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ALMOST CABLE-READY Cable, CE Groups Agree on Digital Standards

2/27/2000 7:00 PM Eastern

Washington -- The cable industry reached agreement ondigital-television standards last week with the trade group that represents TV-set makers,cheering federal regulators who threatened to impose standards if private efforts failed.

The agreement, announced by the National Cable TelevisionAssociation and the Consumer Electronics Association, means digital"cable-ready" TV sets could appear on store shelves in time for the Christmasshopping rush, if not sooner.

"No longer can anyone say there is any reason whyconsumer-electronics manufacturers can't go forward with the production ofdigital-television sets," NCTA president Robert Sachs said.

But the NCTA and the CEA acknowledged that some importantissues are unresolved. They failed to agree on a definition of cable-ready and they failedto reach consensus on technology to protect premium programming from illegal copying -- acrucial issue for Hollywood studios.

"It's clear that we need to focus on the tworemaining problems. We are working very hard to get an agreement with the CEA," CableTelevision Laboratories Inc. CEO Richard Green said.

"They agreed on some issues, but not all issues,"said Victor Tawil, senior vice president of the Association for Maximum Service Television(MSTV), a broadcaster organization that lobbies Congress and the Federal CommunicationsCommission for TV stations making the transition to digital.

The cable-ready debate centers on the CEA's refusal torequire its members to build all digital-TV units with the Institute of Electrical andElectronics Engineers' 1394 interface -- the so-called fire wire, which permitstwo-way broadband traffic. Some CEA members want to build low-end sets without the firewire.

Labeling a non-fire-wire digital-TV set as cable-ready isproblematic because the cable industry is concerned about a possible consumer backlashwhen people discover that their cable-ready sets lack the range of functions offire-wire-equipped sets.

The two associations continued to negotiate this point lastweek. The cable industry would like to purge the phrase cable-ready and replace it with"one-way" or "two-way," depending on the level of fire-wireinstallation.

CEA vice president of communications Jeff Joseph saidprice-sensitive TV-set makers are concerned about costs, and they do not want to installthe fire wire on low-end, 13-inch sets that many people will place in their kitchens.

"We strongly believe that consumers should havechoice. It shouldn't be mandated if all you want to do is go home and plug this thingin," Joseph said.

On the copy-protection issue, CEA members fear that thetechnology to stop digital piracy could interfere with reasonable copying by consumers.

"We think copy protection is incredibly important. Ifyou want to tape the HD [high-definition] version of Friends, you should have theright to do that," Joseph said.

Last week's announcement came about five weeks beforeFCC chairman William Kennard's deadline for action.

Upset that talks had stalled, Kennard warned that he wouldattempt to adopt interoperability standards if his April 1 deadline were ignored by theindustries. In a statement last week, he hailed the results of the NCTA-CEA accord.

"Today's announcement of industry agreement ondigital-TV technical standards will jump-start the digital revolution fortelevision," he said. "It means that Americans are one step closer to enjoyingdigital television over their cable systems."

In a separate statement, FCC commissioner Susan Ness wasmore restrained in her reaction. While pleased with the agreement, she urged caution untilthe fire-wire, labeling and copy-protection issues were solved.

"We can't declare victory when the game'sonly at halftime," Ness said.

Ness gave a speech at the Western Show in December warningthat consumers would object if expensive digital-TV sets marked cable-ready wereincompatible with cable and other video equipment. On the copyright issue, Ness said,Hollywood was entitled to protect its content, but not to an unreasonable degree.

"The consumer is going to be confused if he does nothave the digital connector on it and he's going to be locked out of those advancedservices cable would offer him. It needs prompt resolution," NCTA vice president forscience and technology William Check said.

The agreement includes a host of details on the display ofon-screen channel guides and other technical specifications. "There are somethroughput limitations as to how much bandwidth the guides will use," Check said.

The National Association of Broadcasters -- members ofwhich are pouring millions of dollars into digital technology to meet a 2006analog-spectrum give-back deadline -- slammed the NCTA-CEA agreement as a half-measuredesigned to keep regulators at bay.

"This is a transparent attempt by cable operators andTV manufacturers to avoid an FCC interoperability rule that is desperately needed byconsumers," NAB spokesman Dennis Wharton said. Consumers won't buy digital-TVsets until the two associations have resolved all compatibility issues, he added.

Tawil said he was upset with both the NCTA and the CEA, notjust cable. "We are knocking both of them down, to be candid," he added.

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