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Independence Day Celebration

In advance of the Fourth of July, the Consumer Electronics Association (CEA) marked July 1 as sort of an Independence Day for consumers as the Federal Communications Commission (FCC) 's requirement for set-top separable security became effective. The CEA crowed about the FCC's rejection of the National Cable & Telecommunications Association (NCTA) 's blanket request for a cable industry get-out-of-jail-free card, as well as the Commission's release of a Notice of Proposed Rulemaking (NPRM) on two-way plug-and play technology, the next-generation CableCARD solution.

"We have finally arrived at the July 1 implementation date, and soon consumers will be offered the widest choices in both equipment and services," declared CEA president and CEO Gary Shapiro in a statement, as "Stars and Stripes Forever" played in the background.

CEA is a bit hypocritical on this issue, of course. The association is a big supporter of both satellite TV and mobile device manufacturers. Not because service providers in those markets embrace completely open models with electronics manufacturers, but simply because they aggressively support retail distribution. EchoStar Satellite LLC 's DISH Network vertically integrates its equipment and services, but CEA sees no problem there, as long as retailers get to sell the gear, earning margins and commissions. The same goes for tightly integrated mobile device/service bundles.

This is where the cable industry missed the mark on its "Seven-Oh-Seven" set-top strategy. If cable operators had embraced selling set-tops at retail like their satellite brethren, rather than controlling the business through box leasing, the CEA and its cabal might have turned down the heat with the feds. Analysis is always easier through the rear-view mirror.

— Michael Harris, Chief Analyst, Cable Digital News

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