TWC Pokes More Holes in TiVo's SDV Proposal

Time Warner Cable Inc. (NYSE: TWC) is still fighting like heck to make sure TiVo Inc. (Nasdaq: TIVO)'s proposal to use an IP return path to set up switched digital video (SDV) sessions on its CableCARD-based DVRs doesn't become a regulatory requirement that, it claims, could end up costing the MSO millions of dollars.

TWC execs stated their case at a meeting with Federal Communications Commission (FCC) officials last week, telling the agency that special tuning adapters, currently used to help TiVo boxes view channels in an MSO's "switched" tier, represent a perfectly adequate answer to the problem. (See CableLabs Stamps SDV Tuning Adapters .)

TiVo, which originally backed the tuning adapter concept and aided its development, has since reversed its stance, arguing that the devices, made by Motorola Inc. (NYSE: MOT) and Cisco Systems Inc. (Nasdaq: CSCO), are tantamount to a clunky, separate set-top, don't get enough support from cable operators, and are far less elegant than the IP backchannel alternative. TiVo is urging the FCC to consider its proposal as the Commission works up new CableCARD rules. TWC thinks the debate should instead be tabled for the FCC's broader "AllVid" notice of inquiry proceeding. (See TiVo, Cable Re-Spark SDV Debate , FCC Floats 'Simple' Gateway, CableCARD Rules , and TiVo: Cable Should Love It Some IP.)

Time Warner Cable, Comcast Corp. (Nasdaq: CMCSA, CMCSK), and the National Cable & Telecommunications Association (NCTA) have argued against TiVo's idea before, but TWC hammered home its message at length during last week's meeting, described in a seven-page ex parte document filed on September 13. (See TiVo, Cable Re-Spark SDV Debate .)

TWC: Proposal fraught with complexities
The MSO hit on the technical requirements of the IP backchannel alternative, arguing it "remains untested and fraught with substantial complexities and costs" and that there's no assurance that it would give TiVo users an adequate viewing experience.

In an IP return path scenario, TWC explained, the functions of the tuning adapter (i.e. delivering the MSO's local lineup and securely setting up the SDV sessions with the headend) would be housed far away in proxy servers that could translate IP signals into a format that's compatible with cable systems.

TWC said using a public Internet backchannel would run latency risks and "introduce an entirely new set of challenges relating to data transport and new interfaces, thus making the television-viewing experience dependent on a host of additional variables, including attributes of the customer's home network."

TWC also bristled at TiVo's suggestion that an operator be required to dedicate network capacity for the IP return path, noting that bandwidth remains a limited resource and that roughly 25 percent of TWC's digital video subs get broadband from other providers.

Sizing up the costs
TiVo has previously estimated that the core hardware and software investment required for the IP backchannel would run between $10,000 to $25,000 to support up to 25,000 one-way boxes for SDV, holding that the setup would need only serve a "few hundred" customers to offset the costs of buying and deploying tuning adapters.

Time Warner Cable argued that those costs would easily hit seven-figure ranges because it would require the operator to create a new network architecture, software, and firewalls, and conduct a lot of testing -- elements that would tax the operator's engineering resources.

On top of that, TWC said it would have to install proxy servers at each of its roughly 65 headends at the very least to make the TiVo proposal go, and possibly many more if the operator was forced to install them closer to network edges.

The requisite development costs and equipment outlays "would be millions of dollars at a minimum" and reach "tens of millions of dollars if proxy servers were required at the level of hubs," the operator said.

As the bottom line goes, the MSO said the tuning adapter remains adequate to serve the small pocket of TiVo users that require them to access SDV channels. TWC estimates that it has distributed 21,000 tuning adapters so far, representing a "substantial majority" of its customers who use CableCARD-equipped TiVo devices in markets where the MSO has deployed SDV.

Although TiVo has its share of cable critics with respect of the IP back channel alternative, others, including Suddenlink Communications , RCN Corp. and Cox Communications Inc. , are starting to adopt it to allow the delivery of cable video-on-demand (VoD) services to TiVo boxes without tru2way. (See Cox, TiVo Strike a DVR Deal, Cox, TiVo Connect at Retail , Suddenlink Boxes Up TiVo Deal , and RCN to Expand TiVo 'Premiere' Rollout.)

— Jeff Baumgartner, Site Editor, Light Reading Cable

COMMENTS Add Comment
Jeff Baumgartner 12/5/2012 | 4:23:31 PM
re: TWC Pokes More Holes in TiVo's SDV Proposal

I'm still on the fence on this issue as a whole, and I think the FCC will have a hard time figuring this one out. Someone's going to be very upset no matter which way this one goes.

I realize that some consumers have had a less than optimal experience with tuning adapters, either with the installation process or with the devices after they've been installed. But if the IP backchannel merely replicates those functions, I don't see all that much value.

I see more value if this was used to help TiVo boxes do more, like access cable VoD, giving the device a nice service to complement the OTT content TiVo offers. But we've already seen this start to happen on an individual basis, with Cox, Suddenlink, and RCN, and possiblly others inking agreements. Whether that's partly for show for regulation's sake is another story. We already know that TiVo will probably never make a tru2way box.

I just don't think mandating it , and the costs that would go with it, is the answer.  But if it is mandated, I'm sure cable would argue that it would also have to be applied somehow to the telcos and satellite guys, too.  JB

Jeff Baumgartner 12/5/2012 | 4:23:18 PM
re: TWC Pokes More Holes in TiVo's SDV Proposal

TiVo just freshened up its view on this matter in the FCC docket via a new filing in the FCC docket.

It offers a general summary of its earlier opinions, including its take on pricing for the IP backchannel approach, claiming it's still a "much better, cheaper, and more customer-friendly solution."

TiVo also tries to explain why it was initialy a proponent of the tuning adapter, but is now seeking out an alternative. "The tuning adapter was designed to be a short-term fix, not a long-term solution. Longer-term, this two box solution acts as as a choke-point to ensure that UDCPs [unidirectional digital cable products] cannot compete on an equal footing with MSO leased-boxes."



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