Cable Operators

CEA: Cable Failed in Retail Set-Top Plan

8/01/2011 12:01 AM Eastern

Washington — A coalition of consumer-electronics
companies and public-interest groups says the cable
industry has not demonstrated any progress towards a
robust retail market for set-tops and is instead trying to
forestall FCC action to create that market.

“In fact, they confirm that after a decade and a half
of product demonstrations and announcements, the
mandate established by Congress in Section 629 [of
the Communications Act] remains unfulfilled,” said
the groups, led by the Consumer Electronics Association,
in a letter to Federal Communications Commission
chairman Julius Genachowski.

That came in a response to a July 7 letter by National
Cable & Telecommunications Association president
Michael Powell.

POWELL: MARKET IS WORKING

As the FCC contemplates whether and how to spur the
creation of a universal gateway for traditional and Webvideo
content — per its open AllVid proceeding — as well
as whether to spur a retail set-top market, Powell argued
in his letter that the marketplace can handle, and is handling,
the heavy lifting on both of those fronts.

He cited examples of set-top boxes that already combine
TV and Web content. One of the reasons the FCC
launched the proceeding, in addition to trying to goose
the retail market in set-tops, was to drive broadband
adoption by more seamlessly wedding online and traditional
content in the TV set, as 99% of the population already
has a TV, compared to only 80% to 85% who own
computers. He also pointed to the “TV Everywhere”
expansion to smartphones and tablets; cloud-based
interfaces from Comcast enabling new apps; social networking
and searchable guides; home networking; and
more.

At June’s Cable Show in Chicago, Powell said there had
been evidence of that progress.

But the CEA and other parties had an entirely different
takeaway: “The NCTA letter invites you to conclude
that there is more competition today in the device market.
But the opposite is the case … What the panel discussions
and the demonstrations at the Cable Show showed
most clearly is that the industry is moving toward [Internet
protocol]-based program distribution. A failure by
the commission to move in parallel to a standards-based
IP home-network interface would be a failure of potentially
historic proportions.”

And all those innovative approaches Powell was talking
about? The CEA called them incremental achievements,
pointing to them as a tactic the NCTA has used
in the past to forestall FCC action.

‘WALLED GARDENS’ SEEN

The NCTA’s letter touts “innovative approaches” while
omitting the fact that none will support the operation of a
device on more than one [multichannel video programming
distributor’s] services,” according to the CEA. “Nor
is there any assurance that the demonstrated products
will operate on all, many, or most of the systems owned
by the MSO for whose services they are specifically designed.”

The CEA-led group found one point of agreement with
Powell: “The marketplace is at a critical juncture.” But it
said the NCTA’s path leads to a walled garden where video
providers deploy “system-specific” devices that frustrate
competition and innovation.

In addition to the CEA, groups signing the letter included
the Consumer Electronics Retailers Association,
the Open Technology Initiative, Media Access Project
and Public Knowledge.

November

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