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DSTAC: 2 Opposing Views on the Future of TV

Put a fork in it. DSTAC is done.

The work of the Downloadable Security Technology Advisory Committee (DSTAC) has come to an end, and the committee's final report is proof that there are still two fundamentally opposing views of how pay-TV services should evolve in the Internet era. Asked by the Federal Communications Commission (FCC) to provide recommendations on an industry-wide downloadable content security solution -- one that would replace outdated CableCARD technology and drive more innovation in the market -- committee members split along familiar lines.

On one side, multichannel video programming distributors (MVPDs) have proposed an apps-based approach that makes pay-TV services available on third-party devices. On the other side, TiVo Inc. (Nasdaq: TIVO), Google (Nasdaq: GOOG) and others are recommending a virtual headend strategy that would require pay-TV providers to separate out their video content from any proprietary user interface. This would allow third parties to create new UIs and new features that leverage both pay-TV and over-the-top streaming video content. (See DSTAC Still Seeking Common Ground .)

The DSTAC's final summary report is not yet available to the public, but the basis for the group's recommendations can be found in working group documents posted online on the FCC website.

The advisory committee's work was short -- only six months from start to finish -- but onerous. At the end of the process, members applauded each other on completing the work and on remaining civil even in heated debate. However, there was still much disagreement, and no consensus solution that all committee members were willing to support.

MVPDs argue that the virtual headend strategy would be problematic for two reasons. First, they contend that the user interface is inextricably tied to the content they deliver, and that the legal agreements they've made with content owners wouldn't allow them to separate the two. Second, MVPDs believe a virtual headend solution would require significant work to implement, making it onerous and therefore not within the bounds outlined by the FCC mandate.

Asked if the whole DSTAC process was worthwhile given the major disagreements apparent in the final report, Google's Milo Medin suggested that members of the committee had "two different definitions of success." However, he said he thought the effort "was worthwhile if it catalyzes some definition of the problem," i.e. a determination of whether the issue is solely about making content available on more devices, or whether it's about making pay-TV content accessible to third parties that want to introduce their own UIs and new service features.

TiVo CTO Dr. Joseph Weber agreed with Medin that there were positive results from the DSTAC process. For example, he noted that there was clear acknowledgement among the group that "there is no DCAS." Referring to the idea of a universal downloadable conditional access system, Weber suggested that everyone now understands that what Charter Communications Inc. is doing to introduce a downloadable security system within its footprint cannot be replicated across every pay-TV system. (See Hey New Charter Subs, You're Getting a Worldbox!.)

Instead, he noted that everyone agreed that "IP is where we should be looking, and I think that's very positive."

Want to know more about pay-TV market trends? Check out our dedicated video services content channel here on Light Reading.

Most of the MVPD representatives on the committee, including executives from Comcast Corp. (Nasdaq: CMCSA, CMCSK), Charter and Dish Network LLC (Nasdaq: DISH), were unwilling to comment on the DSTAC process or on the final report.

However, attorney Paul Glist, who served as the alternate representative for Cablevision Systems Corp. (NYSE: CVC) on the DSTAC, was willing to provide a viewpoint. Glist defended the apps-based approach proposed by MVPDs, asserting that the proposal makes sense in an environment where video delivery systems vary significantly. "The apps-based approach is a very flexible way of dealing with the diversity," noted Glist.

He also argued that MVPD apps should be treated exactly like Internet-based streaming video apps. Citing agreements between Netflix Inc. (Nasdaq: NFLX) and TiVo, as well as between Comcast and TiVo, Glist pointed out that companies can make deals to provide deep-link access to content metadata as a way to enable development of unique UIs. In other words, that access doesn't have to be mandated, it can be negotiated in business arrangements.

Glist also noted that access goes both ways. Google, for example, has removed the public API for YouTube. The issue, according to Glist, isn't just about MVPDs giving up control.

