News

Firewire: A $400 Million Black Hole

6/28/2010 12:01 AM Eastern

LAST WEEK, ALMOST FIVE YEARS TO THE DATE OF ITS INSTANTIATION, THE Federal Communications Commission lifted the mandate for cable operators to deploy set-tops that include a “FireWire” connector, also known as “IEEE 1394.”

Cable operators didn’t exactly hear angels singing. Why: Because cable sank some $400 million into the effort, over the last half-decade.

Back-of-the-envelope math puts the connector cost at about $20 (including copy protection), times about 20 million boxes fielded with it since the July 1, 2005, mandate.

What’s worse: Nobody’s using it. Ask any cable engineer how many subscribers requested 1394, since the mandate. I did, back in March, of the CTO of a cable company with about 5 million subscribers. His answer? Five. (Five. Out of 5 million. In five years.)

Keeping a handful of FireWire boxes on hand wasn’t an option. The rule spanned all digital boxes.

Connector issues are tricky in a “one hand clapping” way. You need two. One on the set-top, in this case, and one on the HDTV. At the time, some HDTV makers wanted 1394. They also wanted assurances that cable operators would put a reciprocal 1394 connector on HD set-tops. So they pushed, and it became law.

This is a bit like being mandated to build a spur of a railroad line to a town with no people. Doesn’t matter that nobody lives in Nowhere. Someday, somebody might!

Let’s say you’ve plowed $400 million, so far, to build that spur. Then, five years in, you’re told you can stop building, because other people say it’s expensive (Intel, Motorola and TiVo, in this case). Also, because nobody is there, in Nowhere.

Um … thank you?

Here’s what happened, in a huge oversimplification: HDMI won as the predominant way to connect HDTV sets to set-tops and DVD players. FireWire was an early contender, and was indeed the fastest wire in town, at one point. But HDMI won.

That’s the short version of the $400 million cable operators won’t see again.

March