Policy

NCTA Keeps Fighting New Box Rules

1/12/2005 9:34 AM Eastern

Complaints that the set-top box market won’t flourish without new federal mandates are “ludicrous,” the National Cable & Telecommunications Association said Tuesday in a new attempt to quell a lobbying campaign against cable led by the Consumer Electronics Association, Microsoft Corp., Intel Corp. and TiVo Inc.

In a letter meant to be a point-by-point rebuttal to advocates of federal intervention, the NCTA said those in favor of government mandates were the ones who really opposed providing consumers with low-cost alternatives.

“It is [the] CEA, not [the] NCTA, that wants to deny `consumer choice’ to obtain an integrated box,” the letter said. “It is [the] CEA, not [the] NCTA, that wants the government to enforce a rule that, as [Federal Communications Commission] chairman [Michael] Powell has said, `removes from the market a potentially cost-effective choice for consumers.’”

Cable and the CEA are at war over an FCC rule that would ban cable-operator deployment of new set-top boxes that integrate signal-security and channel-selection functions. The NCTA wants the FCC to drop the ban on integrated boxes, which is to take effect July 1, 2006, or to at least postpone it for 18 months.

The CEA supports the ban, which would mean that every new digital box sold at retail or leased by cable companies would work only with a CableCard -- a device about the size of a credit card that slips into the boxes to authorize reception of scrambled programming.

About 10,000 plug-and-play digital-TV sets that work with CableCards have been purchased by consumers, the NCTA said.

Although the CEA, Microsoft, Intel and TiVo argued that retail set-top sales won’t flourish unless cable is forced to support CableCards in leased boxes, the NCTA claimed that the ban would add at least $70 to the cost of each box -- or hundreds of millions of dollars to cable bills in the aggregate -- without providing consumers with new services to enjoy.

The NCTA’s nine-page letter noted that at last week’s Consumer Electronics Show in Las Vegas, a mind-blowing array of innovative products were on display, including TiVo’s dual-tuner digital-video recorder with two CableCard slots.

“The notion that [the consumer-electronics industry] can’t innovate until the integration ban is imposed and operational is ludicrous,” the NCTA said.