While Glist was the only MVPD representative willing to talk after the last DSTAC meeting, executives from Google, TiVo, Public Knowledge and Hauppauge Digital Inc. had plenty to add on the other side of the debate.

Countering Glist, John Bergmayer, senior staff attorney for Public Knowledge, argued that traditional pay-TV providers are not like Netflix, and therefore shouldn't be treated the same way. And where cable companies have cited innovation success with TiVo, Bergmayer pointed out that his group in the DSTAC is "looking to take what TiVo has done and expand on that model."

In Bergmayer's words, the big problem with the apps-based approach is that it would reduce any retail set-tops to acting as "dumb terminals," with no opportunity for developers to create differentiation or further service innovation.

Disputing the difficulty of implementing a virtual headend type of solution, Hauppauge Chief Technologist Brad Love dismissed the concern, saying, "I don't think it would be hard to implement at all." He added that "software could be written on a CableCARD" to link a consumer's device to a hosted interface (available in the cloud or locally through a bridging device) that would provide both user authentication and metadata to support third-party UIs.

Medin added one more critical point. He noted that the wireless industry was forced to give up control of the mobile phone UI when Apple Inc. (Nasdaq: AAPL) entered the picture. However, while cellular carriers fought the transition at the time, the wireless industry has more value now than it ever did when the UI was still locked down. "[The pay-TV industry] is the last industry where the operator controls the interface," said Medin.

Weber agreed and said he thought service providers could generate new types of revenue by giving up UI control.

It was noted among the group that operators' "control fetish" is getting in the way of their ability to make more money.*

It may also hurt programmers. Medin pointed out that by not enabling unified search and recommendation tools, MVPDs make it harder for viewers to find the content they want.

Now that the final DSTAC report is complete, it's unclear what will happen next. The assumption among at least some committee members is that there will be a request for public comment on the recommendations. However, it's up to the FCC to decide on next steps, and so far, the FCC hasn't announced its intentions.

UPDATE: The FCC has now released a notice asking for public comment.

*Note: an earlier version of this statement attributed it to Joe Weber.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

davidhoffman5 8/31/2015 | 4:41:11 PM
Re: One other note on set-tops I have always wondered why cable compaanies have not seen the wisdom of moving the set top box issues onto the subscriber. No warehouses of DVRs or recievers to store and maintain. My wired land line telephone company did not supply me with the phones, facsimile machines, or answering machines I use and maintain. I have an abundance of choices for these devices and they all conform to a set of common technical standards. Why could we not do the same for set top boxes?  The ability to install SIM cards in devices has led to the proliferation of innovative machines for the mobile telecommunications world. Something similar would happen with set tops.
DaveZNF 8/31/2015 | 9:51:14 AM
It's a land grab

Instead of being satisfied with the current delegation of authentication and video, the MPVDs and the CEs equally derailed the process by going for the land grab. If they could have been content simply virtualizing CableCARD, maybe we'd have gotten somewhere. CableCARD is a janky solution - but that's what a compromise looks like. It's not great, but it serves a purpose. Do it without hardware and everyone wins. Based on some of the comments, I guess that approach is "too hard" -- so we'll continue to limp along with CableCARD until TiVo's time warp patent expires and 2018 ... as no one else would be silly enough to go down that path in retail given the uncertainty in the industry and general consumer pain and frustration. It's also too bad for the MPVDs - theirs is a short sighted approach, as they should be doing everything possible to make it easy to watch their content on whatever device I choose given the acceleration of cord cutting.

msilbey 8/31/2015 | 9:37:52 AM
One other note on set-tops Despite the leasing fees, I've always disbelieved the argument that cablecos want to be in the business of set-tops given what a pain it is to manage the customer hardware. But someone pointed out to me (Bob Schwartz?)  that subscribers in Canada can buy their cable set-tops in a store the way we can buy modems in the States. If Canada can make that model work, why not cablecos in the US? Why is that not an option? Rental fees are also going up at the same time that video margins are eroding. 
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