Son of CableCard
In a world…
Oppressed by lame and expensive set-top boxes…
From cable, satellite and telco providers…
Only one technology can set Americans free: AllVid!
I have to give the FCC props for coming up with a snappy name — AllVid — for what was previously a terrible, eight-syllable mouthful: “all-MVPD solution.”
Unfortunately that may be the best thing about AllVid (see FCC’s ‘AllVid’ Gateway Would Require Six IP Video Streams).
As I’ve written previously, having the FCC specify the exact technical details of how pay-TV providers deliver their service represents an undue tax on all their customers (see FCC Wants Its ‘Stupid’ Gateway Everywhere Starting in 2013).
Why is this a bad proposal? Simply put: It will impose significant costs on cable, satellite and telcos, which will potentially have to re-engineer their video-delivery platforms in fundamental ways. It could involve a complete overhaul of the IPG. It would definitely slow down and/or derail their development of new features.
An AllVid “set-back” device or gateway, as sketched out by the FCC’s notice of inquiry, would not be cheap.
You want a gateway that could deliver six HD streams in the home? I would point out that the three-tuner Moxi HD DVR system is $799. Yes, that’s a retail MSRP not a bill of materials, and it includes a 500-GB disk that an AllVid thing wouldn’t necessarily need. But clearly you’re not going to get an HD six-tuner AllVid gateway for anything close to 100 bucks a pop.
And to what end?
To serve the interests of consumer-electronics manufacturers, who have convinced the FCC that a wonderful world of innovative, inexpensive video-enabled gadgets and gizmos would magically flourish as a result of all-MVPD portability. Even though there’s been only evidence to the contrary (see TiVo Subscriber Losses Accelerate In 2009).
For cable operators, who’ve spent more than $1.2 billion complying with the CableCard rules, the silver lining of AllVid is that it applies to satellite and telco as well — so MSOs won’t be at a competitive disadvantage in complying with whatever shakes out.
Indeed, the burden on DirecTV and Dish Network would probably be disproportionately higher than on cable or telcos. Here’s an excerpt on this point from the AllVid notice of inquiry:
[G]iven the DBS industry’s inherently one-way distribution model, DISH Network and DIRECTV have indicated that home gateway devices for DBS would need to include hard drives for video caching to allow their subscribers to view VOD programming instantly and might need to include additional “intelligence.”
Let me reach for another metaphor about why AllVid is a bad idea. Tell me if this one is a stretch!
We haven’t seen much innovation in movie-theater seats over the years. Yeah, theater owners have put in some cushier models, stadium seating and jumbo-size drink holders.
But c’mon — where the heck is the innovation in movie-theater seats? Maybe I want a different color. Or Corinthian leather.
Or, how cool would it be to have a WiFi-enabled seat so I could maybe listen to the soundtrack on a headset as I’m making a quick trip to the concession stand! Or — sweeeeeetness — a Hammacher Schlemmer massaging chair.
My modest proposal: The U.S. government should force movie theaters to let customers buy their own seating, and force theater owners to conform to the same seating specs. That would drive down prices of third-party theater seats (which, no joking, seem very expensive) and consumers could take their own personalized seats to any theater in any state.
Sound good? Well, sort of. The question is whether the costs of this regulation would justify the benefits. I think that would be a “no.”
So what do you think? Is AllVid the way to go? Is there a better answer? I think one thing is certain: There aren’t any cheap and simple ways to get to the all-MVPD portability the FCC hopes for.
To me, the AllVid rules should first strive to do no harm — by not forcing TV operators to fundamentally redesign their video-delivery infrastructure.
ChefJoe commented:
Movie theater seating as an analogy ? Wow. Talk about a stretch.
It's not about a plan to make something completely revolutionary but opening up the system enough to allow other companies to have a chance at making something different from what your cable company buys by the millions.
Next you're going to suggest that you'd like to go back to old school dialup "AOL internet", where you could pick from a few dozen sites to visit based on their homepage of links. I mean, why would you want to go somewhere AOL didn't think was worth a link on their homepage ?
The report cites the average HD set-top rental as $8.22/month or ~$100/yr on what used to be optional as "cable-ready". $100 per HDTV per year with cable seems like an expense worth asking "is this necessary"?
Todd Spangler commented:
Joe - thanks for the comments.
1. Ultimately the FCC's AllVid concept, if codified as a rule, would specify the architecture and the exact physical and logical interfaces MVPDs **must** use. The FCC may be soliciting industry input but, as envisioned, this would be an FCC-mandated technical solution.
2. You say a gateway would let MSOs get "hundreds of billions of dollars of capital investment in set-top boxes off their balance sheets" -- What? How? They will still have to purchase & deploy the gateway! And we haven't even gotten into additional deployment and operational costs AllVid would require for installers, CSRs, tech support.
3. Can you provide evidence to back up your numbers? The dual-tuner Hauppage WinTV-HVR-2250 is $150. And that's without additional components required to support encryption/authentication, service discovery, and potentially transcoding.
Joe commented:
You should real the actual NOI before commenting and perhaps take off your completely subjective blinders:
1. "having the FCC specify the exact technical details of how pay-TV providers deliver their service represents an undue tax on all their customers." The NOI is clear that the FCC will not specific exact technical details but is looking for input from the industry.
