Cable-Ready DTVs: Wait 'Til Next Year?

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It's been four days since the emergence of the agreement between the National Cable & Telecommunications Association and the Consumer Electronics Association to build digital cable set-tops into digital TVs, and it's two weeks until the Consumer Electronics Show. Suddenly, signs of useful momentum for the new year are coming into view.

[It's also Christmas week. If you're like me, the cards are definitely going to be late, and it just occurred to you to wonder whether it's too late to shop online, so as to avoid the stroller-wielding mall aggressors.]

Which is a long way of saying, rip this out and toss it into the stack of stuff to read en route to Las Vegas.

The understanding of what happened last Thursday will have more of an impact on holiday shopping seasons to come than on this week's shopping sprees. But it is
the conversation that will occupy most of the talk time at CES.

Raise a glass

The fact that there will even be
a linkage of holiday shoppers, consumer electronics and cable in a year or so is reason enough for restrained celebration. Restrained, because it's easy to glance at last week's deal and let worry turn into exasperation: Is it enough? Shouldn't a two-way, cable-ready digital set — what the agreement calls an "interactive" cable-ready DTV set — come first, and not second, to market?

Regardless of where you stand, bear in mind that the agreement announced last Thursday morning tackles the part of the "digital television transition" that rises most fervently to the top of cable's strategic concerns: Its undesired addiction to two types of scrambling mechanisms for premium services.

How many times have you heard of it, or complained of it yourself? For me, the answer is: Often enough that I've almost forgotten the origins of the complaint.

A review of the situation brings it back to equipment portability for consumers. To say it another way, the lack
of equipment portability within cable doesn't do much for national retail chains that sell consumer electronics.

The reason you walk into Best Buy, or even The Great Indoors, and see the gorgeousness of HDTV — only to sigh and shake your head when you see the Away Team's name on the picture — is that it is hard for a retailer to sell a piece of expensive TV technology that works in Pittsburgh, but not in Green Bay, Wisc.

Two cities' tale

Those two cities were chosen deliberately. Pittsburgh, an AT&T Broadband market now served by Comcast Corp., is a city whose cable constituents use set-tops made by Motorola Inc. Green Bay's cable constituents, customers of Time Warner Cable, get their services from boxes made by Scientific-Atlanta Inc. There are hundreds of cities that are one, and not the other.

By competitive contrast — and as you well know — DirecTV Inc. and EchoStar Communications Corp. both rain a signal down on Pittsburgh and Green Bay, and it doesn't matter if someone moves from one place to the other. After getting the dish back up on the new roof, the box inside works pretty much the same.

Last week's agreement assures that consumer-electronics devices with built-in digital cable set-tops will work in Green Bay and in Pittsburgh; in Charlotte and in Houston; and so on.

That means the HDTVs, cable-ready DTVs and other electronic gadgets that people buy from any of the dozen consumer-electronics manufacturers signed on to the deal will come with POD slots.

POD stands for "point of deployment." It's a component of the Cable Television Laboratories Inc. OpenCable specification. When the consumer takes the device home — and wants a premium TV service (Home Box Office or Showtime, for example) — the local cable operator sends a card that slips into the device to descramble the premium services that were ordered.

It is when that consumer wants other stuff — two-way services, like VOD or SVOD, or wants to plug in a digital video recorder or recordable DVD player (they're coming) — that the digital interfaces mentioned in the NCTA-CEA deal come into play. Those elements, as well as the "encoding rules" and copy protection elements of the agreement, will be described in the next installment of this column.

All about customers

It's easy to get lost or frustrated by the many complications of "the DTV transition." One thing is important to remember: Last week's deal was intended to benefit customers who spend dollars on expensive TV technologies, and on cable services — not to disenfranchise them. As a side bonus, each integrated set sold is one less $225 set-top that a cable provider has to buy and install.

An end of the year note: Little makes a technology writer happier than a mother lode of complicated issues to "translate." From the number of times the word "complex" was used during last Thursday's press conference, it looks like this intersection between cable and consumer electronics will spawn piles of column inches next year.

Happy holidays.

Questions? Suggestions? Write to Leslie Ellis at Ellis299@aol.com.

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