NCTA Prices TiVo's SDV Idea at $22M
Annual maintenance and operations tied to TiVo's proposal would run another $3 million to $5 million, the NCTA noted in an ex parte filing that describes a recent meeting with FCC officials
The filing supports the opposition voiced by Time Warner Cable Inc. (NYSE: TWC), which says TiVo's idea would be costly and subject to a raft of technical limitations and complexities. (See TWC Pokes More Holes in TiVo's SDV Proposal .)
The NCTA numbers arrive as the FCC pursues new CableCARD rules, aiming to preserve the Commission's current separable security while setting the stage for the AllVid notice of inquiry (NOI) that would address cable, telco, and satellite-TV operators. TiVo is proposing that the FCC mandate the use of an IP backchannel for SDV, in lieu of the special tuning adapters used today. (See CableLabs Stamps SDV Tuning Adapters , Everyone Hearts the Tuning Adapter!, TiVo, Cable Re-Spark SDV Debate , FCC Floats 'Simple' Gateway, CableCARD Rules , and TiVo: Cable Should Love It Some IP.)
The NCTA, citing its cost analysis, argues that the IP backchannel is unnecessary. Moreover, the NCTA says the backchannel would require every consumer with a unidirectional digital cable product (such as TiVo DVRs or Arris Group Inc. (Nasdaq: ARRS) retail Moxi boxes with CableCARD slots) to have an Internet connection simply to watch TV.
TiVo says proxy servers -- at a cost of $10,000 to $25,000 each for serving 25,000 UDCP (unidirectional digital cable product) customers -- would do the job and would offset the costs of tuning adapters and the truck roll costs associated with installations. The NCTA disagrees.
"The existing 32,000 TiVo and Moxi customers using Tuning Adapters are all not located in one or two headends that can be retrofitted for $50,000," the NCTA filing reads. "They are scattered nationally across hundreds of headends."
The organization estimates there are 7,622 headends and 32,000 tuning adapters in the US, scattered across 62 million cable customers.
The NCTA, which estimates that 60 percent of US cable systems will offer SDV by the year's end, said TiVo's estimates also ignore the need for spare proxy servers and don't consider other elements such as the upgrading of SDV servers to enable the IP backchannel technology.
"IP backchannel related costs would translate into $600 to $800 for every device now equipped with a Tuning Adapter. In other words, the costs to replace the Tuning Adapter would exceed what it would cost if the cable industry were to buy every TiVo or Moxi consumer now using a Tuning Adapter a new TiVo DVR, or a set-top box that includes the capability of receiving two-way SDV services," the NCTA said in its statement.
The organization also argued that it would take too much time to come up with a standard IP backchannel method that would work with all one-way CableCARD devices. Cisco Systems Inc. (Nasdaq: CSCO), which makes tuning adapters, says it would take between 30 and 42 months to implement TiVo's proposal.
Although the NCTA continues to shoot holes in TiVo's proposal, it's not against continuing the discussion. But the NCTA thinks the idea should be addressed during the AllVid NOI proceeding, not now, as the FCC mulls new short-term rules around CableCARD.
— Jeff Baumgartner, Site Editor, Light Reading Cable