The plan doesn't go into heaps of technical detail, but the general idea is a "simple" and "inexpensive" gateway whose "sole function should be to bridge the proprietary or unique elements of the MVPD [Multichannel Video Programming Distributor] network (e.g., conditional access, tuning and reception functions) to widely used and accessible, open networking and communications standards."

That, the FCC claims, would produce a standard interface with televisions, set-top boxes and other in-home devices and allow consumer electronics manufacturers to develop innovative products independent of the type of service provider network they're connected to... and still be able to access all the content and services consumers get from their cable, telco, or satellite TV operator while also being able to grab video content from the Web.

The FCC highlights broadband modems and their Ethernet ports as an example of how competition can be similarly "unleashed" for set-top boxes. "Innovation can happen on either 'side' of that device [the broadband modem] without affecting the other side," the FCC argued. "Establishing an interface device for video networks that serves a similar purpose to modems for broadband networks could spark similar levels of competition, investment, and innovation."

However, the plan also holds that all that video should be able to pass through retail devices with the MVPD's existing copy protection flags intact.

The FCC also claimed that it's "reasonable" to assume that such a universal, network-agnostic gateway device could be developed and ready for deployment by the end of 2012 because it's proposing the use of "relatively simple architectures."

The National Cable & Telecommunications Association (NCTA) has already argued that development of such a device would "entail crippling delays," and has already offered up its own commitments to help the retail box market develop. (See The Set-Top Mess , Cable's Seven-Fold Path, and Cable's Got Ideas for a Universal Retail Box .)

Potential penalties
But the FCC expects everyone to get with the program, and is already thinking about some "appropriate enforcement mechanisms" for those who don't begin supporting the gateway approach "in all new subscriber homes and in all homes requiring set-top boxes" by the dawn of 2013.

Penalties would be determined via public input and rulemaking proceedings, but the plan offers some suggestions, such as hitting non-complying operators with fines, or denying extensions of waivers for Digital Terminal Adapter (DTA) boxes that use integrated security. (See FCC Approves DTAs From Moto, Cisco, Thomson & Pace.)

FCC commissioner Robert McDowell was critical of the National Broadband Plan's set-top component, urging the agency to "tread gingerly" and, if it must act, start with a Notice of Inquiry.

"Technological mandates by the government almost never result in robust innovation. In fact, history shows that such mandates are more often than not counterproductive," McDowell said in a likely reference to the current CableCARD regime.

CableCARD crutch
Given that such gateways won't be available right away, the proposed plan wants to "fix" some prevalent issues surrounding the CableCARD in the interim so as to "sustain the current retail market for set-top boxes." (See Whither the CableCARD?)

Applying a suggestion already floated by TiVo Inc. (Nasdaq: TIVO), the FCC wants equal access to linear channels for retail and operator-leased CableCARD devices in systems that use switched digital video (SDV). It's also suggesting that it be done by enabling communications with the cable headend over IP. (See TiVo: Cable Should Love It Some IP.)

The FCC also wants more transparency on CableCARD pricing to help consumers know what they're paying, whether those modules are used in retail or leased devices. In addition, it wants MSOs to provide a discount if there's a price discrepancy between the two scenarios.

The Comission wants to standardize installation policies for all CableCARD devices and "streamline and accelerate" the certification for all retail CableCARD devices, noting that the process typically involves "uncertainty and delays" and typically costs a company $100,000 to $200,000 to weave its way through it.

The plan proposes that all those CableCARD rules be in place by the fall of 2010.

— Jeff Baumgartner, Site Editor, Light Reading Cable