News

Deal on a Two-Way Street

5/30/2008 8:00 PM Eastern

After years of rejecting cable's technology for accessing interactive video services, Sony Electronics reached an agreement with the six largest cable companies to adopt the industry's Tru2way specification.

For cable, the deal potentially establishes Tru2way as the national standard for interactive-TV applications.

And it looks to be the nail in the coffin for “Digital Cable Ready Plus,” a rival proposal Sony and the Consumer Electronics Association spent more than two and a half years pushing before the Federal Communications Commission.

Last week, CEA president and CEO Gary Shapiro struck an agreeable tone in commenting on the Sony-cable pact: “We look forward to working with our cable colleagues to ensure Americans across the country have access to high-value cable content while using the equipment of their choosing.”

Sony's agreement with the six operators — Comcast, Time Warner Cable, Cox Communications, Charter Communications, Cablevision Systems and Bright House Networks — is a binding memorandum of understanding (MOU) that addresses how two-way, cable-ready products access interactive services like video-on-demand, digital video recording and interactive programming guides.

The breakthrough was a political win for cable, gaining the endorsement of Rep. Rick Boucher (D-Va.), a senior member of the House Energy and Commerce Committee who has urged the two industries to cooperate on this issue.

“I congratulate Sony and the major cable operators for achieving consensus on a set of core principles that will speed the introduction of new two-way plug-and-play devices,” Boucher said, in a statement.

Theoretically, a cable subscriber will be able to plug in any Tru2way-certified TV, digital video recorder or other device and be able to access VOD and other services that require communication back to the cable headend — without an operator-supplied set-top box.

The détente between cable and Sony could obviate an FCC rulemaking action it was considering for how cable would be required under the Telecom Act of 1996 to provide access to VOD, switched digital video and other services.

The FCC had been weighing both Tru2way and the DCR-Plus proposal. Agency spokesman Clyde Ensslin last week said the FCC would not comment on the Sony-cable deal.

Cable had claimed the CEA's DCR-Plus plan would have cost hundreds of millions of dollars to develop and support.

Sony and other manufacturers objected that Tru2way (previously called the OpenCable Applications Platform) was too cumbersome for lower-end products — tantamount to putting a personal computer in a TV set — and carried unfavorable licensing terms (see “Two-Way Tussle,” Dec. 10, 2007, page 15).

Cable operators had feared that two-way would morph into an even more costly debacle than CableCards, the devices that provide access to one-way linear TV programming.

One of the biggest differences with the new agreement is that MSOs are contractually obligated to support Tru2way by certain dates. Before, cable operators had provided informal pledges.

“That provided the additional incentive for Sony to sign on” to Tru2way, said a cable-industry source.

The deal also includes a common-reliance clause specifying that 20% of MSOs' new set-top boxes will use Tru2way until 10 million are deployed, NCTA vice president of communications Brian Dietz said.

Detailed terms of the memorandum have not yet been released, while “other potential signatories” complete their review of the agreement, the NCTA said.

January 2002: CableLabs completes first OpenCable (OCAP) specification.
October 2004: Samsung becomes first OCAP licensee.
November 2005: Consumer Electronics Association first proposes “DCR-Plus.”
June 2007: Intel announces plans to develop chips for OCAP-based set-tops.
October 2007: Comcast CEO Brian Roberts and Time Warner Cable CEO Glenn Britt meet with FCC commissioners to lobby for OpenCable.
January 2008: CableLabs announces “Tru2way” as consumer brand for OCAP.
May 2008: Sony signs deal to adopt Tru2way; MSOs contractually commit to widely support technology.
July 2009: Comcast, Time Warner Cable, Cox, Cablevision, Bright House to support Tru2way in all their systems.
July 2010: Charter to support Tru2way in all systems.
SOURCE: Multichannel News research

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