Both Sides Hoping for Two-Way Momentum

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Now that the Federal Communications Commission has ratified the plug-and-play agreement hammered out between the cable industry and consumer-electronics manufacturers, observers expect increased attention to talks on two-way TV services.

That's important because consumers won't be able to use such services, which include video-on-demand, with one-way cable-ready sets that received the FCC's green light on Sept. 10.

Subscribers will still need a set-top to access to those services until a two-way agreement is reached.

"There was a lot that had to get completed on one-way," said Comcast Corp. senior vice president of strategic planning Mark Coblitz, including procedures for the joint test suite at Cable Television Laboratories Inc., where CE manufacturers are testing TV sets. "We can now focus solely on the two-way. The most important issue on two-way is that the underlying [one-way] agreement has been done.

"In order to do anything we had to understand what the rules were," he added. "That was a base for what we're going to do. We know the encoding rules. We know what the specs are CE needs to build to. Now we can talk about specifics."

Two-way services are more complicated, Coblitz said, but "we're hopeful we can find ways to quickly get products to market."

Added Time Warner Cable senior vice president of strategy and development Kevin Leddy, "This will definitely accelerate the two-way negotiations." (Both Coblitz and Leddy are part of cable's negotiating team in the talks.)

The two groups began work on a two-way deal earlier this year, but had to spend several months working on one-way refinements as the FCC worked on the proposal, Leddy said. "Now we can get back to two-way."

The issues are more complicated because it's a shared environment, he added. "How that's going to work with OCAP [the OpenCable Applications platform] is not clear," he said, but the fact that OpenCable has been standardized by the Society of Cable Telecommunications Engineers and is close to Advanced Television Systems Committee specifications should help.

Although some CE manufacturers believe they can sell millions of one-way TVs, cable isn't so sure.

"We believe the real market is a full featured device that does all the cable companies' applications," Leddy said. "As we roll out VOD aggressively, the appeal on one-way products won't be as great. That's why we want to get the two-way deal as done as fast as we can.

But whether it's a new impetus behind the two-way talks, or the FCC's approval of one-way CableCARDs, CE manufacturers are pumped. "We will be adding ATSC tuners into all our TV products," said Ed Wolff, vice president of merchandising at Panasonic Display Group.

Panasonic plans to start shipping a 53-inch widescreen model that includes a digital tuner, a photo viewer SD memory card, PCMCIA slots for still pictures on TV, an HD and Multimedia Interface and high-bandwidth digital content protection (HDCP) this fall. It will be one of six ATSC models Panasonic rolls out in the next few months, all of which will feature CableCARD slots.

"Every market will get these sets," Wolff promises, with some models in a few markets as early as the end of October. Panasonic is talking to cable operators, to inform them on where and when these sets will be available, he said.

One option for consumers is to use the Go2 Broadband site established by CableLabs so consumers can see which cable operator to talk to get service authorized, and to let operators know which markers Panasonic will have built into sets.

Zenith Electronics Corp. said its parent company, LG Electronics, plans to introduce a digital-cable ready HD set in the first half of next year.

Pioneer Electronics Corp. said it planned to make its cable-ready TV set announcements at the January International Consumer Electronics Show in Las Vegas.

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