Let Market Decide Fate of Set-Tops

9:30 AM -- The Federal Communications Commission (FCC) is seeking comment on video device "innovation" as it vets a National Broadband Plan it's tasked to present on March 17, taking aim at a set-top-box market currently being served by individual cable MSOs and telcos and distributed primarily through rental models. (See Whither the CableCARD?)

The Commission issued that public notice (No. 27, if you care to know) on Dec. 3, 2009, and the comments have been flying fast and furious since, with little to no consensus to be found among the wide range of parties involved. (See The Set-Top Mess , The Set-Top Files (Part I) , The Set-Top Files (Part II) , TiVo Gives Cable Both Barrels , and Cable's Got Ideas for a Universal Retail Box .)

The problem the FCC sees in the present set-top distribution configuration is that it somehow stifles competition within the marketplace, therefore making it difficult for consumers to access Internet-fed services and bring that content to TV screens.

This makes for a hodgepodge of Internet-connected video devices consumers must rent or purchase to experience what they want. Examples would be the Xbox 360, a new breed of Blu-ray players, and Apple TV.

The FCC sought to resolve this problem earlier through CableCARDs and the ban on integrated security boxes. It's an understatement to say that this mandate has failed to spur a retail cable box market and bring us closer to anything beyond the old operator-supplied model. So, where does the solution to this quandary lie?

To say that MSOs and telcos are stifling competitors or not working on solutions that will take advantage of Internet-fed video services seems ludicrous within a competitive market realm. The last thing this market needs is more regulation or mandates governing how companies should run their businesses, or how they should spend capital to offer products that market forces will demand on their own.

Personally, I would like to see home gateways emerge as a solution to this problem.

Under that model, each provider could ensure that their specific services interface with the gateway. It would be much simpler and efficient in handling the needs of consumer demand. And this should not be mandated, but left to the market to develop, enabling the use of any encryption product via plug-ins.

Being realistic, this solution is easier to launch on paper than in the real world. My point is that innovation, competitiveness, adoption, and lower prices do not come from mandates. They come from situations that allow market forces, and not the FCC, to rule.

— Leonard Grace, a cable industry vet, is a telecom strategist and blogger. He can be reached at [email protected]. Special to Cable Digital News
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