2. "It will impose significant costs on cable, satellite and telcos, which will potentially have to re-engineer their video-delivery platforms in fundamental ways." The gateway will just serve as the end device on video delivery platforms, just as set-top boxes do currently, and will allow operators to continue to invest and innovate in their networks. Convert to SDV - just swap out or download a firmware upgrade to the gateway (like operators have to swap out or upgrade set-top boxes now). Oh, and with a gateway, operators can get the hundreds of billions of dollars of capital investment in set-top boxes off their balance sheets. Some investors and shareholders care about returns on invested capital.
3. "You want a gateway that could deliver six HD streams in the home? I would point out that the three-tuner Moxi HD DVR system is $799. Yes, that’s a retail MSRP not a bill of materials, and it includes a 500-GB disk that an AllVid thing wouldn’t necessarily need. But clearly you’re not going to get an HD six-tuner AllVid gateway for anything close to 100 bucks a pop." Using data from InStat, the BOM for a 6-tuner HD capable gateway, including all the interfaces required, QAM and RF components, and operating system (if required) is about $60-65. That's for a whole-home gateway serving 3 TVs, as opposed to several hundred dollars right now for individual set-top boxes for each TV.
Just trying to inject some facts into this discussion...
Scott commented:
The inquiry from the FCC refers back to the Cable Act of '96, and Congress' desire to create more competition in equipment used to access pay TV. Fast forward 14 years, and most consumers can choose from a minimum of 3 pay TV providers, and many from 4 or 5 providers. In a capital intensive business, that is a significant amount of competition. The fact that competition hasn't evolved as Congress originally envisioned (i.e. in the device used to access the services) doesn't mean that there isn't robust competition in the pay TV space.
The NOI will keep lawyers and engineers engaged for years before the effort collapses under its own weight (see CableCard), all in an effort to deliver something that it isn't clear that many consumers even want - to purchase their own equipment at retail.
Scott commented:
The inquiry from the FCC refers back to the Cable Act of '96, and Congress' desire to create more competition in equipment used to access pay TV. Fast forward 14 years, and most consumers can choose from a minimum of 3 pay TV providers, and many from 4 or 5 providers. In a capital intensive business, that is a significant amount of competition. The fact that competition hasn't evolved as Congress originally envisioned (i.e. in the device used to access the services) doesn't mean that there isn't robust competition in the pay TV space.
The NOI will keep lawyers and engineers engaged for years before the effort collapses under its own weight (see CableCard), all in an effort to deliver something that it isn't clear that many consumers even want - to purchase their own equipment at retail.
Scott commented:
The inquiry from the FCC refers back to the Cable Act of '96, and Congress' desire to create more competition in equipment used to access pay TV. Fast forward 14 years, and most consumers can choose from a minimum of 3 pay TV providers, and many from 4 or 5 providers. In a capital intensive business, that is a significant amount of competition. The fact that competition hasn't evolved as Congress originally envisioned (i.e. in the device used to access the services) doesn't mean that there isn't robust competition in the pay TV space.
The NOI will keep lawyers and engineers engaged for years before the effort collapses under its own weight (see CableCard), all in an effort to deliver something that it isn't clear that many consumers even want - to purchase their own equipment at retail.
Scott commented:
The inquiry from the FCC refers back to the Cable Act of '96, and Congress' desire to create more competition in equipment used to access pay TV. Fast forward 14 years, and most consumers can choose from a minimum of 3 pay TV providers, and many from 4 or 5 providers. In a capital intensive business, that is a significant amount of competition. The fact that competition hasn't evolved as Congress originally envisioned (i.e. in the device used to access the services) doesn't mean that there isn't robust competition in the pay TV space.
The NOI will keep lawyers and engineers engaged for years before the effort collapses under its own weight (see CableCard), all in an effort to deliver something that it isn't clear that many consumers even want - to purchase their own equipment at retail.
Paul commented:
I love my CableCard-based TiVoHD and manage to get by without a tuning adapter. No need for PPV or redundant west coast feeds on switched video, and for video on demand, Netflix and Amazon are adequate enough. Despite that, I think it's foolish to force yet another technology mandate on the cable industry after it's tried so hard to implement CableCards per prior FCC mandates. Now CableCards are going bye-bye in favor of IP gateways that use an altogether different technology? Sounds silly. I wonder why IP gateways can't be mandated for all video providers but designed in such a way that existing CableCard tech can authenticate the entire IP gateway instead of individual video streams. I would think an idea like that would prevent cable companies from having to start from scratch, prevent consumers from being upset about their current CableCard enabled devices becoming obsolete (we were misled about CableCards being the future!) and it just might reduce telcos and satellite providers costs in catching up to cable companies (adapting technology that's already designed to support CableCards should be cheaper than developing new technology for AllVid). I don't know. The FCC is starting to seem less "pro consumer" with each passing day. I'd like to see everyone start thinking more about costs to the consumer because, as you point out, this all gets passed down to you and I in the end. A competitive marketplace is getting expensive (subscription rates, content fees, box rentals, etc) and I wonder what all this fair competition will helps when customers have enough and just stop subscribing.
Todd Spangler commented:
P.S. The costs to comply with regulations such as the one AllVid potentially represents are not simply imposed on the "cable company," the "satellite company" or the "telephone company."
They're passed along to you and me, ultimately, in one form or another.